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2013 SESSION

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Senate Committee on Commerce and Labor
Subcommittee Electric Utility

Norment (Chairman), Saslaw, Stanley

Clerk: Maribeth Turner, Cheryl Law
Staff: Frank Munyan
Date of Meeting: January 25, 2013
Time and Place: Friday, Jan. 25, 7 AM, 3 West
UPDATED - the meeting will begin at 7 AM, not 8 AM

S.B. 852 Renewable energy facilities; eligibility for incentives.

Patron: Petersen

Renewable energy facilities; eligibility for incentives. Establishes a requirement that electricity generated from renewable sources be generated from a facility located in the Commonwealth or if the facility is an offshore wind facility, located off the Commonwealth's coastline, in order to qualify as renewable energy for purposes of the renewable energy portfolio standard program. The measure also makes renewable powered generation facilities located outside of the Commonwealth, except offshore wind facilities located in waters off the Commonwealth's shoreline, ineligible for certain cost recovery and enhanced rate of return incentives in the Virginia Electric Utility Regulation Act.

A BILL to amend and reenact §§ 56-585.1 and 56-585.2 of the Code of Virginia, relating to renewable energy facilities; limiting eligibility for incentives.

13100548D

S.B. 1023 Electric utility regulation; exemption for purchases from renewable energy sellers.

Patron: Edwards

Renewable energy power purchase agreements. Excludes renewable energy sellers from regulation as a public utility. A renewable energy seller is a person that (i) owns or operates a renewable energy electricity generation source on the premises owned, leased, or otherwise controlled by an eligible customer-generator under the net energy metering program and (ii) sells the electricity generated from such renewable energy electricity generation source exclusively to such eligible-customer generator under a power purchase agreement. The measure expands the scope of permitted retail competition for electric generation service to allow individual retail customers that are eligible customer-generators to purchase electric energy provided 100 percent from renewable energy exclusively for their own consumption from a renewable energy seller pursuant to a power purchase agreement in order to supply some or all of such retail customer's electric energy requirements. These customers will be permitted to purchase electric energy provided 100 percent from renewable energy pursuant to a power purchase agreement from a renewable energy seller without regard to whether the incumbent electric utility serving the exclusive service territory offers an approved tariff for electric energy provided 100 percent from renewable energy. An eligible customer-generator may enter into a non-net-metered power purchase agreement with a renewable energy generator for onsite qualifying renewable energy generation facilities that are greater than the maximum allowable net metering project size provided they have a capacity of less than five megawatts, unless the utility permits a larger size.

A BILL to amend and reenact §§ 56-265.1, 56-576, 56-577, and 56-594 of the Code of Virginia, relating to electric utility regulation; exemption for purchases from renewable energy sellers.

13102578D

S.B. 1025 Net energy metering; standby charges.

Patron: Edwards

Net energy metering; standby charges. Requires the State Corporation Commission, when determining whether to approve a utility's proposed standby charge methodology, to find that the cost and benefit components used to calculate the proposed standby charges are based on load research on the affected class of eligible customer-generators and that the number of eligible customer-generators used in such load research is sufficient to form reasonable statistical conclusions about such costs and benefits. In addition, the standby charges collected from eligible customer-generators shall allow the supplier to recover only the portion of the supplier's net costs that are properly associated with serving eligible customer-generators. The measure also requires the Commission to review standby charges approved prior to July 1, 2013, for conformance with these new requirements for standby charge approval.

A BILL to amend and reenact § 56-594 of the Code of Virginia, relating to the net energy metering program; standby charges.

13103439D

S.B. 1259 Electric utilities; renewable energy portfolio standard program, eligible energy.

Patron: Edwards

Renewable energy portfolio standard program; eligible energy. Requires that, in order to be counted toward meeting the RPS Goals of the renewable energy portfolio standard program, renewable energy that is purchased by a participating utility be acquired under an agreement that transfers both ownership of the energy generated and the ownership of its renewable attributes. The measure also continues to allow renewable energy generated by a Virginia public utility to be counted toward meeting the RPS Goals when it is from a facility in which the public utility owns at least a 49 percent interest, but adds the condition that the facility be located in the Commonwealth, in the interconnection region of the regional transmission entity of which the participating utility is a member, or in a control area adjacent to such interconnection region. Renewable energy represented by renewable energy certificates will continue to be eligible to be counted toward meeting the RPS Goals.

A BILL to amend and reenact § 56-585.2 of the Code of Virginia, relating to electric utilities; renewable energy portfolio standard program.

13103434D

S.B. 1269 Renewable energy; amends existing portfolio standard program.

