Dive Brief:
- After the Virginia State Corporation Commission ordered Dominion Energy to directly assign some costs of transmission to large-load facilities, Microsoft filed an Aug. 28 notice of appeal with the Virginia Supreme Court. A company spokesperson said in an email to Utility Dive that the company has not yet appealed the decision and the notice of appeal “preserves its ability to challenge” future implementations of the decision.
- “While Microsoft has not appealed the Commission's decision, it is preserving its rights to ensure that any rates ultimately put in place are transparent, fair, and reflect the costs each customer creates,” the spokesperson said.
- The SCC’s July 31 decision ordered Dominion to craft an amendment to its existing line extension policy “that would require a mandatory [contribution in aid of construction, or CIAC] for defined types of transmission facilities,” and file that proposed amended policy in a new docket within 90 days from the date of the decision.
Dive Insight:
The SCC case concerned Dominion’s proposed change to its Rider T-1, a line-item charge allocated to cost recovery for transmission investments, and the commission ruled in favor of a mandatory CIAC for “direct connect” facilities, which will apply to the cost of the substations and the transmission lines which connect those facilities to the grid.
According to Virginia law, after a notice of appeal is filed, a petition for appeal must be filed within four months after the SCC enters its final order, giving Microsoft until late November to appeal the commission’s decision. Dominion’s amended policy is due in the follow-on docket in October.
Will Reisinger, a partner at law firm Reisinger Gooch who represented The Piedmont Environmental Council in the SCC hearing, told Utility Dive in an interview that it would be “somewhat odd” or “unusual” for “somebody to file a notice of appeal if they didn't actually intend to formally appeal the decision.”
During the SCC hearing, ThompsonMcMullan partner Cliona Robb argued on behalf of Microsoft that the company had concerns about impacted customers not having enough of a say, raising questions about “who's in the courtroom when this direct assignment decision is being made.”
“One thing I said at the hearing is that it is difficult for me to imagine that the commission could have given more notice to the public, including the data centers,” Reisinger said. “I cited a number of different orders where the commission signaled that they would consider cost allocations in this particular case … this issue has been unresolved for a long time in Virginia.”
PEC Senior Energy Infrastructure Policy Analyst Michael Barber said the group doesn’t think that argument from Microsoft “holds water … if you were interested in this issue as a developer, you knew about this proceeding, and you had the opportunity to be at this proceeding. But that was the point that Microsoft was making — whether or not that will be part of the grounds they're appealing on, I don't know.”
A spokesperson for Google, which also participated in the case along with fellow hyperscalers Amazon and Meta, said in an email that Google is not able to comment on Microsoft’s appeal “at this stage.”
Hannah Coman, a strategic negotiator with Google's Energy Market Development team, told Utility Dive in an interview that she sees the commission’s order as “thoughtful.” During the SCC’s hearings, Google argued in favor of voluntary CIACs instead of mandatory ones.
“Google is committed to building data centers the right way, and we advocated for the direct interconnection costs to be allowed to be payable by the data centers, and we were comfortable with them making it mandatory,” Coman said.
Regarding Dominion’s upcoming docket filing, Coman said it would be “important to see how the proposal defines the direct interconnection facilities.”
“I do think there is a line between our direct costs, including the radial lines and substations, and the separate bucket of general network upgrades,” she said. “We need to clearly define the direct interconnection costs subject to CIAC and then have a separate proceeding to discuss how to address the more general network upgrades.”
Both Reisinger and Barber said they think the SCC’s decision is legally solid.
“Especially as limited in scope as they kept it — applying just to the substations and direct connect transmission lines,” Barber said. “If you're talking about a but-for cost, something that never would exist if not for that customer, I don't know how you could view that infrastructure as anything else. That stuff would never be built if not for that data center needing to go there.”
Reisinger said that if Microsoft does appeal the decision, and the Virginia Supreme Court finds in favor of that appeal, the court has the authority to remand the decision and direct the commission to conduct further proceedings.
