AOBA Alliance



AOBA AT IssueUtility and Energy ReportNovember 2019Dominion Energy Seeks Fast Track Approval for 100% Renewable Energy Tariff *NEWOn October 8, Dominion filed a motion seeking to accelerate the SCC’s review of its proposed 100% renewable energy proposal, Rider TRG. Dominion’s motion seeks to remove the hearing examiner and have the case heard by the full Commission instead. This would reduce the time necessary for the SCC to enter a final order in this case. Dominion claims that its motion is filed “for purposes of judicial economy and in furtherance of the public interest.” This procedural change may also allow Dominion to receive approval of Rider TRG before the 2020 General Assembly session, where renewable energy market issues are expected to be debated.Rider TRG would reallocate the energy generated from several renewable energy facilities that are either in Dominion’s rate base or from which Dominion currently purchases power. Rider TRG customers would pay a premium of 0.421 cents per megawatt-hour to purchase this energy, which would increase a 1,000 kWh monthly bill by $4.21. The generation for Rider TRG would be sourced from solar, hydroelectric, and biomass generation facilities as well as from Dominion’s Virginia City coal plant. (Dominion estimates that the coal mixture burned at this plant will consist of 90% coal and 10% biomass wood waste by 2023.) If the SCC approves Rider TRG – and finds that it constitutes a 100% renewable energy tariff pursuant to Va. Code § 56-577 A 5 – Dominion customers would no longer have the option to purchase renewable generation from competitive suppliers.Several parties, including renewable energy advocates, competitive service providers, and environmental advocates have intervened in this case. These parties are expected to oppose the application because it would eliminate customer choice for renewable energy; because it would not support the development of any resources not already in Dominion’s portfolio; and because it would force customers to subsidize Dominion’s Virginia City coal plant and carbon-intensive biomass plants. Responses to Dominion’s motion are due on October 17. Parties will file direct testimony on October 17. An evidentiary hearing is scheduled for November 21. Case No. PUR-2019-00094State Corporation Commission (SCC) to Consider Grid Transformation Projects Proposed by Dominion Energy Virginia *NEWThe State Corporation Commission (SCC) has scheduled a January hearing to consider a plan for electric distribution grid transformation projects proposed by Dominion Energy Virginia. The company filed its petition for plan approval on September 30, 2019.In its petition, the company states that the proposed grid technologies and grid hardening projects will improve service reliability and support the integration of distributed energy resources. This three-year phase of the plan is estimated to cost $517.6 million in capital investment and $83.2 million in operations and maintenance expense. Overall, the 10-year plan is estimated to cost $2.8 billion in capital investment and approximately $480 million in operations and maintenance expense.One component of the plan proposes to fully deploy advanced metering infrastructure across Dominion’s service territory over the next six years. This includes smart meters at all customer locations. As proposed, customers will have the option to decline a smart meter. However, doing so would involve a one-time opt out fee of $84.53 and an on-going monthly fee of $29.20. The fees are intended to recover the costs of a customer opting out of smart meter installation.Case Number PUR-2019-00154New Building Energy Performance Standards (BEPS) in the District *UPDATE On January 18, 2019, Mayor Muriel Bowser signed the “ HYPERLINK "" CleanEnergy DC Omnibus Amendment Act of 2018” into law. The goal of this legislation is to:Reduce GHG emissions in the District by 50% by 2032 and 100% by 2050Achieve 100% renewable electricity in the District by 2032Develop Building Energy Performance Standard (BEPS) for buildings in the DistrictAdopt Net Zero Energy (NZE) for new construction, starting in 2026The Washington Department of Energy and Environment (DOEE) will establish a minimum threshold for energy performance which will be “at least” the local median ENERGY STAR score by building type. The initial BEPS compliance cycle begins for building > 50,000 square feet in January 1, 2021 and will be based on the building performance in 2019 and 2020.Buildings that fall below the median threshold will have at least two compliance paths Performance: Reduce energy usage 20%Prescriptive: Implement cost-effective energy efficiency measuresOther as determined by DOEEThe building size threshold lowers to >25,000 square feet in January 1, 2023 and January 1, 2026 for buildings >10,000 square feet.DOEE has begun sending out the annual scorecard for buildings greater than 50,000 square feet, the scorecard will contain your building’s Energy Star score and rank within your building type in the District. DOEE is still developing the regulations for buildings to comply with the new law and AOBA and its members are actively participating in this process.The Mayor’s Office is convening a BEPS Task Force of interested stakeholders to