This document contains the report of the Virginia State Corporation Commission ("Commission") pursuant to § 56-596 B and § 30-205 of the Code of Virginia ("Code"), which directs the Commission to provide an update by November 1 of each year on the status of the implementation of the Virginia Electric Utility Regulation Act, Code §§ 56-576 through 56-596.4 ("Regulation Act"). The Regulation Act has expanded in recent years with new programs and requirements that fall within the Commission's purview. This report summarizes the Commission's efforts to implement the Regulation Act for investor-owned electric utilities(*1) as well as the electric cooperatives.

Key highlights from the report include:

• The Regulation Act was amended by the 2023 General Assembly to make significant changes to the Commission's regulation of both Virginia Electric and Power Company d/b/a Dominion Energy Virginia ("Dominion" or "DEV") and Appalachian Power Company ("APCo"). Among other things, the new legislation directs a return to biennial reviews of base rates for both companies, replacing the current triennial review structure.2 House Bill 1770 and its companion Senate Bill 1265 (collectively, "HB 1770")3 permitted Dominion to seek Commission approval to securitize its deferred fuel balance; directed the "roll-in" of $350 million of DEV's rate adjustment clause ("RAC") revenues into base rates on July 1, 2023; required DEV to file a biennial review after July 1, 2023; set a return on equity ("ROE") of 9.7% for DEV's 2023 biennial review; modified the sharing provisions applicable to earnings above an approved level; and directed the Commission to initiate a proceeding before December 31, 2023 to determine protocols and standards for performance-based adjustments to ROE.

• House Bill 1777 and its companion bill Senate Bill 1075 (collectively, "HB 1777")4 created a separate biennial review process applicable to APCo. APCo will file its first biennial review on March 31, 2024.

• The Commission continues to implement the requirements of the Virginia Clean Economy Act ("VCEA").(*5) The VCEA includes provisions establishing a mandatory Renewable Energy Portfolio Standard ("RPS") and an Energy Efficiency Resource Standard. The relevant Commission dockets that implement or update these programs, as well as the dockets that continue to provide oversight of the utility's existing operations, are summarized in Section IV, below.

• On September 18, 2023, the Commission issued a Final Order concerning its review of DEV's petition for approval of Phase III of its Grid Transformation ("GT") Plan.(*6) The approved GT Plan investments focus on grid reliability and are designed to accommodate or facilitate the expected increase in distributed energy resources on the grid resulting from recent policy developments, including the VCEA and FERC(*7) Order 2222. Approved Phase III investments include a continuation of: (i) advanced metering infrastructure; (ii) the customer information platform; (iii) an expanded mainfeeder hardening pilot; (iv) targeted corridor improvement; (v) voltage island mitigation; (vi) voltage optimization enablement; (vii) substation technology deployment; (viii) distributed energy resource management system; (ix) telecommunications; (x) physical security; (xi) cyber security; and (xii) customer education. The Commission also approved two new programs: an outage management system and a non-wires alternative pilot. The Commission's approval of these projects was made subject to certain contingencies, cost caps, and reporting requirements.

• On April 14, 2023, the Commission issued a Final Order wherein it: (i) found DEV's 2022 RPS Plan was reasonable and prudent based on the record of the case; (ii) granted certificates of public convenience and necessity ("CPCNs") and approved approximately 474 megawatts ("MW") of new solar generation capacity in the Commonwealth; (iii) found that 270 MW of solar power purchase agreements ("PPAs") and 49 MW of energy storage PPAs were prudent; (iv) approved a CPCN request for a 15.7 MW energy storage facility; and (v) approved, to recover through Rider CE, the costs of the CE-3 Projects and related interconnection facilities, two distributed solar projects and related interconnection facilities totaling approximately 6 MW, and the costs of solar projects and related interconnection facilities approved by the Commission in prior RPS Filing proceedings. The Commission also established additional directives regarding DEV's modeling in its subsequent RPS Plans. The Commission further directed DEV to include, in its next RPS Filing, modeling results that incorporate the effects of the Inflation Reduction Act ("IRA"), and that show alternative scenarios with the Commonwealth's participation in, and exclusion from, the Regional Greenhouse Gas Initiative ("RGGI"). DEV made its 2023 RPS Filing on October 3, 2023.(*8)

