Below is our firm’s summary of notable energy regulatory activity at the Virginia State Corporation Commission (“SCC” or “Commission”) during November, 2024. 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:
- Dominion Energy Virginia files supplemental information in IRP docket showing impacts of projected data center load growth – Case No. PUR-2024-00184
On October 15, Dominion Energy Virginia (“Dominion”) filed its latest Integrated Resource Plan (“IRP”). The IRP is filed under Virginia Code §§ 56-597 through 56-599. In Virginia, an IRP is not a commitment to build any particular resource, but represents the utility’s general plan for meeting anticipated demand over the next 15 years. The IRP includes four Portfolios, representing alternative pathways for meeting customer demand. Each alternative includes the addition of natural gas resources in 2030-2031 and small modular nuclear reactors (“SMRs”) beginning in 2035. Dominion’s IRP states that the company recently issued an RFP for an SMR development at the company’s existing North Anna nuclear site. The IRP projects that, by 2035, the monthly bill for a residential customer using 1,000 kWh could be between $215.62 and $277.31, depending on which methodology is used to calculate the bill increases.
On October 11, the SCC published an order requiring Dominion to supplement its IRP no later than November 15. The SCC stated that this supplement should show the impact of projected data center load growth on Dominion’s generation planning scenarios. The SCC also directed Dominion to include a list of planned transmission projects and to indicate the cost and “whether the need for such projects is primarily being driven by data center load growth.” Dominion filed the supplemental information on November 15. The SCC will hold an evidentiary hearing regarding the IRP on April 16.
- SCC schedules hearing regarding Appalachian Power fuel rider – Case No. PUR-2024-00195
On September 10. 2024, Appalachian Power Company (“APCo”) filed an application to retain its existing fuel recovery rider, called the “fuel factor.” Under Va. Code § 56-249.6, APCo is permitted to recover all prudently incurred fuel expenses, including the costs of purchased power. Fuel costs are recovered from customers on a dollar-for-dollar basis with no rate of return applied. The company’s application projects slightly lower fuel costs for the next rate year. APCo, however, requests that the Commission retain the current fuel rates. APCo claims that it has not fully recovered excess costs that were incurred in prior years and deferred for future recovery.
On November 15, the SCC published a scheduling order. The SCC will hold an evidentiary hearing on February 25, 2025. Interested parties can intervene in the case by filing a notice of participation on or before January 3. The scheduling order also states that APCo can keep its current fuel factor rates in effect pending the outcome of the hearing.
- SCC approves smaller base rate increase for Appalachian Power Company; requires new consumer assistance programs – Case No. PUR-2024-00024
On March 28, Appalachian Power Company filed its 2024 biennial review application. Under Va. Code § 56-585.1, et seq., a biennial review is a base rate case in which the SCC reviews the utility’s earnings during the previous two calendar years. The law allows the SCC to increase or decrease the utility’s base rates or modify any of the utility’s terms and conditions of service. The statute applicable to this case directs the SCC to review APCo’s reported earnings for the 2023 calendar year and determine whether any adjustments are warranted.
In its initial application, APCo sought an annual base rate increase of approximately $95 million. The utility later reduced its request to approximately $64 million due to errors in its initial filing. The utility stated that a rate increase is necessary due to several factors, including higher vegetation management expenses, carrying costs on deferred fuel balances, and increased operations and maintenance expenses. APCo also requested an increase to its current authorized profit level, or rate of return on common equity. If the rate increase was approved, Appalachian’s residential customers using 1,000 kWh in a month would have experienced a $6.75 monthly bill increase.
The SCC held an evidentiary hearing between September 10 and September 14. On November 20, the SCC published a final order approving a smaller base rate increase of $9.7 million per year. The order includes findings on a number of disputed issues in the case. The SCC also recognized the significant number of disconnections for non-payment in APCo’s service territory. The order directs the company to work with the Virginia Poverty Law Center to develop a plan to reduce service disconnections and to develop a “pilot program” whereby customers are offered longer, more flexible repayment plan options.
Renewable energy, efficiency, and new energy infrastructure:
- SCC schedules hearing regarding Dominion Energy’s 2024 VCEA RPS Development plan – Case No. PUR-2024-00147
On October 15, Dominion Energy Virginia filed a petition for approval of its 2024 renewable portfolio standard (“RPS”) Development Plan. Dominion also requests approval of new solar and storage projects. The petition is filed pursuant to the 2020 Virginia Clean Economy Act (“VCEA”). The VCEA, at Va. Code § 56-585.5, requires Dominion to supply an increasing percentage of its electricity sales from clean energy resources. The law also requires Dominion to petition the SCC for approval of minimum quantities of solar and storage resources, located in Virginia, between 2020 and 2035.
Dominion’s 2024 RPS Development Plan describes the Company’s progress towards the VCEA RPS targets. The plan also explains how the company intends to obtain the additional renewable energy certificates necessary to comply with future RPS targets. Dominion’s petition requests approval to construct two new utility-scale solar projects and to enter into agreements to purchase the output from 24 solar and storage facilities. Finally, Dominion seeks to recover the costs of the new projects through an updated rate adjustment clause.
On November 7, the SCC published an order for notice and hearing. The SCC will hold an evidentiary hearing on February 18. Interested parties may intervene in this case by filing a notice of participation on or before December 13.
- SCC publishes final amendments to shared solar regulations – Case No. PUR-2024-00122
On August 12, the SCC published an order proposing revisions to the regulations governing Dominion Energy Virginia’s shared solar program. The SCC’s order was published pursuant to 2024 amendments to the shared solar statute. The 2024 amendments, among other things, established a shared solar program for Appalachian Power Company. The legislation also directed the Commission to recalculate the “minimum bill” that participating customers must pay to the utility each month. The legislation allows the SCC to expand the capacity of Dominion’s shared solar program by an additional 150MW.
Interested parties filed comments regarding the SCC’s draft regulations on September 26. Several solar advocates, including the Solar Energy Industries Association, filed comments encouraging the SCC to consider the environmental benefits provided by shared solar facilities when setting the minimum bill. The solar advocates also requested that the SCC clarify when it will authorize the additional 150 MW of capacity for the Dominion program.
On October 10, the SCC Staff filed a Staff Report in response to the comments from interested parties. The Staff Report included proposed project completion milestones that shared solar developers would be required to meet in order to maintain their spot in the initial program queue. Between October 29 and October 31 several solar industry advocates filed responses in opposition to the Staff Report. On November 25, the SCC published an order adopting final regulations. The SCC’s final order modifies some of the Staff’s proposed regulatory language.
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