STATE CORPORATION COMMISSION, CLERK'S OFFICE

AT RICHMOND, OCTOBER 22, 2020

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. PUR-2019-00182

Ex Parte: In the matter
concerning the implementation
of a pilot program for
municipal net energy metering

ORDER REVISING GUIDELINES

Chapters 746 and 747 of the 2019 Virginia Acts of Assembly (the "Act") amended the Code of Virginia by adding a new § 56-585.1:8 to provide for a pilot program for municipal net energy metering ("Pilot Program") in the service territories of Virginia Electric and Power Company d/b/a Dominion Energy Virginia ("Dominion") and Appalachian Power Company ("APCo").¹ The Act became effective July 1, 2019.

The Act instructed the State Corporation Commission ("Commission"), by December 1, 2019, to adopt such rules or establish such guidelines as may be necessary for its general administration of the Pilot Program. On November 1, 2019, the Commission issued an Order for Comments on Draft Guidelines, which included draft guidelines ("Proposed Guidelines") to govern the Pilot Program required by the Act and inviting comments from interested parties on or before November 15, 2019.

The Commission received comments from the Virginia Energy Purchasing Governmental Association ("VEPGA"), the VML/VACo APCo Steering Committee ("Steering Committee"), the Southern Environmental Law Center on behalf of Appalachian Voices ("Appalachian Voices"), and the City of Alexandria ("Alexandria"). Several of these parties proposed modifications to the Proposed Guidelines. In addition, VEPGA proposed that the Commission "provide municipalities impacted by the Proposed Guidelines with the opportunity to propose amendments to such Proposed Guidelines by determining that the guidelines adopted on December 1, 2019 will be subject to amendment after December 1, 2019 based on substantive comments submitted by municipalities or other similarly interested parties in this docket."

On November 25, 2019, the Commission entered an Order adopting the Proposed Guidelines ("Guidelines") and inviting additional comments from interested persons on proposed changes to the Guidelines, to be filed on or before January 15, 2020. The Commission received additional comments from the Steering Committee and Dominion.²

On May 18, 2020, the Commission entered an Order directing the Commission's Staff ("Staff") to file a Staff Report in this docket on or before July 31, 2020. Staff filed its Report as directed on July 31, 2020.

Term of the Pilot Program

Several parties suggest that the term of the Pilot Program, as set forth in the Guidelines, is incorrect, as the Guidelines set the term of the program as six years, while the Code states that the Commission may extend the term of the program beyond its initial term, and if the term is not extended, target accounts participating at the end of the initial term shall be permitted to continue to participate under the terms of the Pilot Program that existed during the initial term.³ We agree and have revised the Guidelines accordingly.

Commencement Date

Appalachian Voices and the Steering Committee recommend that the commencement date of the Pilot Program be revised. Appalachian Voices states that the Guidelines "incorrectly base the commencement of the six year period on the Commission's order adopting the guidelines and not the commencement of the actual Pilot Program," while the Steering Committee recommends that the "Commencement Date for the Pilot Program be set on a date after the approval of the Pilot Program for each Utility, and that the Commission set a deadline for APCo to submit a proposed pilot program to the Commission."⁴

Staff and Dominion each note that the Guidelines themselves represent the Pilot Program proposals from Dominion and APCo as set forth in the statute, and thus recommend that the Guidelines be revised to state that the commencement date be determined by the final order adopting guidelines in this docket.⁵ We agree with Staff and Dominion and have revised the Guidelines accordingly.

Definition of "Renewable Fuel Generator"

Alexandria and the Steering Committee note that the Guidelines define "Renewable Fuel Generator" in a more restrictive manner than is specified by the enabling statute.⁶ Dominion proposes that the Commission eliminate the definition of "Renewable Fuel Generator," as the Guidelines primarily use the term "Municipal Customer-Generator," which is defined in reference to the specific language of the Code.⁷ Dominion proposes a modified definition of "Renewable Generating Facility" in Section III of the Guidelines that references Code 56-576. Staff supports Dominion's proposed modifications.⁸ We agree with Dominion and Staff. The guidelines adopted herein incorporate Dominion's proposed changes.

Definition of "Target School"

The Steering Committee states in its comments that the definition of "Target School" in the Guidelines excludes public schools that admit students from another school division.⁹ Staff states that the Guidelines describe which public school technical centers may be included, not which should be excluded, but nevertheless supports modifying the Guidelines to ensure no public school technical center is excluded based upon the school division from which it accepts public school students.¹⁰ We agree and will revise the Guidelines as recommended by Staff.

