Virginia State Corporation Commission staff, in a March 1 report, recommended that the commission grant approval of a proposed transaction through which Potomac Edison would transfer its 38.46% ownership interest in the Virginia portion of the 500-kV Mt. Storm-Valley Line, as well as its 61.54% ownership interest in the Virginia portion of the 500-kV Front Royal-Meadow Brook Line to Virginia Electric and Power d/b/a Dominion Energy Virginia.
Upon consummation of those transfers – referred to as the Virginia transfers – Dominion Energy Virginia would assume full ownership and responsibility for operation and maintenance (O&M) of the Virginia facilities, staff noted. Dominion Energy Virginia also seeks authority to revise its Virginia certificate of public convenience and necessity (CPCN) to reflect the Virginia transfers – collectively, the approvals sought are referred to as the Virginia transactions.
The companies wish to simplify the ownership and operating structure of the Virginia facilities, staff added, noting that according to the companies, Virginia customers’ rates and service would not be adversely affected by the proposed Virginia transactions.
As noted in the filing, Dominion Energy Virginia and Potomac Edison jointly own the Virginia portion of the existing Mt. Storm-Valley line. Under a FERC interconnection agreement, which memorializes the joint ownership and responsibilities of each party with respect to the Virginia facilities, Dominion Energy Virginia is the responsible party that performs the O&M of the Mt. Storm-Valley line.
The filing added that according to the companies, under the purchase and sale agreement, Dominion Energy Virginia would acquire Potomac Edison’s 38.46% interest in, and would be required to perform the O&M on, the portion of the line extending from the West Virginia-Virginia state line to a point of attachment at the jointly owned dead-end structure directly outside the Northwest corner of Valley Station, located in Virginia. That comprises a segment of 500-kV line traveling a distance of about 30.8 miles from Valley Station toward Mt. Storm station, located in West Virginia; following the Virginia transfers, Dominion Energy Virginia would own 100% of the Virginia portion of the Mt. Storm-Valley line.
The filing also noted that Potomac Edison and Dominion Energy Virginia jointly own the existing Front Royal-Meadow Brook line, all of which is located within Virginia. Under the FERC interconnection agreement, Potomac Edison is currently the responsible party that performs the O&M of about 5.3 miles of the Front Royal-Meadow Brook line. The filing added that under the purchase and sale agreement, Dominion Energy Virginia would acquire Potomac Edison’s 61.54% interest in, and would perform the O&M on, the segment of 500-kV line traveling a distance of about 5.3 miles from the Meadow Brook station to the Front Royal station; following the Virginia transfers, Dominion Energy Virginia would own 100% of the Front Royal-Meadow Brook line.
The filing noted that Potomac Edison proposes to transfer the Virginia facilities to Dominion Energy Virginia at its net book value as of closing. Based on the balances of Sept. 30, 2018, Dominion Energy Virginia would account for the transfer of the Virginia facilities by debiting A/C 101 – Electric Plant in Service – for about $2.7m, crediting A/C 108 – Accumulated Depreciation – for about $2.1m, and crediting A/C 102 – Electric Plant Purchased or Sold – for $579,039.
Based on the companies’ representations, “adequate service to the public at just and reasonable rates will not be impaired or jeopardized by the proposed Virginia transfers,” staff said. “Therefore, staff recommends that the commission grant approval of the proposed Virginia transactions subject to” certain requirements.
Those requirements include that within 60 days of completing the Virginia transfers, the companies should file a report of action with the commission, subject to administrative extension by the commission’s director of the Division of Utility Accounting and Finance. The report should include the effective date of the Virginia transfers, as well as an executed copy of the purchase and sale agreement, among other things, staff added.