Services, Inc. January 5, 2018

Transcription

1 Services, Inc. ~ Dominion 120 Tredegar Street, Richmond, VA ~ Energy Dominion Energy.com January 5, 2018 Application of Virginia Electric and Power Company For approval to establish a companion tariff, designated Schedule RG, pursuant to of the Code of Virginia Case No. PUR To: Local Government Officials Pursuant to the State Corporation Commission of Virginia s December 28, 2017 Orderfor Notice and Comment ( Order ), Virginia Electric and Power Company ( Company ) is providing a copy of the Company s Application and the Order to you. Please take notice of their contents. A copy of the complete Application materials in this matter may be obtained from the Company at no cost by written request to Jakarra J. Jones, Esquire, McGuire Woods LLP, 800 East Canal Street, Richmond, Virginia If acceptable to the requesting party, the Company may provide the documents by electronic means. Attachment Lisa S. Booth Deputy General Counsel

2 COMMONWEALTH OF VIRGINIA STATE CORPORATION COMMISSION APPLICATION OF ) ) VIRGINIA ELECTRIC AND POWER ) COMPANY ) ) CaseNo,PUR For approval to establish a companion tariff, ) designated Schedule RG pursuant to ) of the Code of Virginia ) APPLICATION OF VIRGINIA ELECTRIC AND POWER COMPANY FOR APPROVAL TO ESTABLISH A COMPANION TARIFF, DESIGNATED SCHEDULE RG PURSUANT TO ~ OF THE CODE OF VIRGINIA Pursuant to of the Code ofvirginia ( Va. Code ) and Rule 80 of the Rules of Practice and Procedure of the State Corporation Commission of Virginia ( Commission ), 5 VAC , Virginia Electric and Power Company ( Dominion Energy Virginia or the Company ), respectfully requests Commission approval of its application ( Application ) to establish a voluntary companion tariff, designated Schedule RG Renewable Generation Supply Service ( Schedule RG ), whereby participating large, non-residential customers may voluntarily elect to purchase, in an amount up to 100 percent of their energy needs, the net energy output from renewable energy resources, as well as the renewable and environmental attributes associated with this renewable energy. Schedule RG is modeled after the experimental, voluntary RG Pilot Program and Rate Schedule RG (together, the Original Offering ), which was approved by the Commission as being in the public interest in Case No. PUE and closed in April Schedule RG makes four significant improvements upon the Original Offering, all of which are based on customer feedback. First, under the Original Offering, the billing adjustment received by participating customers was a credit primarily based on the Company s fuel rider charge for the

3 quantity of renewable energy purchased. Under Schedule RG, a participating customer will see a billing adjustment reflecting the market value of renewable energy purchased from specified renewable energy resources under this schedule. Second, the Original Offering did not permit aggregation of accounts, whereas Schedule RO permits a single customer to aggregate multiple accounts, and the aforementioned billing adjustment may be distributed among a single customer s multiple accounts. Third, the administrative charge under the Original Offering was $500 per month per account served. By contrast, the Schedule RO administrative charge is assessed for each customer per renewable generation facility, which may serve multiple accounts for the same customer. Fourth, unlilce the Original Offering, which restricted each customer s renewable energy purchases to a maximum of 24,000 megawatt-hours per year, Schedule RG only limits participating customers renewable energy purchases to the customer s actual annual energy load. Because these improvements were based on discussions with customers, the Company believes they will significantly increase customer interest in Schedule RO. In support of this Application, the Company respectfully shows the following: I. GENERAL INFORMATION 1. The Company is a public service corporation organized under the laws of the Commonwealth of Virginia furnishing electric service to the public within its certificated service territory. The Company also supplies electric service to non-jurisdictional customers in Virginia and to the public in portions of North Carolina. The Company is engaged in the business of generating, transmitting, distributing, and selling electric power and energy to the public for compensation. The Company also is a public utility under the Federal Power Act, and certain of its operations are subject to the jurisdiction of the Federal Energy Regulatory Commission. The Company is an operating subsidiary of Dominion Energy, Inc. ( Dominion Energy.). 2

4 Company are: 2. The Company s name and post office address are: Virginia Electric and Power Company 120 Tredegar Street Richmond, Virginia The names, post office addresses and telephone numbers of the attorneys for the Lisa S. Booth William H. Baxter II David 3. DePippo Dominion Energy Services, Inc. 120 Tredegar Street, Riverside 2 Richmond, Virginia (804) (telephone) (804) (facsimile) Joseph K. Reid III Jakarra 3. Jones Anne Hampton Andrews McGuireWoods LLP Gateway Plaza 800 East Canal Street Richmond, Virginia (804) (telephone) (804) (facsimile) II. AUThORITY AND BACKGROUND 4. Va. Code A provides that [i]t shall be the duty of every public utility to furnish reasonably adequate service and facilities at reasonable and just rates to any person, firm or corporation along its lines desiring the same. 5. In addition, Va. Code B provides that: It shall be the duty of every public utility to charge uniformly therefor all persons, corporations or municipal corporations using such service under like conditions. However, no provision of law shall be deemed to preclude voluntary rate or rate design tests or experiments, or other experiments involving the use of special rates, where such experiments have been approved by order of the Commission after notice and hearing and a finding that such 3