APCo Phase I Utility Agreement

Appalachian Voices requests clarity on whether APCo's Municipal Customer Generators are subject to the three megawatt ("MW") net metering cap for municipalities found in the terms of their "Phase I Utility Agreement," or the higher caps allowable under the Pilot Program. This agreement is a private contract between a utility and its non-jurisdictional customers, and the Commission does not have jurisdiction to modify it. Accordingly, we will not modify the parameters of the Pilot Program set forth in the Guidelines, which are consistent with the directive to the Commission in the Code.

Definition of "Net Metering Customer"

The Steering Committee argues against the Guidelines' adoption of the definition of "Net Metering Customer" from 20 VAC 5-315-20 of the Regulations Governing Net Energy Metering, 20 VAC 5-315-10 et seq., because those limit generation capacity to 1 MW for nonresidential customers, whereas the enabling statute for the Pilot Program defines a Municipal Customer-Generator as having a generation capacity up to 2 MW.¹¹

Staff notes that the definition of Municipal Customer-Generator found within the Guidelines correctly establishes the necessary 2 MW capacity limit, and that the reference to Net Metering Customer in Section IV.A.1 of the Guidelines should be removed.¹² We note that the concern regarding an alleged conflict between 20 VAC 5-315-20 and the Pilot Program established by the Code is now moot, as the General Assembly has raised the capacity limit in Code § 56-594 B to 3 MW. We agree with Staff that Section IV.A.1 of the Guidelines should be deleted. We further agree with Staff that other provisions of the Commission's Net Metering Rules are applicable to the Pilot Program and will revise the Guidelines to make clear that 20 VAC 5-315 applies to the extent there is no conflict with the Guidelines.

Administrative Costs

The Steering Committee notes that the Guidelines are silent regarding when administrative costs are to be assessed.¹³ Dominion proposes that the Guidelines be revised to require administrative costs be assessed annually, coincident with the Utility's application of bill credits for the Municipal Customer-Generator's Excess Generation.¹⁴ We agree with Dominion and have revised the Guidelines accordingly.

Alexandria proposes that the Commission add a definition of "administrative costs" to the Guidelines, and requests that reasonable administrative costs be subject to Commission review.¹⁵ As Staff notes, no party proposed a definition of administrative costs in this proceeding, and thus we do not have a record upon which to base such a definition. We will, however, modify Sections VI.A.1 and VI.B.l of the Guidelines to specify that administrative costs covered by the Guidelines be reasonable. We will not require that administrative costs be reviewed by the Commission.

Metering Requirements

The Steering Committee and Appalachian Voices both request that the Guidelines be modified to clarify that Municipal Customer-Generators should not be made to pay twice for Advanced Metering Infrastructure ("AMI") meters.¹⁶ We do not believe that modification of the Guidelines is necessary, as the existing language is clear that no customer should be required to pay for AMI meter upgrades more than once.

Renewable Energy Certificates

Alexandria recommends removal of Section VIII.B restricting a Municipal Customer-Generator's ability to sell RECs associated with the Renewable Generation Facility during the Pilot Program, stating that neither "Section § 56-585.1:8(C) of the Code of Virginia (1950) as amended, nor any other section of the Code of Virginia, imposes any restrictions or limitations on the ownership of Renewable Energy Certificates (RECs)."¹⁷ Dominion opposes this request, stating that the Commission "has in its Final Order in Case No. PUR-2018-00039 recognized that when RECs are separated from the energy from which those RECs generated, that energy can no longer be considered renewable."¹⁸

The Commission continues to find, as we did in our approval of the public school net metering pilot program,¹⁹ that it is reasonable to prohibit a REC from being separated from the energy that created that REC and, thus, to prohibit a municipal customer-generator's ability to sell such RECs. In addition, the Commission notes that no participant identified any provision of Code § 56-585.1:8 that limits the Commission's authority to exercise its discretion thereunder in this manner.

Virginia Tort Claims Act

The Steering Committee considers the last sentence of Section X to be unnecessary and recommends that it be deleted. That section currently states that "[t]o the extent permissible under the Virginia Tort Claims Act, the participating schools and school districts shall be responsible for any negligent acts or omissions of their board members, employees, contractors, agents, students, or other representatives associated with the Pilot Program."²⁰ We agree with the Steering Committee, as these Guidelines do not address liability.

