The Virginia State Corporation Commission has rejected a proposal by Wal-Mart Stores seeking permission to aggregate the demands of certain nonresidential customers of electric energy. The retailer asked for authority to aggregate the demands of 120 nonresidential retail customers located in the territory of Virginia Electric & Power Company (Dominion) and to aggregate the demands of 44 nonresidential retail customers located in the territory of Appalachian Power Company. The commission found that approval of Walmart’s request is not consistent with the public interest.

It said that when the General Assembly had created the possibility of aggregated retail choice, it recognized that the aggregation of customers in order to access retail choice providers may adversely affect the utility or non-shopping customers, and--unambiguously--granted the commission the broad discretion to determine “public interest” for purposes of this statute. The commission noted that the Virginia Code states that the commission may permit aggregated retail choice if it makes two independent findings: (a) neither the affected electric utility nor retail customers of such utility that do not choose to obtain electric energy from alternate suppliers will be adversely affected in a manner contrary to the public interest by granting such petition; and (b) approval of such petition is consistent with the public interest.

To begin its review of the proposal, the commission gave the following short history of restructuring of the electric industry in the state. In 1999, state passed legislation to begin a process to restructure Virginia’s electric utility regulatory system from its historical model of a state-regulated, vertically-integrated monopoly provider to a system in which the “wires” function would remain a monopoly but the power supply function would become deregulated. In 2007, the General Assembly and the Governor made the policy decision to terminate the experiment and return to the model of a vertically-integrated monopoly provider of both the wires function as well as electricity supply.

This legislation, however, permitted the continuation of retail choice in three narrow and specifically identified cases. Two of those are mandatory. The commission has no discretion to approve or reject: (1) retail choice for large customers with a demand exceeding five megawatts; and (2) retail choice for 100% renewable energy if the same is not offered by the customer’s utility. The third is subject to the Commission’s discretion and is at issue in the instant cases: retail choice for nonresidential customers that aggregate their demand to exceed five megawatts.

Upon review of the facts of the case it found that that remaining customers would not be held harmless. The commission explained that approval of aggregated retail choice for Walmart in Appalachian’s service territory could shift approximately $4 million of costs to remaining customers over the next ten years. For Dominion, aggregated retail choice for Walmart could shift up to $65 million of costs to remaining customers over that period. As to bill impacts, granting the petitions is estimated to increase residential customers’ monthly bills by $0.05 and $0.13 for Appalachian and Dominion, respectively. The commission said that while it does not question the veracity of Walmart’s assertions and respects the economic and business goals reflected in Walmart’s requests, it is clear that the harm to customers who do not or cannot switch to a CSP is contrary to the public interest. Re Wal-Mart Stores East, LP and Sam’s East, Inc., Case Nos. PUR-2017-00174 & PUR-2017-00173, Feb. 25, 2019 (Va.S.C.C.).

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