Patron: McEachin

Renewable energy portfolio standard program. Amends the existing renewable energy portfolio standard program to require that for calendar years 2016 through 2025 a utility shall apply (i) only renewable energy generated or purchased in Virginia, off its coast, or represented by a renewable energy certificate from eligible sources in Virginia or off its coast and (ii) renewable energy sales or renewable energy certificates from electric energy derived from any combination of sunlight, onshore wind, offshore wind, wave motion, tides, or geothermal power to meet at least 40 percent of the sales requirement for the RPS Goal in that year. The measure also eliminates provisions that give double or triple credit toward meeting the RPS Goals for energy from specified sources of energy.

A BILL to amend and reenact § 56-585.2 of the Code of Virginia, relating to the renewable energy portfolio standard program.

13100911D

S.B. 1339 Electric utility ratemaking; revises certain incentives & other provisions applicable.

Patron: Saslaw

Electric utility ratemaking. Revises certain incentives and other provisions applicable to investor-owned electric utilities under the 2007 re-regulation legislation. The measure (i) eliminates the 50 basis point performance incentive that has been available to utilities that attain the renewable energy portfolio standard goals; (ii) replaces the provision that has authorized the State Corporation Commission (SCC) to adopt a performance incentive that may increase or decrease a utility's combined rate of return by up to 100 basis points, based on a comparison of the utility's generating plant performance, customer service, and operating efficiency with nationally recognized standards, with a provision that authorizes the SCC to increase or decrease the utility's combined rate of return consistent with its precedent for incumbent electric utilities prior to the 2007 re-regulation legislation; (iii) increases the threshold for determining whether the utility's earned combined rate of return on common equity is excessive or insufficient, for test periods commencing after December 31, 2012, from 50 basis points above or below the return determined by the SCC to 70 basis points above or below such return; (iv) eliminates the provision that requires the SCC, when it determines that rates should be revised or credits applied to customers' bills, to combine a rate adjustment clause previously implemented to recover transmission-related costs with the utility's costs, revenues, and investments until the amounts that are the subject of the rate adjustment clause are fully recovered; (v) eliminates the provision that authorizes the SCC to include in a rate adjustment clause for environmental costs the enhanced rate of return on common equity that is provided for new generation facilities if the environmental costs reduce the need for constructing new generation facilities by enabling the continued operation of existing generation facilities; (vi) requires a utility seeking approval to construct a generating facility to demonstrate that it has considered and weighed alternative options, including third-party market alternatives, in its selection process; (vii) eliminates the authorization for a utility to earn an enhanced rate of return on the costs of a new generation facility during the first portion of its service life if the facility does not utilize nuclear power or offshore wind, unless the SCC has approved a rate adjustment clause for the facility by July 1, 2013, or the utility filed a petition therefor on or before January 1, 2013; (viii) reduces the potential enhanced rate of return on the costs of a new generation facility utilizing nuclear power or offshore wind from 200 to 100 basis points; (ix) requires certain costs related to early retirement of generation plants, severe weather events, and natural disasters to be deemed to have been recovered through customer rates during the test period under review unless doing so would place the utility in an under-earning position, in which event the SCC is required to authorize deferred recovery of such costs and allow the utility to amortize and recover the deferred costs over future periods; and (x) directs that the fair combined rate of return on common equity determined by the SCC in a biennial rate review shall apply to the entire two successive 12-month test periods ending December 31 immediately preceding the year of the utility's subsequent biennial review filing for purposes of reviewing the utility's earnings on its rates for generation and distribution services.

A BILL to amend and reenact §§ 56-585.1 and 56-585.2 of the Code of Virginia, relating to the regulation of investor-owned electric utilities.

13103792D

S.B. 1366 Electric utility regulation; schedule for biennial reviews, authority to petition.

Patron: Puckett

Electric utility regulation; schedule for biennial reviews; authority to petition for rate increase. Requires Appalachian Power, referred to as a Phase I utility, to delay the filing of its next biennial review from March 31, 2013, until March 31, 2014, upon giving the State Corporation Commission 30 days' notice. Such a utility is (i) prohibited from deferring on its books for future recovery certain costs incurred during calendar year 2011 and (ii) required to file subsequent biennial filings by March 31, 2016, and every two years thereafter. The bill also provides that if the combined rate of return on common equity earned by generation and distribution services for the two successive 12-month test periods ending December 31, 2013, is no more than 50 basis points above or below the return determined for this utility, the combined return shall not be considered either excessive or insufficient, respectively. In addition, the measure provides that for any test period commencing after December 31, 2012, for Dominion, referred to as a Phase II Utility, and after December 31, 2013, for Appalachian Power, if the utility has, during the test period or periods under review, earned below the return determined for the utility, whether or not such combined return is within 70 basis points of the return as so determined, the utility may petition the State Corporation Commission for approval of an increase in rates as if it had earned more than 70 basis points below a fair combined rate of return. The bill states that an emergency exists and that the bill is in force from its passage.

A BILL to amend and reenact § 56-585.1 of the Code of Virginia, relating to electric utility rates; biennial review schedule; rate of return collar.

13104134D

EMERGENCY