5 experiments are necessary in order to acquire information which is or may be in fbrtherance of the public interest) 6. Dominion Energy Virginia is committed to evaluating cost-effective opportunities to expand its portfolio of renewable generation resources, and to responding to customer preferences to promote and utilize such resources, as part of its overall planning strategy to provide electric service to its customers in a safe, reliable, cost-effective, and environmentally responsible manner. As discussed below, these Dominion Energy Virginia objectives are consistent with legislative enactments by the Virginia General Assembly and the Governor s Executive actions encothaging utilities to increase their renewable power generation and decrease carbon dioxide emissions. 7. Over the past several years, the Company has received a host of inquiries from current and prospective commercial and industrial customers interested in renewable energy options. Many large energy users have sustainability goals or mandates to power their facilities with renewable energy. Often, these current and potential customers view sustainability as a core principle of their business strategy and make expansion or new facility siting determinations based on the availability of renewable energy options. To meet the needs and desires of these customers, the Company has been, and remains in, communication with a number of large, non residential customers with demonstrated interests in Schedule RG. These communications have yielded many of the improvements to Schedule RG that is, in addition to promoting the Commonwealth s interest inittilizing renewable energy and expanding its use, Schedule RG reflects a tariff structure that large, non-residential customers (and potential customers) have indicated they need and desire. As an example, the Company has worked closely with Walmart The Company is not proposing an experimental rate. To the extent that Va. Code B is found to be applicable to the Company s Application, however) the Company asserts that Scheduk RO is in the public interest for the reasons stated herein. 4

6 during the development of Schedule RO to create a tool that it could utilize to further its aggressive and significant renewable energy goals, including: (i) to be supplied 100 percent by renewable energy;2 (ii) by 2025, to be supplied by 50 percent renewable energy; and (iii) to reduce emissions in Walmart s operations by 18 percent by 2025 through the deployment of energy efficiency and consumption of renewable energy.3 Walmart has 96 stores, two distribution centers, and related facilities that take service under the Company s OS-i, 05-2, and OS-3 rate schedules. III. SCHEDULE RG 8. In response to these customer requests and to further promote the development and utilization of renewable energy resources in the Commonwealth, the Company proposes Schedule RQ. As set out in the testimony of Company Witness Robert J. Trexler, and as indicated in Paragraph l.a of Schedule RO, included as Schedule 1 to Mr. Trexier s testimony, Schedule RO is a companion schedule,.available on a voluntary basis to eligible commercial and industrial customers of the Company who currently are taking (or agree to take) service under an approved applicable tariff, currently including the Company s Rate Schedule OS-i, Small Oeneral Service; Rate Schedule GS-2, Intermediate Oeneral Service; Rate Schedule QS-2T, Intermediate Oeneral Service Time-of-Usage; Rate Schedule 08-3, Large Oeneral Service Secondary Voltage; Rate Schedule OS-4, Large Oeneral Service Primary Voltage; Rate Schedule 10, Large Oeneral Service; Rate Schedule 27, Outdoor Lighting Service High Pressure Sodium Vapor; and Rate Schedule 28, Outdoor Lighting Service Customer Charges for Outdoor Lighting Served on Schedule 28 (collectively, the Company s Rate Schedules OS- 1, OS-2, GS-2T, GS-3, OS-4, 10, 27 and 28 and each a Principal Tariff ). For example, if a 2 See See 16/1 1/04/walmart-offers-uew-vision-for-the-companys-role-in-society. 5.

7 customer elects to take service under Schedule RO, that customer will receive service concurrently under its selected Principal Tariff and Schedule RO. Schedule RG is intended to provide a mechanism for participating customers to support the use of existing and/or the development of new renewable energy generation facilities ( renewable generation facilities ), and commit to purchase up to 100 percent of the net electric energy output generated exclusively from renewable generation facilities (including the capacity, as applicable, of the specified renewable generation facility) ( Electrical Output ), along with the Environmental Attributes4 associated with the renewable energy purchased, in an amount that corresponds to up to 100 percent of the customer s annual electric energy load. The Company is seeking herein all necessary approvals from the Commission related to the implementation and operation of Schedule RO. 9. Schedule RG is designed to allow participating customers to benefit from the Company s sale of the energy output of specified renewable generation facilities into the PJM, Interconnection, L.L.C. ( PJM )5 markets, while increasing the level of renewable energy generation and utilization in the Commonwealth. Through the arrangement facilitated by Schedule RG, participating customers will continue to purchase energy and capacity from Dominion Energy Virginia and commit to purchase a specified quantity of kilowatt-hours As used herein, Environmental Attributes means other than the electric energy, ancillary services, or capacity benefit produced by the renewable generation facility, an aspect claim, characteristic, or benefit, howsoever entitled, associated with the generation of a quantity of electric energy by a renewable generation facility, other than the electric energy produced, and that is capable of being measured, verified or calculated. Environmental Attributes include Renewable Energy Certificates ( RECs ), but do not include federal, state, and local tax credits or other incentives. As used herein, Renewable Energy Certificate or REC means the certificate or other transferable indicia created under the applicable program associated with one (1) megawatt-hour ( MWh ) of electric energy generated by the applicable renewable generation facility. ~ PilvI is defmed as the PJM Interconnection, L.L.C. (Pennsylvania-New Jersey-Maryland Interconnection, IJ.L.C.), or any successor, that is the regional transmission organization and is part of the Eastern Interconnection grid that operates an electric transmission system used to serve the Company s customers for purposes of accounting for. the generatitm and delivery of the energy and the associated Environmental Attributes. 6

