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Direct Seeks Dismissal Of Dominion Virginia Power Application For Renewable Supply Tariff (Tariff Would Foreclose Ability Of Certain Customers To Take Competitive Supply)

July 27, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Direct Energy Services, LLC asked the Virginia SCC to dismiss an application from Dominion Virginia Power for approval of 100 percent renewable energy tariffs, as Direct argued that as Dominion's application lacks information on the rate or source of renewable power under the program, "it fails to provide any basis on which the rates to be charged could be determined to be reasonable and just, or any basis on which the proposed rate schedules could be determined to be in the public interest."

As previously reported, under Dominion's application, non-residential customers with peak measured demands of 1,000 kW or greater could voluntarily elect to purchase 100 percent of their energy needs from renewable energy resources. Under the program, customers would negotiate individually with Dominion to take such service, there would be no uniform tariffed rate. Instead, there would be a requirements contract between Dominion and the customer that would define the terms of the customer's purchase of renewable energy, including the negotiated all-inclusive rate.

In response, Direct Energy said in its motion that, "Rather than specifying the rates to be charged, the renewable resources to be assembled or the product mix to be provided, Virginia Electric and Power Company ('Dominion' or 'Company') is asking the Commission, its customers and all of the other stakeholders to 'Trust us. We'll make sure it all turns out to be just and reasonable in the end.' Dominion actually seeks nothing more than the ability it already has to enter into special contracts, but with the added 'benefits' of avoiding Commission oversight while eliminating competition."

"[T]he tariffs Dominion proposes are not tariffs at all. They do not set out the terms at which service will be provided. They merely provide an unnecessary framework within which Dominion would negotiate unique contracts with individual customers. Dominion's proposal attempts to provide an illusion of competition, but without any competitors, and also without regulatory oversight. Dominion's application lacks any essential substance and seems designed for the principal purposes of avoiding required Commission oversight and improperly eliminating competition," Direct Energy said in its motion

Virginia Code § 56-577 (A)(5) provides that individual customers, regardless of customer class or size, may purchase from a competitive 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."

Direct said in its motion that, "Dominion proposes to add to the actual costs of purchased power its ROE plus an administrative fee, which is entirely inconsistent with the typical practice of providing purchased power costs at no mark-up to customers. This appears on its face to be unreasonable."

To the extent the SCC declines to dismiss the application, Direct Energy said that Dominion’s application be abated until two precedential cases are resolved to help inform parties intervening in the Dominion proceeding. These proceedings involve Appalachian Power Company’s renewable power application (which a Commission Hearing Examiner has recommended rejecting) and Dominion’s recently noticed appeal to the Virginia Supreme Court which seeks to overturn the SCC's order in response to Direct Energy’s declaratory judgment petition, which clarified the rules governing competitive service providers’ sales to residential, commercial and industrial customers.

Direct Energy issued the following statement concerning its motion to dismiss:

"Dominion’s proposal attempts to provide an illusion of competition, but without any competitors. Its renewable tariffs without pricing or sourcing terms, if approved, also have the added 'benefits' to Dominion of avoiding Commission oversight, while simultaneously eliminating renewable choices for customers. Given these deficiencies, we respectfully ask the Commission to dismiss Dominion’s renewable application," stated Ron Cerniglia, Direct Energy’s Director of Corporate & Regulatory Affairs.

Docket PUR-2017-00060

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