Below is our firm’s summary of notable energy regulatory activity at the Virginia State Corporation Commission (“SCC” or “Commission”) during June, 2023. Please contact attorneys Will Reisinger or Matt Gooch should you have any questions about these cases or Virginia’s energy market. ReisingerGooch PLC provides regulatory and transactional counsel to clean energy businesses, associations, and public interest organizations. The following is presented for informational purposes only and does not constitute legal advice.
Rate cases, oversight, and resource planning:
- SCC schedules hearing regarding Dominion Energy Virginia 2023 Integrated Resource Plan – Case No. PUR-2023-00066.
On May 1, Dominion Energy Virginia (“Dominion”) filed its 2023 Integrated Resource Plan (“IRP”). The IRP is the utility’s plan to meet customer demand over the next 15 years. Dominion’s plan presents five alternative scenarios. All of Dominion’s alternative plans incorporate new combustion turbine gas plants, and four of the five alternatives incorporate small modular nuclear facilities. All of Dominion’s alternatives assume that Virginia exits the Regional Greenhouse Gas Initiative in 2023.
Under Virginia law, an IRP is not binding on the utility and, if approved, does not represent SCC approval of any particular facility or course of action. Pursuant to the statute, the SCC must review the IRP and determine whether it is “reasonable” and “in the public interest.” The SCC will hold an evidentiary hearing on Dominion’s plan beginning September 19. Interested parties can intervene by filing a notice of participation on or before July 14.
- Dominion requests SCC approval to issue securities; projects $30 billion in capital expenditures over the next three years – Case No. PUR-2023–00090
On May 22, Dominion filed an application for approval to issue up to $13.625 billion of debt securities and preferred stock. Dominion states that “[t]he proceeds from the sale of the Securities will be used for meeting a portion of the Company’s capital requirements” which “generally consist of construction, upgrading and maintenance expenditures, capacity expansion acquisitions, and refunding of outstanding securities.” Dominion also states that, “[o]ver the next three years, the Company has approximately $1.45 billion of scheduled debt maturities and approximately $30 billion of projected capital expenditures.” Dominion must receive Commission approval before issuing securities pursuant to Chapter 3 of Title 56 of the Code of Virginia (the “Securities Act”). Dominion’s last application to issue securities was in 2019 when the Commission authorized $8 billion in issuances.
- SCC approves Columbia Gas rate increase – SCC Case No. PUR-2022-00036
On April 29, Columbia Gas of Virginia (“Columbia”) filed an application for an increase to its base rates. Columbia requested a rate hike sufficient to increase its annual revenues by $58 million. The utility stated that the increase is necessary due to recent investments in its rate base and a higher required rate of return. The application states that Columbia has recently made significant capital investments to improve the overall safety, reliability, and integrity of its natural gas system to accommodate customer growth. The requested rate increase, if approved, would have increased the average monthly bill of a typical residential customer using 5.4 dekatherms from approximately $79.54 to approximately $88.53, or by 11.30%.
On May 15, the SCC published a final order approving a settlement agreement signed by the utility, the Attorney General, and the SCC Staff. The settlement authorizes a smaller annual base rate increase. Under the agreement, Columbia will receive an annual revenue increase of about $40 million based on a return on common equity of 9.7%.
- SCC schedules hearing regarding Dominion transmission rate increase; utility requests $125 million annual increase for transmission expenses – Case No. PUR-2023-00065
On May 1, Dominion Energy Virginia (“Dominion”) filed an application to increase its transmission cost recovery revenue requirement by $124.7 million. Under Va. Code § 56-585.1(A)(4), Dominion is allowed to recover the costs of transmission services provided by PJM, including administrative expenses and new facility construction costs, through a rate adjustment clause. Dominion’s transmission costs are recovered through a combination of base rates and the utility’s transmission rate adjustment clause, designated Rider T1. The application, if approved, would result in an increase the monthly bill for a typical residential customer using 1,000 kWh by $2.67.
The SCC will hold an evidentiary hearing on June 22. Pursuant to the statute, the SCC must publish a final order within three months of the filing, or by August 1, 2023.
- SCC schedules hearing regarding Appalachian Power transmission rate increase; utility requests $45 million annual increase to transmission rider – Case No. PUR-2023-00061
On May 4, Appalachian Power Company (“APCo”) filed an application to increase its transmission rate adjustment clause. Under Va. Code § 56-585.1(A)(4) APCo is allowed to recover the costs of transmission services provided by PJM, including administrative expenses and new facility construction costs. APCo’s proposed revenue requirement is approximately $45.1 million higher than current rates. APCo states that the rate increase, if approved, would add $4.15 to the monthly bill for a residential customer using 1,000 kWh. The SCC has not yet established a procedural schedule for this case.
