The State Corporation Commission has issued a decision expanding the right of large customers to bypass the monopoly franchises of Virginia’s electric utilities and purchase electricity from competitive suppliers.
While the General Assembly was embroiled in debate over grid modernization and the rollback of the electric rate freeze, the SCC approved the first ever “customer aggregation” petition. Reynolds Group Holdings Inc. now has permission to aggregate the demand of three of its subsidiaries at six locations in Virginia served by Dominion Electric Virginia for the purpose of purchasing electricity from someone other than Dominion.
Reynolds, based in Auckland, New Zealand, owns several packaging enterprises associated with the old Reynolds Metals, formerly headquartered in Richmond. According to the SCC ruling, the aggregated peak electric demand of Reynolds’ Virginia operations was 10.12 megawatts, representing approximately 0.06% of Dominion’s system peak of 17,000 megawatts. The impact on Dominion, which projects peak demand growth of 1.3% over the next 15 years, was de minimis.
It was not clear from the ruling whom Reynolds intends to buy its electricity from. However, Calpine Energy Solutions and Collegiate Clean Energy filed comments in support of the petition. California-based Calpine supplies natural gas, power and associated energy and risk management services to customers throughout the United States. Wilmington, Del.-based Collegiate supplies 100% clean energy solutions to universities and businesses.
Will Reisinger with the GreeneHurlocker law firm explains the significance of the ruling in a blog post:
[The] law allows large customers with annual demands over 5 MW to purchase generation from competitive suppliers. Importantly, the law also allows a group of customers to “aggregate” their demands in order to reach the 5 MW threshold. The statute treats large customers with multiple meter locations as different customers but allows them to aggregate to meet the 5 MW threshold. Once aggregated, the group will be treated as a “single, individual customer” under the law. Before allowing an aggregation, however, the Commission must find that the requested aggregation would be “consistent with the public interest.”
SCC Case No. PUR-2017-00109 was the first test of this statutory provision – that is, the first time a group of customers sought to combine their demands in order to reach the 5 MW threshold. In this case, Reynolds Group Holdings, Inc. (“Reynolds”), a metals and packaging manufacturer, petitioned the SCC for approval to aggregate six of its retail accounts in Dominion’s service territory.
Dominion and Appalachian Power Company (“APCo”) intervened in the case and opposed the petition. Dominion argued that allowing customers to aggregate their demand “would unreasonably expand the scope of retail access [and would] have the potential effect of eroding a significant portion of the utility’s jurisdictional customer base.” Dominion also suggested that the General Assembly – despite authorizing customer shopping and aggregation – intended to allow retail choice “only in limited circumstances.”
But the SCC, relying on the plain language of Va. Code § 56-577 A 4, rejected Dominion’s and APCo’s arguments and approved the petition. Dominion and APCo have until March 23, 2018, to appeal the decision to the Virginia Supreme Court.
No word yet from Reynolds, Calpine or Collegiate about what exactly they have planned.
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