• On September 7, 2023, the Commission issued a Final Order on APCo's 2023 RPS Filing, wherein the Commission: (i) approved APCo's annual plan for the development of new solar, wind, and energy storage resources; (ii) approved APCo's requests for approval of cost recovery of the up to 146.2 MW Grover Hill wind facility located in Ohio; (iii) granted APCo's request for a prudency determination for six new solar PPAs totaling 184 MW and one renegotiated PPA totaling 20 MW; (iv) authorized APCo to count its over-retired renewable energy credits ("RECs") towards its 2023 RPS Program requirement; and (v) denied APCo's request for cost recovery associated with its Beech Ridge wind facility located in West Virginia due to negative net present values. The Commission also established additional directives regarding APCo's modeling in its subsequent RPS Plans.(*9)

• Following issuance of its Final Order(*10) approving requested cost recovery associated with DEV's proposed 2,587 MW Coastal Virginia Offshore Wind Commercial Project ("CVOW Project") subject to a performance standard, DEV and the Office of the Attorney General, Division of Consumer Counsel ("Consumer Counsel") requested that the Commission reconsider aspects of the Final Order. The project consists of 176 wind turbines, each designed to generate 14.7 MW. The project is expected to have a capital cost of $9.8 billion and will likely be the largest capital investment, and single largest project, in the history of DEV. On October 28, 2022, a Second Proposed Stipulation and Recommendation ("Second Stipulation") was filed by Dominion, Consumer Counsel, Walmart, Appalachian Voices and Sierra Club.(*11) The Commission issued its Order on Reconsideration on December 15, 2022.(*12) The Commission found that the performance standard contained in the Commission's Final Order should be stricken and replaced with the terms of the Second Stipulation.(*13),(*14)

• On August 4, 2023, the Commission issued a Final Order in DEV's annual demand-side management ("DSM") filing that approved, among other things, (i) DEV's proposed Phase XI DSM Programs, including proposed enhancement and expansion of certain previously approved programs; (ii) "bundling" of certain programs within DEV's DSM Portfolio; and (iii) cost recovery through associated RACs.(*15)

• APCo (a Phase I Utility) estimates that it is on target to implement energy efficiency programs and measures to achieve the total annual energy savings targets for 2023 as required by Code § 56-596.2. DEV (a Phase II Utility) does not project that it will meet the target to implement energy efficiency programs and measures to achieve the total annual energy savings target for 2023 as required by Code § 56-596.2. These results have not yet been subject to Commission review. The Commission will review these results as a part of each utility's upcoming energy efficiency filings and will provide additional data related to the feasibility of achieving these energy efficiency goals in future reports.

DEV Bill Impacts

• DEV's typical(*16) monthly residential bill has increased by $34.53 (38.12%) to $125.12 from July 1, 2007(*17) to July 1, 2023. Over the 12 months ended July 1, 2023, DEV's typical monthly residential bill has decreased by $11.81.

• On May 1, 2023, and July 3, 2023, respectively, Dominion filed applications to reduce its fuel factor and to securitize its fuel deferral balance of approximately $1.275 billion.(*18) The Commission permitted Dominion to reduce its fuel factor on an interim basis, which resulted in an approximate $6.79 reduction in the monthly bill of a typical residential customer using 1,000 kWh per month, beginning July 1, 2023. The Commission's decision on the fuel securitization application is due by November 3, 2023.(*19)

• On May 1, 2023, Dominion notified the Commission that it was combining Riders R, S and W with the Company's base rates effective July 1, 2023, as required by HB 1770.(*20) These RACs recovered the costs of the Company's Bear Garden Generating Station (Rider R), the Virginia City Hybrid Energy Center (Rider S), and the Warren County Power Station (Rider W), which will now be recovered through base rates. According to Dominion's analysis, this resulted in an approximate reduction of $6.75 on the monthly bill for a typical residential customer using 1,000 kWh per month, beginning July 1, 2023.(*21)

• DEV filed a biennial review application on July 3, 2023, which is currently pending before the Commission.(*22) The Commission will report on its determinations resulting from its review of this filing in next year's report.

