New Front In Dominion’s War Against Competition

Dominion Energy Virginia has opened a new and aggressive front in its economic war against companies seeking to offer Virginians retail choice for electricity service, directly attacking two firms promising 100 percent renewable energy to lure away environmentally minded customers.

In separate filings on July 15, the utility charged that both Direct Energy Services LLC and Calpine Energy Solutions LLC are not meeting the requirements under the law to claim they are offering 100 percent renewable energy.   It asks the State Corporation Commission for a declaratory judgment on those requirements and refuses to transfer any more of its customer accounts over to those firms until the SCC rules.  Here is the motion against Direct Energy and here is the similar move against Calpine.

Both companies quickly responded with motions for  injunctive relief, asking the SCC to order Dominion to continue transferring customers until the dispute is resolved.  How many customers have signed up for the competitive service providers only to be held in limbo is not included in the filings, although Calpine provided a confidential list to the SCC. 

Virginia law allows customers to use an outside provider for 100 percent renewable power because Dominion does not offer that option. Its latest effort to create a renewable  tariff is pending at the SCC and this push must be viewed in that context.  The SCC has now given Dominion until July 31 to respond to the motions for injunctions and the independent providers until August 6 to respond to those responses.  No hearing or hearings on this dispute have been scheduled.

There will instead be a full hearing today on the utility’s other major tactical move against competition, its effort to revise its existing market-based rate (MBR) option for large industrial and commercial customers.  It has proposed the new Rider MBR with the admitted goal of undercutting its competitors for the large industrial customers. Customers with a steady 5 megawatt load are also allowed to seek an alternative supply under Virginia law.

The Rider MBR proposal, previewed on Bacon’s Rebellion back in April, has received favorable comment from the SCC staff, which has offered some suggested improvements that Dominion is accepting and some that it is not.  A more detailed report on that proposal will following the hearing.

The third front in this war, also playing out in front of the Commission, includes the ongoing efforts by individual retail customers to aggregate their demand up to the five-megawatt threshold so they would have the same opportunity to escape Dominion’s monopoly as the largest customers enjoy.  One of those frustrated escapees, Costco, has just filed to join this new Calpine case.

So to review the three fronts:   Dominion has 1) cut off transfers of its customers to two competitive suppliers offering a renewable product and asserts to the SCC they are operating illegally, 2) continues to contest efforts by medium size retail customers to aggregate enough load to depart the monopoly, and 3) is working hard to offer a lower-priced alternative to those customers who already have enough load to leave.

One question common to all of the cases is whether customers who choose to remain with Dominion, or who have no choice under the law, end up hit with additional costs because the others have left or because the large users will have this new, lower-cost rate alternative.  That is the reason the SCC has cited for denying most petitions by retailers for aggregation of their load.

At the heart of the dispute with the renewable providers is the old question of what constitutes “100 percent renewable” power when all the electrons mix on the same grid and most renewable sources operate intermittently.  Dominion asserts that to qualify as competitive suppliers in this arena, the companies must have contracts not only for renewable power output but also for capacity.  “(I)t must have control of sufficient renewable generation resources, including renewable capacity and associated renewable energy, to enable it to serve the full load requirements of the customers it intends to serve,” is how Dominion states the standard it sees.

It cites a recent SCC decision in favor of a similar company challenged by Appalachian Power Company. In that case, Collegiate Clean Energy “had demonstrated that the renewable capacity under its control and available to serve its customers was capable of meeting the requirements of its customers on an hourly basis.  In stark contrast to the facts underlying the APCo Order, Direct Energy now asserts that it need not provide any renewable capacity whatsoever to provide service,” Dominion writes in its petition challenging Direct Energy.

“Under the limited standard that Direct Energy asserts is the extent of its obligation, it could avoid its full service obligation by over-procuring renewable energy when there is excess renewable energy in the market {e.g. off-peak wind or run-of-river hydro generation) and provide non-renewable energy service to customers in all other periods. In reality, PJM Members’ non-100% renewable resources could, and likely would, be generating the energy that Direct Energy would be using to serve these customers most of the time.”