Reporting Requirements

Section XI of the Guidelines states that "[t]he Utility shall submit a report to the General Assembly by December 1 of each year the Pilot Program is in effect, commencing in 2020, regarding the status of the Pilot Program's enrollment and any other information the Utility deems appropriate." Appalachian Voices believes this requirement does not accurately reflect the requirements of the Code, which requires that the "Commission shall review the pilot programs established pursuant to this section in 2021 and every two years thereafter for the duration of the pilot program."²¹ Staff proposes that this section be revised to provide that each utility contemporaneously provide a copy of its General Assembly report to the Commission by December 1.²²

The Guidelines we have promulgated cannot limit the reports required by the Code. We agree, however, with Staff that the utility reports to the General Assembly can inform the Commission's own reports to the General Assembly and will adopt the change to the Guidelines proposed by Staff.

NOW THE COMMISSION, upon consideration of the foregoing, finds that it is appropriate to modify the Guidelines as set forth herein.

Accordingly, IT IS ORDERED THAT:

(1) The Commission adopts the revised guidelines attached to this Order to govern the Pilot Program, as discussed herein.

(2) This matter is continued to accept the reports required by this Order.

A COPY HEREOF shall be sent electronically by the Clerk of the Commission to all persons on the official Service List in this matter. The Service List is available from the Clerk of the Commission.

____________________________

¹The Commission was directed to establish rules or guidelines for this Pilot Program in the uncodified Second Enactments of these Acts of Assembly.

²The Dominion Comments included proposed changes to the adopted Guidelines. Where necessary, these proposals are referred to herein as the "Dominion Proposal."

³Alexandria Comments at 1; Appalachian Voices Comments at 4-5; Steering Committee Comments at 1; Staff Report at 2.

⁴Appalachian Voices Comments at 5-6; Steering Committee Comments at 2.

⁵Dominion Proposal at 5; Staff Report at 6.

⁶Alexandria Comments at 2; Steering Committee Comments at 2.

⁷See generally, Dominion Proposal §§ I and III.

⁸Staff Report at 7.

⁹Steering Committee Comments at 3.

¹⁰Staff Report at 7.

¹¹Steering Committee Comments at 3.

¹²Staff Report at 10.

¹³Steering Committee Comments at 4.

¹⁴ Dominion Proposal, Sections VI.A.1 and VI.B.l.

¹⁵Alexandria Comments at 2.

¹⁶Steering Committee Comments at 4; Appalachian Voices Comments at 6.

¹⁷Alexandria Comments at 2.

¹⁸Dominion Comments at 6. See also Appalachian Power Company v. Collegiate Clean Energy, LLC, Case No. PUR-2018-00039, 2018 S.C.C. Ann. Rept. 382, Final Order (Sept. 21, 2018).

¹⁹Commonwealth of Virginia, ex rel., State Corporation Commission, Ex Parte: In the matter concerning the implementation by Virginia Electric and Power Company d/b/a Dominion Energy Virginia of a pilot aggregation program pursuant to House Bill 1451, Case No. PUR-2018-00061, 2018 S.C.C. Ann. Rept. 413, Order Establishing Guidelines (Nov. 26, 2018). Section VIII.B of these guidelines reads, "During the [t]erm of the [p]ilot [p]rogram and continuing after the [t]ermination [d]ate of the [p]ilot [p]rogram, the [h]ost [s]chool agrees to waive any right (i) to sell to the [c]ompany or to any other party or (ii) to offer to market all Renewable Generation Facility RECs which are created and accumulated during the [t]erm of the [p]ilot [p]rogram."

²⁰Steering Committee Comments at 4-5.

²¹Appalachian Voices Comments at 6.

²²Staff Report at 15-16.

STATE WATER CONTROL BOARD

Proposed Enforcement Action for USDA-US Forest Service Grindstone Recreation Area

An enforcement action has been proposed for the USDA-US Forest Service for violations of the State Water Control Law at the Grindstone Recreation Area sewage treatment plant in Smyth County. A description of the proposed action is available at the office named or from the contact person listed. Comments will be accepted by Jonathan Chapman from November 23, 2020, through December 23, 2020.

Contact Information: Jonathan Chapman, Department of Environmental Quality, Southwest Regional Office, 355-A Deadmore Street, Abingdon, VA 24210, or email jonathan.chapman@deq.virginia.gov.

