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State Corporation Commission Stand By Service

COMMONWEALTH OF VIRGINIA

STATE CORPORATION COMMISSION

AT RICHMOND, AUGUST 26,2010

 

APPLICATION OF

VIRGINIA ELECTRIC COOPERATIVES

CASE NO. PUE-2010-00036

 

For approval of Standby Service

Compliance Plan

 

ORDER

 

Virginia Code ("Code") § 56-235 . 1 : 1, enacted by the 2009 Session of the Virginia General Assembly,' directed the State Corporation Commission ("Commission") to adopt regulations for electric utility standby service provided by electric utilities to "customers that operate a cogeneration facility in the Commonwealth that generates renewable energy, as defined in § 56-576." This law also required that such regulations must "allow the electric utility to recover all of the costs that are identified by the electric utility and determined by the Commission to be related to the provision of the stand-by service, including but not limited to the costs of transformers and other equipment required to provide stand-by service and the costs of capacity and generation, including but not limited to fuel costs."

 

Section 56-235 .1 :1 of the Code further required that within ninety (90) days of the effective date of such regulations, each public utility providing electric service in the Commonwealth must "submit a plan setting forth how the utility will comply with the regulations if it does not already have stand-by provisions approved by the Commission that comply with the regulations ." Thereafter, the Commission is required, after notice and an opportunity for a hearing, to determine whether a utility's plan complies with the regulations. 1 Chapter 745 of the 2009 Acts of Assembly.

 

By Order dated December 2, 2009, in Case No . PUE-2009-00080, the Commission adopted regulations entitled : Rates for Standby Service Furnished to Certain Renewable Cogeneration Facilities Pursuant to § 56-235 . 1 :1 of the Code ("Standby Service Rules ,).2 Pursuant to 20 VAC 5-317-40 of the Standby Service Rules, each electric utility was required to submit to the Commission, on or before April 1, 2010, its plan for compliance with the Standby Service Rules.

 

On March 31, 2010, A&N Electric Cooperative, BARC Electric Cooperative, Central Virginia Electric Cooperative, Community Electric Cooperative, Craig-Botetourt Electric Cooperative, Mecklenburg Electric Cooperative, Northern Neck Electric Cooperative, Northern Virginia Electric Cooperative, Prince George Electric Cooperative, Rappahannock Electric Cooperative, Shenandoah Valley Electric Cooperative, and Southside Electric Cooperative (collectively, ''Cooperatives") filed with the Commission a Request for Waiver or, in the Alternative, Proposed Compliance Plan ("Application" or "Compliance Plan").

 

In their Application, the Cooperatives requested that the Commission waive the Standby Service Rules for the Cooperatives and allow them to continue their current practice of negotiating standby service rates on a case-by-case basis. According to the Cooperatives, in negotiating an arrangement for standby service, each Cooperative would calculate the cost of the physical plant and other facilities necessary to serve the customer. The Cooperative would then collect these costs through an excess facilities charge, a contribution-in-aid of construction, or some combination of the two. The Cooperative and the customer would then enter into a formal agreement memorializing terms, which the Cooperatives argue would comply with the Standby Service Rules. According to the Application, each Cooperative has at least one existing rate schedule under which such service could be provided.3

 

On April 27, 2010, the Commission issued an Order for Notice and Comment in this proceeding denying the Cooperatives' request for waiver and requiring the Cooperatives to provide notice to the public and allowing interested parties to comment on the Application or request a hearing in this matter. The Commission received no comments or requests for hearing. By letter dated July 2, 2010, Staff indicated that it did not intend to file comments.

 

NOW THE COMMISSION, having considered the matter, is of the opinion that the Cooperatives' Compliance Plan satisfies the requirements of § 56-235.1 :1 of the Code and the Commission's Standby Service Rules.

 

Accordingly, IT IS HEREBY ORDERED THAT:

(1) The Cooperatives' Compliance Plan is hereby approved.

(2) As there is nothing further to come before the Commission, this matter is dismissed and the papers herein placed in the file for ended causes.

 

AN ATTESTED COPY hereof shall be sent by the Clerk of the Commission to: Samuel R. Brumberg, Esquire, LeClairRyan, 4201 Dominion Boulevard, Suite 200, Glen Allen, Virginia 23060; and C. Meade Browder, Jr., Senior Assistant Attorney General, Division of Consumer Counsel, Office of the Attorney General, 900 East Main Street, 2nd Floor, Richmond, Virginia 23219; and a copy shall be delivered to the Commission's Office of General Counsel and the Divisions of Energy Regulation and Economics and Finance.

 

 

 

1 Chapter 745 of the 2009 Acts of Assembly.

Chapter 317 (20 VAC 5-317- 10 el seq.) of Title 20 of the Virginia Administrative Code .

3 Application at 4-5.