In its response (here), one of the challenged companies disputes Dominion’s interpretation of what is required to be deemed a a renewable supplier.

“Calpine vehemently disagrees with the Dominion-created “renewable capacity” requirement and looks forward to establishing in the course of this proceeding that it will supply customers served under Section A 5 with 100 percent renewable energy, and that it has adequately documented its ability to do so. For the purpose of this Motion, Calpine will demonstrate that Dominion lacks any authority to unilaterally create and impose its own definition of service under Section A 5, including a “renewable capacity” requirement, and to deny service to Calpine’s customers based on this non-existent requirement.”

The other response (here) has a tone of anger over Dominion’s decision to refuse to facilitate the transfer of customers until the SCC decides this issue.

“Dominion’s decision to deny service to Direct Energy Business’s customers,  before the Commission has even had a chance to consider and rule on its declaratory judgment action, is unsupported by Virginia law and Commission precedent and is just the latest in a series of efforts by Dominion to frustrate the purpose of Va. Code § 56-577 and to interfere with the efforts of Direct Energy Business to do business in Virginia as a licensed CSP.”

The battlefront has grown so wide Dominion is calling in reserve divisions.  These new petitions were filed by Richmond mega law firms Troutman Sanders and Hunton Andrews Kurth, not Dominion’s usual outside counsel McGuire Woods.

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19 responses to “New Front In Dominion’s War Against Competition

  1. I saw an article a few weeks ago about how the cloud companies are pressuring Dominion for 100% renewable. I was not sure if it was the cloud companies pushing so hard, perhaps I should say the environmentalists are demanding the cloud companies demand 100% renewable from Virginia.

    The article indicated it was bad that Virginia was using nat gas, and that Virginia needed to be more like California.

    But Virginia is not California, we actually have a winter here. We need natural gas power, partially because we have heat pumps (vs. nat gas piped to homes). Our carbon foot print is actually among the best, we use relatively little energy to run our state.

    The issue is not using nat gas, the issue is carbon footprint. The fact we have a winter should not be counted against us. There are endemic factors beyond our control, including the fact Virginia was cheated by God on high wind zones in the mountains for cost-effective onshore wind. We need to consider the endemic factors.

    Nonetheless, the eco-community is demanding 100% renewable for Virginia, come “hell or high water”. But I think what companies are asking for is Domninion to say renewable energy being produced is being sent for the cloud companies so they can say it is is 100% renewable. Verbal segregation of electrons, in other words.

    • “But I think what companies are asking for is Domninion to say renewable energy being produced is being sent for the cloud companies so they can say it is is 100% renewable. Verbal segregation of electrons, in other words.”

      These virtue signalling claims of 100% renewable generation made to feed voracious appetites of crony capitalists feeding off our tax dollars and corrupt tax credit system, all this corruption reminds me of the Robert Mueller Special Counsel investigation – an illusion built out of a vast web of lies wrapped in a grand hoax.

  2. You do good reporting on Dominion and the related issues. Other than Ivy Main, I’m not sure I know of any others except for the occasional article in RTD and other media.

    It’s becoming more and more clear that Dominion has a particular view of what it’s monopoly grants them and excludes competition though it’s not in uber-obvious ways that the average citizen will see – with the exception perhaps as Jim B has pointed out that 100% “renewable” on a 24/7 basis is counter-intuitive, i.e. at some point the actual power at 2 am is likely coming from fossil fuels in Virginia which has almost no wind-power and I don’t know if PJM has a separate option of wind-power only at auction.

    But if you were out west – in some places you would see so many large wind turbines that it would easily convince you that they also generate at night when solar was not.

    But the theory back east is that if you buy enough “renewable” that if spread over 24hr, it would be “enough” to supply you that you “qualify” for 100% “renewable”.

