SCC News

RICHMOND — The State Corporation Commission (SCC) has set four local hearings in August to receive public comments on a proposed solution for resolving the exhaustion of available phone numbers in the 757 area code.

The North American Numbering Plan Administrator (NANPA), filed an application with the SCC to begin the exhaust relief planning process. According to NANPA, subscriber growth and the expanding number of devices requiring phone numbers eventually exhausts the numbers available within an area code. The 757 area code was created in 1996, splitting off from the 804 area code which was nearing exhaustion at that time.

In this case, NANPA is recommending an all-services overlay as the solution for 757 area code exhaust. Under this plan, a new area code would be assigned to the existing 757 area code region once all available numbers are exhausted. This plan would require 10-digit dialing for local calls, but is the least disruptive option.

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:

• August 12, 2019, at 6:30 p.m. in the Board of Supervisors Room at the Southampton County Administration Building, 26022 Administration Center Dr., Courtland, Virginia 23837
• August 20, 2019, at 2 p.m. and 7 p.m., in the Board of Supervisors Room of the James City County Government Center, Building F, 101 Mounts Bay Rd., Williamsburg, Virginia 23185
• August 21, 2019, at 2 p.m. and 7 p.m., in Chesapeake City Council Chambers at the City Hall Building, 306 Cedar Rd., Chesapeake, Virginia 23322
• August 22, 2019, at 2 p.m. and 7 p.m., Board of Supervisors Chambers in the Accomack County Administration Building, 23296 Courthouse Ave., Accomac, Virginia 23301

The hearing will continue in Richmond on September 17, 2019, 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 September 10, 2019, 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-2019-00059 when commenting. Individuals may also submit comments online at www.scc.virginia.gov/case/PublicComments.aspx. Find case number PUR-2019-000059, 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-2019-00059 – Ex Parte: In the matter of the Commission’s investigation into exhaust relief for the 757 area code

Contact: Andy Farmer (804) 371-9141

RICHMOND — The State Corporation Commission (SCC) has approved a package of 11 new energy efficiency and demand response programs requested by Dominion Energy Virginia to run for a five-year period beginning July 1, 2019. In another order, the Commission approved an updated rate adjustment clause to cover the costs of Appalachian Power’s current energy efficiency and demand response programs for the rate year July 1, 2019, through June 30, 2020.

The Dominion package of programs includes six residential and five non-residential programs with an estimated cost of $225.8 million. In the Appalachian Power case, the SCC approved a revenue requirement of $5.68 million for the company’s energy efficiency and demand response portfolio for the 2019 rate year. The company was not requesting the SCC’s approval of any new programs in this case.

The Commission directed both companies to file in every future energy efficiency and demand side management (DSM) rate adjustment clause proceeding evidence of the actual energy savings achieved as a result of each specific program for which cost recovery is sought, along with revised cost-benefit tests that incorporate actual Virginia energy savings and cost data.

The SCC stated that the information will be relevant to at least two foreseeable issues. The first issue is identifying the true cost-effectiveness of DSM programs, which will enable the SCC to determine which programs should be expanded in scope and budget to maximize the reductions in energy usage, which ones are least effective and should have their budgets shifted to more effective programs; and which ones are not cost-effective and should be discontinued. The second issue is evaluating any claim by Dominion and Appalachian to cost recovery for lost revenues.

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Case Number PUR-2018-00118

Case Number PUR-2018-00168

Contact: Andy Farmer (804) 371-9141

RICHMOND — The State Corporation Commission (SCC) has scheduled a public hearing in Norton, on May 23, 2019, to receive public comment in a case involving a fuel rate increase requested by Kentucky Utilities Company, doing business in Virginia as Old Dominion Power Company. The fuel rate is the portion of the electric bill that pays for the cost of fuel used to generate electricity and power purchased from other utilities and power producers.

The hearing will begin at 6 p.m. at the City of Norton Municipal Building, 618 Virginia Avenue N.W. The hearing will resume in Richmond on June 12, 2019, at 1:30 p.m. The hearing will be held in the SCC’s courtroom on the second floor of the Tyler Building, 1300 East Main Street in downtown Richmond. Persons wishing to comment at either hearing should arrive early and notify the SCC bailiff.

