RD191 - Report of the State Corporation Commission to the Commission on Electric Utility Regulation of the Virginia General Assembly - Status Report: Implementation of the Virginia Electric Utility Regulation Act - September 1, 2012


Executive Summary:
Section 56-596 B of the Code of Virginia ("Code") directs the State Corporation Commission ("Commission") to provide an annual update to the Governor and the General Assembly on the status of the implementation of the Virginia Electric Utility Regulation Act, §§ 56-576 through -596 of the Code ("Regulation Act") and to offer recommendations for any actions by the General Assembly or others. This report is responsive to that directive. Since the Commission's last report, presented on September 1, 2011, the following activities occurred:

• The "Virginia Energy Sense" ("VES") program broadened its scope to provide Virginia consumers of electricity with information to help save energy. Over the past year, the program implemented school outreach, added television public service announcements ("PSA"), increased its participation in community events, expanded digital and social media outreach, established partnerships with non-profit organizations, continued public relations activities, and conducted a follow-up benchmark survey.

• In response to statutory changes to § 56-594 of the Code, the Commission adopted revisions to its Regulations Governing Net Energy Metering, 20 VAC 5-315-10 et seq. ("Net Energy Metering Rules"). The revisions increased from 10 kilowatts ("kW") to 20 kW the maximum capacity of an electrical generation facility of a residential customer that qualifies for participation in a net energy metering program and require that an eligible residential customer-generator with a facility that exceeds 10 kW pay a Commission-approved standby charge that allows the participating utility to recover the costs associated with serving such customers. Virginia Electric and Power Company d/b/a Dominion Virginia Power ("Dominion, DVP, or Virginia Power") requested, and the Commission approved, a standby charge for distribution and transmission related costs. The Commission rejected a standby charge proposal related to generation costs.

• The Commission approved Dominion's requests to construct a 1,300 megawatt ("MW") combined-cycle generating facility in Warren County and to convert three existing coal-fired generating facilities at Altavista, Southampton, and Hopewell, Virginia, into biomass generation facilities. Additionally, the Commission is evaluating the company's proposed community solar demonstration program. With respect to generation additions approved prior to this year:

* Appalachian Power Company's ("APCo") 580MW combined-cycle natural gas facility in Dresden, Ohio, began commercial operation on March 1, 2012;
* Dominion's 585 MW fluidized bed coal facility in Wise County began commercial operation on July 10, 2012; and
* Northern Virginia Electric Cooperative's 49.9 MW biomass facility in Halifax County is expected to begin commercial operation in late 2013.

• APCo and Dominion have met the 2011 renewable portfolio standard goal as set forth in § 56-585.2 of the Code.

• The Commission approved additional energy efficiency and demand response programs for Virginia Power.

• The first biennial review cases for APCo and Virginia Power were completed.

• The Commission is currently considering applications for base rate increases for Community Electric Cooperative ("CEC") and Central Virginia Electric Cooperative ("CVEC"). The Commission also is considering a revenue-neutral adjustment of rates for A&N Electric Cooperative ("A&N").

• APCo and DVP's 2011-12 electricity rates appear to be competitive with their peer utilities, although pending rate requests could lessen the competitiveness of electricity rates in the future.

• The Commission continues to participate in and monitor several proceedings at the Federal Energy Regulatory Commission ("FERC") involving PJM Interconnection, LLC ("PJM").