Umair Gaines
In the state of Virginia, the Division of Public Utility Regulation (PUR) supports the Commission in regulating the state's investor-owned electric companies, natural gas, water and sewer utilities, member-owned electric cooperatives, and the telecommunications industry. The PUR aims to ensure that Virginia consumers receive adequate utility services at fair and reasonable rates. The Virginia Electric Utility Regulation Act governs the construction and operation of electrical generating facilities, while also addressing issues such as net stranded costs and renewable energy certificates.
| Characteristics | Values |
|---|---|
| Regulating body | The Division of Public Utility Regulation (PUR) |
| Regulated companies | Investor-owned electric companies, natural gas, water and sewer utilities, member-owned electric cooperatives, and the telecommunications industry |
| Goal | Ensure Virginia consumers receive adequate utility services at just and reasonable rates |
| Office hours | 8:15 a.m. to 5:00 p.m., Monday through Friday |
| Mailing address | Division of Public Utility Regulation, P.O. Box 1197, Richmond, Virginia 23218 |
| Phone | (804) 371-9611 |
| Toll-free | 1-800-552-7945 |
| Fax | (804) 371-9350 |
| [email protected] |
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What You'll Learn
The State Corporation Commission (SCC)
The SCC is supported by the Division of Public Utility Regulation (PUR) in its regulatory functions. The PUR's primary role is to assist the SCC in ensuring that Virginia consumers have access to essential utility services at just and reasonable rates. While Virginia does not have a fully competitive energy market, there are alternative options for meeting energy needs.
The SCC's website provides valuable information for consumers, including details on rate regulation, competitive service, and aggregation. The SCC also offers a map of electric service territories, listing the investor-owned electric companies it regulates, such as Appalachian Power Company, Dominion Energy Virginia, and Kentucky Utilities (serving as Old Dominion Power).
Additionally, the SCC regulates electric cooperatives, which are owned by the members they serve. The SCC's role extends to permitting the construction and operation of electrical generating facilities in Virginia. This process involves a comprehensive review to ensure that the facilities meet specific criteria, including having no adverse impact on the reliability of electric service and being in the public interest.
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Regulated electric cooperatives
In Virginia, the State Corporation Commission (SCC) has regulatory authority over utilities, insurance, state-chartered financial institutions, securities, retail franchising, and railroads. The SCC regulates electric cooperatives, which are owned by the members they serve.
Virginia has private not-for-profit cooperatives (co-ops) that provide electricity to customers in about one-third of the state. Each co-op has a specific service area defined by the SCC where they have a monopoly to provide electricity. There are 13 co-ops in total. The electric co-ops are businesses owned by their members, in contrast to municipal utilities owned by cities or for-profit utilities owned by investors.
Rates charged to customers provide the funds needed for a co-op to purchase electricity, pay staff for operations, and finance capital improvements such as replacement distribution lines and substations. Each year, the co-op board determines how much is needed and if there is an excess to distribute back to the members/customers who contributed the capital. Returning capital credits to members can be challenging due to the delay between collecting and releasing the money, and members who move away may not receive notifications.
Examples of electric cooperatives in Virginia include the Central Virginia Electric Cooperative, Northern Virginia Electric Cooperative, Southside Electric Cooperative, and Rappahannock Electric Cooperative.
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Construction of electrical generating facilities
The Virginia State Corporation Commission (SCC) regulates investor-owned electric companies and electric cooperatives in the state.
The construction and operation of electrical generating facilities in Virginia are permitted by the Commission upon certain conditions. These conditions are outlined in the Virginia Electric Utility Regulation Act and include:
- No material adverse effect on the reliability of electric service provided by any regulated public utility.
- Required by public convenience and necessity, if the petition for the permit is filed after July 1, 2007, and if the facility is to be constructed and operated by a regulated utility with rate-regulated tariffs.
- Not contrary to the public interest, including consideration of the facility's environmental impact.
The Act also sets out the process for reviewing petitions for certificates to construct and operate generating facilities, with the Commission establishing conditions to minimise adverse environmental impacts.
Virginia's electrical industry is in transition due to deregulation, which has the potential to create a competitive market for electrical energy supplies. Despite this, electrical energy distribution remains regulated, with both public utilities and non-utility generating firms supplying electrical power.
Virginia's power generation mix includes natural gas, nuclear, solar, biomass, coal, petroleum, hydroelectric, wind, and other sources. The state is working towards a target of 100% renewable energy by 2045, with plans to construct significant additional capacity in solar, onshore wind, and offshore wind by 2035.
Some specific examples of electrical generating facilities in Virginia include:
- Dominion Virginia Power operates two large nuclear plants in eastern Virginia, at North Anna and Surrey, as well as the Bath County pumped-storage hydroelectric facility.
