SCC News

RICHMOND — The State Corporation Commission (SCC) The State Corporation Commission (SCC) has directed regulated electric, natural gas and water companies in Virginia to suspend service disconnections until the coronavirus outbreak subsides.

The 60-day temporary moratorium on disconnects provides immediate relief for any customer, residential and business, who may be financially impacted by the COVID-19 outbreak. In taking this action, the Commission order takes judicial notice of the ongoing public health emergency related to the spread of the coronavirus.

The Commission recognizes the current situation continues to evolve and may take further action, if necessary.

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Case Number PUR-2020-00048 - Order Suspending Disconnection of Service and Suspending Tariff Provisions Regarding Utility Disconnections of Service

Contact: Ken Schrad (804) 371-9858​

RICHMOND — The State Corporation Commission (SCC) announced today that the North American Numbering Plan Administrator (NANPA) has assigned a new area code to the Hampton Roads region. The new 948 area code will relieve the future exhaustion of phone numbers in Virginia’s 757 area code.

The 757 area code region encompasses the vast majority of the Hampton Roads metropolitan area, including Williamsburg, Franklin and Suffolk in the west, and Virginia Beach and the Eastern Shore to the east. The area code was created in 1996, splitting off from the 804 area code which was nearing exhaustion at that time. Current estimates predict the available numbers in the 757 region will run out during the fourth quarter of 2021.

Under a relief plan approved by the SCC, the new 948 area code will be phased into the existing 757 area code region. While the plan will require 10-digit dialing for local calls, the Commission determined that an all-services overlay is “the most equitable and reasonable approach for providing area code relief.” No phone numbers currently used in the 757 area code region will be altered, allowing residents and businesses to keep their existing numbers.

The Commission agreed with the findings of an SCC hearing examiner following a series of public hearings in the 757 region last year. An all-services overlay is also the relief method preferred by the telecommunications industry, as it is the least disruptive for customers in the region.

Following the order issued by the SCC, telecommunications industry service providers will move forward with a proposed 13-month implementation schedule. Under the plan, there will be a six-month permissive dialing/customer education period during which calls within the 757 number plan area can be completed using either 7- or 10-digits. The permissive dialing period is used to ease the transition from 7-digit to 10-digit dialing so customers can be educated on the changes without having calls impacted prior to assignment of the 948 area code.

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Case Number PUR-2019-00059 - Ex Parte: In the matter of the Commission’s investigation into exhaust relief for the 757 area code

Contact: Allan A. Sharrett (804) 371-9968 

RICHMOND — The State Corporation Commission (SCC) has set three local hearings in March 2020 to receive public comments on a proposed solution for resolving the exhaustion of available phone numbers in the 540 area code.

The federal regulatory authority responsible for resolving area code exhaustion, the North American Numbering Plan Administrator (NANPA), has recently filed an application with the SCC to begin the relief planning process. According to NANPA, subscriber growth and the expanding number of devices requiring phone numbers will exhaust the numbers available in this area code in 2022. The 540 area code was created in 1996, splitting off from the 804 area code which was nearing exhaustion at that time.

The solutions being considered for resolving the area code exhaustion include:

• An all-services overlay: This would superimpose a newly assigned area code over the area currently covered by the existing 540 area code. The entire current 540 area would then be covered by both the 540 area code and the newly assigned area code.
• A geographic split: This would carve the existing 540 area code zone into two separate areas. One region would retain the 540 area code and the other would convert to a newly assigned second area code.
• A 540 and 434 overlay, or a 540 and 276 overlay: In both options, the current 434 area code area OR the current 276 area code area would be “combined” with the current 540 area code area. If approved, the near exhausted 540 area would be combined with areas in either the 434 or 276 area code. Then those numbers would be assigned in areas of both 540 and 434; or the 540 and 276.

To allow for ample public opportunities to comment, the SCC has scheduled the following public hearings to receive comments from residents in the affected area code:

• March 3, 2020, at 2 p.m. and 6:30 p.m., in the Roanoke City Council Chambers, Noel C. Taylor Municipal Building, 215 Church Avenue, S.W., Room 450, Roanoke
• March 4, 2020, at 2 p.m. and 6:30 p.m., in the Rockingham County Administration Center, Board of Supervisors Meeting Room, 20 E. Gay Street, Harrisonburg
• March 5, 2020, at 2 p.m. and 6:30 p.m., in the Warren County General District Court, Courthouse Square, 1 East Main Street, Front Royal
• The hearing will continue in Richmond on May 6, 2020, at 10 a.m., in the Commission’s second-floor courtroom located in the Tyler Building at 1300 East Main Street.

Any person wishing to comment at any of the hearings should arrive early and sign in with the SCC bailiff. The SCC will webcast an audio stream of the Richmond hearing. Instructions for listening to the proceeding can be found online at www.scc.virginia.gov/pages/Webcasting.