• DEV filed an Integrated Resource Plan ("IRP") on May 1, 2023, in accordance with Code § 56-599, in Case No. PUR-2023-00066.(*23) The Commission will report on its determinations resulting from its review of this filing in next year's report.

• DEI(*24) presented its fourth quarter earnings to investors on February 8, 2023.(*25) Unlike prior years, this February 2023 presentation did not include anticipated growth capital expenditures for DEV over a five-year period. As presented in last year's report, DEI previously identified approximately $27.9 billion in anticipated growth capital expenditures for DEV over the period 2022 – 2026 in a February 2022 presentation to investors, including investments in wind and solar generation, energy storage, nuclear facility relicensing, transmission, distribution undergrounding, and grid transformation. These investments would reflect a 74% increase in DEV's rate base by 2026, with 55% being recovered from customers through RACs.

APCo Bill Impacts

• APCo's typical monthly residential bill has increased by $91.01 (136.63%) from July 1, 2007 to July 1, 2023. Over the 12 months ending July 1, 2023, APCo's typical monthly residential bill has increased by $35.37.

• The Commission issued its Order on Remand in the remanded 2017 – 2019 triennial review on December 21, 2022.(*26) The Commission found APCo had an earned return of 7.945% for the 2017 – 2019 triennial period and approved a going forward revenue requirement increase of $28.4 million. The Commission also granted approval of a Rider R.C.R. to recover revenue not collected from January 22, 2021 through September 2022. Rider R.C.R. is expected to be in place for 16 months commencing October 2022 and expiring January 2024.(*27)

• APCo filed a triennial review application for the 2020-2022 period on March 31, 2023.(*28) The Commission will report on its findings in next year's report.

