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Virginia SCC Staff: Granting Wal-Mart Petition To Take Competitive Retail Supply Would Have "De Minimis" Impact On Utility Ratepayers
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Granting an application from Wal-Mart Stores East, LP and Sam's East, Inc. to aggregate load and take competitive retail supply in the Dominion Energy Virginia (DEV, or Dominion, or Virginia Electric and Power Company, or VEPCO) service area would have a "de minimis" impact on DEV and its ratepayers, Staff of the Virginia State Corporation Commission said in a recent report
Under Code § 56-577 A 3, retail access to competitive electricity supply is available to certain large customers with demand exceeding five megawatts.
Wal-Mart is seeking to aggregate the demand of 120 individual Wal-Mart locations and related accounts, which are all nonresidential retail customers. The combined total peak demand of the stores is 70.52 megawatts
While DEV has raised objections to Wal-Mart's petition, the Staff report states, "Staff notes that DEV does not appear to provide any specific evidence in its Comments that approval of this Petition will adversely impact DEV or its remaining customers."
The Staff report further states, "Further, information provided by DEV in its most recent Integrated Resources Plan indicates that DEV's system peak is expected to exceed 17,000 MW in 2017, and grow by an annual average of 1.3% over the next 15 years. As previously noted, Wal-Mart has a peak demand of 70.52 MW, which is only approximately 0.40% of the system peak. The Comments of Calpine, Direct Energy, and MP2 reference the Commission's granting of the Reynolds Petition and that the load loss from the granting of the Wal-Mart Petition is de minimis. Staff does not disagree with this statement."
"The Wal-Mart Petition is the equivalent of a load of loss by DEV with the exception that distribution and transmission load are retained. The loss of generation load would in Staff's opinion have a de minimis on the Company and other ratepayers resulting from the loss of profitability from a generation rate perspective. Similarly, loss of load could have a de minimis impact on fuel costs depending on how the load curve is affected and on off-system sales as more energy is available for the PJM market. The profit associated with off-system sales is shared between die ratepayer and shareholder. Finally, any loss of load that offsets the system peak could have a de minimis impact on capacity needs," the Staff report states
Consistent with Staff's recommendation in the Reynolds case, Staff recommended various reporting requirements if Wal-Mart's petition is granted
In comments in response to the Staff report, Dominion said that Staff and Wal-Mart inappropriately use a 1% load threshold to determine whether there are any adverse impacts on ratepayers from the aggregation of customers for retail supply
"Subdivision A 4 contains no presumption -- express or implied -- in favor of approval of a petition to aggregate load that on its own or in combination with previously approved aggregation petitions is less than 1% of a utility's peak load. Instead, by its plain terms, the Commission must find whether the Company or other retail customers are adversely affected by the proposed aggregation and, if so, whether those adverse effects are contrary to the public interest," Dominion said
"Rather, the language of Subdivision A 4 requires the Commission to consider whether granting a petition to aggregate would adversely affect the Company and its customers in a manner contrary to the public interest. Importantly, granting an aggregation petition could adversely affect the Company and its customers in a manner contrary to the public interest regardless of whether the load to be aggregated is less than 1% of the incumbent electric utility's peak load," Dominion said
Dominion said, "As of March 31, 2018, the load of customers who have chosen to obtain electric energy from an alternate supplier under Subdivision A 3 and A 5 is 43.7 megawatts ('MW'). Walmart is proposing to aggregate 70.5 MW, and the Commission previously granted Reynolds Group Holdings Inc.'s request to aggregate 10.1 MW. Thus, the cumulative load that should be considered is 124.3 MW. Considering the Petition in this context ... shows that granting permission to aggregate and take supply from a licensed CSP would shift costs, adversely affecting the Company and its remaining customers in a manner contrary to the public interest."
Dominion noted that the total competitive retail load of 124.3 MW, if Wal-Mart's petition is granted, would be 0.89% of the measured peak load of the VEPCO's jurisdictional customers
Case PUR-2017-00173
Separately, the SCC also recently granted Texas Retail Energy, LLC, a unit of Walmart, an electric competitive service provider license
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April 25, 2018
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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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