Virginia SCC Approves 100% Renewable Tariff At Dominion That Ends Exception Allowing Customers To Take Competitive Retail Supply

Rules On Eligibility Of Customers Signing Retail Supplier Contracts, But Not Yet Enrolled, To Take Retail Supply

July 2, 2020

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Ron Cerniglia, Director of Corporate & Regulatory Affairs for Direct Energy, provided the following statement on the SCC's order:

"We are disappointed that the SCC approved Dominion’s TRG one-size-fits all offering despite overwhelming opposition from virtually all parties in this proceeding. It should not be lost that NOT ONE customer or customer group expressed support for Dominion’s proposal and the Governor and Legislature made historic strides this year to recognize that competitive customer choice is an integral component of the Commonwealth achieving its 100% carbon reductions goals. Direct Energy and the growing coalition of environmental and business groups will continue to fight for the ability of customers to have choices when it comes to renewable options. Close to 1,000 MWs of customer load has switched since September 2019, demonstrating that customers want a choice from what they are receiving from Dominion., Virginia’s economic and renewable development efforts will be harmed given today’s decision reinforced the belief that there’s nothing more expensive than allowing Dominion to control all decisions around the green economy,"

--- Ron Cerniglia – Director of Corporate & Regulatory Affairs for Direct Energy

As previously reported, earlier this year, Virginia Gov. Ralph Northam approved HB 868 which, if adopted by lawmakers again in the next legislative session, would permit all customers of the investor-owned utilities to take competitive retail electric supply, if the customer purchases 100% renewable electricity, regardless of whether the incumbent utility offers a 100% renewable supply tariff (see story here for details)

Earlier:

The Virginia SCC has approved a 100% renewable energy tariff option at Dominion Virginia Energy which triggers an end to a statutory exemption that allowed customers of any size to purchase electric supply from a competitive retail supplier for a 100% renewable plan

Statute allows shopping customers already purchasing 100% renewable supply to continue their existing competitive retail contracts. In a separate case, the SCC found that customers who have executed a 100% renewable energy agreement with a competitive retail supplier, but who have not yet been enrolled or switched, are not eligible to take competitive service under those retail contracts if the customers have not yet been switched prior to the utility 100% green tariff taking effect

Specifically, in Case PUR-2019-00094, the SCC approved Rider TRG,100 Percent Total Renewable Generation Rider, at Virginia Electric and Power Company d/b/a Dominion Energy Virginia (the "Company "), under §§ 56-577 A 5 ("Section A 5") and 56-234 of the Code of Virginia ("Code")

Code § 56-577 A 5 states in full:

5. Individual retail customers of electric energy within the Commonwealth, regardless of customer class, shall be permitted:

      a. To purchase electric energy provided 100 percent from renewable energy from any supplier of electric energy licensed to sell retail electric energy within the Commonwealth, other than any incumbent electric utility that is not the incumbent electric utility serving the exclusive service territory in which such a customer is located, if the incumbent electric utility serving the exclusive service territory does not offer an approved tariff for electric energy provided 100 percent from renewable energy; and

      b. To continue purchasing renewable energy pursuant to the terms of a power purchase agreement in effect on the date there is filed with the Commission a tariff for the incumbent electric utility that serves the exclusive service territory in which the customer is located to offer electric energy provided 100 percent from renewable energy, for the duration of such agreement.

In other words, in the absence of a qualifying renewable energy tariff from the utility, any size customer could elect competitive retail supply for 100% renewable energy. Once the utility offers an approved 100% renewable tariff under this section, this ability of any size customer to take competitive supply is removed, except that existing customers may continue to take competitive supply for the duration of their agreement

The SCC found that Rider TRG is designed to supply the customer's full load requirements with electric energy provided 100 percent from "renewable energy" as defined by statute, consistent with the Commission's precedent concerning such tariffs. Therefore, Dominion will now offer a qualifying 100% renewable tariff, and the 100% renewable competitive supply exemption will terminate

The SCC found, "We continue to find it is reasonable, for purposes of supplying 100 percent renewable energy under Section A 5, to match renewable generation with a participating customer's load on a monthly basis, as proposed by the Company."

The SCC found that Rider TRG may be "offered" under the terms of Section A 5 until it becomes fully subscribed, or until the Company fails to accomplish the monthly matching of load and supply, as approved in the order.

The SCC said that Rider TRG does not preclude customers ineligible to participate (i.e., those with peak demands at or above 5 megawatts, noted below) from purchasing electric energy provided 100 percent from renewable energy from a competitive supplier pursuant to Section A 5 (customers 5 MW or larger may take competitive supply under a separate exemption for large customers, regardless of renewable content)

Direct Energy had recommended a sunset provision providing that, should the Commission approve Rider TRG, it should sunset after six months of approval if Dominion Energy has not enrolled 100 MW of load that is comprised of at least 15,000 residential customers.

The SCC rejected this sunset provision proposed by Direct Energy

In the order, the SCC noted protests from parties that had stated that approval of Rider TRG would end the noted competitive supply exemption.

The SCC said that it, "recognize[s] the General Assembly's policy decision, which removes competition under Section A 5 if the utility has an approved tariff thereunder."

"In the exercise of the Commission's discretion, we have found - after fully considering the respondents’ opposition - that Rider TRG as approved herein is just and reasonable and in the public interest and, moreover, that neither the facts nor the law attendant to this case mandate rejection thereof," the SCC said

As proposed, Dominion expects that the TRG Portfolio will be able to meet the capacity and energy requirements of approximately 50,000 residential customers or their commercial equivalent

Under the Company's proposal, all customers with a peak demand of less than five megawatts in the most recent 12-month billing period would be eligible to participate in Rider TRG.

Enrollment Case

Separately, the SCC issued an order in a related "enrollment case", addressing the ability of customers who have executed an agreement with a competitive retail supplier for 100% renewable energy, but who have not yet been enrolled or switched to a retail supplier (completion of enrollment by the utility), to qualify as existing customers and to take competitive supply (and have their enrollment completed) even after any qualifying utility 100% renewable tariff otherwise ends the exemption for competitive supply

Direct Energy had filed with the Commission a Petition for Declaratory Judgment and Request for Expedited Action against Dominion seeking an order finding that a customer of Dominion has the right to purchase 100% renewable energy from a CSP [competitive supplier] under § 56-577 A 5 of the Code of Virginia ("Code") as long as the customer has executed a service contract with the CSP prior to the effective date of a compliance filing submitted by Dominion associated with an approved tariff for Dominion's provision of 100% renewable energy.

The SCC found that, "the plain language of the Code mandates that a customer must have already enrolled in or switched to the CSP's electric supply service at the time Dominion files an approved 100% renewable energy tariff with the Commission in order to take such service from the CSP after Dominion's tariff becomes effective."

Quoting statute, the SCC said that § 56-577 A 5 a does not authorize customers to enter into agreements with CSPs, but instead, "allows retail customers to purchase 100% renewable energy from CSPs if the incumbent does not offer a 100% renewable energy tariff."

"Once the incumbent utility offers an approved 100% renewable energy tariff, customers are no longer allowed to purchase from CSPs unless they are already purchasing from a CSP pursuant to an effective power purchase agreement. The Code clearly states that such customers may 'continue purchasing' renewable energy from the CSP. Consequently, the customer must already be purchasing from the CSP at the time Dominion files its tariff (and not merely have entered into an agreement to do so in the future), else there would not be any purchases to continue," the SCC said

Case PUR-2020-00044

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