Dive Brief:

• The Virginia State Corporation Commission (SCC) rejected Dominion Energy's proposed 100% renewable offering for commercial and industrial customers, finding "there is simply too much uncertainty and subjectivity in the tariffs."
• The decision is a win for retail energy providers, who are allowed to market an all-green offering only so long as the incumbent utility does not. Many saw Dominion's proposal as a way to edge out competition.
• The utility is continuing to grow its renewable resources in the state. Dominion recently filed its integrated resource plan, which seeks to accelerate the growth of its solar resources along with constructing eight new gas-fired plants.

Dive Insight:

Dominion proposed to determine the cost of its 100% renewable product through a formula that would have included "extraordinary discretion delegated to the utility," regulators said in rejecting the tariff. Other concerns included "the magnitude of combined uncertainty and subjectivity in the formula's variables and resulting rates."

The SCC's order notes that the list of "unknown variables" and utility discretion is lengthy and includes: energy cost; forecasted energy prices at the generator node; forecasted capacity prices at the generator node; forecasted renewable energy certificate (REC) prices; forecasted REC sales; and more than a half dozen other inputs.

"There is simply too much uncertainty and subjectivity in the tariffs for the Commission to find that they will result in just and reasonable rates," regulators wrote.

The Southern Environmental Law Center (SELC), which represented the activist group Appalachian Voices in the proceeding, called the decision a win for the state and its businesses.

“Competition in clean energy helps keep prices reasonable and empowers customers to choose what’s right for them," Peter Anderson, a program manager for Appalachian Voices, said in a statement.

Virginia law allows third parties to market a 100% renewable tariff only so long as Dominion does not have a similar offering. While the SCC decision is a setback for Dominion's efforts to access larger customers interested in all-renewable energy, the utility is also seeking SCC approval for a similar tariff for residential customers.

“The SCC did the right thing in protecting commercial customers in Virginia and we hope they take the same close look at Dominion’s request when it comes to residential customers and their rights,” said SELC attorney Will Cleveland. “Boxing out third parties from providing renewable energy will only stymie renewable energy in the Commonwealth and keep customers from having choices.”

While Dominion is growing its renewable resources in Virginia, the utility still maintains that it needs to construct significant new gas-fired capacity.

Dominion's Virginia solar fleet could grow by almost 5 GW over the next 15 years. But the utility's long-term plan also calls for eight new gas-fired plants by 2033, capable of producing up to 3,664 MW. Dominion will also continue to operate the state's four nuclear units.