8 ( kwh ) of Electrical Output generated by specified renewable generation facilities and delivered to the Company s electrical grid, pursuant to the terms of the customers written agreements with the Company. 10. Pursuant to Schedule RU, the Company will (i) contract with a third-party renewable energy provider ( Renewable Generator ) to purchase the desired Electrical Output and associated Environmental Attributes on the customer s behalf and/or (ii) at the customer s request and subject to mutually agreeable terms, construct a renewable generation facility on the customer s behalf to generate the desired Electrical Output (a Company Renewable Resource ).6 A participating customer may request a specific type of renewable energy resource, provided that it generates renewable energy as defined by Va. Code , which includes, in pertinent part: energy derived from sunlight, wind, falling water, biomass, sustalnable or otherwise, (the definitions of which shall be liberally construed), energy from waste, landfill gas, municipal solid waste, wave motion, tides, and geothermal power, and does not include energy derived from coal, oil, natural gas, or nuclear power. 11. Under Schedule RU, any renewable generation facility from which the Company will purchase renewable energy on behalf of a participating customer may be located outside of the Company s service territory, but must be located physically within and interconnected with the PJM wholesale electric market for purposes of accounting for the generation and delivery of the energy and the associated Environmental Attributes. 6 If Dominion Energy Virginia pursues developing Conipany Renewable Resources in Virginia, it would seek a Permit by Rule from the Virginia Department of Environmental Quality or a certiflcató of public convenience and necessity from the Commission, as applicable. 7

9 A. Eligibility and Terms 12. In addition to the requirement that a customer must receive Electric Service7 under a Principal Tariff; additional eligibility requirements apply to Schedule RU. A customer wishing to apply for service under Schedule RG must agree to purchase its Electrical Output from a Company Renewable Resource or through a power purchase agreement, as set forth in Paragraph 14 below, of at least 1,000 kilowatts ( kw ) in nameplate capacity, where the electric energy purchased from such Company Renewable Resource or through such power purchase agreement does not exceed the customer s annual electrical energy load. Unlike the Original Offering, Schedule RU permits aggregation of accounts to satisfy the minimum resource capacity requirement, which will enhance participation in the PJM wholesale markets. 13. As set out in the testimony of Company Witness Trexler, and as indicated in Paragraph I.C of Schedule RU, Schedule RG customers must execute a Customer Contract for the Purchase of Renewable Generation Pursuant to Virginia Electric and Power Company s Schedule RG Renewable Generation Supply Service ( Schedule RU Agreement ) with the Company that sets forth the mutual terms and conditions associated with the Company s purchase or supply of renewable generation to be delivered to the electrical grid on behalf of the customer from each renewable generation facility under Schedule RG. The Schedule RU Agreement will specify the pricing negotiated with each participating customer to account for the customer s purchase of Electrical Output and reflect the customer s purchase of any associated Environmental Attributes, which will be retired by the Company on the customer s behalf. 14. As set out in the testimony of Company Witness James M. l3illingsley, and indicated in Paragraph I.C of the tariff, Schedule RU requires that the Company and a The capitalized terms Electric Service and Electricity Supply Service used herein are defined as used in the Company s Terms and Conditions on file with the Commission and available at httpsf/dominionenergy.com/. 8

10 Renewable Generator execute a Renewable Generation Power Purchase Agreement ( Schedule RG PPA ) if a prospective customer requests that the Company purchase renewable energy from a Renewable Generator on behalf of the customer. The Schedule RU PPA will address the terms of the Company s purchase of renewable energy from a Renewable Generator on the customer s behalf and the delivery of renewable generation to the Company s electric grid from each renewable generation facility identified therein. Accordingly, the Schedule RU PPA recognizes the participating customer as a third-party beneficiary to the agreement. 15. The Company intends to contain the costs related to the purchase and sale of Electrical Output under Schedule RG to each participating customer. A participating customer will sign the Schedule RG Agreement with the Company, pursuant to which the customer agrees to be responsible for all costs associated with its purchase of Electrical Output and any associated Environmental Attributes under Schedule RU, including any administrative costs, as discussed below. Moreover, pursuant to a customer s Schedule RU Agreement, no costs related to the Schedule RG PPA, if applicable, or the Company Renewable Resource, if applicable, will be assigned to the Company s other jurisdictional or non-jurisdictional customers. B. The Enrollment Process and Contract Term 16. Schedule RG will be available to eligible customers, subject to the enrollment parameters outlined herein, until an initial proposed cap of 50 customers is met ( customer cap ).8 Upon approval, an electronic enrollment process will be offered on the Company s website, for eligible customers. Subject to the enrollment period limitations discussed herein, eligible customers will be able to enroll in and take service under Schedule RU until th~ customer cap is reached, provided customers have satisfied all of the The Company reserves the right to propose an increase of the initial customer cap in the future, as needed. 9

