Virginia Energy Regulatory Updates (September 2023)

Below is our firm’s summary of notable energy regulatory activity at the Virginia State Corporation Commission (“SCC” or “Commission”) during September, 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 holds evidentiary hearing regarding Dominion proposal to “securitize” outstanding fuel costs – Case No. PUR-2023-00112

On July 3, Dominion Energy Virginia (“Dominion”) filed a request to finance its accumulated fuel costs by issuing fuel cost bonds. Dominion projects that its current unrecovered fuel balance is approximately $1.27 billion. Dominion proposes to utilize a special purpose entity in order to issue bonds to finance the unrecovered fuel balance as of June 30, 2023. Dominion states that “the proceeds from these bonds would be used to satisfy the unrecovered fuel balance and reduce the near-term impact to customers from paying these costs over a shorter period of time.” Dominion states that its unrecovered fuel balance “continues to be substantial, largely due to significant marketplace commodity price increases during the prior fuel period.”

Several parties and the SCC Staff filed expert witness testimony on August 9. The Attorney General’s expert witness testified that, based on elevated interest rates and bond yields, the potential benefits of securitization “do not appear to justify” approving the plan. The witness noted that, under Dominion’s proposal, customers would have to pay several hundred million in extra financing costs in order to finance the unrecovered fuel balance over ten years. The Staff’s accounting witness, Carol Myers, also filed testimony identifying the “pros” and “cons” to Dominion and customers associated with securitizing the unrecovered fuel debt. Ms. Myers proposed an “alternative” recovery option, which would not rely in securitizing the fuel debt but would allow Dominion an extra year to recover the costs through its fuel rider.

The SCC held an evidentiary hearing on the petition on September 6. Dominion’s application was opposed by the Virginia Poverty Law Center (“VPLC”) and the Virginia Energy Purchasing Governmental Association. VPLC supported the SCC’s alternative recovery proposal, noting that approval of Dominion’s securitization proposal would nullify the pro-consumer provisions of a settlement agreement approved by the Commission in Dominion’s last fuel factor case, Case No. PUR-2022-00064. Pursuant to the statute, the SCC must issue an order approving or rejecting the application by November 3.

Renewable energy, efficiency, and new energy infrastructure:

  • SCC begins review of regulations for small electric generators and storage resources; solar advocates challenge Dominion request regarding technology standards – Case No. PUR-2023-00069

On May 2, the SCC published an order initiating a review of its existing regulations governing the interconnection of small electric generators and storage facilities. The order directs the SCC’s Division of Public Utility Regulation to solicit comments from interested parties and provide recommendations for changes to the regulations. On September 15, 2023, Dominion filed a motion requesting interim authority to require certain technology installations at net energy metering facilities. In a separate proceeding, Case No. PUR-2023-00097, the SCC granted a request from the solar industry to block Dominion from implementing certain technology requirements while the interconnection regulations are under review.

In its September 15 motion, Dominion acknowledges the Commission’s directive in Case No. PUR-2023-00097. The, motion, however requests interim authority to “(1) continue to require either a fiber optic or cellular-based direct transfer trip (“DTT”) communication system, at the customer’s election, when one of two criteria are met…and (2) require installation of a Distributed Generation Panel (“DG Panel”) under certain conditions…” A group of solar companies filed a response in opposition to Dominion’s motion on September 28. The solar advocates call Dominion’s motion “premature” and without credible support.

  • Dominion files biannual update on EV charging tariffs – Case No. PUR-2021-00151

On September 29, Dominion filed a biannual update on customer participation in five electric vehicle (“EV”) charging tariffs previously approved by the Commission. The Commission approved the tariffs in a July 2022 final order. Dominion’s update states that no customers are currently participating in the tariffs. Three of the tariffs are intended to provide mechanisms for customers to work with the utility charging infrastructure on the customer’s premises. Two of the tariffs establish rates for Dominion to charge the public for EV charging at Company-owned and operated public charging stations. Dominion states that it recently updated its website and has taken other actions to notify customers about these EV charging options. 

  • SCC approves Appalachian Power Company’s 2023 VCEA RPS plan – Case No. PUR-2023-00001

On March 15, 2023, Appalachian Power Company (“APCo”) filed its latest Virginia Clean Economy Act implementation plan and petition for approval of new resources. The VCEA requires Dominion Energy and APCo to meet increasing renewable portfolio standard (“RPS”) percentage targets. The law also requires both utilities to propose minimum amounts – in megawatts – of new solar, onshore wind, and storage resources by 2035. Both utilities must petition the Commission for approval of such resources based on a schedule set forth in the Code.

The filing includes multiple alternative portfolios that comply with the RPS targets based on different resource allocations, such as earlier coal retirements or larger solar versus wind energy investments. APCo’s filing requests approval of several new solar facilities. In particular, APCo requests that the Commission authorize the utility to acquire one new solar facility located in Ohio and to enter into six power purchase agreements (“PPAs”) for solar energy. APCo also proposes to adjust the rate adjustment clause for its VCEA projects. This adjustment would result in a small monthly rate decrease for a typical residential customer.

The SCC published a final order approving APCo’s application on September 7. The SCC’s final order approves APCo’s new solar investments, but rejects cost recovery for one out-of-state wind facility. The final order also directs the utility to change its modeling of future renewable resources and to modify the terms of its requests for proposals.