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Va. Supreme Court: Large Customers Taking Electric Choice Not Subject To Minimum Stay For 100% Green

April 02,2018

The Virginia Supreme Court has affirmed a decision from the State Corporation Commission which had found that large customers which avail themselves of the exemption for customer choice, for customers electing 100% renewable energy (where no approved utility renewable tariff is offered) are not subject to the minimum stay and notice provisions which large customers are subject to if they take competitive supply under the statutory exemption specific to large customers (5 MW).

Addressing an appeal from Dominion Virginia Power, the Court considered whether certain large customers can purchase electricity from any licensed supplier of energy in the Commonwealth under Code § 56-577(A)(5) (the renewable exemption), without being subject to the notice requirement set forth in Code § 56-577(A)(3) (the 5 MW exemption)

Section (A)(3) allows certain large customers whose demand exceeds five megawatts to purchase electricity from a competitive service provider (CSP), regardless whether the electricity is produced with renewable or nonrenewable energy. Under this section, if a large customer purchases electricity from a CSP, it cannot return to the incumbent utility without providing five years’ advance written notice. Section (A)(5) applies to "individual retail customers of electric energy within the Commonwealth, regardless of customer class."

In contrast, customers can purchase electricity from a CSP under Section (A)(5) if they purchase electricity provided 100% from renewable energy, and (i) the incumbent utility does not offer an approved tariff for such electricity or (ii) the purchase is pursuant to a power purchase agreement in effect on the date a tariff for such energy is filed with the Commission. There are no minimum stay or notice provisions for customers taking service under Section (A)(5), and the Virginia SCC affirmed this interpretation in an order

Dominion Virginia Power appealed the SCC's order, arguing that large customers are subject to the minimum notice and stay regardless of the exemption they use to be eligible for choice

The Virginia Supreme Court denied the appeal

"The plain language of Sections (A)(3) and (A)(5) is clear and unambiguous. Section (A)(5) provides that 'individual retail customers' can purchase electricity produced with 100% renewable energy from CSPs. Unlike Section (A)(3), Section (A)(5) does not contain a limitation based on the size of a customer’s demand for electricity. Further, Section (A)(3) does not state that it governs all purchases of electricity by large customers from CSPs, and the phrase 'subject to' clarifies that (A)(3) is not the only avenue under which a customer can purchase electricity from a CSP. Accordingly, we hold that customers who satisfy the size requirements of Section (A)(3) can purchase electricity from a CSP under Section (A)(5), provided that they satisfy the separate conditions of Section (A)(5)," the Court ruled

"VEPCO also argues that large customers must comply with the notice requirement in Section (A)(3), even if they purchase electricity from a CSP under Section (A)(5). That argument, however, is not supported by a plain reading of the statute. Section (A)(3) states that large customers can purchase electricity from any licensed supplier of energy 'subject to the following conditions.' The notice requirement, contained in subsection (c), is one of four enumerated conditions. The phrase 'subject to' and the fact that the notice requirement is a subsection of Section (A)(3) demonstrate that the notice requirement applies only to purchases made under Section (A)(3). There is no notice requirement for purchases under Section (A)(5), and no language that incorporates the notice provision from (A)(3) into (A)(5). Accordingly, the notice requirement in Section (A)(3) does not apply to purchases made under Section (A)(5)," the Court said

Record No. 171151

Virginia   Deregulation   Electric Choice  

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