Proposed Amended Enforcement Action for Hampton Roads Sanitation District's Acquisition of the Town of Surry's Wastewater Treatment Plant

An amended enforcement action has been proposed for Hampton Roads Sanitation District's acquisition of the Town of Surry's wastewater treatment plant located at 11463 Rolfe Highway in Surry, VA. The purpose of this amendment is to extend the scheduled date for the town's discharge elimination in the amended consent order issued on March 28, 2018. A description of the proposed action is available at the office named or from the contact person listed. Comments will be accepted by Frank Lupini from November 23, 2020, through December 23, 2020.

Contact Information: Frank Lupini, Enforcement Specialist Senior, Department of Environmental Quality, P.O. Box 1105, Richmond, VA 23218, or email frank.lupini@deq.virginia.gov.

Total Maximum Daily Load for the Mattaponi River and Tributaries

Public Meeting: The Virginia Department of Environmental Quality (DEQ) will virtually host the final public meeting for the Mattaponi River and Tributaries total maximum daily load (TMDL) project on Wednesday, December 9, 2020, at 5:30 p.m. This meeting will be open to the public and all are welcome to participate. Register and gain access to the meeting at https://attendee.gotowebinar.com/register/3542105706491764495. The webinar ID is: 280-864-043. Please register ahead of the meeting. Given the current State of Emergency related to the COVID-19 pandemic, this meeting will be held entirely virtually. A computer or a telephone are necessary to participate virtually. All participants are encouraged to access the meeting using a computer to view presentations or visual displays, although audio only participation using a phone is also an option.

If you have technical issues registering or difficultly signing on to the meeting please contact Marilee Tretina at (804) 698-4506 or email marilee.tretina@deq.virginia.gov.

In the event that the Governor's State of Emergency is lifted, the meeting will be held on the same date and time in the Training Room of the Piedmont Regional Office, 4949-A Cox Road, Glen Allen, VA 23060.

Purpose of Notice: DEQ and its contractors, the Virginia Institute of Marine Sciences and StreamsTech, will present a draft water quality study known as a TMDL for a portion of the Mattaponi River and tributaries located in King and Queen, Essex, Caroline, and King William Counties. The draft study reports the current status of the waterbodies and the possible sources of bacterial contamination. The study recommends TMDLs for the impaired waters. A TMDL is the total amount of a pollutant a water body can contain and still meet water quality standards. To restore water quality, bacterial levels have to be reduced to the TMDL amount. A 30-day public comment period (December 10, 2020, to January 11, 2021) will follow the meeting.

Description of Study: Portions of the Mattaponi River and its tributaries were identified in Virginia's 2016 and 2018 Water Quality Assessment Integrated Report as impaired due to exceedances of the state's water quality standards for E. coli and do not support the Designated Uses of 2018 Primary Contact (recreational or swimming). The specific impairments are listed in the table. Reductions and TMDLs for the causes of the impairments have been developed through the water quality study process.

Affected Waterways: Mattaponi River and Tributaries

How to Comment and Participate: The meetings of the TMDL process are open to the public and all interested parties are welcome. Written comments will be accepted through January 11, 2021, and should include the name, address, and telephone number of the person submitting the comments. For more information or to submit written comments, contact the staff person listed.

Contact Information: Jen Rogers, Department of Environmental Quality, Piedmont Regional Office, 4949-A Cox Road, Glen Allen, VA 23060, telephone (804) 527-5174, or email jennifer.rogers@deq.virginia.gov .

VIRGINIA CODE COMMISSION

Notice to State Agencies

Contact Information: Mailing Address: Virginia Code Commission, Pocahontas Building, 900 East Main Street, 8th Floor, Richmond, VA 23219; Telephone: (804) 698-1810; Email: varegs@dls.virginia.gov.

Meeting Notices: Section 2.2-3707 C of the Code of Virginia requires state agencies to post meeting notices on their websites and on the Commonwealth Calendar at https://commonwealthcalendar.virginia.gov.

Cumulative Table of Virginia Administrative Code Sections Adopted, Amended, or Repealed: A table listing regulation sections that have been amended, added, or repealed in the Virginia Register of Regulations since the regulations were originally published or last supplemented in the print version of the Virginia Administrative Code is available at http://register.dls.virginia.gov/documents/cumultab.pdf.

Filing Material for Publication in the Virginia Register of Regulations: Agencies use the Regulation Information System (RIS) to file regulations and related items for publication in the Virginia Register of Regulations. The Registrar's office works closely with the Department of Planning and Budget (DPB) to coordinate the system with the Virginia Regulatory Town Hall. RIS and Town Hall complement and enhance one another by sharing pertinent regulatory information.