The revised fuel rate of 2.643 cents per kilowatt-hour (kWh) will go into effect on an interim basis beginning on April 1, 2019. The proposed fuel rate represents an increase of $4.03 per month for a residential customer using 1,000 kWh per month.

Written comments on the request are due June 5, 2019, and may be sent to the Clerk of the State Corporation Commission’s Document Control Center, P.O. Box 2118, Richmond, Virginia 23218-2118. Please refer to case number PUR-2019-00029.

People desiring to submit comments electronically may do so via 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-2019-00029, and hit the “Submit Comments” button.

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Case Number PUR-2019-00029 – Application of Kentucky Utilities Company to revise its fuel factor

RICHMOND — The State Corporation Commission (SCC) has ordered a reduction in the rates of Dominion Energy Virginia and Appalachian Power Company on April 1. The reduction and forthcoming rate credits continues a directive of the Commission issued in January 2018 that ensures customers receive the benefits of the corporate tax cut contained in federal tax legislation passed by Congress in December 2017.

The federal corporate income tax rate was reduced from 35% to 21% effective January 1, 2018. A week later, on January 8, the SCC ordered the companies to preserve the savings from this tax cut for the benefit of their customers.

Last July, in response to legislation passed by the 2018 Virginia General Assembly, Dominion Energy Virginia reduced rates by $125 million, on an interim basis subject to further Commission review.

Because of the same legislation, Appalachian Power reduced rates by $50 million last July, also subject to further review. And, in November, Appalachian Power applied certain Federal tax savings as an offset to the revenue generated by the portion of the monthly bill that pays for the fuel used to generate electricity.

Since then, each company submitted additional filings with the Commission to make certain the tax savings are properly calculated and reflected in base rates as of April 1, 2019.

Dominion Energy Virginia’s base rates are being reduced by $182.5 million, or $57.5 million more than the interim rate reduction last July. Appalachian Power’s base rates are being reduced by $80.1 million, or $30.1 million more than last July.

Each company will be providing a one-time credit to customers to account for the difference in rates between the January 1, 2018 effective date of the Federal tax reduction and March 31, 2019, the last day of interim rates.

Dominion Energy Virginia must provide the one-time credit by July 1, 2019. Appalachian Power Company must provide the one-time credit by October 1, 2019.

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Case number PUR-2018-00054 – Appalachian Power Company federal tax rate reduction
Case number PUR-2018-00055 – Dominion Energy Virginia federal tax rate reduction

Contact: Ken Schrad (804) 371-9858

RICHMOND — The State Corporation Commission (SCC) has rejected Walmart's request for permission to leave the utility systems of Dominion Energy Virginia (Dominion) and Appalachian Power Company (APCo) to obtain electric power supply for its retail stores throughout Virginia from third-party suppliers.

The Commission found that if Walmart, a large-demand customer, left the utilities' systems, the remaining Dominion and APCo 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. Such captives represent the vast majority of both utilities' customers and include residential and small businesses.

Based on the record developed in this case, if Walmart's request to leave was granted, the costs shifted to remaining captive customers is estimated at $65 million for Dominion customers and $4 million for APCo customers over the next 10 years. The loss of Walmart's demand would cause, for remaining customers, a net increase in other costs, including rate adjustment clauses and base rates, and a possible decrease in rate refunds otherwise due to customers.

The Commission also considered Walmart's application in the context of the past ten years of rising rates for captive customers of Dominion and APCo. Over this time, the monthly bills for APCo residential customers have increased by $48, or 73 percent, and for Dominion residential customers by $26, or 29 percent. And, the Commission noted the likelihood of future rate increases stating, "Additional bill increases are expected as utilities incur new costs under the mandates of Senate Bill 966."

Enacted by the 2018 session of the Virginia General Assembly, Senate Bill 966 also contained a provision that automatically granted certain large-demand customers of Dominion the right to a two percent rate cut, a rate cut that was not available to residential and small-business customers, and that will result in cost-shifting to small-demand customers.

