Below is our firm’s summary of notable energy regulatory activity at the Virginia State Corporation Commission (“SCC” or “Commission”) during October, 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 files 2024 Integrated Resource Plan; utility projects largest growth in power demand since World War II – 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. In a press release, the company stated that “it is experiencing the largest growth in power demand since the years following World War II.” Dominion states that the “key drivers” for the projected load growth include data center development and expected electric vehicle charging demand. The IRP states that, in order to meet this projected demand, the company “must maintain a focus on a diverse portfolio of energy supply resources” including not only “planned renewable and energy storage resources but also traditional dispatchable generation and new technologies.”
The IRP includes four Portfolios, representing alternative pathways for meeting customer demand over the next 15 years. 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 include, among other things, modeling that incorporates updated PJM capacity prices. 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.” The SCC has not yet established a procedural schedule for this case.
- Attorney General and interested parties file briefs opposing Appalachian Power Company’s rate increase request – Case No. PUR-2024-00024
On March 28, Appalachian Power Company (“APCo”) 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 states that the 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 seeks an increase to its current authorized profit level, or rate of return on common equity. If the rate increase is approved, Appalachian’s residential customers using 1,000 kWh in a month would experience a $6.75 monthly bill increase. The total monthly bill for such customers would likely exceed $178.
The SCC held an evidentiary hearing between September 10 and September 14. On October 21, APCo and the parties to the case filed post-hearing briefs. In its brief, APCo reasserted its request for a $64 million rate increase, arguing that current rate levels do not allow it to earn a fair return. The Attorney General’s brief argued that APCo’s rates should actually be reduced by $19.9 million. In its brief, the Virginia Poverty Law Center opposed the rate increase and urged the SCC to require APCo to provide additional consumer protections, including longer and more flexible payment plan options. The statute requires the SCC to issue a final order by November 20.
- SCC proposes metrics to evaluate electric utility performance in future rate cases – Case No. PUR-2023-00210
On December 12, 2023, the SCC published an order establishing a proceeding to determine metrics to evaluate the performance of Dominion Energy Virginia and Appalachian Power in future rate cases. The 2023 General Assembly amended the electric utility code, at Va. Code § 56-585.1(A)(2)(c), to provide that “[t]he Commission may increase or decrease the utility’s combined rate of return for generation and distribution services by up to 50 basis points based on factors that may include reliability, generating plant performance, customer service, and operating efficiency of a utility.” The statute also provides that “[a]ny such adjustment to the combined rate of return for generation and distribution services shall include consideration of nationally recognized standards determined by the Commission to be appropriate for such purposes.”
On April 1, Dominion, Appalachian Power, the Attorney General, Clean Virginia, and the Southern Environmental Law Center filed separate performance incentive proposals. A group of solar advocates also urged the Commission to consider distributed resource interconnection efficiency when evaluating utility performance. On October 21, the SCC published an order including a proposed “scorecard” that would be used to evaluate utility performance in the areas of reliability, generating plant performance, customer service, and operating efficiency. The order states that the metrics established in this case will be used in biennial reviews occurring after January 1, 2027.
Interested parties may file comments on the proposed metrics on or before November 15. The order directs the SCC Staff to review the comments and file proposed regulations on or before March 7.
- SCC dismisses Dominion request for a new market-based rate schedule for large customers – Case No. PUR-2024-00158
On August 28, Dominion Energy Virginia filed an application for approval of a voluntary market-based rate proposal (“Rate Schedule MBR”). The rate schedule is designed to reflect actual PJM wholesale market prices. Dominion states that the market-based rate “acts as a natural hedge against the volatility of fuel charge prices.” The rate schedule is available for commercial and industrial customers who had at least one monthly peak demand of 5,000 kW within the most recent 12 months.” Unlike prior market-based rate proposals, Rate Schedule MBR is not proposed as an experimental tariff option. The rate schedule, if approved, would have no expiration date.
The SCC published an order dismissing the application on October 18, finding that “it would not be in the public interest to consider the [the tariff] at this time.” The order notes that the proposal would establish “a permanent tariff offering for certain large load customers, which would include the six customers, many of whom are data centers, currently enrolled in [an experimental market-based rate tariff].” The order also states that the request comes “at a time when there is significant projected load growth resulting from the increased deployment of hyperscale retail electric customers in the Commonwealth.” The Commission noted that it will consider issues related to data center load growth in a technical conference scheduled for December 16.
The SCC dismissed the application “without prejudice,” meaning Dominion is not precluded from refiling its proposal at a later date.
- SCC schedules technical conference to evaluate impacts of data centers and other large users – Case No. PUR-2024-00144
On October 2, the Commission announced that it will hold a technical conference on December 16 to evaluate the impacts of data centers and other large energy users. In its scheduling order, the Commission stated that it “is interested in potential frameworks that would facilitate service [to these customers] in a manner that, among other things, reasonably addresses the risks and issues attendant to this new load type, is just and reasonable to both current and future customers, and is permissible under current Virginia statutory law.”
The order references several potential regulatory changes, including amendments to utility line extension policies, the direct assignment of transmission costs, or a new tariff with a minimum contract length and collateral provisions to protect the utility’s other customers. The order states that, “[f]ollowing the technical conference, it is the Commission’s intent to invite all interested persons to submit post-technical conference comments addressing some or all of the issues raised during the technical conference.”
The SCC’s order states that anyone interested in participating as a panelist should submit a self-nomination form via email to [email protected] no later than October 22.
