Michael Martz has a good report in this morning’s Times-Dispatch on the State Corporation Commission’s opinion trimming Dominion Energy Virginia’s proposed transmission charge. The SCC ordered the proposed Rider T going into effect next month reduced to reflect the lower federal income tax rates. It also rejected the utility’s argument that a payment it was receiving from the PJM regional transmission entity was a generation cost it should be allowed to book against base rates instead of against Rider T. Booking it against base rates would in effect make it profit.
The payments are made because PJM asked Dominion to continue operating its Yorktown plant for reliability reasons. The SCC wrote: “Legally, these payments are part of the PJM Transmission Tariff, which explicitly states that — in this particular instance — the generator is providing a “transmission service” for which PJM is assessing “an additional transmission charge” of $12.7 million. Accordingly, the Commission finds that both (1) the charges assessed, and (2) the payments made, by PJM under the PJM Transmission Tariff for this transmission service shall be reflected in the Subsection A 4 revenue requirement.”
As the biggest beneficiary of that increased reliability, Dominion is actually providing about half of the money to PJM which is then repaid to Dominion. How does it collect its share? In Rider T. These are all transmission dollars.
The adjustments ordered by the SCC will save more than $2 per month on the mythical 1,000 kwh residential customer bill. The question now is, will Dominion appeal the decision to the friendly Supreme Court of Virginia? In its final written arguments to the Commission it pointed to the legislative provision (which of course it wrote) that these costs are on their face “reasonable and prudent.” Reading the SCC opinion (not yet up on its website) it is obviously laying the groundwork for its argument in any possible appeal.
If the appeal is filed it will have little to do with this issue and a great deal to do with the battles to come over Dominion’s massive grid investment plan, just getting underway. The tax issue involved more money, but the argument over the payment from PJM for maintaining operations at the Yorktown power plant goes right to the heart of the legislative declaration of “reasonable and prudent” and the utility’s game of moving costs back and forth between base rates and rate adjustment clauses when it improves its bottom line.