    What I do not know or perhaps missed in the articles is do these folks buy that package but then also have to pay for whatever grid power they have to use – at night? If that’s Dominion’s complaint then perhaps it does have merit. If it’s not and those folks pay for the 100% package and the grid power from Dominion then is Dominion arguing that their monopoly grants them the right to decide if entities can buy 100% renewable ?

    If so, my bet is that they apparently think they can win in the SCC and if not win in the GA – and in the current Federal environment – win in US courts and administration policy and basically attack the basic concept of these 100% renewable packages.

    The proposition that more and more electricity customers would use renewables – when available – and drop back to fossil fuel grid power when not – probably needs to be looked at – grid power that is only needed “sometimes” has got to be way more expensive to produce and deliver than 24/7 grid power – all that infrastructure STILL has to be built and maintained no matter whether you use grid power 24/7 or only 7 hours a day – it’s like roads and super efficient cars versus less efficient cars – they both use the road and one pays far less gas tax.

    • Larry, you say, “[T]he theory back east is that if you buy enough “renewable” that if spread over 24hr, it would be “enough” to supply you that you “qualify” for 100% “renewable.” Actually that’s generally the rule nationwide. You have to buy enough kilowatthours of RECs to meet your load with renewable-resource-generation but time shifting by hours and even days is allowed. See the discussion below for a more detailed explanation.

    • Virginia Code Section 56-576:

      “‘Renewable energy’ means energy derived from sunlight, wind, falling water, biomass, sustainable or otherwise,…, energy from waste, landfill gas, municipal solid waste, wave motion, tides, and geothermal power and does not include energy derived from coal, oil, natural gas or nuclear power. Renewable energy shall also include the proportion of thermal or electric energy from a facility that results from the co-firing of biomass.”

      Many of those sources can and do produce round the clock. Interesting that a renewable energy facility by this definition include Dominion’s Wise County COAL plant, whenever it is “co-firing..biomass.”

      • My knowledge is dated, but once upon a time, for example, the old Bremo coal plant was also talked about for trash burning and biomass (wood, sawdust) burning because it had old-fashioned bottom grates in its boilers where anything could be burned — instead of burning pulverized coal dust sprayed in through nozzles (along with stabilizing oil) like modern coal plants. My sense is that this provision in the law was intended to cover that sort of actual or potential dual use or converted use for old coal plants.

        The definition of renewable energy, while entirely a matter of each state’s jurisdiction, was fairly standardized collaboratively, I believe through NARUC. A standardized definition was pushed by the New England states in the 80s, to make trading of renewable energy credits between states possible, building on the fact that plenty of utilities served retail customers across state lines so they wanted a uniform definition too. I know when Maryland enacted RPS requirements and had to include a definition of what was a renewable, it incorporated the standard definition and some other language from elsewhere (New Jersey?) which probably had borrowed it in turn. All this is a long way of saying, I expect this provision for biomass energy from an old coal facility is not unique to Virginia.

        • Bremo was converted to run on natural gas as a condition of the Air Board issuing the permit for the Wise County plant, AC. It’s since been retired.

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  4. Let me provide some background. This will be a long post so skip it if you don’t want to wade into the weeds, here; but given the level of interest in Dominion issues in the past I think I should put this out here.

    This controversy is about the “retail access” statute, which keeps the vision of electricity retail access alive in Virginia in only two meaningful, highly limited circumstances after the broader rollback in 2007. Specifically, what do the limiting provisions mean when they allow retail competition in very limited circumstances while refusing to allow it generally. Unfortunately the SCC’s ruling on these petitions will have major consequences for the scope of retail electricity competition in Virginia. If it works in these limited instances, there will be pressure on the GA to reinstate retail access more broadly, something that Dominion is dead-set against.

    First, renewables. Electric energy is fungible; that is, you cannot trace the electrons back to specific source; nobody can tell whether they came from a renewable-resources generator or not. Early in the renewables era the people that wanted to promote renewable energy sales devised a workaround: you, the retail customer, can buy a third party guarantee that for every kilowatthour of electric energy you withdrew from the grid, somebody, somewhere else, put at least that much energy into the grid created by a renewable-energy generator; an REC can only be consumed once. These guarantees, certificates also denominated in kilowatthours, are called “Renewable Energy Credits” or RECs.