11 qualifications and requirements of Schedule RG, including the execution of a Schedule RG Agreement and, if applicable, the Renewable Generator and the Company executing a Schedule RG PPA. While the Company is proposing an initial customer cap in the Application to allow an opportunity for ongoing evaluation by the Company, the Commission, and other stakeholders of this new tariff offering, there is no cap proposed on the quantity of renewable energy purchases under Schedule RG, except that a customer may only purchase up to 100 percent of its annual electrical energy load. 17. With respect to enrollment, as set out in the testimony of Company Witness Derek L. Wenger, Dominion Energy Virginia will solicit customer interest in Schedule RG during a three-month enrollment period within sixty (60) days of receiving approval from the Commission and, at a minimum, once per year thereafter. The frequency of such solicitations may occur more than once per year as warranted by aggregate customer interest. In order to ensure renewable resources are properly procured and allocated, as well as foradministrative efficiency, the Company will endeavor to utilize an enrollment process schedule similar to the following example: Months 1-3: * Months 4-5: Month 6: Months 7-8: Month 9+: Enrol1me~t Period (notification of customer interest) Market solicitation process to identify renewable generating resources to meet identified customer interest (or evaluate the provision of Company Renewable Resource(s)) Provide indicative pricing to customers and affirm continued interest Negotiate/Execute Schedule. RG Agreement and Schedule RG PPA, as applicable Customer begins service on Schedule RG 10

12 Enrollment Period (Notification of Customer Interest) ~ Market Solicitation Process to Renewable Generation Provide Indicative Pricing to Customers Contract Negotiations with Customers and Generators I~ Customer Begins Service on Applicable Schedule RG * Month 1 begins 60 days after Commission approval and at least once per year thereafter. 18. A prospective customer also may enroll in Schedule RG outside of the enrollment and solicitation period outlined in Paragraph 17 above in the event that the prospective customer either identifies a specific Renewable Generator with whom the Company will execute a Schedule RG PPA on behalf of the prospective customer, or requests the Company to construct a Company Renewable Resource on behalf of the prospective customer. 19. During the enrollment period, the Company will solicit interest in Schedule RG through a variety of means, such as news releases, direct mail, , and social media. The Company also will establish a dedicated webpage on the Dominion Energy Virginia website. Additionally, the Company will ensure that customer service representatives are equipped with information about Schedule RG,,and that other Company employees will be available to provide additional detail on the program should customers have more in-depth questions. 20. The electronic enrollment process will be available on-line and will include specific requirements of Schedule RG. In addition, prospective participants requesting that the Company identify a renewable generation facility will be able to submit an application from the website electronically during the annual three-month enrollment period. Prospective participants that provide the Company with an identified renewable generation facility may submit an application from the website at any time prior to Schedule RG reaching the customer cap. 21. If the customer elects to apply, the customer will be subject to a one-time, non refundable Schedule.RG application fee of $2,000 per customer (regardless of the number of 11

13 accounts served), which is intended to defray the Company s costs related to the solicitation process. Company representatives will work with the customer through the remainder of the renewable generation sourcing process and contract execution. C. Rate Design, Pricing and Billing 22. For each customer taking service on Schedule RG, the Company will continue to bill the customer s account in accordance witli the applicable Principal Tariff. In other words, the customer will still pay the capacity and energy charges (including applicable rate adjustment clause charges and fuel rider charges) associated with the full requirements of its load. Because Schedule RG has been designed as a companion tariff to an applicable Principal Tariff, a participating customer s monthly billing statement will look much as it does today, except that it also will reflect the cost associated with contracted-for renewable energy, net of PJM settlement credits and charges associated with the customer s purchase of Electrical Output by specified renewable generation facilities under this schedule (the Net Schedule KG Settlement charge or credit). The Net Schedule KG Settlement charge or credit may be distributed equitably among multiple accounts for the same customer. Specifically, upon the customer s written request, a single customer can select two or more of the customer s own accounts or accounts under a common legal parent, with agreement by such account owner, for which the charges and credits from the customer s Schedule RG Agreement can be billed in accordance with this schedule and the terms of the customer s Schedule RG Agreement. 23. The Net Schedule RG Settlement charge or credit is comprised of the following components: (i) the Schedule KG Charge ; (ii) the Schedule RG Adjustment ; and (iii) the Schedule KG Administrative Charge. 12

14 24. The Schedule RO Charge will be set forth in the Schedule RG Agreement and represents the cost of the Electrical Output delivered by the specified renewable generation facility (including the capacity costs, as applicable, of the specified renewable generation facility), and thus, will be driven by the terms of the Schedule RG PPA (or the agreement reflecting the use of a Company Renewable Resource). The Schedule RG Charge also reflects the purchase of the associated Environmental Attributes, which will be retired on behalf of the participating customer. 25. The Schedule RG Adjustment, which is designed to reflect the customer s purchase of Electrical Output, shall be equal to the PJM settlement credits for the Electrical Output of the Schedule RG PPA, if applicable, and/or the Company Renewable Resource. The PJM settlement credits shall represent all charges and credits as billed by PJM for the application of the energy and capacity, if applicable, to the electrical grid. The PJM settlement credits may include, but are not limited to, capacity credits, if applicable, energy credits, and balancing, ancillary, and/or administration charges or credits. 26. The Schedule RG Administrative Charge, which will be addressed in the Schedule RG Agreement, shall be equal to the greater of (i) $500 for each 30-day billing period or (ii) $0.25 per MWh supplied by each Renewable Generator and/or Company Renewable Resource for which the customer has contracted to purchase Electrical Output pursuant to Schedule RG. Unlike the administrative cost for the Original Offering, which was $500 per month per account served, the Schedule RG Administrative Charge applies to each renewable energy resource, which may serve multiple accounts for the same customer. 27. As set forth in Paragraph VI of Schedule RG, contracted customers will continue to take service on Schedule RG through the respective terms of their Schedule RG Agreements, 13