The Commission said, "In conclusion, given the context of a decade of rising rates and the likelihood of even higher rates in the future, we do not find it consistent with the public interest for captive customers who do not have the legal ability to obtain lower rates – predominantly residential and small business – to suffer from the cost-shifting identified [in this case] by enabling a large-demand customer to seek its power supply elsewhere..."

A provision of Virginia law mandates that a single customer with more than five megawatts of demand can leave the utility system and purchase power from a third-party vendor. Another provision of law allows, subject to the Commission's discretion, an applicant such as Walmart to aggregate the demand from many retail stores to reach the threshold. Walmart had applied under this provision, and the Commission used its legal discretion to deny Walmart's petition.

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Case Number PUR-2017-00173 & PUR-2017-00174

View Final Order

Contact: Ken Schrad, (804) 371-9858

RICHMOND — The State Corporation Commission (SCC) has approved a petition from Dominion Energy Virginia (Dominion) to build and own two solar generation projects.

As a condition of its approval, however, the SCC required a 20-year performance guarantee to protect Dominion’s customers from the risk of underperformance by the solar generators, which would drive up the costs to customers.

Dominion has proposed to charge customers for the costs of the projects through a rate adjustment clause, or separate rider, on customers’ bills. The power generated by the solar projects will be associated with renewable energy certificates (RECs) that will be purchased by Facebook’s new facility in the Richmond area. The revenue from the RECs will offset the cost to Dominion’s customers charged through the rider.

The SCC contrasted the financial structure of these projects with a Dominion solar project the Commission approved just a few months ago, in which Dominion will purchase the solar power from a third-party vendor through a contract. “With the [purchased-power] model [demonstrated in the Water Strider solar project] … performance risks are typically borne by the third-party vendor, not by customers. With a self-build option as proposed in this petition, Dominion’s customers bear both the performance and financial risks. Dominion bears little of either.”

The SCC further noted that: “From an economic standpoint, a solar project such as this one has two distinct advantages: there is no fuel-cost risk and there is no carbon-cost risk. Solar, however, under the present state of technology is intermittent and non-dispatchable, so the economic risk is significantly related to its performance at generating electrical power. Simply put, as performance falls short, the cost [to customers] goes up.”

The Commission found that for Dominion’s customers to break even on these projects, the solar facilities must produce a collective capacity factor – the time generating power – of at least 25 percent. Yet, evidence in the record showed that the actual capacity factors of other solar generators in Virginia have been below 20 percent.

The Commission pointed out that customers would bear the costs of underperformance in two ways: customers would have to make up the shortfall in REC revenues from Facebook and customers would bear the costs of energy purchases necessary to make up the shortfall.

To protect Dominion’s customers, the Commission conditioned its approval of these projects on a performance guarantee. The key conditions required by the Commission are:

• Dominion must guarantee a collective capacity factor performance of at least 25 percent. In any year in which performance falls below 25 percent, Dominion will bear the additional costs, not customers.
• The period of the guarantee is 20 years. The Commission pointed out that by the end of the 20-year period more than 75 percent of the costs of the projects will have already been paid through the rider, thus customers are protected from the bulk of the projects’ costs.
• Any claim of “force majeure” to explain underperformance will be limited to truly extraordinary events such as hurricanes, not just vagaries in weather.

Dominion must accept these conditions to proceed with construction of the solar facilities. During the hearing Dominion proposed a seven-year guarantee.

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Case Number PUR-2018-00101
View Order Granting Certificates

Contact: Ken Schrad (804) 371-9858

RICHMOND — The State Corporation Commission (SCC) has approved the cyber and physical security provisions of a proposed grid transformation plan submitted by Dominion Energy Virginia (Dominion). The SCC denied other provisions of the plan that were unsupported by the evidence or where the Commission determined the high costs to customers outweighed any proven benefits.

As presented, Dominion’s 10-year plan was projected to cost approximately $6 billion, including financing, to be recovered from its customers. In this proceeding, Dominion sought approval for the first three-year phase of the plan, which had a total cost of approximately $1.5 billion, including financing. The parts of the plan the SCC approved will cost $154.5 million to be recovered for the first phase. The parts the SCC denied would have cost $1.34 billion for the first phase and $5.07 billion in total.