help formulate the regulations around compliance with the Act. This process is still in progress. The BEPS Task Force is scheduled to be sworn in on November 18th.Sample DOEE ScorecardPepco Requested a Multi-year Rate Increase of $162 Million in D.C. On May 30, 2019, Pepco requested a multi-year rate plan in the District of Columbia, which would increase rates in the District by $162 million over the three-year period beginning in May 2020 (Formal Case No.1156). As part of the request, Pepco seeks to change its ratemaking from the traditional rate case filings, where Pepco files a request with the DCPSC based on an historical test year when it wants to increase its rates, to a multi-year rate plan in which rates based on Pepco’s forecasts would increase automatically each year over the three-year period, 2020 through 2022. Pepco proposes to raise rates in three steps, scheduled for May 1, 2020, January 1, 2021, and January 1, 2022. Pepco proposes to increase rates by $84.9 million in 2020, $40.4 million in 2021, and an additional $36.4 million in 2022. If the DCPSC does not approve the multi-year rate plan, Pepco asks, in the alternative, to increase its rates by $88.6 million in May 2020.With the multi-year rate plan, Pepco is also asking the Commission to approve several incentive mechanisms that would allow the Company to earn more money if it hits certain annual performance metrics which could raise rates even further in 2021 and 2022 than what is estimated.? AOBA has intervened in this case and will file testimony challenging Pepco’s proposed multi-year rate plan, the Company’s proposed rate increase and Return on Equity (ROE), as well as many other Pepco adjustments and proposals contained in the company’s new application.On August 9, 2019, the DC PSC issued an order adopting a procedural schedule in this proceeding which may, under certain circumstances allow for hearings beginning on June 29, 2020. The table on the next page shows Pepco’s calculated bill impact. The link to the DC PSC’s Public Notice of the rate increase is inserted below. DC PSC FC 1156 Public Notice Pepco Rate Increase EstimatesSettlement Filed in Washington Gas Maryland Rate Case*UPDATEOn August 30, 2019, Washington Gas, AOBA, the Maryland Office of People’s Counsel and the Maryland Public Service Commission Staff filed a Stipulation and Settlement of all issues in Washington Gas’ pending rate case in Maryland Case No. 9605. The Settlement agreement provides for an increase in the Company’s annual base rate revenue of $27.0 million, an increase of approximately 8.0%. This increase includes approximately $3.0 million of costs that are currently collected under the STRIDE plan that will now be included in base rates. New rates became effective October 15, 2019.On April 22, 2019, Washington Gas had filed its Application requesting a $35.9 million increase in rates, in the Company's Maryland annual base rate revenues (Maryland Case No. 9605). AOBA, the Office of People’s Counsel and PSC Staff all submitted additional testimony, including changes in the revenue allocation by customer class. The proposed rate increase includes $5.1 million of costs that are currently collected under the STRIDE plan that will now be included in the base rates, resulting in an incremental increase of $30.8 million, or 5.75%. All monthly customer charges are proposed to increase by 5%.The chart on the next page shows the estimated rate increase impact on each customer class for 1) distribution charges only, 2) a distribution increase including surcharges and 3) an estimated total bill impact including all surcharges. Washington Gas distribution charges represent roughly 50% of the total customer bill and therefore the third column shows an estimated increase in the total bill.Settlement Filed in Washington Gas Maryland Rate Case (Continued)Pepco’s Request for a $29.9 Million Rate Increase in Maryland Reduced to $10.3 MillionUPDATE: On July 9, 2019, a Proposed Order of the Public Utility Law Judge (PULJ) authorized an increase in rates of $10.3 million for Pepco based on a return on equity (“ROE”) of 9.6%. This PULJ Order was appealed by the Maryland PSC Staff. On August 12, 2019, the MDPSC affirmed the PULJ’s Proposed Order and new rates became effective August 13, 2019.On January 15, 2019, Pepco filed a request for an increase in base distribution revenues of $29.9 million (approximately a 7% increase in distribution revenues), which was reduced to approximately $27 million during the proceedings. AOBA intervened in this case and filed testimony stating that Pepco was entitled to no more than a $398,000 increase in rates. Hearings concluded May 24, 2019 and the Commission decision was issued August 12, 2019. New rates became effective August 13, 2019. (Maryland Case No. 9602). 