15 continuing though and until the latest termination date of the applicable Schedule RU Agreement. Additionally, Schedule RU provides that the Company shall be the exclusive provider of Electric Service, including the exclusive provider of Electricity Supply Service for the customer s account(s) to which Schedule RU applies. D. Schedule kg Is Just, Reasonable and in the Public Interest 28. Schedule RG is just and reasonable because the Net Schedule RU Settlement charge or credit will be designed to recover the Company s actual costs to serve each participating customer under this schedule, inclusive of applicable RIM settlement credits and administrative charges. Importantly, non-participating customers will not be required to pay for, or subsidize, the costs to serve Schedule RG customers with renewable energy. Schedule RU will, effectively, ring-fence that portion of the participating customer s costs related to the purchase and sale of Electrical Output and Environmental Attributes from the Renewable Generator and/or the Company Renewable Resource(s). 29. Schedule RU also is just and reasonable because participating customers will continue to be billed under their Principal Tariffs, consistent with the corresponding standard rate schedules for non-participating customers (the Company s Rate Schedules US-i, GS-2, GS-2T, GS-3, GS-4, 10, 27 and 28), and they will be voluntarily incurring the additional Net Schedule RU Settlement charge or credit on their bills. 30. Schedule RU also will further the Commonwealth Energy Policy as stated in Va. Code and and the Governor s Executive actions9 encouraging utilities to increase their renewable power generation and decrease carbon dioxide emissions in that the 9See, e.g., Executive Directive 11, Reducing Carbon Dioxide Emissions From Electric Power Facilities and Growing Virginia s Clean Energy Economy (May 16, 2017), available at actions/executive-directivesl (last visited Nov.22, 2017). 14

16 Company will endeavor to source new renewable energy resources within the Commonwealth to serve customers on Schedule RG, to the extent such resources are available and consistent with participating customers needs and interests, which is in the public interest. Specifically, the Company s offering of Schedule RG will support the objectives under to increase Virginia s reliance on sources of energy that, as compared to t~aditional energy resources, are less polluting of the Commonwealth s air and water. The Company s provision of Schedule RG is consistent with the goals under to [sjupport research and development of, and promote the use of, renewable energy sources, and to [p]romote the generation of electricity through technologies that do not contribute to greenhouse gases and global warming. 31. Implementation of Schedule RG also is consistent with the goals of the Virginia Energy Plan to accelerate the development of renewable energy sources in Virginia to ensure a diverse fuel mix and prdmote long-term economic health, as well as Governor McAuliffe s Executive Order 57 to reduce carbon emissions in Virginia while encouraging a pathway for clean energy initiatives that will grow jobs and help diversif~ the economy. 32. Relatedly, and as discussed above, many large, non-residential energy users have sustainability goals or mandates to power their facilities with renewable energy. As such, their ability to obtain renewable energy for their facilities under terms they find favorable or complementary to their business needs and goals can impact their decisions regarding whether to retain, expand, or site new facilities in the Commonwealth. In turn, those decisions can have significant impacts on the jobs and the economy in the Commonwealth. As discussed, the terms and structure of Schedule RG have been developed through and in response to discussions with large, non-residential customers and potential customers. To that end, Schedule RG provides ~ Executive Order 57, Development of Carbon Reduction Strategies for Electric Power Generation Facilities (June 28, 2016), available at (last visited Nov. 14, 2017). 15

17 these entities with an avenue, on desired terms, to develop, obtain, and utilize renewable energy in the Commonwealth, and serves as an important offering in the Company s larger suite of renewable energy offerings to such customers. VII. CONCLUSION 33. Pursuant to Va. Code , the Company proposes Schedule RGto provide eligible customers with a newly designed voluntary, companion tariff to service under the Company s Rate Schedules OS-i, 05-2, GS-2T, 05-3, 05-4, 10, 27 and 28. Schedule RO will, firét, facilitate the development and utilization of renewable energy offerings that will help to attract and retain industry-leading, innovative commercial and industrial customers with sustainability goals or renewable energy mandates, growing and preserving jobs and diversifying the economy of the Commonwealth; second, benefit participating customers by permitting them to promote the development of new renewable generation facilities and the utilization of existing rençwable generation facilities in the Commonwealth and meet their sustainability goals by purchasing the Electrical Output of such renewable generation facilities; and, third, help to further promote the development of renewable energy resources for the benefit of the Company s customers and the Commonwealth as a whole. WHEREFORE, Dominion Energy Virginia respectfully requests that the Commission approve the Company s proposed voluntary companion tariff, designated Schedule RG, pursuant to , and grant such other and further relief as it deems necessary or appropriate. 16

18 Respectfully submitted, VIRGINIA ELECTRIC AND POWER COMPANY By: Dated: December 1, 2017 Lisa S. Booth William H. Baxter II David J. DePippo Dominion Energy Services, Inc. 120 Tredegar Street, Riverside 2 Richmond, Virginia (804) (LSB telephone) (804) (WHB telephone) (804) (DJD telephone) (804) (facsimile) lisa.s. booth~dominionenergy. corn william. h. baxter(,djdominionenergy. corn david.j. depippo ~dominionenergy. corn Joseph K. Reid III Jakarra J. Jones Anne Hampton Andrews McGuireWoods LLP Gateway Plaza.800 East Canal Street Richmond, Virginia (804) (JKR telephone) (804) (JJJ telephone) (804) (AHA telephone) (804) (facsimile) jreid~rncguirewoods. corn jjones~mcguirewoods. corn aandrews(äjmcguirewoods. corn Counselfor Virginia Electric and Power Company 17