Written comments on the case must be submitted by April 29, 2020, and be sent to the Clerk of the State Corporation Commission, Document Control Center, P.O. Box 2118, Richmond, Virginia 23219-2118. Please refer to case number PUR-2019-00148 when commenting. Individuals may also submit comments online at www.scc.virginia.gov/casecomments/Submit-Public-Comments. Find case number PUR-2019-00148, and click on the “Submit Comments” button for this case.

For more information about this case, the Division of Public Utility Regulation has posted frequently asked questions related to area code exhaust and solutions.

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Case Number PUR-2019-00148 - Ex Parte: In the matter of the Commission’s investigation into exhaust relief for the 540 area code

Contact: Allan A. Sharrett (804) 371-9968

RICHMOND — The State Corporation Commission (SCC) has rejected a proposal from Dominion Energy Virginia to set its future rate of return on equity at 10.75 percent. Instead, the SCC approved a rate of 9.2 percent.

The return on equity is effectively the allowed profit that Dominion’s shareholders receive on their investment in Dominion’s equity. The return on equity set by the Commission impacts two major components of the monthly electric bill paid by customers. It will be used in future rate adjustment clause cases. Through these rate riders, Dominion collects from its customers the costs of various capital projects, including the authorized profit on those capital expenditures.

In an annual report to the General Assembly last August, the SCC reported that Dominion is planning new capital expenditures of more than $12 billion between 2019 and 2023. If the capital expenditures are approved by the Commission, Dominion is eligible to collect a return on equity on the projects through its Virginia customers’ rates.

For illustration, on $12 billion of capital expenditures recovered over 25 years (a minimum recovery period for recent capital projects), a 155-basis point difference in rate of return (the difference between 10.75 percent and 9.2 percent) could cost customers an additional $1.4 billion.

Secondly, the return on equity will be used during the 2021 review of Dominion’s earnings on base rates for years 2017 through 2020, under applicable state law.

In rejecting Dominion’s requested return on equity (ROE) of 10.75 percent, the Commission said that the proposed profit “represents neither the actual cost of equity in the marketplace nor a reasonable ROE for [Dominion]. Nor is Dominion’s proposed ROE of 10.75% consistent with the public interest.”

In contrast, the Commission found that a return of 9.2 percent was “consistent with the public interest” and “reasonably balances the interests of [Dominion], its customers, and its investors.”

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Case Number PUR-2019-00050
2019 Report on Electric Utility Regulation

Contact: Ken Schrad (804) 371-9858​

RICHMOND — The State Corporation Commission (SCC) has scheduled a January hearing to consider a plan for electric distribution grid transformation projects proposed by Dominion Energy Virginia. The company filed its petition for plan approval on September 30, 2019.

In its petition, the company states that the proposed grid technologies and grid hardening projects will improve service reliability and support the integration of distributed energy resources. This three-year phase of the plan is estimated to cost $517.6 million in capital investment and $83.2 million in operations and maintenance expense. Overall, the 10-year plan is estimated to cost $2.8 billion in capital investment and approximately $480 million in operations and maintenance expense.

One component of the plan proposes to fully deploy advanced metering infrastructure across Dominion’s service territory over the next six years. This includes smart meters at all customer locations. As proposed, customers will have the option to decline a smart meter. However, doing so would involve a one-time opt out fee of $84.53 and an on-going monthly fee of $29.20. The fees are intended to recover the costs of a customer opting out of smart meter installation.

The public hearing is scheduled for 1:00 p.m. on Monday, January 27, 2020. The hearing will be held in the Commission’s second floor courtroom of the Tyler Building at 1300 East Main Street in downtown Richmond. Any person wishing to testify should appear prior to the hearing and sign in with the Commission bailiff.

Written public comments on the proposed plan are due by Tuesday, January 21, 2020. They may be sent to the Clerk of the Commission, Document Control Center, P.O. Box 2118, Richmond Virginia 23218-2118. All comments should refer to case number PUR-2019-00154. Comments may be submitted electronically at the SCC’s website: www.scc.virginia.gov/casecomments/Submit-Public-Comments. Click on the public comments/notices link and then the submit comments button for this specific case.

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Case Number PUR-2019-00154

Contact: Ken Schrad (804) 371-9858​

RICHMOND — Every three hours in the United States, a pedestrian or vehicle is hit by a train. During Rail Safety Week September 23-29, 2019, the State Corporation Commission (SCC) reminds Virginians to stay alert and always practice safe behavior around railroad tracks and trains.

A joint effort of Operation Lifesaver in the U.S. and Canada, Rail Safety Week is designed to raise awareness and highlight the importance of rail safety education. The goals of the effort include reducing collisions, fatalities, and injuries at highway rail crossings and preventing trespassing on or near railroad tracks.

