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Virginia Utility Says 5+ MW Customers Otherwise Permitted To Take Retail Choice Aren't Allowed To Purchase 100% Renewable Power from Retail Supplier If Utility Offers Green Tariff

October 17, 2016

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

Virginia customers with loads in excess of 5 MW, while permitted to take competitive retail electric supply, may not purchase 100% renewable energy from a retail supplier if the customer's incumbent utility offers a 100% renewable energy tariff approved by the State Corporation Commission, Appalachian Power said in response to a petition for declaratory judgment from Direct Energy

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). Under the 5 MW exception alone (not the renewable exception), a five-year notice period is generally required for any return to utility supply.

Section (A)(5) provides that individual customers, regardless of customer class or size, may purchase from a retail supplier, "electric energy provided 100% from renewable energy," if the utility, "does not offer an approved tariff for electric energy provided 100% from renewable energy."

As exclusively reported by EnergyChoiceMatters.com, Direct Energy had asked 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, and concerning rules applicable to serving customers under the 5 MW exemption.

In comments on the petition, Appalachian Power said that, "the plain and unambiguous text of Section 56-577.A.5.a makes clear that if ... customers are located in the service territory of a utility that has an approved tariff for electric energy provided from renewable energy, no customer, regardless of size, can purchase 100% renewable energy from a CSP [competitive service provider]."

However, Dominion Virginia Power does not agree with this interpretation in its filed comments.

"Section A5 is a general grant of authority to all customers in a utility's service area, including those that do not meet the demand requirements in Section A3. Where two statutes govern the same thing (in this case purchases of electricity from a CSP), the more specific statute will control. In this case. Section A3 specifically governs purchases of electric energy from a CSP by customers with demands in excess of five megawatts; accordingly, the specific provisions of Section A3 will govern any such purchases," Dominion said

"When a customer with a demand greater than five megawatts seeks to purchase electricity from a CSP, it does so under the provisions of Section A3, regardless of the source of electricity used to serve the load," Dominion said

"In short, commercial and industrial customers with demands in excess of five megawatts are free to purchase renewable energy from a licensed CSP, but they do so under the specific authority in Section A3," Dominion said, noting such conditions include a 5-year notice requirement before competitive supply customers are able to return to utility supply (which does not apply to customers taking service under section A5, the 100% renewable exemption).

More generally, both Appalachian Power and Dominion oppose the declaratory judgment being sought by Direct Energy as contrary to the language of the statute. The utilities said that, outside of existing power purchase agreements with customers in effect on the date that any utility 100% green tariff is filed, retail suppliers may not rely on the renewable power exemption to offer service to customers. New customers, utility said, may not be enrolled once such 100% green utility tariff is in place, and the fact that a retail supplier was marketing in a service area with generic "agreements" not specific to individual end use customers cannot circumvent the statutory language that a PPA be in place with a customer for competitive service to the customer to be grandfathered (and only then, through the term of the PPA).

Utilities also said that the minimum stay and notice provisions are applicable to any service to customers in excess of 5 MW under the exemption under Section A3

Appalachian Power also said that Direct Energy's petition should be dismissed because it amounts to an impermissible request for an advisory opinion.

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