19 COMMONWEALTH OF VIRGINIA STATE CORPORATION COMMISSION ~ :1 ~ E AT RICHMOND, DECEMBER 28, 20l.7,r~i~V~L CE~TER APPLICATION OF VIRG[NIA ELECTRIC AND POWER COMPANY ~Et 28 P 3: 30 CASE NO. PUR For approval to establish a companion tariff, designated ScheduLe RG, pursuant to of the Code of Virginia ORDER FOR NOTICE AND COMMENT On December 1, 2017, Virginia Electric and Power Company dlb/a Dominion Energy Virginia ( Dominion or the Company ), pursuant to of the Code of Virginia ( Code ) and Rule 5 VAC of the Rules of Practice and Procedure ( Rules of Practice ) of the State Corporation Commission ( Commission ), filed with the Commission its Application of Virginia Electric and Power Company for Approval to Establish a Companion Tariff, Designated Schedule RG, Pursuant to of the Code of Virginia ( Application ). Through its Application, Dominion seeks approval to establish a voluntary tariff, designated Schedule RG - Renewable Generation Supply Service ( Schedule RG ), whereby participating large non-residential customers voluntarily may elect to purchase, in an amount up to 100 percent of their energy needs, the net energy output from renewable energy resources, as well as the renewable and environmental attributes associated with this renewable energy. The Company states that Schedule RG is modeled after the experimental voluntary RG Pilot Program and Rate Schedule RG, which was approved by the Commission in Case No. 5 VAC e seq.

20 PUE-20 12~ Dominion asserts that the terms and structure of the proposed Schedule RG have been developed through and in response to discussions with large non-residential customers and potential customers.3 Proposed Schedule RG is designed to allow participating customers to benefit from the Company s sale of energy output of specified renewable generation facilities into the PJM Interconnection, LLC ( PJM ) markets, while increasing the level of renewable energy generation and use in the Commonwealth.4 As proposed, Schedule RG would be a companion schedule, available on a voluntary basis to eligible commercial and industrial customers of the Company who currently are taking (or agree to take) service under an approved applicable tariff (Rate Schedules GS- I, GS-2, GS-3, GS-4, 10, 27, and 28).~ Pursuant to the proposed Schedule RG, Dominion would: (i) contract with a third-party renewable energy provider to purchase the desired electrical output and associated environmental attributes on the customer s behalf andlor; (ii) at the customer s request and subject to mutually agreeable terms, construct a renewable generation facility on the customer s behalf to generate the desired electrical output.6 A participating customer may request a specific type of renewable energy resource, provided that it generates renewable 2 Application at I. The RG Pilot Program and Rate Schedule RG closed in April See Application of Virginia Electric and Power company, For approval to establish a renewable generation pilot program pursuant to of (he Code of Virginia, Case No. PUE O 142, 2013 S.C.C. Ann. Rept. 346, Final Order (Dec. 16, 2013). The Company represents that it is not offering an experimental rate. Application at 4, n. I. Application at 4-5, 15. id. at6. 5!d. at5. 61d at7. 2

21 energy as defined by Code ~ According to the Company, under the proposed Schedule RG, any renewable generation facility from which the Company would purchase renewable energy on behalf of a participating customer may be located outside of the Company s service territory but would have to be located physically within and interconnected with the PJM wholesale electric market for purposes of accounting for the generation and delivery of the energy and associated environmental attributes.8 To be eligible for Schedule RG, a customer, in addition to taking service under an approved applicable tariff, would need to agree to purchase electrical output from a Company renewable resource or through a power purchase agreement of at least 1,000 kilowatts nameplate capacity, where the electric energy purchased from such Company renewable resource or through such power purchase agreement does not exceed the customer s annual electrical energy load.9 Schedule RG, as proposed by Dominion, would permit the aggregation of accounts to satisfy the minimum resource requirement. Proposed Schedule RO also provides that the Company would be the exclusive provider of electric service, including the exclusive provider of electricity supply service for the customer s account(s) to which Schedule.RG applies. A Schedule RG customer would execute a Schedule RG Agreement, setting forth the mutual terms and conditions associated with the Company s purchase or supply of renewable ~ Id. ~ Id. at 7. Dominion represents that the Company will endeavor to source new renewable energy resources within the Commonwealth to serve customers on Schedule RG, to the extent such resources are available and consistent with participating customers needs and interests. Id. at 15, ~ Application at 8. Id. H Id. at 14. 3

