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2018 SESSION

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Senate Committee on Commerce and Labor
Subcommittee Electric Utility

Norment (Chairman), Saslaw, Stanley, Chafin, McDougle

Clerk: Chad Starzer
Staff: Frank Munyan
Date of Meeting: February 5, 2018
Time and Place:

S.B. 284 Electric utilities; solar generation capacity, public interest.

Patron: Saslaw

Electric utilities; solar generation capacity; public interest. Declares that the construction or purchase of certain solar generation facilities, or the purchase of the energy, capacity, and environmental attributes from the facilities, is in the public interest. An enactment clause states that the development of solar generation facilities is encouraged in order to enable ratepayers to obtain the benefit of this energy source during the remaining period of the existing federal investment tax credit.

A BILL to amend the Code of Virginia by adding a section numbered 56-585.1:4, relating to solar energy capacity in the Commonwealth.

18102528D

S.B. 285 Utility rates; voluntary rate design schedules or riders.

Patron: Saslaw

Utility rates; voluntary rate design schedules or riders. Requires the State Corporation Commission (SCC) to enter its final order on certain petitions filed by an investor-owned electric utility within eight months of the filing of the petition. The measure applies to petitions seeking approval of a schedule or rider for a voluntary rate or rate design test or experiment. An existing exemption to the requirement that each public utility uniformly charge each of its customers using its service under like conditions allows a utility to implement special rates upon SCC approval of a petition for a voluntary rate or rate design test or experiment.

A BILL to amend and reenact § 56-234 of the Code of Virginia, relating to public utility rates; timeline for orders on voluntary rate design schedules or riders.

18102529D

S.B. 662 Electric utilities; competition.

Patron: Wagner

Electric utilities; competition. Limits the scope of the provision that allows individual retail customers to aggregate or combine their demands in order to meet the five megawatt threshold above which they are permitted to purchase electric energy from any licensed supplier. The measure provides that the demands of individual retail customers may be aggregated or combined to meet this level only if they (i) are served by an electric cooperative with more than 150,000 customer accounts, (ii) have a combined noncoincident peak demand that exceeds 120 megawatts, and (iii) receive service at sites that are within 20 miles of each other.

A BILL to amend and reenact § 56-577 of the Code of Virginia, relating to electric utility regulation; ability to purchase from competing supplier.

18103013D

S.B. 901 Electric utilities; undergrounding distribution lines, reasonableness and prudence of costs.

Patron: Sturtevant

Electric utilities; undergrounding distribution lines; reasonableness and prudence of costs. States that the General Assembly has determined that (i) the conversion of an investor-owned electric utility's existing overhead distribution tap lines with new underground facilities will provide local and system-wide benefits, (ii) the new underground facilities are cost beneficial, and (iii) the costs associated with the new underground facilities are reasonably and prudently incurred. This legislative determination replaces a provision enacted in 2017 that established a rebuttable presumption regarding these three issues. The measure also directs the State Corporation Commission, in proceedings authorized or required by § 56-585.1, to only consider whether activities, facilities, or projects were or will be subject to proper and required purchasing and construction practices and whether costs proposed for such activities, facilities, or projects are reasonable such that they are attributable to expenses. This directive supersedes provisions enacted in 2007 that authorized the Commission to determine the reasonableness and prudence of costs incurred by a utility.

A BILL to amend and reenact § 56-585.1 of the Code of Virginia, relating to electric utility regulation; undergrounding distribution facilities; finding by General Assembly; authority to determine the reasonableness and prudence of costs.

18104735D

S.B. 922 Electric utilities; rates and tariffs.

Patron: Chafin

Electric utilities; rates and tariffs. Directs the State Corporation Commission to use the unconsolidated capital structure and cost of capital of an investor-owned electric utility when regulating the rates, terms, and conditions of service. Currently there is no requirement that the capital structure and cost of capital be unconsolidated. The measure also authorizes a utility to request an adjustment to a tariff during a biennial filing when the utility's rates do not change and requires the Commission to approve such an adjustment if it is found to be in the public interest.

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

18102900D

S.B. 965 Electric utility regulation; rate review proceedings, Transitional Rate Period, etc.

