RD93 - Commission on Electric Utility Regulation Executive Summary of Interim Activity and Work - February 2015


    Executive Summary:
    The Commission on Electric Utility Regulation (the Commission) is established pursuant to Chapter 31 (§ 30-201 et seq.) of Title 30 of the Code of Virginia. The Commission is charged with:

    • Monitoring the work of the State Corporation Commission (SCC) in implementing Chapter 23 (§ 56-576 et seq.) of Title 56;

    • Examining generation, transmission, and distribution systems reliability concerns;

    • Establishing one or more subcommittees for any purpose within the scope of the duties prescribed to the Commission; and

    • Reporting annually with such recommendations as may be appropriate for legislative and administrative consideration in order to maintain reliable service in the Commonwealth while preserving the Commonwealth's position as a low-cost electricity market.

    Senator Thomas K. Norment, Jr., chairs the Commission. The Commission's other members are Senators John C. Watkins, Richard L. Saslaw, and L. Louise Lucas and Delegates Terry G. Kilgore, Timothy D. Hugo, Kenneth R. Plum, Jackson H. Miller, Ronald A. Villanueva, and Matthew James.

    This executive summary of the interim activity and work of the Commission is submitted pursuant to § 30-207 of the Code of Virginia and is provided in lieu of an annual report.

    The Commission met on January 23, 2014, for the purpose of reviewing several bills pertaining to the regulation of the electric utility industry. The Commission received testimony on seven bills, and acted on several of the bills, as follows:

    1. House Bill 848: This bill, patroned by Delegate Manoli Loupassi, would authorize investor-owned electric utilities to recover the costs of new underground distribution facilities through a rate adjustment clause. A motion that the Commission recommend House Bill 848 was adopted.

    2. Senate Bill 585: This bill was patroned by Senator Richard L. Saslaw. An amendment in the nature of a substitute was offered that was identical to House Bill 848, with one substantive difference, was considered. A motion was adopted to recommend the substitute to Senate Bill 585, with an amendment to subsection D of § 56-585.1 that stating that the SCC may determine, during any proceeding authorized or required by this section, the reasonableness or prudence of any cost incurred.

    3. House Bill 1059: This bill, patroned by Delegate Terry Kilgore, would have (i) limited the portion of the costs incurred by an investor-owned electric utility between July 1, 2007, and December 31, 2013, in developing a nuclear power facility or an offshore wind project that are recoverable through a rate adjustment clause to 30 percent of such amount; (ii) allowed recovery of the remaining 70 percent of such costs only through existing base rates in the test periods under review in the utility's next biennial review filed after July 1, 2014; and (iii) amended subsection D of § 56-585.1 in the same manner as was proposed in the substitute to Senate Bill 585. No recommendation was made with respect to House Bill 1059 pending resolution of issues relating to the review of reasonableness and prudence and the amortization period. The Attorney General's Office, Dominion, and industrial customers were asked to attempt to develop a mutually satisfactory solution by January 30.

    4. House Bill 1288: This bill, patroned by Delegate Terry Kilgore, would authorize any electric utility to petition the State Corporation Commission for approval of a rate adjustment clause to recover from non-industrial customers the projected and actual costs of programs that will enhance the reliability of the utility's distribution system. The patron stated that he intended that his bill be carried over to the 2015 Session. The Commission took no action on the bill.

    5. Senate Bill 643: This bill, patroned by Senator Donald McEachin, provided a mechanism for a utility to write off 70 percent of the costs incurred in development of off-shore wind generation facilities in the next biennial rate case, as was also addressed in House Bill 1059. The Commission took no action on Senate Bill 643 pending resolution of the issues of the review of reasonableness and prudence and the amortization period.

    6. House Bill 1224: This bill, patroned by Delegate Israel O'Quinn, as introduced would have required AEP to consider the generation or purchase of power in its service territory within the Commonwealth before acquiring power from plants outside the Commonwealth. The measure also would have authorized AEP to petition the SCC for approval to construct or cause to be constructed a combined cycle natural gas-fueled electric generation facility to meet its native load and default service obligations. An amendment in the nature of a substitute revised the bill to require AEP to contract for the purchase of power in its service territory within the Commonwealth before acquiring power from plants outside the Commonwealth. The Commission received testimony that the bill represented an effort by Competitive Power Ventures to enter into a contract with AEP in order to secure financing for a 700 megawatt gas-powered power plant in Smyth County. A motion to recommend House Bill 1224 died for lack of a second. The Commission took no further action on the bill.

    7. House Bill 1061: This bill, patroned by Delegate Scott Surovell, would have amended Virginia's renewable energy portfolio standard (RPS) program to establish minimum percentages of the RPS Goals that Dominion, defined as a Phase II utility, is required to meet from distributed generation energy sources. While the bill was being presented, the Commission lost its quorum and the meeting adjourned without taking action on House Bill 1061 or any of the other items of legislation on its agenda.

    Additional information regarding the Commission's meeting in 2014 may be found on the Commission's website at http://dls.virginia.gov/commissions/eur.htm?x=mtg.