22 p M generation to be delivered to the grid on behalf of the customer from each renewable generation facility under Schedule RG. 2 As proposed, Schedule RO also would require that the Company and a renewable generator execute a power purchase agreement ( Schedule RG PPA ) if a prospective Schedule RG customer requests that the Company purchase renewable energy from a renewable generator on behalf of the customer.13 Under Dominion s proposal, eligible customers electing to apply for service pursuant to Schedule RG would pay a non-refundable application fee of $2,000 (regardless of the number of accounts served), which is intended to defray the costs related to the Company s solicitation process for Schedule RG. 4 The customer s monthly billing statement would, in addition to the capacity and energy charges associated with the full requirements of its load, reflect the cost associated with contracted-for renewable energy, net of PJM settlement credits and charges associated with the customer s purchase of electrical output by specified renewable generation facilities under proposed Schedule RG ( Net Schedule RG Settlement ). 5 The Net Schedule RG Settlement charge or credit could be distributed equitably among multiple accounts for the same customer id. at 8. ~ Id. at 8-9. The Schedule RO PPA would recognize the participating customer as a third-party beneflciary to the agreement. Application at ~ id. at 12. The Net Schedule RG Settlement would be comprised of the following components: (I) the Schedule RG Charge ; (ii) the Schedule RG Adjustment ; and (iii) the Schedule RG Administrative Charge. id. The details of all three of these components are set forth ni the Company s Application. 16 Application at 12. 4

23 Dominion proposes to solicit customer interest in proposed Schedule RO within 60 days of receiving approval from the Commission and, at minimum, once a year thereafter, 7 If approved, prospective customers may enroll in proposed Schedule RG outside of an enrollment period in the event that the prospective customer either identifies a specific renewable generator with whom the Company would execute a purchase power agreement on behalf of the prospective customer, or requests Dominion construct a Company renewable resource on behalf of the customer,18 As proposed, Schedule RG would be available to eligible customers until an initial proposed cap of 50 customers is met. 9 The Company proposes no cap on the quantity o:f renewable energy purchases under Schedule RG except that a customer may purchase up to 100 percent of its annual electrical energy load.20 Dominion intends to contain the costs related to the purchase and sale of electrical output under Schedule RG to each participating customer.2 Specifically, pursuant to the Schedule RO Agreement, no costs related to the Schedule RG PPA (if applicable) or the Company renewable resource (if applicable) would be assigned to the Company s other jurisdictional or non jurisdictional customers.22 ~ Id. at 10. ~ Id. at I I. ~ Id. at 9, n.8. 2O,~/ at Id. at Id 5

24 r~ Dominion asserts, among other things, that the proposed Schedule RG is just and reasonable and in the public interest.23 Dominion also asserts that Schedule RG would further the Commonwealth s Energy Policy as set forth in Code ~ and , the Governor s Executive actions encouraging utilities to increase their renewable power generation and decrease carbon dioxide emissions, and Virginia s Energy Plan.24 Dominion asserts that the proposed Schedule.RG would help to attract and retain industry-leading, innovative commercial and industrial customers with sustainability goals or renewable energy mandates, while growing and preserving jobs and diversifying the economy of the Commonwealth.25 NOW THE COMMISSION, upon consideration of this matter, is of the opinion and finds that this matter should be docketed; that the Company should provide public notice of its Application; interested persons should have an opportunity to file comments on the Application, file a notice of participation as a respondent, or request that a hearing be convened; the Commission s Staff ( Staff ) should be directed to investigate the Application and present its findings and recommendations in a report; and a Hearing Examiner shall be assigned to conduct all further proceedings in this matter, concluding with the filing of a report containing the Hearing Examiner s findings and recommendations on the Company s Application. Accordingly, IT is ORDERED THAT: (1) The Company s Application hereby is docketed and assigned Case No. PUR d.at4,n.l; Id. at 14-IS. 2~ Id. at 16. 6

25 (2) As provided by of the Code and 5 VAC of the Commission s Rules of Practice, Procedure before hearing examiners, a Hearing Examiner is appointed to conduct all further proceedings in this matter, concluding with the filing of a report containing the Hearing Examiner s findings and recommendations on the Company s Application. (3) A copy of the Application and this Order for Notice and Comment, as well as other orders and documents now or hereafter filed in this matter, shall be available for public inspection in the Commission s Document Control Center located on the first floor of the Tyler Building, 1300 East Main Street, Richmond, Virginia 23219, between the hours of 8:15 a.m. and 5 p.m., Monday through Friday, excluding holidays. A copy of this Application also may be obtained by submitting a written request to counsel for the Company, Jakarra 3. Jones, Esquire, McGuireWoods LLP, Gateway Plaza, 800 East Canal Street, Richmond, Virginia Upon receipt of a request for a copy of the Application, the Company shall serve copies of the same upon the requesting party within three business days of such request. If acceptable to the requesting party, the Company may provide the Application by electronic means. in addition, the Commission s Order for Notice and Comment and other orders entered in this docket, Hearing Examiner s Rulings, the Commission s Rules of Practice and Procedure, as well as other information concerning the Commission and the statutes it administers, may be viewed on the Commission s website at (4) On or before February 13, 2018, the Company shall cause the following notice to be published as display advertising (not classified) on one occasion in newspapers of general circulation throughout the Company s service territoly within the Commonwealth of Virginia: 7

