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FERC Denies Changes In Allocation Of Transmission Charges That Retail Suppliers Had Said Would Stifle Retail Competition

February 19, 2018

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

FERC denied, without prejudice, proposed tariff revisions from Virginia Electric and Power Co., d/b/a Dominion Energy Virginia to change the calculation of Network Service Peak Load for transmission customers in the Dominion Zone.

Specifically, Dominion had proposed incorporating a new average demand calculation that would serve as a backstop to the current annual coincident peak demand methodology. Dominion has said that the proposed change was made in order to reduce a transmission customer’s incentive to avoid consumption during the system peak, and thereby shift transmission costs to other transmission customers.

See background on the specific methodologies and change here

In brief, under the change, Dominion would allocate Network Service charges based on the higher of an LSE’s 1-CP load contribution, or its average load.

In a protest of the filing, Calpine Energy Solutions had said that, "retail competition would be impeded if Dominion were permitted to change its NSPL contribution methodology as proposed and thereby limit efforts by CSPs in Virginia to compete to provide services and products at the lowest competitive price."

In rejecting Dominion's proposal, FERC said, "Traditionally, public utility transmission providers have relied on the demand of its transmission customers at its system’s coincident peak to determine each customer’s network transmission service charges. A public utility transmission provider may adopt a different approach, but it must adequately support it. Here, Dominion has failed to do so. Dominion relies on a hypothetical situation under which a transmission customer could reduce its load at Dominion’s coincident peak to avoid Network Service charges, shifting costs to other transmission customers; however, Dominion has not provided any evidence that such cost shifts have actually occurred or are likely to occur. The Commission cannot determine the justness and reasonableness of Dominion’s proposal given the lack of evidence to support the existence of the problem and the solution to the potential problem."

"Moreover, while Dominion claims that its proposal will ensure that each of its transmission customers pay for their use of the transmission system, Dominion does not adequately explain how using a transmission customer’s average demand to establish billing determinants only when that customer’s average demand is greater than its coincident peak demand achieves this result. Based on the record before us, we find Dominion’s justification for its proposal inadequate, and reject the instant filing," FERC said

Docket No. ER18-493-000

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