The State Corporation Commission has approved a challenged natural gas contract between Virginia Natural Gas and an affiliated asset management firm, but the next request for proposal process will start this coming summer with substantially greater oversight. The March 15 opinion is here.
As reported on Bacon’s Rebellion a few weeks ago, losing bidders for the contract to serve the Hampton Roads region gas distributor had complained that the RFP process they went through was not fair, a complaint that drew some support from an SCC hearing examiner. VNG’s existing contract with Sequent Energy Management was about to run out, so the hearing examiner suggested a one-year approval followed by a re-do.
The commission granted two years, but that will allow more than a year for the SCC itself to review the next RFP process. In the meantime, the order includes a long list of requirements – 26 in all – demanding information and issuing directives to VNG and Sequent over how the work will proceed.
Virginia Natural Gas and Sequent are both owned by Southern Company Gas, and because they are affiliates, the SCC must approve any contractual relationship to make sure it is fair to the utility’s customers. After a long sole source relationship between the companies, it was the SCC which ordered the first RFP process for this latest contract period.
Sequent sells the excess capacity VNG has under contract with the pipeline companies, and the profits on those transactions should flow to VNG ratepayers. Among those challenging this new contract were large industrial customers, and when they raise a red flag, other consumers should pay attention. Money is on the table.
Energy Efficiency Without Mandates, Incentives or Strife?
Dominion Energy Virginia has petitioned the SCC for creation of a new rate schedule to provide outdoor light fixtures for homes, apartments, clubhouses, churches and businesses using LED (light emitting diode) bulbs instead of the HPS (high pressure sodium) vapor lighting provided in its current program. The program for HPS lighting would be closed to new customers.
The short petition includes an estimate that if every existing outdoor lighting customer using older technology converted to LED they would save a combined $2.8 to $4.2 million annually. It’s not a large program, serving a limited number of customers, but the energy and maintenance savings are significant with the new lamps. The HPS lamps are getting harder and harder to obtain, Dominion reports.
A cursory review shows no indication that the company is seeking any payment for lost revenue on this move toward energy efficiency, nor it is seeking to induce customers to sign up with cash incentive payments. It is just marketplace forces moving everybody to something better and cheaper.
Appalachian Power’s Grid Transformation Also On Hold
While I like to call it the Ratepayer Bill Transformation Act, that oft-mentioned 2018 Act of Assembly did require the state’s two major electric utilities to submit plans for enhancements and investments in their distribution networks, incorporating the latest technology.
The smaller utility, Appalachian Power, got its plan in just under the wire in December, but has now received SCC permission to drop it and file again. It has read what the SCC decided about Dominion Virginia Energy’s plan, approving some of the security and communication elements but rejecting most of what it sought to do. In light of that, the APCo petition states:
“A future Petition will be better aligned with the standards established in the Dominion Order, and the Company will be better prepared to respond to the types of inquiries that it has received from Staff and respondents through discovery. That is, allowing the Company to withdraw this Petition and re-file at a future date will allow for a better-quality petition, enabling a more efficient review by Staff and respondents, which will in turn create a more robust record upon which the Commission could base its decision on such petition.”
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