26 NOTiCE TO THE PUBLIC OF AN APPLICATION BY VIRGINIA ELECTRIC AND POWER COMPANY FOR APPROVAL TO ESTABLISH A COMPANION TARIFF, SCHEDULE RG, PURSUANT TO OF THE CODE OF VIRGINIA CASE NO. PUR On December 1,2017, Virginia Electric and Power Company dfb/a Dominion Energy Virginia ( Dominion or the Company ), pursuant to of the Code of Virginia ( Code ) and Rule 5 VAC of the Rules of Practice and Procedure ( Rules of Practice ) of the State Corporation Commission ( Commission ), filed with the Commission its Application of Virginia Electric and Power Company for Approval to Establish a Companion Tariff, Designated Schedule RG, Pursuant to of the Code of Virginia ( Application ). Through its Application, Dominion seeks approval to establish a voluntary tariff, designated Schedule RG - Renewable Generation Supply Service ( Schedule RG ), whereby participating large non-residential customers voluntarily may elect to purchase, in an amount up to 100 percent of their energy needs, the net energy output from renewable energy resources, as well as the renewable and environmental attributes associated with this renewable energy. The Company states that Schedule RG is modeled after the experimental voluntary RG Pilot Program and Rate Schedule RG, which was approved by the Commission in Case No. PUE Dominion asserts that the terms and structure of the proposed Schedule RG have been developed through and in response to discussions with large non-residential customers and potential customers. Proposed Schedule RG is designed to allow participating customers to benefit from the Company s sale of energy output of specified renewable generation facilities into the PJM Interconnection, LLC ( PJM ) markets, while increasing the Level of renewable energy generation and use in the Commonwealth. As proposed, Schedule RG would be a companion schedule, available on a voluntary basis to eligible commercial and industrial customers of the Company who currently are taking (or agree to take) service under an approved applicable tariff (Rate Schedules OS-i, GS-2, OS 3, GS-4, 10, 27, and 28). Pursuant to the proposed Schedule RG, Dominion would: (i) contract with a 8

27 fr~ third-party renewable energy provider to purchase the desired electrical output and associated environmental attributes on the customer s behalf and/or; (ii) at the customer s request and subject to mutually agreeable terms, construct a renewable generation facility on the customer s behalf to generate the desired electrical output. A participating customer may request a specific type of renewable energy resource, provided that it generates renewable energy as defined by Code According to the Company, under the proposed Schedule RG, any renewable generation facility from which the Company would purchase renewable energy on behalf of a participating customer may be located outside of the Company s service territory but would have to be located physically within and interconnected with the PJM wholesale electric market for purposes of accounting for the generation and delivery of the energy and associated environmental attributes. To be eligible for Schedule RG, a customer, in addition to taking service under an approved applicable tariff, would need to agree to purchase electrical output from a Company renewable resource or through a power purchase agreement of at least 1,000 kilowatts nameplate capacity, where the electric energy purchased from such Company renewable resource or through such power purchase agreement does not exceed the customer s annual electrical energy load. Schedule RG, as proposed by Dominion, would permit the aggregation of accounts to satisfy the minimum resource requirement. Proposed Schedule RG also provides that the Company would be the exclusive provider of electric service, including the exclusive provider of electricity supply service for the customer s account(s) to which Schedule RG applies. A Schedule RG customer would execute a Schedule RG Agreement, setting forth the mutual terms and conditions associated with the Company s purchase or supply of renewable generation to be delivered to the grid on behalf of the customer from each renewable generation facility under Schedule RG. As proposed, Schedule RG also would require that the Company and a renewable generator execute a power purchase agreement ( Schedule RG PPA ) if a prospective Schedule RG customer requests that the Company purchase renewable energy from a renewable generator on behalf of the customer. Under Dominion s proposal, eligible customers electing to apply for service pursuant to Schedule RO would pay a non refundable application fee of $2,000 (regardless of the number of 9

28 accounts served), which is intended to defray the costs related to the Company s solicitation process for Schedule RG. The customer s monthly billing statement would, in addition to the capacity and energy charges associated with the full requirements of its load, reflect the cost associated with contracted-for renewable energy, net of PJM settlement credits and charges associated with the customer s purchase of electrical output by specified renewable generation facilities under proposed Schedule RG ( Net Schedule RG Settlement ). The Net Schedule RG Settlement charge or credit could be distributed equitably among multiple accounts for the same customer. Dominion proposes to solicit customer interest in proposed Schedule RG within 60 days of receiving approval from the Commission and, at minimum, once a year thereafter. If approved, prospective customers may enroll in proposed Schedule RG outside of an enrollment period in the event that the prospective customer either identifies a specific renewable generator with whom the Company would execute a purchase power agreement on behalf of the prospective customer, or requests Dominion construct a Company renewable resource on behalf of the customer. As proposed, Schedule RG would be available to eligible customers until an initial proposed cap of 50 customers is met. The Company proposes no cap on the quantity of renewable energy purchases under Schedule RG except that a customer may purchase up to 1 00 percent of its annual electrical energy load. Dominion intends to contain the costs related to the purchase and sale of electrical output under Schedule RG to each participating customer. Specifically, pursuant to the Schedule RO Agreement, no costs related to the Schedule RG PPA (if applicable) or the Company renewable resource (if applicable) would be assigned to the Company s other jurisdictional or nonjurisdictional customers. Dominion asserts, among other things, that the proposed Schedule RG is just and reasonable and in the public interest. Dominion also asserts that Schedule RG would further the Commonwealth s Energy Policy as set forth in Code ~ and , the Governor s Executive actions encouraging utilities to increase their renewable power generation and decrease carbon dioxide emissions, and Virginia s Energy Plan. Dominion asserts that the proposed Schedule RG would help to attract and retain 10