Patron: Newman

Electric utilities. Advances the date rate reviews are scheduled to resume for Dominion Energy Virginia (DEV) from 2022 to 2021. The review will use the three 12-month test periods beginning January 1, 2018, and ending December 31, 2020. The measure provides that for purposes of the Utility Facility Act a company that owns or operates facilities for the storage of electric energy for sale, including pumped hydroelectric generation and storage facilities in the coalfield region of Virginia is a public utility. The measure excludes from the definition of "public utility," for purposes of the Utility Facility Act, a company that provides storage of electric energy that is not for sale to the public, if the company is not organized as a public utility. The measure also includes enactment clauses that (i) direct the State Corporation Commission to conduct pilot programs for the deployment of electric power storage batteries; (ii) bar Appalachian Power (AEP) from recovering $10 million of incurred fuel costs; (iii) direct DEV to provide current customers a one-time bill credit of $133 million; (iv) require DEV to roll into its base rates certain costs associated with the conversion of certain generation facilities to utilize biomass as fuel; (v) require reductions in the rates for all incumbent electric utilities to reflect reductions in federal tax liability resulting from the enactment of federal tax legislation; and (vi) require DEV and AEP to continue funding for pilot programs for energy assistance and weatherization for low-income, elderly, and disabled individuals.

A BILL to amend and reenact §§ 56-265.1 and 56-585.1:1 of the Code of Virginia, relating to electric utility regulation; rate review proceedings; Transitional Rate Period; energy storage facilities; cost recovery; pilot programs; fuel factor; bill credits; rate adjustment clauses for major unit conversions; rate reductions attributable to changes in federal law.

18105571D

S.B. 966 Electric utility regulation; grid modernization, energy efficiency.

Patron: Wagner

Electric utility regulation. Provides that, in lieu of the biennial review proceedings previously required, Dominion Energy Virginia (DEV) and Appalachian Power (AEP) will be subject to triennial reviews of their rates, terms, and conditions for generation, distribution, and transmission services. The measure advances the termination of the Transitional Rate Period for DEV by two years, to December 31, 2017. The termination of the Transitional Rate Period for AEP remains December 31, 2017. For DEV, the first review after its Transitional Rate Period will be held in 2021, which is one year earlier than currently scheduled. For AEP, the first review after its Transitional Rate Period will be held in 2020, which is unchanged. In the triennial review proceedings, overearnings that might have been refunded to customers may be reduced by the amounts invested by DEV in certain new solar or wind generation facilities or on electric distribution grid transformation projects. The measure also: (i) excludes from the definition of "public utility" for purposes of the Utility Facility Act a company that provides storage of electric energy that is not for sale to the public, if the company is not organized as a public utility; (ii) provides that an energy efficiency program proposed by an electric utility is in the public interest if the net present value of the benefits exceeds the net present value of the costs as determined by any three of four benefit cost tests; (iii) declares that the conversion of an investor-owned electric utility's existing overhead distribution tap lines with new underground facilities are cost beneficial and that related costs are reasonable and prudently incurred if the average cost per customer does not exceed $20,000 and the costs per mile do not exceed $750,000; (iv) establishes a new rate adjustment clause category for electric distribution grid transformation project expenses; (v) declares that electric distribution grid transformation projects are in the public interest; (vi) provides that the costs of such projects may be recovered either through a rate adjustment clause or through a customer credit reinvestment offset; (vii) requires the State Corporation Commission (SCC) to enter an order on a petition for approval of a solar generation facility within six months after the petition's filing; (viii) provides that in any triennial review certain costs, including costs for certain meters and costs of coal combustion byproduct management, may be deferred for recovery in future periods; and (ix) allows utilities to avoid being required to credit customers with 70 percent of the amount of overearnings by applying a customer credit reinvestment offset for expenses on new solar and wind generation facilities and electric distribution grid transformation projects. The provision creating the customer credit reinvestment offset expires on July 1, 2028. The measure also includes enactment clauses that (a) establish a pilot program consisting of the approval of the underground construction of two electrical transmission lines and directs the SCC to approve as a qualifying project a transmission line that appears to track the I-66 Hybrid Route that has been considered in the application of DEV for the Haymarket transmission line project in Prince William County and approve a rate adjustment clause to allow the utility to recover from the utility's Virginia jurisdictional customers the costs of the project; (b) require DEV to provide current customers a one-time bill credit of $133 million; (c) require DEV to roll certain costs associated with the conversion of certain generation facilities to utilize biomass as fuel into its base rates; (d) require reductions in the rates for all incumbent electric utilities to reflect reductions in federal tax liability resulting from the enactment of federal tax legislation; (e) require DEV and AEP to continue funding for pilot programs for energy assistance and weatherization for low-income, elderly, and disabled individuals; and (f) require the SCC to submit a report and make recommendations to the Governor and the General Assembly annually on or before December 1 of each year, assessing the reliability of electrical transmission or distribution systems, the integration of utility-owned or customer-owned renewable electric generation resources with the utility's electric distribution grid, the level of investment in generation, transmission, or distribution of electricity, and related matters.

