Author: Catherine MorehousePublished: Aug. 5, 2019 Utility Dive
Competitive retail providers are fighting for customers in the state, alongside a growing number of displeased ratepayers.
Credit: Deloitte )
In an increasingly changing energy world, state energy markets vary widely in how they allow companies to compete for and retain customers. And that’s beginning to matter more in states with large retail customers in a (mostly) regulated vertical energy market, such as in Virginia.
Dominion Energy, the state’s dominant utility, in May filed an applicationwith the State Corporation Commission (SCC) for approval of its 100% renewable energy tariff. If approved, that tariff offering would prevent other retail electricity providers from competing in the market to give large and residential customers a 100% renewable option.
Virginia customers are only able to procure energy outside Dominion through two routes: If a customer has a load larger than 5 MW, it can apply to exit through the SCC. Or, customers of any size can shop for a 100% energy product from competitive services providers (CSPs).
Two CSPs — Direct Energy and Calpine Energy — have been soliciting business customers in the state to offer a 100% renewable energy package. On July 15, Dominion terminated processing all current and future interconnection applications with those CSPs, citing concerns over their ability to provide that offering to customers.
Policy watchers say this fight between Dominion and the CSPs highlights a larger tension in the state — whether Virginia should move toward a competitive retail choice market, something customer advocates, environmentalists, corporate customers and others are advocating for.
Battling for customers
The state’s other utility, Appalachian Power Company (APCo), had its tariff approved in January, meaning CSPs cannot offer their 100% renewables package through that power provider’s load zone. And though Dominion filed with regulators in 2017 for approval of its 100% tariff, it says it has modeled its new application off APCo’s.
“Our goal is to ensure that all customers in Virginia are protected. And so we want the competitive service providers to be held to the same standard that APCo and Dominion Energy are being held to,” Dominion spokesperson Audrey Cannon told Utility Dive. “We want them to have to be able to show the SCC that they have that generation in the same way that we’re showing it.”
Direct Energy serves almost a quarter million business customers across North America and says they “clearly have the expertise needed to provide renewable power to customers,” Direct Energy Director of Government and Regulatory Affairs Ron Cerniglia told Utility Dive. “We look forward to establishing in the course of this proceeding that we are supplying customers with 100% renewable energy. And we’ve certainly adequately documented [Direct Energy’s] ability to do so.”
That process is “very prescriptive,” according to Cerniglia. Direct Energy contracts with a renewable energy provider and delivers that power through Dominion’s load zone, pending its approval.
The only exception, is if the utility offers a 100% renewable option in the form of a tariff, regulators ruled in 2017 after pressure from Direct Energy to clarify the rules.