RD193 - Report of the State Corporation Commission on Electric Utility Regulation: Status Report -- Implementation of The Virginia Electric Utility Regulation Act


Executive Summary:
In 2008, the General Assembly amended § 56-596 B of the Code of Virginia (or “Code”) to require the Virginia State Corporation Commission (“SCC” or “Commission”) to provide annual reports to the Governor and the General Assembly on the status of the implementation of the Virginia Electric Utility Regulation Act (the “Regulation Act”), and to offer recommendations for any actions by the General Assembly or others.(*1) This report is tendered by the Commission in compliance with § 56-596 B.

During the past year, the SCC continued the scheduled implementation of components of the Regulation Act as required by statute. The majority of this report will highlight these activities.

We also note that the SCC, both by itself and as a member of the Organization of PJM States, Inc. (“OPSI”), continued to participate in various proceedings before the Federal Energy Regulatory Commission (“FERC”) this past year. While Virginia’s return to regulated retail rates alters the impact of PJM Interconnection, LLC (“PJM”)(*2) electricity market outcomes on Virginia’s homes and businesses, PJM markets and processes are still important to the Commonwealth’s energy future. Nearly all of Virginia’s electric utilities are members of PJM and participate in the power markets that PJM operates. For example, Virginia’s electric cooperatives and municipal utilities and their retail customers are directly affected by exposure to PJM’s wholesale market electricity prices. Additionally, the electric investor-owned utilities (*3) continue their participation in PJM markets and purchase a significant portion of their energy needs from PJM administered wholesale markets.

Accordingly, this report addresses matters before the Commission, as well as relevant FERC proceedings.
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(*1) The SCC is not making any legislative recommendations in this report.
(*2) PJM Interconnection, LLC is a regional transmission organization in the mid-Atlantic area comprising all or part of 13 states: Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia. PJM attempts to ensure the reliable operation of the electric power supply system, facilitate an effective wholesale electricity market, and manage a long-term regional electric transmission planning process to maintain grid reliability and relieve congestion. Additional information is available at: http://www.pjm.com.
(*3) Electric investor-owned utilities include Virginia Electric and Power Company d/b/a/ Dominion Virginia Power (“Dominion Virginia Power” or “DVP”), Appalachian Power Company (“Appalachian” or “APCo”), the Potomac Edison Company d/b/a Allegheny Power (“Allegheny Power” or “AP”), and Kentucky Utilities d/b/a Old Dominion Power (“KU”).