    Back in the 1990s when the FERC created regional independent system operators (ISOs) like ours, PJM, it decided that the wholesale markets would not distinguish between generator types, adhering to the basic principle that a kilowatthour is a kilowatthour — whether derived from a solar collector or a nuclear plant or a pumped storage unit or a battery. So, REC markets arose separately in the various States. In these wholesale markets, “competitive service providers” (CSPs) could buy all the RECs they needed in order to market “guaranteed 100% renewable energy” to consumers.

    Now let’s back up a moment and look at how PJM’s wholesale markets actually work. There is a “real-time energy market” in which the marginal price (the price used for billing purposes) is determined by PJM’s “economic dispatch” of generation across its entire 13-state region
    designed to achieve the lowest marginal price feasible consistent with reliability. This price may vary slightly at different locations based on transmission constraints and losses but it’s basically a uniform energy price across all of PJM. Dominion and Apco and Rappahannock Electric Coop. all pay this wholesale energy price for what they withdraw from the grid. How much they mark up that price for retail sales is up to the SCC, which regulates retail sales.

    Meanwhile, there is an entirely separate wholesale market, run by PJM and every other ISO, for buying and selling “capacity.” In the capacity market, every “load serving entity” (LSE), which roughly translates to every retail electricity provider, MUST buy and dedicate to PJM, on an annual basis, the exclusive right to call on generating capacity sufficient to supply its forecast peak load plus its share of regional reserves. The concept is simple: PJM in the aggregate controls enough generation to meet its peak load, and the cost of this is borne by the LSEs through the capacity market (or bilaterally if the LSE so chooses). This is the basis for assuring the reliability of the overall electric supply in the PJM region.

    Dominion Energy is a holding company with two subsidiaries particularly relevant here. Its retail sales unit, its LSE, is Virginia Electric and Power Company (Vepco); its wholesale generation management unit is Dominion Generation Company (DG). Dominion Generation sells both capacity and energy at wholesale. Most of DG’s capacity is sold bilaterally to its affiliate, Vepco. The terms of that bilateral deal require Vepco to pay the capital and operating costs of those DG generating plants, costs which the SCC allows Vepco to include in its retail rates (the SCC also has jurisdiction over the bilateral deal itself, because it is between utility affiliates). The energy from DG’s PJM-regional units is sold (if the unit runs, meaning, if PJM dispatches the unit) into the PJM energy market. Vepco takes delivery from the grid at all its delivery points and buys that amount of energy from the PJM energy market. DG’s sales and Vepco’s purchases rarely match; the diffference is made up by net wholesale purchases or sales from the PJM energy market.

    Now onto this brief description of the wholesale electricity markets let’s overlay the CSP who comes along and offers to provide 100% renewable resources energy to consumers. The CSP is competing with Vepco to make retail sales; the CSP, therefore, becomes the LSE (the fact that the CSP’s electricity will be delivered over Vepco-owned distribution equipment is irrelevant here; there’s a separate charge on customers’ retail bills for that use of the wires). The CSP becomes the energy market buyer from PJM’s point of view; it will receive a bill for its share of PJM energy market deliveries to Vepco’s distribution delivery points.

    But what about that capacity market? PJM requires every LSE to buy capacity equal to its forecast load plus reserves. The CSP is an LSE. Therefore the CSP must take on its share of the capacity obligation, formerly borne by Vepco, for all those renewable resource customers it has taken on.