In its final order, the Commission said, “Dominion’s proposed plan is expensive, so it is important that Dominion’s customers receive adequate benefit for the costs they will bear in their monthly bills.”

With respect to the denied elements, the SCC agreed with the Consumer Counsel of the Office of Attorney General, which argued, “the plan as filed is significantly lacking in detail...” The SCC also agreed with a witness for environmental groups who testified, “As a complete package, the … plan is not cost-effective and will result in an economic loss for all customers.”

The Commission stated, “While we find the plan elements related to cyber and physical security are well-conceived, well-supported and cost-effective, we find that the remaining plan elements, which will cost customers hundreds of millions of dollars, are not.”

One of the costlier elements of the plan that the SCC denied was advanced metering infrastructure, known as smart meters. The Sierra Club, Environmental Respondents and Consumer Counsel all opposed Dominion’s smart meter proposal as not cost-effective. The SCC agreed with an environmental-group witness who testified, “…without a well-reasoned plan, this expensive equipment could … provide little to no benefit to customers.”

Other elements of the plan that were denied included, among other things, grid hardening provisions which involved replacing and rebuilding certain primary electricity line segments. Consumer Counsel and environmental groups all opposed these plan elements as not providing sufficient benefit for their large cost. The Commission agreed.

The Commission’s denial of certain elements of the plan was “without prejudice.” Dominion is free to seek approval for an amended or better supported plan in the future if the company chooses to do so.

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Case Number PUR-2018-00100
View PUR-2018-00100 Final Order

Contact: Ken Schrad (804) 371-9858

RICHMOND — The State Corporation Commission (SCC) will hold a hearing to consider a request by Dominion Energy Virginia for a new rate adjustment clause aimed at recovering costs incurred to comply with state and federal environmental regulations.

The rate adjustment clause, designated Rider E, proposes a revenue requirement of $113.6 million during the 2019 rate year (Nov. 1, 2019-Oct. 30, 2020) to fund environmental projects at four of the company’s power stations.

According to the company, this rider would increase the monthly bill of a residential customer using 1,000 kilowatt hours per month by approximately $2.15.

A public hearing is scheduled for June 11, 2019, at 10 a.m. The hearing will be held in the SCC’s courtroom on the second floor of the Tyler Building, 1300 East Main Street in downtown Richmond. Anyone wishing to offer public comment at the hearing should arrive early and notify the SCC bailiff.

Written comments on the case are due by June 4, 2019. Anyone wishing to submit written comments may do so by mailing them 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-2018- 00195.

Members of the public who wish to comment electronically may do so via the SCC’s website at www.scc.virginia.gov/casecomments/Submit-Public-Comments. Find case number PUR-2018-00195, and hit the “Submit Comments” button for that specific case.

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Case Number PUR-2018-00195 Dominion Energy Virginia Rider E request

Contact: Andy Farmer (804) 371-9141

RICHMOND — The State Corporation Commission (SCC) has approved a proposal allowing Appalachian Power Company (APCo) customers voluntarily to purchase electric energy provided 100 percent from sources of renewable energy.

Virginia law permits a Virginia utility company to design a rate that participating customers may choose to pay to receive all their power from a mix of renewable resources. As designed, the rate would charge a premium of $4.25 a month above the standard rate of an average residential customer using 1,000 kilowatt hours of electricity.

Applying applicable Virginia laws, the Commission approved the voluntary renewable energy rider and found that:

• The participating customer is receiving a product that is provided 100 percent from renewable energy.
   
• The tariff includes safeguards that hold harmless customers who choose not to participate.
   
• The rate is reasonable for the purposes of the renewable energy product that is being supplied.
   

The Commission previously had rejected two other proposals from APCo for a 100 percent renewable energy tariff. The order of approval in this case notes that, unlike the prior requests, this proposal ensures that APCo will supply 100 percent renewable energy as defined by statute. And, the rate is reasonable for customers who voluntarily elect such service.

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Case Number PUR-2017-00179
View Order Approving Tariff

Contact: Ken Schrad (804) 371-9858​