Renewable energy, efficiency, and new energy infrastructure:
- SCC schedules evidentiary hearing regarding Appalachian Power Company net metering proposal – Case No. PUR-2024-00161
On May 6, the SCC published an order in Case No. PUR-2024-00047 directing Appalachian Power Company (“APCo) and Dominion Energy Virginia (“Dominion”) to file net metering proposals. Virginia law, at Va. Code § 56-594(E), requires the SCC to conduct hearings to establish the net metering credit rates for each utility. In particular, the law requires the SCC to “evaluate and establish (a) an amount customers shall pay on their utility bills each month for the costs of using the utility’s infrastructure; (b) an amount the utility shall pay to appropriately compensate the customer, as determined by the Commission, for the total benefits such facilities provide; (c) the direct and indirect economic impact of net metering to the Commonwealth; and (d) any other information the Commission deems relevant.” The law also requires the SCC to “make all reasonable efforts to ensure that the net energy metering program does not result in unreasonable cost-shifting to nonparticipating electric utility customers.” The SCC’s order directed APCo to file its net metering proposal by September 2. Dominion was directed to file its proposal on or before May 1, 2025.
APCo filed its net metering proposal on August 30. APCo proposes to close its current net metering tariff and to implement a new program for all future customers. APCo’s current tariff is designated Rider N.M.S. The new program, designated Rider N.M.S. II, would provide credits to net metering customers based on the energy produced each month. However, while Rider N.M.S. provides a monthly credit equal to the utility’s full retail rate, the new program would compensate customers based on a lower “avoided cost rate.” APCo states that the new structure “will ensure appropriate crediting to customer-generators for the energy delivered to the grid while minimizing cost-shifting to non-participating electric utility customers.”
The SCC will hold an evidentiary hearing on May 20. Interested parties can file written comments on or before May 13.
- Dominion files 2024 VCEA RPS Development plan; requests approval of new solar and storage projects – Case No. PUR-2024-00147
On October 15, Dominion Energy Virginia (“Dominion”) 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.
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 Staff files testimony opposing Dominion’s proposal to construct natural gas storage facility – Case No. PUR-2024-00096
On June 4, Dominion Energy Virginia filed an application for approval to construct and operate a liquified natural gas storage project in Brunswick and Greensville counties. The gas storage facility would serve as a backup fuel source for the company’s Brunswick and Greensville natural gas power stations. Dominion currently receives natural gas supply from the Transco interstate pipeline. The application states that the storage facility is necessary “to maintain an onsite, safe, and reliable fuel source for the Brunswick County and Greensville County Power Stations in the event of severe weather, cyberattacks, natural disasters, or other interruptions that disrupt the Company’s primary natural gas supply.”
The application states that with a “full tank,” the facility could operate the Brunswick and Greensville power stations at full capacity for four days. Dominion states that the estimated cost of the project is $547 million. The application does not include an estimated consumer rate impact.
The SCC Staff filed several volumes of direct testimony on October 15. The Staff concluded that Dominion did not sufficiently justify the proposal and urged the Commission to deny the application. The Staff noted that Dominion’s economic analysis was incomplete and that the utility had not demonstrated that consumers would benefit from the project. The SCC will hold an evidentiary hearing on November 19.
- SCC approves Appalachian Power’s 2024 RPS development plan – Case No. PUR-2024-00020
On April 25, Appalachian Power Company (“APCo”) filed its annual Virginia Clean Economy Act (“VCEA”) Renewable Portfolio Standard (“RPS”) development plan. The VCEA requires APCo to meet an increasing clean energy resource standard. The law, at Va. Code § 56-585.5(D), requires APCo to file an annual plan explaining its proposal to satisfy the VCEA’s renewable energy procurement requirements. APCo’s plan includes five alternative modeling scenarios. The alternative scenarios assume different levels of solar, wind, natural gas, and capacity market resources. APCo also requests cost recovery for two solar projects that were abandoned due to escalating costs. The application states that, if approved, APCo’s RPS rider would increase by approximately $0.05 per month for a residential customer using 1,000 kWh.
The SCC held an evidentiary hearing on July 25. The SCC approved APCo’s RPS development plan in an October 21 final order, subject to certain modifications and reporting requirements.
- SCC approves Appalachian Power battery storage proposal – Case No. PUR-2024-00001
On January 18, Appalachian Power Company filed an application to develop a new $57 million battery storage project. The application is filed pursuant to the Virginia Clean Economy Act, at Va. Code § 56-585.5(D), which, among other things, requires APCo to propose at least 400MW of new battery storage resources by 2035. APCo states that its project “will be composed of two separate [battery energy storage] sites connected to the Glade-Whitetop 34.5 kV distribution circuit in Southwestern Virginia, with a total rating of 7.5 MW (capacity) and 30 MWh (energy).” One site is located in Smyth County and the other is in Grayson County. APCo states that the project is more cost-effective than other reliability alternatives and will have a “minimal” impact on customer rates. APCo proposes to seek cost recovery for the project in a subsequent VCEA proceeding.
The SCC held an evidentiary hearing before a hearing examiner on June 11. The examiner recommended approval of the application in a report and recommendation filed on July 3. The examiner concluded that the project is “a reasonable, cost-effective proposal to meet the requirements of the VCEA and address the reliability concerns [in the region].” The SCC adopted the hearing examiner’s findings and recommendations in a final order published on October 21.
- Solar advocates file responses in opposition to the SCC Staff’s proposed 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 proposed rules also establish a shared solar program for Appalachian Power Company customers. The SCC’s order is published pursuant to 2024 amendments to the shared solar legislation. The 2024 amendments, among other things, established a shared solar program for APCo. 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 includes 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. The Coalition for Community Solar Access filed comments opposing the Staff’s proposed project milestone requirements. The SCC has not yet established an opportunity for additional comments.
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