Dominion Energy Virginia has opened a new and aggressive front in its economic war against companies seeking to offer Virginians retail choice for electricity service, directly attacking two firms promising 100 percent renewable energy to lure away environmentally minded customers.
In separate filings on July 15, the utility charged that both Direct Energy Services LLC and Calpine Energy Solutions LLC are not meeting the requirements under the law to claim they are offering 100 percent renewable energy. It asks the State Corporation Commission for a declaratory judgment on those requirements and refuses to transfer any more of its customer accounts over to those firms until the SCC rules. Here is the motion against Direct Energy and here is the similar move against Calpine.
Both companies quickly responded with motions for injunctive relief, asking the SCC to order Dominion to continue transferring customers until the dispute is resolved. How many customers have signed up for the competitive service providers only to be held in limbo is not included in the filings, although Calpine provided a confidential list to the SCC.
Virginia law allows customers to use an outside provider for 100 percent renewable power because Dominion does not offer that option. Its latest effort to create a renewable tariff is pending at the SCC and this push must be viewed in that context. The SCC has now given Dominion until July 31 to respond to the motions for injunctions and the independent providers until August 6 to respond to those responses. No hearing or hearings on this dispute have been scheduled.
There will instead be a full hearing today on the utility’s other major tactical move against competition, its effort to revise its existing market-based rate (MBR) option for large industrial and commercial customers. It has proposed the new Rider MBR with the admitted goal of undercutting its competitors for the large industrial customers. Customers with a steady 5 megawatt load are also allowed to seek an alternative supply under Virginia law.
The Rider MBR proposal, previewed on Bacon’s Rebellion back in April, has received favorable comment from the SCC staff, which has offered some suggested improvements that Dominion is accepting and some that it is not. A more detailed report on that proposal will following the hearing.
The third front in this war, also playing out in front of the Commission, includes the ongoing efforts by individual retail customers to aggregate their demand up to the five-megawatt threshold so they would have the same opportunity to escape Dominion’s monopoly as the largest customers enjoy. One of those frustrated escapees, Costco, has just filed to join this new Calpine case.
So to review the three fronts: Dominion has 1) cut off transfers of its customers to two competitive suppliers offering a renewable product and asserts to the SCC they are operating illegally, 2) continues to contest efforts by medium size retail customers to aggregate enough load to depart the monopoly, and 3) is working hard to offer a lower-priced alternative to those customers who already have enough load to leave.
One question common to all of the cases is whether customers who choose to remain with Dominion, or who have no choice under the law, end up hit with additional costs because the others have left or because the large users will have this new, lower-cost rate alternative. That is the reason the SCC has cited for denying most petitions by retailers for aggregation of their load.
At the heart of the dispute with the renewable providers is the old question of what constitutes “100 percent renewable” power when all the electrons mix on the same grid and most renewable sources operate intermittently. Dominion asserts that to qualify as competitive suppliers in this arena, the companies must have contracts not only for renewable power output but also for capacity. “(I)t must have control of sufficient renewable generation resources, including renewable capacity and associated renewable energy, to enable it to serve the full load requirements of the customers it intends to serve,” is how Dominion states the standard it sees.
It cites a recent SCC decision in favor of a similar company challenged by Appalachian Power Company. In that case, Collegiate Clean Energy “had demonstrated that the renewable capacity under its control and available to serve its customers was capable of meeting the requirements of its customers on an hourly basis. In stark contrast to the facts underlying the APCo Order, Direct Energy now asserts that it need not provide any renewable capacity whatsoever to provide service,” Dominion writes in its petition challenging Direct Energy.
“Under the limited standard that Direct Energy asserts is the extent of its obligation, it could avoid its full service obligation by over-procuring renewable energy when there is excess renewable energy in the market {e.g. off-peak wind or run-of-river hydro generation) and provide non-renewable energy service to customers in all other periods. In reality, PJM Members’ non-100% renewable resources could, and likely would, be generating the energy that Direct Energy would be using to serve these customers most of the time.”
In its response (here), one of the challenged companies disputes Dominion’s interpretation of what is required to be deemed a a renewable supplier.
“Calpine vehemently disagrees with the Dominion-created “renewable capacity” requirement and looks forward to establishing in the course of this proceeding that it will supply customers served under Section A 5 with 100 percent renewable energy, and that it has adequately documented its ability to do so. For the purpose of this Motion, Calpine will demonstrate that Dominion lacks any authority to unilaterally create and impose its own definition of service under Section A 5, including a “renewable capacity” requirement, and to deny service to Calpine’s customers based on this non-existent requirement.”
The other response (here) has a tone of anger over Dominion’s decision to refuse to facilitate the transfer of customers until the SCC decides this issue.
“Dominion’s decision to deny service to Direct Energy Business’s customers, before the Commission has even had a chance to consider and rule on its declaratory judgment action, is unsupported by Virginia law and Commission precedent and is just the latest in a series of efforts by Dominion to frustrate the purpose of Va. Code § 56-577 and to interfere with the efforts of Direct Energy Business to do business in Virginia as a licensed CSP.”
The battlefront has grown so wide Dominion is calling in reserve divisions. These new petitions were filed by Richmond mega law firms Troutman Sanders and Hunton Andrews Kurth, not Dominion’s usual outside counsel McGuire Woods.
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