    That, in a nutshell, is what Dominion Energy is demanding for CSPs that provide renewable energy. In theory I agree with DE, the capacity obligation is real, and falls on the LSE under PJM rules, not the owner of the distribution wires. The practical consequence of administering it for the small amount of capacity involved is, well, difficult, and maybe not worth the administrative cost. The SCC ducked the issue in an Apco case raising this point; now Dominion is going to press for a resolution of the matter. I predict Dominion will win, despite the fact that the Virginia statute mentions only “energy.” In fact the capacity requirement is fixed by the FERC on all wholesale buyers and the SCC could simply defer to the FERC rather than make its own politically-fraught determination. In any case, Dominion itself offers an all-renewables-energy rate to customers who choose it; that requires no change of LSEs.

    But will Dominion win the war? The larger issue here is, how will CSPs that take on Dominion commercial/industrial customers be handled? The requirement for retail access by such customers under Virginia law is that the customer have a load exceeding 5 megawatts (for comparison, a residence typically has a load of .001 megawatt). The SCC did not grant earlier petitions by Walmart and Costco to aggregate loads on grounds that, frankly, only buy time. Somehow, the SCC must come up with rules for CSPs to handle how they meet their capacity obligations to PJM. The problem really isn’t how the CSP buys capacity or how Vepco’s reduced capacity obligation is calculated (that’s already laid out in the PJM tariffs). The problem is what happens if a CSP goes out of business and defaults on its contracts: who picks up the pieces? In most states the “default provider” is the utility that owns the distribution system — here, that would be Vepco, which is both an LSE to its own retail customers and a distribution service (wires) provider to all the customers on its part of the grid. But this raises issues that Virginia has never decided, even though most retail access states went through all this years ago.

    Unlike a few homeowners and businesses who seek renewable energy as a matter of principle, the flipping of 5+ megawatt loads from one LSE to another on short notice requires serious planning and can have serious reliability consequences. Dominion has proposed in its retail tariff some limitations on customers’ ability to switch providers. Some are reasonable — for example, multi-year contracts are required so that customers don’t simply change LSEs every few months in order to take advantage of seasonal differences in retail rates. Some are unreasonable and simply anticompetitive — for example, requiring 5 years notice to change LSEs, even though the LSE’s capacity obligation is fixed only 3 years out and adjustable up to 1 year out under PJM rules, with provision for shorter-notice adjustments as needed.

    And there’s another issue: what does “greater than 5 megawatts” mean? It’s simple if a big industrial or institutional customer (like a college or a hospital) has a load that’s always well in excess of 5 megawatts. But what if the customer’s load is less than that in some months? What if the customer has multiple, non-contiguous campuses which in the aggregate exceed 5 megawatts but not at each separate location? The SCC made a discretionary decision to reject aggregation as allowed by the Virginia statute, but it could reconsider at any time. These questions of who qualifies for retail access are issues for the SCC to decide.

    And another issue: as Steve says, Dominion (Vepco) “has proposed the new Rider MBR with the admitted goal of undercutting its competitors for the large industrial customers.” The SCC must determine whether doing that will somehow unreasonably shift costs to other classes of ratepayers — making them pay more just so Dominion can discount the rate to the big industrials. This sort of customer-class-cost-shifting is generally anathema to rate regulators, except for the cost-shifting implicit in the cheap rate for very-low-usage residences.

    All of this lies behind these filings. Good catch, Steve.

    • “But what about that capacity market? PJM requires every LSE to buy capacity equal to its forecast load plus reserves. The CSP is an LSE. Therefore the CSP must take on its share of the capacity obligation, formerly borne by Vepco, for all those renewable resource customers it has taken on.

      That, in a nutshell, is what Dominion Energy is demanding for CSPs that provide renewable energy. In theory I agree with DE, the capacity obligation is real, and falls on the LSE under PJM rules, not the owner of the distribution wires.”

      Counterpoint AC. PJM’s requirements involve wholesale power, a matter left in the exclusive jurisdiction of FERC. Can the state legislature, let alone the state regulatory commission, impose ANY condition that affects this federally based requirement? As you note, the statute only requires the provision to an end use customer of 100% renewable ENERGY–no mention in the state law whatsoever of capacity. No requirement in state law that a competitive supplier secure capacity of any sort. Seems to me the SCC could simply punt these complaints to PJM and/or FERC.