A BILL to amend and reenact §§ 56-265.1, 56-576, 56-585.1, and 56-585.1:1 of the Code of Virginia, relating to electric utility regulation; grid modernization; energy efficiency programs; schedule for rate review proceedings; Transitional Rate Period; energy storage facilities; electric distribution grid transformation projects, wind and solar generation facilities; coal combustion by-product management; pilot programs; undergrounding electrical transmission lines; fuel factor; bill credits; rate adjustment clauses for major unit conversions; rate reductions attributable to changes in federal tax law.

18105626D

S.B. 967 Electric utility regulation; grid modernization, energy efficiency.

Patron: Saslaw

Electric utility regulation. Provides that, in lieu of the biennial review proceedings previously required, Dominion Energy Virginia (DEV) and Appalachian Power (AEP) will be subject to triennial reviews of their rates, terms, and conditions for generation, distribution, and transmission services. The measure advances the termination of the Transitional Rate Period for DEV by two years, to December 31, 2017. The termination of the Transitional Rate Period for AEP remains December 31, 2017. For DEV, the first review after its Transitional Rate Period will be held in 2021, which is one year earlier than currently scheduled. For AEP, the first review after its Transitional Rate Period will be held in 2020, which is unchanged. In the triennial review proceedings, overearnings that might have been refunded to customers may be reduced by the amounts invested by DEV in certain new solar or wind generation facilities or on electric distribution grid transformation projects. The measure also: (i) excludes from the definition of "public utility" for purposes of the Utility Facility Act a company that provides storage of electric energy that is not for sale to the public, if the company is not organized as a public utility; (ii) authorizes an investor-owned electric utility, if a cable operator does not elect to relocate facilities underground when the electric utility relocates its facilities underground, to either convey poles to the cable operator or retain ownership of the poles; (iii) provides that an energy efficiency program proposed by an electric utility is in the public interest if the net present value of the benefits exceeds the net present value of the costs as determined by any three of four benefit cost tests; (iv) establishes a new rate adjustment clause category for electric distribution grid transformation project expenses; (v) increases the amount of capacity of solar generation facilities constructed by a utility that are in the public interest from 50 megawatts to 4,000 megawatts, including rooftop solar installations with a capacity of not less than 50 kilowatts; (vi) declares that the conversion of an investor-owned electric utility's existing overhead distribution tap lines with new underground facilities are cost beneficial and that related costs are reasonable and prudently incurred if the average cost per customer does not exceed $20,000 and the costs per mile do not exceed $750,000; (vii) declares that electric distribution grid transformation projects, offshore wind generation facilities with a capacity of not more than 16 megawatts, and all onshore wind generation facilities, are in the public interest and that the costs thereof may be recovered either through a rate adjustment clause or through a customer credit reinvestment offset; (viii) provides that in any triennial review certain costs, including costs for certain meters and costs of coal combustion byproduct management, may be deferred for recovery in future periods; (ix) requires the SCC to enter an order on a petition for approval of a solar generation facility within six months after the petition's filing; and (x) allows utilities to avoid being required to credit customers with 70 percent of the amount of overearnings by applying a customer credit reinvestment offset for expenses on new solar and wind generation facilities and electric distribution grid transformation projects. The provision creating the customer credit reinvestment offset expires on July 1, 2028. The measure also includes enactment clauses that (a) establish a pilot program consisting of the approval of the underground construction of two electrical transmission lines and directs the SCC to approve as a qualifying project a transmission line that appears to track the I-66 Hybrid Route that has been considered in the application of DEV for the Haymarket transmission line project in Prince William County and approve a rate adjustment clause to allow the utility to recover from the utility's Virginia jurisdictional customers the costs of the project; (b) require DEV to provide current customers a one-time bill credit of $133 million; (c) require DEV to roll certain costs associated with the conversion of certain generation facilities to utilize biomass as fuel into its base rates; (d) require reductions in the rates for all incumbent electric utilities to reflect reductions in federal tax liability resulting from the enactment of federal tax legislation; and (e) require DEV and AEP to continue funding for pilot programs for energy assistance and weatherization for low-income, elderly, and disabled individuals.

A BILL to amend and reenact §§ 56-265.1, 56-466.2, 56-576, 56-585.1, and 56-585.1:1 of the Code of Virginia, relating to electric utility regulation; grid modernization; energy efficiency programs; schedule for rate review proceedings; Transitional Rate Period; energy storage facilities; electric distribution grid transformation projects, wind and solar generation facilities; coal combustion by-product management; pilot programs; undergrounding electrical transmission lines; fuel factor; bill credits; rate adjustment clauses for major unit conversions; rate reductions attributable to changes in federal tax law.

18105575D