The Exelon Utilities and Potomac Edison filed storage pilot projects pursuant to SB573, which was passed last year. The Commission directed the utilities to solicit offers to develop energy storage projects and submit applications for consideration and approval. SB573 and the Commission’s implementing Order require each utility to submit at least two energy storage projects to the Commission in 2020, one of which must not be utility-owned. The collective total capacity across all utilities and battery energy storage system projects must be between 5 and 10 megawatts with at least 15 MWhs of energy storage capability. The Exelon Utilities filed six projects for approval, and Potomac Edison filed two. The utility filings discussed the RFP process and responses received, with final contracts pending Commission approval of the pilot applications. The utilities also included projected costs and benefits of the projects.

Regarding cost recovery, “[f]or all third-party owned projects, the Joint Exelon Utilities propose that all incremental operations and maintenance (“O&M”) costs, including the grid reliability payments to the proposed developer, be included in a newly established regulatory asset. This regulatory asset shall also be included in rate base, and recovery of the regulatory asset shall be requested in future base rate proceedings. Capital costs associated with the implementation of the projects will be included in rate base and recovered in base rates. Any PJM revenues associated with the projects during the 10-year term will be credited to customers.

For all the projects that are utility-owned, the Joint Exelon Utilities propose that the capital and O&M costs associated with the implementation of the projects be included in rate base and recovered in base rates. Any annual PJM market revenue would be credited to customers.”

Similarly, “PE proposes to establish a regulatory asset for all pilot costs incurred by the Company until such time as the regulatory asset can be reflected for recovery in distribution rates as a result of a base rate proceeding, at which time distribution rates will reflect recovery of: (a) the regulatory asset; and (b) on-going pilot costs reflected in the test year, as adjusted where necessary for known and measurable changes.”

The full texts of the Exelon Utilities Filing and Potomac Edison Filing are available on the NEM Website.

The Joint Utilities (JU) submitted comments to the Commission on ESCO financial assurance requirements, following up on the Staff technical conference held in February. The JU made the following recommendations:

• Utilities should not hold or administer ESCO financial security, rather that role should reside with Commission or some other arm of the State government.
• Cash, an irrevocable letter of credit or a parental guarantee where the guarantor has an investment grade credit rating or its equivalent should be accepted forms of financial security. The JU opposed the use of surety bonds.
• The amount of financial security should be sufficient to cover any forfeiture that the Commission may order. The JU also cautioned that “the provision of financial security has a cost” and “the cost of financial security is a cost of doing business that an ESCO must bear.”
• ESCOs should be afforded due process.
• Existing POR programs should not be used to raise or manage funds to secure ESCO price guarantee obligations.

The JU also recommended that the Commission convene a collaborative to review the financial security requirements in the UBP and that “financial security inadequacy is particularly significant in regard to Natural Gas Imbalance Risks.”

The full text of the JU Comments are available on the NEM Website.

Governor Northam signed HB889. HB889 requires the Commission to conduct a shopping pilot program at Dominion under which certain nonresidential customers will be permitted to purchase electric energy from competitive suppliers. The aggregated load participating in the pilot program is limited to 200 megawatts. The Commission will review the pilot program in 2022. The full text of HB889 (Enrolled) is available on the NEM Website.

The Governor signed HB1526/SB851, the Virginia Clean Economy Act. HB1526 replaces Virginia’s voluntary renewable portfolio standard with a mandatory renewable content requirement for electricity sales. Beginning in 2021, APCo and other retail suppliers in APCo's service territory are required to meet a 6% RPS program requirement that incrementally increases to 100% by 2050. In 2021, Dominion and other retail suppliers in Dominion's service territory are required to meet a 14% RPS program requirement that incrementally increases to 100% by 2045. HB1526 authorizes an expanded pilot program for third party power purchase agreements for solar and wind-powered generation up to 500 megawatts for Virginia jurisdictional customers and 500 megawatts for Virginia non-jurisdictional customers. HB1526 also provides that after July 1, 2020, at least 35% of energy storage facilities shall be purchased by the public utility from a party other than the public utility or owned by a party other than the public utility, with the capacity sold to the public utility. The full text of SB851 (Enrolled) is available on the NEM Website.

The Governor offered technical amendments to HB981/SB1027, the Clean Energy and Community Flood Preparedness Act. The legislation would establish a carbon dioxide cap and trade program in compliance with the Regional Greenhouse Gas Initiative. The Department of Environmental Quality would be required to establish and operate an auction program to sell allowances into a market-based trading program. The full texts of SB1027 (Enrolled) and the Governor’s Technical Amendments are available on the NEM Website.