      • You are quite right, the capacity requirement imposed on every LSE as a condition of membership in PJM is there because FERC accepted PJM’s tariff. Therefore the SCC as a legal matter could punt these complaints to them.

        Where would that leave the CSP? He’s got a cost for capacity (imposed by PJM), and Vepco (Dominion’s LSE) loses that cost (PJM reduces Vepco’s load forecast, hence its capacity requirement — if Vepco ends up with more Dominion-owned capacity than it needs to meet its LSE requirement, it can sell the excess in the PJM capacity market). The CSP sets the retail price for its renewable energy high enough to recover the expected cost of both capacity and energy and profit. All this will happen without the SCC doing anything except accepting the CSP’s retail rates as reflecting reasonable costs.

        But, as mentioned above, the real rub is what happens if the CSP goes out of business, unable to pay its PJM wholesale market bills, or even bankrupt. With a typical Virginia utility the SCC has jurisdiction over hard assets and affiliate transactions as well as services and rates — not so with CSPs which may be just thinly-financed middlemen. Faced with this possibility most eastern states have conditioned CSP rates on, or adopted rules establishing, backup provisions for “default service” from someone, usually the distribution wires owner (because they already own the meter, have the billing system in place, will field the initial panicked call from the customer, etc.). This is a State-jurisdictional problem that can’t be punted. I expect the SCC will want to address it up front rather than plunge (without a contingency plan in place) into “default retail service” issues when the first such CSP financial failure occurs.

        Interestingly, I didn’t see this addressed at all in the declaratory judgment petition. So the Commission could duck (or address narrowly) these contingency arrangements for now and deal with default service in a separate, followup investigation on its own motion, timed to create a framework for the CSP rate filings to come.

        Back in the 90s there were a lot of utility objections and regulatory concerns that the distribution utility or its LSE affiliate couldn’t reasonably plan for such a sudden and unexpected shift in load responsibility and, moreover, there might not be enough capacity and energy available in the wholesale marketplace on short notice to pick up the slack. As a practical matter this is moot today, in PJM anyway, because there is abundant short term capacity for sale in the PJM capacity marketplace and the energy market supplies requirements (on demand) service to all PJM delivery points. Of course the capacity previously contracted-for by the broke CSP is still there on the grid, so nothing new actually has to be built or operated to serve the CSP’s customer load, it’s just a question of who now has to buy the energy from PJM and who now has to pay the generator for its capacity commitment.

        Different states have different approaches to how long the default service can last before the customer has to go sign up with another LSE, how the distribution (wires) company interfaces with the customer in the meanwhile (or how it hands off that responsibility to its corporate LSE affiliate, assuming there is one), how the broke CSP hands off its existing contracts (both for its supply of wholesale capacity and for its commitment to serve retail customers), how to handle transitional billing, how to reassure the customer. Obviously the prime goal shared by everyone (including PJM) is, keep the customer’s lights on while the change of LSE gets sorted out. Other mid-Atlantic regulators have worked through this already; I assume the SCC will take advantage of the network of other commissions in OPSI (the Organization of PJM States Inc.) to see how those states that pioneered retail access have handled all this both substantively and procedurally. Back in the day, the Pennsylvania PUC used to be a good resource for retail access ideas as they were one of the first to deal with it.

  5. There is a lot of confusion about this topic because the way our grid works is counter-intuitive. No one uses renewable energy or gas-fired electricity, nuclear, coal, biomass or any other type of electricity. People just use electricity.

    When it is generated it merges into the great trough of electricity that people tap into to meet their demand. Electricity doesn’t even really flow, it “jostles.”

    What Calpine is suggesting is that it has generated 1000 kWh of electricity from renewable sources to meet the 1000 kWh billed to a customer.

    Dominion doesn’t have much renewable generation. Most of the Renewable Energy Credits it has accumulated over the years have come from decades old hydro facilities (often in other states) or plants that burn some wood by-products soaked with oil and burned with coal.