- American Electric Power operates the Smith Mountain Lake pumped-storage hydroelectric facility on the Roanoke River east of Roanoke.
- Virginia Tech Power Plant, which has been in operation since 1901 and has undergone several upgrades, including the integration of a new SCADA system and the implementation of a Predictive Emissions Monitoring System.
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Energy efficiency programs
The Virginia State Corporation Commission (SCC) regulates electric companies in Virginia. The Division of Public Utility Regulation (PUR) supports the SCC in regulating the state's investor-owned electric companies, member-owned electric cooperatives, and the telecommunications industry.
Virginia offers various incentive programs to encourage the adoption of renewable energy and the improvement of energy efficiency. These programs are available for residential customers, small and large businesses, and government agencies.
The state's electricity providers are required to disclose emissions and fuel mix data to the SCC annually. Virginia's 1999 electric industry restructuring law requires electricity providers to disclose fuel mix and emissions data regarding electric generation.
In 2007, Virginia passed legislation to amend the earlier electric industry restructuring law, including an energy efficiency goal of 10% electricity savings by 2022 relative to 2006 base sales. This legislation also includes a provision that allows electricity customers in Virginia to opt for 100% renewable energy from their utility.
The state's two largest gas companies, Columbia Gas and Washington Gas Light, offer rebate programs for the purchase of energy-efficient equipment. Local governments, including Arlington and Fairfax County, also provide financial incentives for energy efficiency improvements.
Virginia established a voluntary Renewable Energy Portfolio (RPS) goal in 2007 as part of legislation to re-regulate the state's electricity industry. The RPS targets are defined as percentages of the amount of electricity sold in 2007 ("the base year"), minus the average annual percentage of power supplied from nuclear generators between 2004 and 2006.
Virginia's Bath County Pumped Storage Station, with a net generating capacity of 3,003 megawatts, is the largest pumped hydroelectric storage facility in the world. In October 2016, Virginia's Eastern Shore was home to the largest solar farm (80 MW) in the mid-Atlantic region at the time. While the state has large areas with offshore wind energy potential, it does not have any wind-powered utility-scale electricity generation.
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Stranded costs for incumbent electric utilities
In Virginia, the State Corporation Commission (SCC) regulates investor-owned electric companies and electric cooperatives. The SCC ensures that the rates charged by incumbent electric utilities are fair and that consumers are protected.
Stranded costs refer to the net losses incurred by an incumbent electric utility due to the deregulation of electricity generation. These costs are a result of investments and obligations related to electricity generation that are no longer viable or necessary in a deregulated market. Examples of such costs include uncollected deferred federal income tax liabilities and the requirement to contribute funds for the decontamination and decommissioning of nuclear sites.
In Virginia, incumbent electric utilities are entitled to recover their stranded costs through various mechanisms, such as capped rates, frozen generation rates, or non-bypassable wires charges. Capped rates are designed to protect consumers, foster competition, and facilitate the recovery of stranded costs. They serve as a safe harbor for consumers, providing stability and a basis for evaluating competitive offers from alternative suppliers.
Frozen generation rates are offered to retail customers, allowing them to continue paying a fixed rate for electricity generation services for a limited time after the deregulation. This gives incumbent utilities an opportunity to recover their stranded costs and earn a reasonable rate of return.
Non-bypassable wires charges are another method for recovering stranded costs. When a customer leaves an incumbent utility to obtain a lower rate from a competitor, they may be subject to a wires charge. This charge helps the incumbent utility recover its stranded costs associated with the distribution infrastructure.
The SCC plays a crucial role in approving and overseeing these cost-recovery mechanisms to ensure fairness for both utilities and consumers. The commission considers the impact of discounting on stranded cost recovery, as selective discounting of capped rates for distribution services may attract customers and encourage competition.
Overall, the regulation of stranded costs for incumbent electric utilities in Virginia aims to balance the interests of utilities, consumers, and the promotion of a competitive energy market.
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Frequently asked questions
The Division of Public Utility Regulation (PUR) provides support to the Commission in its regulation of Virginia's investor-owned electric companies, electric cooperatives and the telecommunications industry.
The chief function of the Division of Public Utility Regulation (PUR) is to support the Commission in ensuring that Virginia consumers receive adequate utility services at just and reasonable rates.
Examples of electric companies regulated by the SCC include the Appalachian Power Company, Dominion Energy Virginia and Kentucky Utilities (serving Virginia as Old Dominion Power).
The office hours of the Division of Public Utility Regulation (PUR) are 8:15 a.m. to 5:00 p.m., Monday through Friday.