• Based on APCo's 2022 IRP billing analysis(*29) showing projected annual impacts to a residential bill over the next five years incorporating the requirements of the VCEA, the monthly bill of a Virginia residential customer using 1,000 kWh per month is projected to be between $141.73 and $143.07 by 2026. This is an increase of between $19.50 and $20.84 per month over the April 29, 2022 residential bill (or an estimated annual increase from $234.00 to $250.08).(*30) In accordance with the provisions of Code §§ 56-585.8, 56-597, and 56-599, APCo is not required to file future IRPs.
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(*1) Code § 56-580 G generally suspends application of the Regulation Act to Kentucky Utilities, d/b/a Old Dominion Power Company ("KU/ODP"), which is an investor-owned electric utility whose service territory is located entirely within Dickenson, Lee, Russell, Scott, and Wise Counties. However, certain provisions of the Regulation Act, including Code §§ 56-585.5 and 56-594, have been made applicable, at least in part, to KU/ODP.
(*2) Code §§ 56-585.1; 56-585.8.
(*3) 2023 Va. Acts chs. 775, 757.
(*4) 2023 Va. Acts chs. 776, 749.
(*5) 2020 Va. Acts chs. 1193, 1194.
(*6) Petition of Virginia Electric and Power Company, For approval of a plan for electric distribution grid transformation projects pursuant to § 56-585.1 A 6 of the Code of Virginia, Case No. PUR-2023-00051, Doc. Con. Cen. No. 230930084, Final Order (Sept. 18, 2023) ("GT Plan Final Order").
(*7) Federal Energy Regulatory Commission ("FERC").
(*8) Petition of Virginia Electric and Power Company, For approval of its 2022 RPS Development Plan under § 56-585.5 D 4 of the Code of Virginia and related requests, Case No. PUR-2022-00124, Doc. Con. Cen. No. 230430025, Final Order (Apr. 14, 2023) (approving 750 MW of new solar generation capacity and 64.7 MW of energy storage capacity) ("2022 DEV RPS Final Order"). The Commission previously approved 1,355 MW of new solar facilities and 103 MW of energy storage for Dominion. See also Commonwealth of Virginia, ex rel. State Corporation Commission, Ex Parte: Establishing 2020 RPS Proceeding for Virginia Electric and Power Company, Case No. PUR-2020-00134, 2021 S.C.C. Ann. Rept. 242, 243, Final Order (Apr. 30, 2021) (approving 498 MW of new solar facilities) ("2020 DEV RPS Final Order"); Petition of Virginia Electric and Power Company, For approval of the RPS Development Plan, approval and certification of the proposed CE-2 Solar Projects pursuant to §§ 56-580 D and 56-46.1 of the Code of Virginia, revision of rate adjustment clause, designated Rider CE, under § 56-585.1 A 6 of the Code of Virginia, and a prudence determination to enter into power purchase agreements pursuant to § 56-585.1:4 of the Code of Virginia, Case No. PUR-2021-00146, 2022 S.C.C. Ann. Rept. 309, Final Order (Mar. 15, 2022) (approving 857 MW of solar generation and 103 MW of energy storage) ("2021 DEV RPS Final Order").
(*9) Petition of Appalachian Power Company, For approval of its 2023 RPS Plan under § 56-585.5 of the Code of Virginia and related requests, Case No. PUR-2023-00001, Doc. Con. Cen. No. 230910123, Final Order (Sept. 7, 2023) ("2023 APCo RPS Final Order").
(*10) Application of Virginia Electric and Power Company, For approval and certification of the Coastal Virginia Offshore Wind Commercial Project and Rider Offshore Wind, pursuant to § 56-585.1:11, § 56-46.1, § 56-265.1 et seq., and § 56-585.1 A 6 of the Code of Virginia, Case No. PUR-2021-00142, 2022 S.C.C. Ann. Rept. 287, Final Order (Aug. 5, 2022) ("CVOW Final Order").
(*11) Application of Virginia Electric and Power Company, For approval and certification of the Coastal Virginia Offshore Wind Commercial Project and Rider Offshore Wind, pursuant to § 56-585.1:11, § 56-46.1, § 56-265.1 et seq. and § 56-585.1 A 6 of the Code of Virginia, Case No. PUR-2021-00142, Motion to Receive and Consider Second Proposed Stipulation and Recommendation, and For Expedited Consideration (filed Oct. 28, 2022).
(*12) Application of Virginia Electric and Power Company, For approval and certification of the Coastal Virginia Offshore Wind Commercial Project and Rider Offshore Wind, pursuant to § 56-585.1:11, § 56-46.1, § 56-265.1 et seq. and § 56-585.1 A 6 of the Code of Virginia, Case No. PUR-2021-00142, 2022 S.C.C. Ann. Rept. 305, 307, Order on Reconsideration (Dec. 15, 2022) ("CVOW Order on Reconsideration").
