SCC Rulings a Setback for Energy Efficiency in Virginia

VAEEC Supports New Efficiency Programs Proposed by Dominion Energy

This past spring, the State Corporation Commission heard oral arguments in support of energy efficiency programs, which were part of Dominion Energy’s 2016 Demand-Side Management (DSM) filing (Case Number PUE-2016-00111).

As part of this filing, two new energy efficiency programs (Phase VI programs) were proposed to replace Phase II programs, which expired last month:

  • Residential Home Energy Assessment Program- bundled a home energy audit with direct install measures such as LED light bulbs, weatherstripping, heat pump tune-ups and adding hot water pipe insulation
  • Non-Residential Prescriptive Program- incentive program for non-residential customers who do not qualify for other Dominion energy efficiency programs; includes installing ENERGY Star appliances, HVAC tune-up and commercial duct sealing and testing

The VAEEC formally intervened in support of the proposed programs during the proceedings this past spring. Our members recognize the incredible value that cost-effective energy efficiency programs provide to our local communities and all ratepayers within the utility’s service territory. We also bring a unique perspective to the conversation, representing our members who work in the field implementing these programs.  During the two-day hearing, our attorneys with the UVA Environmental and Regulatory Law Clinic argued for the Commission to consider the economic benefits these programs provide to the communities they serve. According to Virginia code, it is unquestionably within the Commission’s discretion to consider these economic development benefits among the “other factors” evaluated, in addition to the cost-effectiveness tests. The Attorney General’s office rendered an opinion on this in their closing statements agreeing with our assessment. Our closing arguments go into further detail, which you can read here.

Unfortunately, earlier this month, the Commission denied the Residential Home Energy Assessment Program and approved the Non-Residential Prescriptive Program at half of the requested budget.

Dominion Energy had also requested a two-year extension for their Residential Heat Pump Upgrade Program through May 2019, which was also denied despite the fact that the utility was not seeking additional funding for this program.

In their ruling, the Commission based their decision entirely on the cost-effectiveness scores of these programs. This ruling was surprising for a number of reasons but especially since both of these programs had previously been approved by the Commission and this was not the recommendation from Commission staff. The staff had concerns about the programs but they did not recommend rejecting them outright.

It was also evident that they did not take into consideration our arguments that the economic benefits these programs create should be considered in addition to the cost-effectiveness tests.

So, what’s next? Right now, the Commission is soliciting feedback on how to establish protocols for Evaluating, Measuring and Verifying (EM&V) energy efficiency programs and the savings associated with them. The Commission decided to establish these much-needed protocols after receiving feedback from a variety of stakeholders last year, including the VAEEC.

As stated in our new report, Why Energy Efficiency is a Smart Investment for Virginia”:

Establishing EM&V protocols for Virginia utilities will enable them to develop energy efficiency programs with a strong, data-driven foundation from which to expand their offerings to customers. Robust protocols assure that customers receive the benefits that energy-efficiency programs are designed to deliver.

We will continue to keep our members apprised of important regulatory issues as they arise.