9334502159000* The above percentage increases are based on class averages on distribution rates. The amount of increase per customer will vary by the size of the account. Also, the increase will be affected by changes in the monthly Bill Stabilization Adjustment (“BSA”). Washington Gas Request for a $37.6 Million Increase in Virginia Reduced UPDATE: The Hearing Examiner issued his decision on September 16, 2019 and found that no increase or decrease to WG’s current level of revenue is warranted, i.e., there will be a refund of a portion of the rates that went into effect in January 2019.The Hearing Examiner agreed with AOBA that WG’s TCJA regulatory liability of $35.4 million should be refunded to customers in a one-time bill credit.Washington Gas must return to customers approximately 60% of its distribution rate increase that went into effect January 1, 2019New rates going forward will be approximately 40% of the increase that went into effect on January 1, 2019Washington Gas filed for reconsideration of the Hearing Examiner’s decision on October 21, 2019.A final SCC decision is pending.Washington Gas filed an application on July 31, 2018, requesting authorization to increase its rates and charges and to revise the terms and conditions applicable to gas service effective for usage beginning with the January 2019 billing cycle, subject to refund (Case PUR-2018-00080). AOBA requested a refund in the form of a bill credit for over collected income tax charges from the Tax Cuts and Jobs Act of 2017.Washington Gas Requested a $37.6 Million Increase in Virginia (Continued)Impact to WG BillA tax refund of $35.4 million will be returned to customers as a bill creditRate case refund for rates implemented from January 1 until SCC approval of the Hearing Examiner’s decisionRoughly 60% of the rate increase approved will be returned to customersNew rates going forward will be approximately 40% of the initial January 1, 2019 approved rates65722515811500Washington Gas Virginia Files for $14.2 million SAVE Rider Approval (Case No. PUR-2019-00142)On August 30, 2019 Washington Gas Virginia filed its annual approval for SAVE Rider for Calendar Year 2020. The SAVE rider provides natural gas utilities in Virginia to recover the costs of specific infrastructure replacement programs that have the potential to reduce greenhouse gas emissions and to enhance safety and reliabilityThe Company is seeking approval for $14.2 million in revenue requirements for 2020If approved by the Virginia SCC, the updated SAVE rider charge would be effective January 1, 202019113512192000Washington Gas Filed Revised Pipe Replacement Plan in the District of Columbia “PROJECTpipes 2” UPDATE: The DC PSC approved the recommendation of AOBA and OPC to extend the initial Projectpipes plan through March 31, 2020 while Projectpipes2 was under consideration.On March 22, 2019 AOBA filed comments with the D.C. Public Service Commission that called into question the effectiveness of the original pipe replacement plan and the new proposed PIPES 2 plan going forward. AOBA urged the PSC to issue an RFP for an independent third-party consultant to design and implement the replacement of WGL’s most leak prone pipes, i.e., the PROJECTpipes 1 Plan. AOBA further urged the PSC to require WGL to immediately remediate hazardous gas leaks (Grade 1 and 2), under the purview of the third party administrator, and seek cost recovery in a separate rate case and delay ruling on the PIPES 2 plan until the Commission is able to verify that Washington Gas is able to make progress towards elimination of the most hazardous leaks on time and at reasonable cost. AOBA noted that there has been a 169% increase in reported Grade 1 leaks from 2013 to 2018 which coincides with the original accelerated pipe replacement plan (Formal Case Nos. 1115 and 1154). AOBA’s comments also note that Washington Gas is focusing on the wrong type of pipe replacements. WG’s focus should be on the riskiest mains which are the cast iron pipes; instead Washington Gas is focusing its PIPES 2 plan more on bare steel and vintage mechanically coupled mains. The cast iron mains represent the vast majority of risky mains in the District and should be the primary focus and priority replacement in the District.On December 7, 2018, Washington Gas Light Company filed a revised plan for Accelerated Pipe Replacement in the District of Columbia with the District of Columbia Public Service Commission, PROJECTpipes 2 Plan. AOBA, which participated in the initial phase of this proceeding and has also reviewed similar plans filed by Washington Gas in Maryland and Virginia, has performed a preliminary review of the Company’s recent filing and filed comments with the District of Columbia PSC regarding Washington Gas’s proposed PROJECTpipes 2 Plan. The proposed Projectpipes2 charges are on the next page along with a graph showing the total number of gas leaks in Washington Gas’ territories over the past six years.95250307975011430023190200AOBA Utility UpdateRate Case Expectations *UPDATEPepco-District of Columbia Rate case and Multi-year rate plan filed May 30, 2019 PSC decision currently scheduled for December 2020 Pepco-MarylandRate case filed January 15, 2019New rates effective August 13, 2019 Multiyear rate plan expected after February 1, 2020Washington Gas- District of ColumbiaRate case expected on or after January 2, 2020Multi-year rate plan expectedWashington Gas- Maryland Rate case filed April 22, 2019New rates effective October 15, 2019 Washington Gas- VirginiaHearing Examiner decision issued, rates effective January 1, 2019, subject to refund- SCC final order pendingDominion-VirginiaNext review of rates will be Triennial Review in 2021 ................
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