Upon the SCC’s creation in 1902, railroad regulation was one of the original areas of responsibility assigned to it by the Virginia Constitution. Today, the Railroad Regulation section of the SCC’s Division of Utilities and Railroad Safety works closely with the Federal Railroad Administration to ensure the safe operation of railroads within Virginia. The Division of Utilities and Railroad Safety investigates citizen complaints of blocked rail crossings; conducts accident investigations; and performs railroad track bridge, rail car, and locomotive inspections. Its oversight includes two major railroads, nine short line railroads, and more than 6,700 miles of track.

Renée Salmon, Operations and Rail Safety Manager of the Division of Utilities and Railroad Safety said, “As the Commission’s Rail Safety Manager, I look forward to further expanding our rail safety outreach program. Rail Safety Week is an integral part of that outreach.”

The SCC offers Virginians the following rail safety tips:

• Be aware. Trains do not always follow set schedules. They can approach from either direction of the tracks at any time. When you are near train tracks, stay alert and remain a comfortable distance away even if you think trains aren’t coming.
• Trains have the right of way. To avoid collisions, yield to trains because they cannot yield to you. Even if you think you have time to cross railroad tracks, trains travel faster than they appear. Err on the side of caution. Before crossing, wait until the train passes, the warning gates rise, and lights signal to proceed.
• Always obey train crossing signals. Although you may not see a train coming, never cross when there is an active warning, such as flashing lights or a lowered arm, at a railroad crossing. Trains can be quiet and move more quickly than you expect. Do not risk your life by assuming that you can make it across the tracks before a train arrives.
• Cross tracks ONLY at designated pedestrian or roadway crossings. Never play, stop, or walk on the tracks.

For more information, visit the SCC Division of Utilities and Railroad Safety website at https://www.scc.virginia.gov/pages/Railroad-Regulation or call 804-371-9980 or go to Operation Lifesaver’s website at www.Oli.org.

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Contact: Emily Kirsner (804) 371-9141

RICHMOND — The State Corporation Commission (SCC) has approved a new rate rider for Dominion Energy Virginia to recover a portion of costs spent to meet state and federal environmental regulations. Known as Rider E, the rate adjustment clause will take effect on or before November 1, 2019.

Since 2007, Virginia’s two largest electric companies generally recover the cost of providing service, plus a reasonable return, through three bill components – base rates, a fuel charge, and rate adjustment clauses, also known as rate riders. The approval of Rider E means there are now 15 riders, including the fuel rate, paid by residential customers of Dominion Energy Virginia.

Initially, Rider E will pay for certain environmental projects, including cleaner disposal of coal ash, at several coal-fired power plants – Mount Storm Power Station in West Virginia, Clover Power Station in Halifax County and two units in Chesterfield County (5 & 6).

The Commission denied recovery of environmental costs for two other Chesterfield units (3 & 4). The Commission found that “Dominion has not established that the cost incurred … was reasonable and prudent at the time such cost was incurred.” The record showed the company made the decision in June 2015 to invest approximately $18 million in long-term environmental compliance for units it expected to retire or retrofit within five years.

The two Chesterfield units were placed into cold storage in December 2018 and permanently retired in March 2019. The Commission said the investment was for units “… not providing benefits to retail customers. In addition, because these units are retired, the investment is not currently necessary to comply with federal regulations.”

The Commission’s final order establishes the method for recovering approved environmental expenses. The company has been directed to calculate and file its Rider E tariff within 30 days.

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Case Number PUR-2018-00195

Contact: Ken Schrad (804) 371-9858​

RICHMOND — The State Corporation Commission (SCC) will hold a hearing in Norton in October to receive public testimony on an electric base rate increase requested by Kentucky Utilities Company, doing business in Virginia as Old Dominion Power Company.

According to the company, the proposed rate increase would raise the monthly bill of a residential customer using 1,000 kilowatt hours per month by $23.45, from $109.54 to $132.99, an increase of 21.41 percent.

The company states that the need for a base rate increase is caused by capital investments for generation projects as well as planned improvements on its transmission and distribution network.

A public hearing is scheduled in Norton on October 2, 2019, beginning at 4 p.m. and reconvening at 7 p.m. in the Norton City Council Chambers, 618 Virginia Avenue, NW. The hearing will resume in Richmond on January 22, 2020, beginning at 10 a.m. in the SCC’s courtroom on the second floor of the Tyler Building, 1300 East Main Street. Persons wishing to comment at any of the hearings should arrive early and notify the SCC bailiff.

Written comments may be sent by January 15, 2020, to the Clerk of the State Corporation Commission, Document Control Center, P.O. Box 2118, Richmond, Virginia 23218-2118. Please refer to case number PUR-2019-00060.