(*13) CVOW Order on Reconsideration at 307.
(*14) On July 7, 2023, the Commission issued its Final Order in Case No. PUR-2022-00187, which approved an updated revenue requirement of $270.995 million for Rider OSW, which recovers the cost of the CVOW project. Application of Virginia Electric and Power Company, For revision of rate adjustment clause: Rider OSW, Coastal Virginia Offshore Wind Commercial Project, for the Rate Year commencing September 1, 2023, Case No. PUR-2022-00187, Doc. Con. Cen. No. 230720087, Final Order (July 7, 2023).
(*15) Application of Virginia Electric and Power Company, For approval of its 2022 DSM Update pursuant to § 56-585.1 A 5 of the Code of Virginia, Case No. PUR-2022-00210, Doc. Con. Cen. No. 230810132, Final Order (Aug. 4, 2023).
(*16) For purposes of this report, a typical residential bill is based on usage of 1,000 kilowatt-hours ("kWh") per month.
(*17) Enactment Clause 7 of 2007 Va. Acts chs. 888 and 933 requires the Commission, in consultation with the Office of the Attorney General, to "submit a report to the Governor and General Assembly by November 1, 2012, and every five years thereafter, assessing the rates and terms and conditions of incumbent electric utilities in the Commonwealth." The first five-year window for this rate assessment was 2007-2012. In this report, the Commission begins its rate analysis with the year 2007 to coincide with this window.
(*18) See Application of Virginia Electric and Power Company, To revise its fuel factor pursuant to Va. Code § 56-249.6, Case No. PUR-2023-00067, Doc. Con. Cen. No. 230530184, Order Establishing 2023-2024 Fuel Factor Proceeding (May 12, 2023); Petition of Virginia Electric and Power Company, For a financing order authorizing the issuance of deferred fuel cost bonds pursuant to Va. Code § 56-249.6:1, Case No. PUR-2023-00112, Doc. Con. Cen. No. 230730152, Order for Notice and Hearing (July 14, 2023).
(*19) Code § 56-249.6:2. A.
(*20) Notification of Rate Adjustment Clause Combination filed in Case Nos. PUR-2021-00113, PUR-2021-00114, and PUR-2022-00090 on May 1, 2023, Doc. Con. Cen. No. 230510014. According to DEV's analysis, this reflects a combined annual revenue requirement of $351,721,000. Id.
(*21) Id.
(*22) Application of Virginia Electric and Power Company, For a 2023 biennial review of the rates, terms and conditions for the provision of generation, distribution and transmission services pursuant to § 56-585.1 A of the Code of Virginia, Case No. PUR-2023-00101, Doc. Con. Cen. No. 230710023, Application (filed July 3, 2023).
(*23) Commonwealth of Virginia, ex rel. State Corporation Commission, In re: Virginia Electric and Power Company's 2023 Integrated Resource Plan Filing pursuant to Va. Code § 56-597 et seq., Case No. PUR-2023-00066, Doc. Con. Cen. No. 230510019, IRP Plan (May 1, 2023) ("2023 DEV IRP").
(*24) Dominion Energy, Inc. ("DEI") is the parent company of DEV.
(*25) DEI also gave an investor presentation on May 5, 2023, for the first quarter of 2023, and on August 4, 2023, for the second quarter of 2023. These presentations did not include the same level of DEV-specific capital investment information as the 2022 fourth quarter presentation.
(*26) Application of Appalachian Power Company, For a 2020 triennial review of its base rates, terms and conditions pursuant to § 56-585.1 of the Code of Virginia, Case No. PUR-2020-00015, 2022 S.C.C. Ann. Rept. 198, Order on Remand (Dec. 21, 2022) ("APCo Order on Remand").
(*27) APCo Order on Remand at 201.
(*28) Application of Appalachian Power Company for a 2023 triennial review of its base rates, terms and conditions pursuant to § 56-585.1 of the Code of Virginia, Case No. PUR-2023-00002, Doc. Con. Cen. No. 230350021, Application (filed Mar. 31, 2023) ("2023 APCo Triennial Review").
(*29) APCo filed its 2022 IRP on April 29, 2022, and the Commission issued a Final Order in that case on January 23, 2023. Commonwealth of Virginia, ex rel., State Corporation Commission, In re: Appalachian Power Company's Integrated Resource Plan filing pursuant to Va. Code § 56-597 et seq., Case No. PUR-2022-00051, Doc. Con. Cen. No. 230120021, Final Order (Jan. 23, 2023).
(*30) The projected monthly bill increases of $19.50 and $20.84 are based on the 2022 IRP Least Cost Plan and Hybrid Plan, respectively.