Utility’s case heightens debate over clean energy access in Virginia

A utility commission hearing examiner’s recommendation to reject a proposed 100-percent renewable energy offering by Appalachian Power Co. is heightening the debate over “green” tariffs in Virginia and lack of clean energy options for consumers.

Proponents of renewable energy are rallying behind the recommendation while the Appalachian Power (APCo) staunchly defends a proposal to be the sole supplier of renewable electricity in its Virginia service territory.

State Corporation Commission hearing examiner A. Ann Berkebile recommended that APCo’s proposed tariff is not in the public interest, does not promote the development of renewable energy in accordance with the state’s energy policy and has the potential to pre-empt customer access to cleaner energy by third-party suppliers.

APCo countered each of her findings, which were filed last week, basing its position on state law and what the SCC is, and is not, authorized to rule on.

In what is the most contentious of Berkebile’s recommendations – that the proposed tariff would pre-empt competition – APCo stated it is irrelevant because state lawmakers have yet to authorize third-party supplies direct to their utilities’ regulated customers.

Current state law allows customers of regulated utilities to purchase electricity from third-party suppliers. But that option expires once a customer’s utility offers an approved green tariff of its own.  That’s what has critics of utilities up in arms.

Bradley Romine, a senior vice president of a registered third-party power supplier — Castleton Commodities International – characterized APCo’s proposal in testimony as “here’s renewable energy, take it or leave it.”

APCo insists in its response that it “will not unreasonably prejudice or disadvantage any customer, including renewable energy customers.” A company spokesman declined to elaborate.

The state’s Office of the Attorney General opted not to take a position in this APCo case. But Assistant Attorney General C. Mitch Burton did urge the SCC to clarify what the tariff “would mean for a customers’ right to contract for renewable energy with third-parties.”

How the SCC rules on APCo’s proposal will be closely watched because it is likely to affect a similar offering by Dominion Energy, the larger of the two investor-owned utilities in Virginia.

A decision in either case could help determine how the SCC defines the “public interest” and whether such tariffs are to contribute to the state’s clean energy policy. Together, they could affect what, if any, options for renewable electricity consumers will have in Virginia for years.

APCo asserts that “nowhere” under current law “does the General Assembly require the Commission determine that the costs be in the public interest. Even if such a standard was in place, APCo insisted that its tariff would meet it because it addresses what it acknowledged is a growing demand for renewables in Virginia.

APCo’s last response before the comment period closed last week states that several renewable projects it is developing and power it is contracting for will generate electricity from within the state’s boundaries. It does not project when those new supplies of electricity would be operational.

Until those projects are completed and the rates approved by the SCC, APCo’s proposed tariff is to be supplied by four power purchase agreements (PPAs) for wind and hydroelectric facilities in Indiana and West Virginia. Those facilities were placed into service between 7 and 15 years ago, according to Will Reisinger, an attorney representing the regional chapter of the Solar Energy Industries Association (SEIA).

Berkebile found APCo’s tariff fails “to establish the reasonableness” of the rate it would want to charge. With its current sources of supply, APCo’s “green” tariff offering “would be 18% higher than APCo’s standard rate of service,” Reisinger said. To that, APCo responded it has new and less-expensive renewable sources coming online in the near future and their lower costs would be reflected in the price it would charge. Its latest filing does not commit to a specific price.

For its proposal, Dominion doesn’t make clear which renewable sources it would draw from or what it would charge. While it operates one of the world’s largest hydroelectric “pumped storage” power plants in the world in Bath County, Virginia and has purchased several large solar systems, Dominion’s filing states it “will develop a portfolio of renewable energy resources to exclusively serve” participating customers’ needs and preferences. It would only commit to sources “within the geographic scope of the PJM wholesale (power) market.”

All documents for the case can be found at PUE-2016-00051.

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