The SCC will hold an evidentiary hearing on June 22. Pursuant to the statute, the SCC must publish a final order within three months of the filing, or by August 4, 2023.
- SCC schedules hearing regarding Dominion fuel rider update proposal; utility proposes to mitigate fuel rate increase by financing outstanding fuel debt – Case No. PUR-2023-00067
On May 1, Dominion filed an application to update its current fuel recovery rider, called the “fuel factor.” Dominion projects fuel expenses of over $2.3 billion during the coming rate year. Dominion also states that it is still carrying an unrecovered balance of approximately $1.27 billion, attributable to costs incurred in 2022 and 2023 that have not yet been recovered.
Dominion states that it supports keeping the current fuel factor rate in place until after a new law goes into effect on July 1. The new law, 2023 HB 1770, allows Dominion to request SCC approval to finance the deferred fuel balance by issuing bonds. Dominion states that, without financing the deferred fuel costs, the total fuel rate increase would equate to $7.92 per month for a typical residential customer using 1,000 kWh. The SCC will hold an evidentiary hearing on the application on September 6. Interested parties can intervene by filing a notice of participation on or before June 30.
Renewable energy, efficiency, and new energy infrastructure:
- SCC approves revised guidelines for municipal net metering program – SCC Case No. PUR-2022-00211
In 2019, the General Assembly established a “pilot program” for municipal net metering in Dominion’s service territory. The General Assembly amended the pilot program statute, Va. Code § 56-585.1:8, in 2022. Among other changes, the 2022 legislation provided that a municipal utility customer that generates excess electricity from a renewable energy facility may apply generation credits to a particular customer account. The legislation required Dominion to submit a proposal for the Commission’s consideration. On January 26, Dominion filed proposed guidelines for its revised municipal net metering program. On May 16, after considering comments from the SCC Staff and interested parties, the SCC published an order revising the municipal net metering guidelines.
- Appalachian Power files annual update on participation in renewable energy program – Case No. PUR-2017-00179
On May 9, Appalachian Power Company (“APCo”) filed its annual report regarding the utility’s voluntary renewable energy tariff. The voluntary tariff, Rider Wind/Water/Solar (“Rider WWS”), allows participating customers to purchase energy generated from renewable energy sources. APCo allocates the renewable energy generated at several renewable facilities in order to match the usage of participating customers. In 2018, the SCC approved Rider WWS pursuant to Va. Code § 56-577(A)(5). The SCC’s approval of this tariff means that APCo’s customers no longer have the option to purchase renewable energy from competitive suppliers under this Code section.
In its report, APCo states that approximately 400 customers were participating in Rider WWS as of December 2022. This includes 377 residential customers, 26 commercial customers, and 1 industrial customer. APCo’s report also lists the generation facilities used to supply the renewable energy, including the number of MWhs generated at each facility.
- Appalachian Power files annual report regarding voluntary electric vehicle rate schedule – Case No. PUR-2019-00067
On May 11, Appalachian Power filed an annual report regarding the implementation of its voluntary electric vehicle (“EV”) tariff, designated “Schedule PEV.” Schedule PEV is an optional rate schedule that allows residential customers who are receiving standard service to charge their electric vehicles on a time-of-day rate schedule. APCo states that participating customers must have an advanced metering infrastructure (i.e., AMI) meter installed, and program their charging to take place primarily during off-peak hours. APCo reports that a total of 105 customers had enrolled in Schedule PEV as of March 2023.
- Dominion and Appalachian Power file transportation electrification plans – Case No. PUR-2020-00051
On May 1, Dominion and Appalachian Power Company (“APCo”) each filed transportation electrification plans. The plans include discussion of the infrastructure and rate schedule changes that may be necessary to accommodate increased EV load. The utilities’ plans were filed pursuant to a June 2022 Commission directive.
Dominion’s plan estimates that there will be 900,000 EVs operating in its Virginia service territory by 2038. Dominion states that “[t]ransportation electrification will result in new electric demand and energy usage requirements placed on the Company’s electric grid” which may require “new infrastructure costs incurred by the Company.” Dominion, however, states that “through initiatives like managed charging, the increased energy [cost] requirements may be shifted towards times where overall demand is lower, potentially reducing the need for new or upgraded distribution infrastructure.” Dominion’s plan proposes several new rate schedules that would encourage customers to charge EVs during off-peak hours.
APCo’s filing also projects significant EV adoption in its service territory. APCo reports that, as of December 31, 2022, there were 3,655 “light-duty” plug-in vehicles registered in its Virginia service territory. The utility estimates as many as 40,000 EVs by 2030. APCo, however, estimates that “no transmission or distribution investments are anticipated to occur until the mid-2030’s that would be a direct result of increased light duty EV adoption.” The SCC has not yet established a procedural schedule for this case.