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Direct Energy Seeks Judgment Concerning Rules For Serving Virginia Retail Electric Customer

August 29, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Direct Energy has petitioned the Virginia State Corporation Commission for a declaratory judgment concerning several aspects of retail electric suppliers' ability to serve customers with a 100% renewable electricity product.

EnergyChoiceMatters.com was first to report Direct Energy's intent to seek such a judgment last week

Serving customers with, "electric energy provided 100% from renewable energy," if the utility, "does not offer an approved tariff for electric energy provided 100% from renewable energy," is one of the limited exceptions allowing for retail choice in Virginia.

While certain utilities have filed green tariff programs with the SCC, to date, the SCC has not found that any utility offers a tariff that meets that statutory requirement that would preclude such competitive retail sales (for example, the SCC has ruled utility REC-only programs do not meet the statuary standard which triggers the prohibition on competitive retail sales)

Direct Energy, which intends to market a 100% renewable product initially to residential customers, asked the SCC to rule that Direct Energy may:

A. continue to provide a 100% renewable energy product to existing and future Dominion Virginia Power customers once Dominion Virginia Power has in place an approved tariff to provide 100% renewable energy in its service territory;

B. provide a 100% renewable energy product to commercial and industrial customers whose demand for the previous calendar year exceeded five MWs; and

C. indicate to commercial and industrial customers that they are not subject to the five year minimum stay provision because they are purchasing a 100% renewable energy product from Direct Energy.

Concerning the 100% renewable exception, Direct Energy noted that, under statute, if the incumbent utility receives approval from the SCC to also offer a 100% renewable product, no new competitive service provider may offer that product to customers in the utility's service territory.

"The statute also states, however, that the competitive service providers already offering the 100% renewable product to existing customers may continue to do so even after the Commission approves a 100% renewable energy tariff," Direct Energy noted

"In order to ensure the economic feasibility of its proposed entry into the Virginia energy market, Direct Energy must be assured that an approved Dominion Virginia Power 100% renewable energy tariff will not preclude Direct Energy from offering to serve its then-existing customers, as well as other customers who wish to take such service from Direct Energy," Direct Energy said.

Direct Energy said that Virginia Code § 56-577 (A) (5) (b) allows Direct Energy to continue to serve existing customers with a 100% renewable energy product, "for the duration of such agreement."

"However, Direct Energy will not be providing service pursuant to specific and individual 'agreements' with such customers beyond that which is required by 20 VAC 5-312-80 (C); it will instead be offering service generally to all customers in a particular class (residential, commercial or industrial) pursuant to standardized rates and terms and conditions associated with providing this product. In this case, the existing customers to which Direct Energy may continue to market its services after acceptance of a Dominion Virginia Power 100% renewable energy tariff is most reasonably construed to mean Dominion's overall customer base. Accordingly, Direct Energy should be able to serve new customers even after Dominion Virginia Power offers an approved 100% renewable energy tariff. A contrary result, in which a competitive service provider is unable to market to new customers after a certain event, would make it inefficient, uneconomical and impractical for any competitive service provider, including Direct Energy, to participate in the Virginia market under the existing rules on a widespread basis in the Dominion Virginia Power service territory," Direct Energy said

Concerning commercial customers, Direct Energy noted that Virginia Code § 56-577 (A) (3) allows commercial and industrial customers whose demand for the previous calendar year exceeded five MWs to purchase energy from a competitive service provider. The General Assembly has predicated this ability on the requirements in Virginia Code §§ 56-577 (A) (4) and (5). Notably, under the 5 MW exception alone (not the renewable exception), a five-year notice period is generally required for any return to utility supply.

"In light of the requirement in Virginia Code § 56-577 (A) (5) (b) that a customer may continue to purchase 100% renewable energy from a competitive service provider for the duration of the power purchase agreement, Direct Energy must be assured that an approved Dominion Virginia Power 100% renewable energy tariff will not preclude Direct Energy from offering to serve its then-existing commercial and industrial customers whose demand exceeds five MW customers, as well as future similarly situated customers who wish to take such service from Direct Energy," Direct Energy said.

Direct Energy noted that the Commission's regulations implementing Virginia Code § 56-577 (C) do not address whether individual or aggregated customers with a demand of 5 MW or greater receiving 100% renewable energy from a competitive service provider must provide five years' notice to the investor owned utility in order to return to the investor owned utility for supply.

"Such a minimum stay requirement would make it virtually impossible for Direct Energy to attract such customers for its 100% renewable product. It is therefore essential that the Commission determine that individual or aggregated customers with a demand of 5 MW or greater receiving 100% renewable energy from a competitive service provider be exempt from five year stay requirement in 20 VAC 5-312-80 (Q)," Direct Energy said

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