    This issue goes to the heart of the question we need to resolve to move our energy system forward and keep costs down. If the monopoly applies just to the wires, we need a scheme (as other states have) that properly compensates the utility for maintaining its wires for reliable operation and gives them an incentive to modernize the system.

    This goes back to the original utility compact of a fair return for a fair price to customers. With retail choice, Dominion still gets paid for the use of its wires.

    As previously shown, Dominion’s demand for electricity is not growing. There is no need for it to build new generation. If some of Dominion’s customers get served by others, it will still get repaid in full plus its full profit for the plants that are in the ratebase.

    Other states have worked out ways to open up the grid for a variety of energy suppliers and energy service companies and still keep investor-owned utilities financially healthy. So can we, but it is a significant undertaking.

    New York is probably the state farthest along with modern revisions. The utilities were skeptical and resistant at first, but now they have many new profit opportunities that didn’t exist before. The energy system is cleaner and more resilient, customers have more choices and costs are lower than what they would have been had they stayed with the old system.

    We must adapt to a changing landscape for our own benefit and for the benefit of our valued energy providers.

    • Good perspective. You say, “New York is probably the state farthest along with modern [retail access] revisions.” I don’t disagree, but New York also has its own ISO. Who would you consult if you were looking for advice on retail access in PJM?

  6. Acbar, as I understand it, the capacity requirement for an LSE is to own or have under contract sufficient generating capacity to meet its annual peak demand, plus a designated reserve.

    If a provider other than Dominion serves one of Dominion’s previous customers, that customer’s usage would not be included in Dominion’s peak and therefore, Dominion would not be responsible for paying for capacity.

    Since the capacity auction applies only to dispatchable units, how would a provider go about acquiring a capacity commitment for only renewable energy?

    • The “provider other than Dominion” would be an LSE with its own capacity obligation; and yes, Dominion would be relieved of its obligation to the same extent. But nothing says the CSP has to provide its capacity from renewable-capacity generation. There is no renewables-only capacity requirement in PJM or in any eastern State-run renewables (e.g., RPS) program that I’ve ever seen.

      In fact the CSP does not actually supply its energy from renewables either. What a renewable-energy CSP does is buy requirements energy from PJM and buy RECs (renewable energy credits) in the state-run REC markets and retire the RECs as they are consumed by its customers. That’s why RECs can be consumed at different times than they were generated — e.g., solar RECs are usable at night. PJM does not have a separate energy market in which renewables only are dispatched; it’s just the one energy market, the one delivery grid, all the energy in it is fungible.

  7. So… if some entity has 5000 megwatts of electricity to sell in the PJM territory – does that make them a LSE?

    If they are generating the power AND also selling it at retail…. what’s the problem – except they would be doing it in Dom’s monopoly-granted territory?

    this part.. I’m still not totally understanding – as explained.

    Seems like ANY entity could generate power physically in Virginia then turn around and sell it at “retail” to customers in Virginia (that may be a NO ??? – they can generate and sell via PJM but only those granted the power to sell at retail – can?

    • PJM runs wholesale markets for buyers (LSEs) and sellers (generators). An LSE has to qualify and be accepted as such by the State commission that regulates retail sales; then it can take on the commitment to supply customers with their electricity requirements at retail. That means it has an obligation to keep on serving the retail customer and can’t just decide to drop the customer on a whim. I think you have it about right in your last parenthetical — retail sales without state permission are a NO).

  8. Anyone can get either a permit from DEQ (for certain renewable generation) or a CPCN from the Commission and build a plant to generate power in Virginia.

    No one can sell power to retail customers in Virginia except the incumbent electric companies and co-operatives and, under statutorily set limits, licensed CSPs can sell to certain larger retail customers of DVP and Apco.

    All other power generated by non-utilities in Virginia is either sold into the PJM market or by contract to a load serving entity, as AC notes. Both of these are wholesale sales of power.

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