RD190 - 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, 2013

Executive Summary:
Section 56-596 B of the Code of Virginia ("Code") directs the State Corporation Commission ("Commission") to provide an annual update 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, 2012, the following activities occurred:

• The "Virginia Energy Sense" ("VES") program continued to enhance features to the program designed to build awareness of the value of energy conservation and efficiency. Over the past year, new initiatives included a redesigned website, expanded use of social media, and targeted advertising on local news websites. The program expanded its school outreach, added television public service announcements ("PSA"), increased its participation in community events, and expanded its partnerships with non-profit organizations and businesses.

• The Commission considered requests to construct a nominal 1,358 megawatt ("MW") combined-cycle generating facility in Brunswick County, to transfer generation assets from an affiliate to Appalachian Power Company ("APCo"), and to convert existing coal-fired generating facilities at Bremo and Clinch River Power Stations into generation facilities fueled by natural gas. Additionally, the Commission approved Virginia Electric and Power Company's d/b/a Dominion Virginia Power ("DVP," "Dominion," or "Dominion Virginia Power") community solar demonstration program and initiated a renewable generation pilot program for third party power purchase agreements. With respect to generation additions approved prior to this year:

* DVP's coal-fueled to biomass-fueled conversions ("Biomass Conversions") are nearing completion as Altavista began biomass operation in July 2013, and the conversions of the Hopewell and Southampton facilities are expected to begin biomass operation later this year;

* Dominion's 1,300 MW natural gas combined-cycle facility in Warren County is under construction and expected to begin commercial operation in late 2014; and o 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 their 2012 renewable energy portfolio standard ("RPS") goals pursuant to § 56-585.2 of the Code.

• The Commission approved an extension of two demand-side management ("DSM") programs for Dominion Virginia Power.

• The Commission granted applications for base rate increases for Community Electric Cooperative ("CEC") and Central Virginia Electric Cooperative ("CVEC").

• APCo's and DVP's 2012-13 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").