Below is our firm’s summary of notable energy regulatory activity at the Virginia State Corporation Commission (“SCC” or “Commission”) during September, 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:
- SCC holds evidentiary hearing regarding 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 application, APCo sought an annual base rate increase of approximately $95 million. At the evidentiary hearing, APCo lowered its revenue increase to approximately $64 million. The utility stated that its original application contained cost allocation errors between its Virginia and West Virginia customers. The utility argued 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 (“ROE”). APCo’s current authorized ROE is 9.5%. This ROE was approved by the SCC as part of a rate case settlement in November 2023. The total rate increase, if approved, would result in a monthly bill increase of approximately $7 per month for a typical residential customer using 1,000 kWh.
The SCC held an evidentiary hearing between September 10 and 13. The parties will file post-hearing briefs on October 21.
- SCC proposes regulations governing terminating service for customers with serious medical conditions – Case No. PUR-2024-00138
On September 19, the SCC published an order establishing a proceeding to update the regulations governing public utility service disconnections. The order notes that, in 2024, the General Assembly enacted legislation requiring the Commission to “conduct a proceeding for the purpose of establishing limitations on the authority of public utilities and cooperatives that provide electric, gas, water, or wastewater services to terminate service to the residence of any customer who provides the certification of a licensed physician or a nurse practitioner that the customer has a serious medical condition or the customer resides with a family member with a serious medical condition.” The 2024 legislation requires the SCC to broaden the scope of the current regulations, which only apply to electric and water utility services. The order includes proposed amendments to the Commission’s current regulations.
Interested parties may file comments on the proposed regulations on or before December 2. Parties may also request a hearing regarding this issue on or before that date.
Renewable energy, efficiency, and new energy infrastructure:
- Dominion Energy proposes experimental “carbon-free” energy tariff for commercial and industrial customers – Case No. PUR-2024-00114
On June 25, Dominion Energy Virginia (“Dominion”) filed an application for approval of a voluntary carbon-free tariff option for non-residential customers. The tariff, designated “Carbon-Free or Renewable Generation Supply Service” or “Schedule CFG” would allow participating customers to enter contracts to purchase the output from specific renewable or carbon-free generation facilities. Dominion states that “Schedule CFG is a unique product in the sense that it allows individual customers to contract for carbon-free or renewable generation from facilities that meet their specific needs and then receive the costs and benefits for that on their bill from the Company.” Dominion states that its “other renewable offerings are more uniform in their application, and the Company or a third-party provider controls the facility selection. By contrast, Schedule CFG will allow the customer to select the type and location of the facility.” Dominion also states that carbon-free energy could include nuclear or clean hydrogen facilities.
Dominion requests approval of the CFG tariff as a “experimental rate” pursuant to Va. Code Section 56-234(B). This Code section allows the SCC to approve special tariffs and rate design experiments if they would allow the utility “to acquire information that is or may be in furtherance of the public interest.” The SCC will hold an evidentiary hearing on October 30.
- SCC schedules hearing regarding Dominion public charging tariff proposal – Case No. PUR-2024-00157
On August 28, Dominion Energy Virginia filed an application for approval of an experimental public charging rate schedule, designated “Schedule GS-3 EV Public Charging.” The application is filed under § 56-234(B) of the Code of Virginia. This Code section allows utilities to propose special rates and “experimental” tariffs that are designed to acquire information that “may be in furtherance of the public interest.”
The tariff is designed for non-residential customers who operate public charging service stations. Eligible customers must take service under the utility’s GS-3 rate schedule. The tariff would be available to GS-3 customers whose peak measured demand has reached or exceeded 500 kW during at least three billing months within the current and previous 11 billing months. The application states that the proposed tariff would offer non-residential public charging service stations a non-demand and demand billing option based on the customer’s usage. The SCC will hold an evidentiary hearing on the proposal on January 16, 2025. Interested parties can intervene in the case by filing a notice of participation on or before December 2.
- Dominion files update on EV charging rates and tariffs – Case No. PUR-2021-00151
On September 27, Dominion filed a bi-annual update regarding its SCC-approved electric vehicle charging tariffs and rates. The SCC approved the five voluntary tariffs designed to support electric vehicle charging in a July 2022 order. In its bi-annual update, Dominion reports that it does not have any company-owned charging stations in service to date. Dominion also reports that 83 residential customers are enrolled in the company’s residential charging tariff, including 16 customers who qualify as “low-income.” No customers are currently enrolled in the company’s fleet tariff for commercial and industrial customers. Dominion states that charging infrastructure is in the design and engineering phase for several commercial and industrial customers who will subscribe to charging tariffs in the future.
- Electric utilities and solar advocates file comments regarding proposed regulations for shared solar program – 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 legislation, among other things, established a shared solar program for APCo. The legislation directed the Commission to recalculate the “minimum bill” that participating customers must pay to the utility each month. The legislation also allows the SCC to expand the capacity of Dominion’s shared solar program by an additional 150MW.
Several interested parties filed comments on the 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. The SCC’s August 12 order directs the SCC Staff to review all comments and file a response on October 10.
- Environmental advocates file direct testimony regarding Dominion Energy Virginia’s energy savings targets – Case No. PUR-2023-00227
On January 5, the SCC established a proceeding to set energy efficiency savings targets for electric utilities. The SCC’s order notes that the 2020 Virginia Clean Economy Act (“VCEA”) established annual savings targets for Dominion Energy Virginia and Appalachian Power Company through 2025. For 2025, the statute directs APCo to implement energy efficiency measures designed to achieve annual energy savings equal to “at least 2.0 percent of the average annual energy jurisdictional retail sales by that utility in 2019.” Dominion’s statutory target for 2025 is 5.0% of the utility’s retail sales in 2019. The statute, at Va. Code § 56-596.2(B)(3), provides that “[f]or the time period 2026 through 2028, and for every successive three-year period thereafter, the [SCC] shall establish new energy efficiency savings targets.” The statute also provides that “[i]n advance of the effective date of such targets, the Commission shall, after notice and opportunity for hearing, initiate proceedings to establish such targets.”
The SCC’s initial procedural order directed Dominion and APCo to file energy savings proposals on June 12. APCo’s proposal urges the Commission “to establish energy efficiency savings targets for the period 2026 to 2028 to remain at 2.0% of the Company’s 2019 average annual energy jurisdictional retail sales.” Dominion’s proposal recommends that the Commission decrease its savings target to between 2.09% and 2.72%, on a net savings basis, between 2026 and 2028. Dominion states that its studies “have shown declining savings potential.” On July 26, the SCC published procedural schedules for reviewing each utility’s proposal. Dominion’s savings targets will be reviewed in docket number PUR-2023-00227 and APCo’s targets will be reviewed in docket number PUR-2024-00134.
On September 16, environmental advocates filed direct testimony criticizing several aspects of Dominion’s proposal. The Sierra Club filed testimony recommending, among other things, that the Commission increase Dominion’s savings targets to at least 175% of the levels proposed by Dominion. Appalachian Voices also filed testimony urging the Commission to reject Dominion’s proposed savings targets and instead require the utility to achieve a 7.0% target by 2028. The SCC will hold an evidentiary hearing regarding Dominion’s proposal on October 15.
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