Persons desiring to submit comments electronically may do so at the SCC’s website at www.scc.virginia.gov/casecomments/Submit-Public-Comments Click on the PUBLIC COMMENTS/NOTICES link, find the comment box for case number PUR-2019-00060, and hit the SUBMIT COMMENTS button.

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Case Number PUR-2019-00060 - Application of Kentucky Utilities Company for an adjustment of electric base rates

Contact: Andy Farmer (804) 371-9141

RICHMOND — The State Corporation Commission (SCC) has approved the revised Integrated Resource Plan (IRP) filed by Dominion Energy Virginia. Last December, the SCC rejected Dominion’s original 2018 plan giving the company 90 days to revise it.

An IRP is the utility’s plan for the capital investments that it believes are necessary to provide reliable electricity service to its customers over the next 15 years (2019 to 2033).

While the SCC said that Dominion’s revised plan met the minimum filing requirements of Virginia law, it also warned that the IRP “may significantly understate the costs facing Dominion’s customers.”

The IRP includes a true least-cost plan as a benchmark for providing a reliable supply of electrical power. As ordered by the Commission, Dominion also showed the additional costs of the various legislative mandates contained in Senate Bill 966 passed by the 2018 General Assembly. And, evidence was presented at an SCC hearing in May on the capital spending plans that Dominion presented to Wall Street analysts earlier this Spring.

The evidence demonstrated that the Senate Bill 966 mandates will cost customers more than $6 billion in extra costs above the least-cost plan, not including lifetime financing costs.

The evidence also showed that the capital spending plans Dominion presented to Wall Street analysts on March 25, 2019 included approximately $12.1 billion in capital investment to be paid for by Virginia customers, the majority of which is eligible to be recovered through separate bill riders called rate adjustment clauses.

These costs will have an impact on the rates customers will pay in their monthly bills over the next five years and beyond. By December 31, 2023, the estimated monthly increase will be $29.37 for the average residential customer.

The Commission recognized that Dominion believes this monthly bill impact will be mitigated by lower fuel costs and other factors. However, the Commission noted that the $29.37 monthly bill increase does not include the monthly bill impact of several billion dollars of costs for the 2019 coal ash removal legislation that will be recovered from customers.

The Commission stated, “In sum, we approve Dominion’s IRP as legally sufficient, and we recognize the appropriateness of spending on capital projects when need is proven by factual evidence in actual cases. We do not, however, express approval in this Final Order of the magnitude or specifics of Dominion’s future spending plans, the costs of which will significantly impact millions of residential and business customers in the monthly bills they must pay for power.”

Virginia law now requires the company to submit an IRP every three years. The new schedule begins with Dominion’s next plan to be filed in May of 2020.

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Case Number PUR-2018-00065

Contact: Ken Schrad (804) 371-9858​

RICHMOND — The State Corporation Commission (SCC) has denied an application by Costco to leave the utility system of Dominion Energy Virginia and obtain the combined electric power needs of its retail stores from a third-party supplier.

As it ruled in a recent order denying a similar request by Walmart, the Commission found that if Costco, a large customer, left Dominion’s system, the remaining customers who do not have the legal right to leave and seek lower rates would be harmed by the resulting shifting of costs to captive customers. Captives include residential and small businesses which comprise most of Dominion’s customers.

Costco had argued that Dominion’s rate structure was unfair. During the case, Costco stated that it sought to leave Dominion’s system, “… based on Dominion’s piling on of rate adjustment clauses [(‘RACs’)], and [their] significant impact ….” Costco also said, “under the current statutory structure Dominion has been over-earning on its frozen base rates for a number of years,” and “it is enormously frustrating that an incumbent utility has an incentive to keep what [Costco views] as the customer’s money.” Costco also stated that “Dominion's piling on of excessive costs … was the motivation for the Costco Petition.” Costco further stated that, “Costco is also seeking to avoid the anticipated future rate increases” from “the huge potential cost impact if Dominion elects to fully implement the Grid Transformation and Security Act [Senate Bill 966 from the 2018 General Assembly Session].”

The SCC said that it “respects the economic and business goals reflected in Costco’s pleadings and testimony,” but that “if Costco believes that the current statutory structure for setting vertically-integrated electric utility rates results in unreasonable or unnecessarily high rates, its potential for recourse may be found through the legislative process.”

The SCC continued, “… [G]iven the context of a decade of rising rates and the likelihood of even higher rates in the future, the Commission does not find it consistent with the public interest for … captive customers – predominantly residential and small business – to experience the cost-shifting identified herein by enabling a larger commercial customer to seek its power supply elsewhere through aggregation.”

The Commission concluded, “This Commission will not allow small customers who cannot escape [Dominion’s rate] structure, predominantly small businesses and residential customers, to be further burdened by the identified cost-shifting that will occur if larger customers like Costco choose to seek better deals for themselves outside of Dominion's system.”

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Case Number PUR-2018-00088 – Petition of Costco Wholesale Corporation