Dominion Protecting Renewable Energy Buyers?!

Dominion Energy Virginia is simply trying to protect the unsuspecting public from environmental fraudsters, you understand.  Companies like Costco Wholesale and The Kroger Company lack the energy expertise to decide for themselves if a competitive service provider really is providing 100 percent renewable energy. They are being denied that service by Dominion for their own good.

That’s the basic argument Dominion has advanced for its refusal to allow willing customers of Direct Energy Business or Calpine Energy Solutions to switch.  It has said so in briefs filed at the State Corporation Commission and repeated it during hearings on the two companies’ efforts to force Dominion to accept the various applications for competitive supply. 

“Dominion Energy Virginia is protecting customers and declining to be complicit in Calpine’s provision of unauthorized and illegal service to customers,” one of its attorneys wrote in a brief.

All three SCC judges sat through the hearing August 7 from 1 p.m. well into the evening, first hearing about the Direct Energy Business motion and then the similar motion from Calpine.  The motions were for immediate action on injunctions, but the SCC did not rule from the bench and indicated late on August 8 that decisions on the motions were coming “promptly.”

As previously reported on Bacon’s Rebellion, Dominion started this conflict with a request to the Commission for a declaratory judgement on what level of renewable supply a renewable provider must “control” to abscond with Dominion’s customers.  Then the utility decided that based on the answer it suggested, while waiting on the SCC, it could deny any customer departures.    The two competitors then filed injunction motions to force Dominion to transfer the accounts.

The August 7 hearing was on the injunctions but kept bleeding into the main issue. No new arguments emerged, but the witnesses did fill in some facts.  Both Direct Energy and Calpine were early in the process of establishing their first Dominion zone accounts when Dominion froze the process.

Direct Energy provided numbers.  It has submitted 16 customers with 90 different metered accounts to Dominion for switching, and 12 had cleared the first review hurdle and had been given start dates for the switch.  Another four accounts didn’t clear the process, perhaps because of some discrepancy between the application and Dominion’s own records.

But a flood was coming.  Ronald Cerniglia, Director of Corporate and Regulatory Affairs for Direct Energy, said it has another 93 customers with 1,981 metered accounts considering or ready to leave Dominion.  The size of these accounts was not revealed, but they are mainly commercial, not residential, and thus represent a substantial load and perhaps a substantial loss of Dominion revenue.

In its filings, Calpine included customer information but put it under seal.   Two potential major customers have joined the case, however, and both Costco Wholesale and The Kroger Company sent lawyers to participate August 7.  Costco has also been seeking to escape Dominion by the other allowed route, aggregating its various stores into one large account that exceeds a five-megawatt demand.  So far, the SCC has rejected that effort.

But the section of the law dealing with renewable energy says Dominion customers “shall” be allowed to leave for a provider of 100 percent renewable energy, as long as the monopoly lacks its own approved renewable tariff.  Dominion does lack that, but its latest application to create one is pending. Unless or until that is approved, the competitors can sign up customers and keep them for their full contacts.  Losing that window is one irreparable harm they may suffer if the SCC does not order Dominion to let their customers go.

Dominion is arguing that neither Calpine nor Direct Energy, large national firms with years in this industry, are really selling 100 percent renewable power to Virginia buyers.  For example, it pointed to a contract Direct Energy shared with it from a company providing power from dams and noted force majeure language, absolving the provider if a drought reduced output.

Cerniglia testified that Direct Energy has other renewable suppliers all around the country, plenty of them within the PJM Interconnect LLC territory that serves Dominion.  It has back-ups.  Reliability is not an issue, because Direct Energy is also a licensed load service entity (LSE) and wouldn’t be if PJM were not satisfied it had capacity.  But could it prove it would provide 100 percent renewable 100 percent of the time, even in weather events or peak load, Dominion’s lawyer kept asking?

Judge Mark Christie, perhaps betraying a bit of skepticism about the whole exercise, pressed the Kroger lawyer during his opening comments. Does it bother Kroger that it might not be renewable generation 24-7 for 365 days a year?  “How much purity do you need…how green is green enough for Kroger?”

“As green as we can get,” replied Kurt Boehm, who traveled to the hearing from Cincinnati, Ohio.

This is and always has been the reality of this business.  Any customer buying electricity from the main grid, not from a solar or wind field or dam directly tied to its building, is getting electrons from all forms of generation.  These renewable providers match the demand they are serving with the renewable energy they are buying under purchase contracts, and there is some variation on whether those balance hourly, daily or even monthly.  There are certainly times when the two do not fully balance.

To be in this business, Calpine and Direct Energy have gone through all the review and licensing procedures of PJM, of the SCC, and even have been put through a registration process by Dominion.  They operate in multiple states.  This challenge to their legitimacy, to whether they are operating legally, appeared very late in the game, and only after Dominion had its own tariff request moving forward.

Costco was in the process of moving 28 accounts over to Calpine, and for a while thought it had done so, according to its brief.   “It was only after Calpine recognized that its usage volumes for billing purposes were not as expected, and made inquiries with Dominion as to the reason for the discrepancy, that Calpine discovered that Dominion had paused the enrollments…. At no point did Dominion notify Costco of any enrollment delay…”

“Dominion has deputized itself judge, jury, and executioner during the pendency of these proceedings, taking the position, incredibly, that it may choke the lifeblood of Direct Energy’s Virginia business operations… This is a clear usurpation of the role of this Commission in regulating the Virginia energy marketplace. This Commission should not endorse this sharp tactic. Specifically; this Commission should reject Dominion’s attempt to use its state-chartered monopoly to starve a captive business,” wrote Michael Quinan on behalf of Direct Energy“This is a usurpation of this Commission’s powers and should be met with a sharp rebuke.”