A public hearing on a petition filed by Virginia Electric and Power d/b/a Dominion Energy Virginia regarding a proposed rate adjustment clause will be held on June 11 in Richmond, Va., the Virginia State Corporation Commission said in a Jan. 8 order.
As noted in the order, the company on Dec. 14, 2018, filed with the commission a petition for approval of a rate adjustment clause, designated Rider E, for the recovery of costs incurred to comply with state and federal environmental regulations.
According to the petition, the company seeks cost recovery for certain environmental projects located at the company’s Chesterfield Power Station, Clover Power Station, and Mt. Storm Power Station. According to the company, the commission added, the environmental projects are required for the company to comply with the U.S. Environmental Protection Agency’s (EPA) “Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities; Final Rule” (CCR Rule).
The company notes that to comply with the CCR Rule, it is required to close or retrofit certain coal ash ponds and certain water treatment basins and flue gas desulfurization sludge ponds that contain coal ash at its coal-fired power stations, the commission said. The company also asserts that compliance with the EPA’s Steam Electric Power Generating Effluent Guidelines is a driver of certain of the environmental projects.
The commission added that the company seeks recovery of three general categories of costs: actual costs associated with closure of existing assets – such as a coal ash pond – at the power stations; actual and projected costs associated with newly built assets necessary to allow the power stations to continue to operate in compliance with environmental laws and regulations; as well as actual and projected costs associated with asset retirement obligations for the newly built assets.
In this proceeding, Dominion asks the commission to approve Rider E for the rate year beginning Nov. 1, 2019, and ending Oct. 31, 2020 – the 2019 Rate Year. The commission added that the company states that the three components of the revenue requirement are the projected cost recovery factor, the allowance for funds used during construction (AFUDC) cost recovery factor, and the actual cost true-up factor.
The company requests a projected cost recovery factor revenue requirement of about $94.6m, an AFUDC cost recovery factor revenue requirement of about $19m, and an actual cost true-up factor revenue requirement of $0. Thus, the commission added, the company proposes a total revenue requirement of about $113.7m for service rendered during the 2019 Rate Year.
The company indicates that included in that revenue requirement is the amortization over the 2019 Rate Year of certain deferred costs incurred prior to the beginning of the 2019 Rate Year. The commission added that the company states that the 2019 Rate Year revenue requirement assuming a three-year or five-year amortization of the deferral balance would be about $62.6m and about $52.4m, respectively.
For purposes of calculating the revenue requirement in this case, Dominion states that it utilized a rate of return on common equity (ROE) of 9.2%, which the commission approved in another case, the commission said.
Dominion proposes that Rider E be effective for usage on and after Nov. 1, the commission said, adding that if the proposed Rider E for the 2019 Rate Year is approved, the impact on customer bills would depend on the customer’s rate schedule and usage.
According to Dominion, implementation of its proposed Rider E on Nov. 1 would increase the monthly bill of a residential customer using 1,000 kWh per month by about $2.15. The commission added that the company states that, alternatively, the lower revenue requirements assuming a three-year or five-year amortization of the deferral balance would result in a monthly bill increase for a residential customer using 1,000 kWh per month of about $1.18 or 99 cents, respectively.
Among other things, the commission said that by March 12, any person or entity wishing to participate as a respondent in the proceeding may do so by filing a notice of participation; by April 23, each respondent may file with the commission clerk any testimony and exhibits by which the respondent expects to establish its case; and by May 14, commission staff is to file with the clerk its testimony and exhibits.
The commission added that by May 28, Dominion is to file with the clerk any rebuttal testimony and exhibits that it expects to offer, and that by June 4, any interested person may file written comments on the petition with the commission clerk.