Page 5

The Richmond Voice

May 28 - June 3, 2014 • 5

NOTICE TO THE PUBLIC OF VIRGINIA ELECTRIC AND POWER COMPANY’S REQUEST TO INCREASE ITS FUEL FACTOR CASE NO. PUE-2014-00033 On May 2, 2014, Virginia Electric and Power Company d/b/a Dominion Virginia Power (“Dominion Virginia Power” or “Company”) filed with the State Corporation Commission (“Commission”) its application (“Application”) pursuant to § 56-249.6 of the Code of Virginia (“Code”) seeking an increase in its fuel factor from 2.572 cents per kilowatt-hour (“¢/kWh”) to 3.018¢/kWh, or, alternatively, 3.218¢/kWh, effective for usage on and after July 1, 2014. The Company’s proposed fuel factor, Fuel Charge Rider A, consists of both a current and prior period factor. At the full recovery rate, the Company’s proposed current period factor for Fuel Charge Rider A of 2.819¢/kWh is designed to recover the Company’s estimated Virginia jurisdictional fuel expenses of approximately $1.9 billion for the period July 1, 2014, through June 30, 2015. At the full recovery rate, the Company’s proposed prior period factor for Fuel Charge Rider A of 0.399¢/kWh is designed to recover approximately $267.8 million in estimated under-recovered Virginia jurisdictional fuel expenses for the period July 1, 2013, through June 30, 2014. In total, Dominion Virginia Power’s proposed fuel factor at the full recovery rate represents a 0.646¢/kWh increase from the fuel factor rate presently in effect of 2.572¢/kWh, as approved in Case No. PUE-2013-00042. According to the Company, this proposal would result in an annual fuel revenue increase of approximately $433.9 million when compared to the present fuel rate of 2.572¢/kWh, and when applied to the projected current period kWh sales. The total proposed fuel factor at the full recovery rate would increase the average weighted monthly bill of a typical residential customer using 1,000 kWh of electricity by $6.46, or approximately 6.0%. However, Dominion Virginia Power states in its Application that it recognizes the impact of such an increase in fuel rates on its customers. To mitigate this impact, the Company offers in its Application an alternative mitigation proposal to the full recovery rate, under which the Company would waive its right to recovery of the full deferral balance over the current period in favor of recovery of this balance equally over two fuel periods. Specifically, the Company states that, if approved, its mitigation proposal would amortize the $267.8 million projected June 30, 2014 fuel deferral balance for recovery equally over the fuel periods of July 1, 2014, through June 30, 2015, and July 1, 2015, though June 30, 2016, a total of 24 months. As part of its mitigation proposal, Dominion Virginia Power would further agree that any incremental costs associated with financing the deferral balance over the extended period of 24 months, as opposed to 12 months, would be borne by the Company. Thus, under the Company’s mitigation proposal, Fuel Charge Rider A would contain the same current period factor of 2.819¢/kWh, but be comprised of a prior period factor of 0.199¢/kWh, designed to recover approximately $133.9 million, or one half of the Virginia jurisdiction’s projected June 30, 2014 fuel deferral balance. As such, Dominion Virginia Power represents that the proposed mitigated fuel factor rate would be 3.018¢/kWh, rather than the 3.218¢/kWh full recovery rate. The proposed mitigated fuel factor represents a 0.446¢/kWh increase from the fuel factor rate presently in effect of 2.572¢/kWh, as approved in Case No. PUE-2013-00042. According to Dominion Virginia Power, its mitigation proposal would result in an annual fuel revenue increase of approximately $299.5 million when compared to the present fuel rate of 2.572¢/kWh, and when applied to the projected current period kWh sales. The proposed fuel factor resulting from the Company’s mitigation proposal would increase the average weighted monthly bill of a typical residential customer using 1,000 kWh of electricity by $4.46, or approximately 4.1%. In its Application, Dominion Virginia Power also proposes a modification to the Commission’s Definitional Framework of Fuel Expenses for Virginia Electric and Power Company (“Definitional Framework”). Specifically, the Company states that in the next several years there will be an increase in the natural gas percentage of the Company’s system energy from 14% to 29%, as new efficient gas-fired generation comes on-line, such as the Warren and Brunswick County Power Stations. The Company also states that natural gas prices tend to be more volatile than nuclear fuel or coal prices. Accordingly, Dominion Virginia Power believes it is prudent to expand its approach to securing the supply of natural gas necessary to fuel its power plants, by considering additional natural gas procurement policies and hedging to assist in promoting the reliability of fuel supply and rate stability for customers. To support expansion of its hedging activities, the Company proposes to add a new Paragraph (d) to the existing Definitional Framework to explicitly state that reasonable costs, gains, or losses arising from the use of derivative instruments to financially hedge fuel and purchased power are recoverable through the Company’s fuel factor. Specifically, the Company’s proposed Paragraph (d) states: “[t]he commodity costs referenced in items a., b., and c. above shall include any costs, gains or losses arising from the use of derivative instruments associated with such commodities.” The commodity costs referenced in items a., b., and c. of the Definitional Framework refer to fossil fuel costs, nuclear fuel costs, and purchased power costs, respectively. The Company believes that this change in the Definitional Framework is important and appropriate at this time for the hedging activities to continue to provide benefits for customers in the future, particularly given changing market dynamics. The Commission entered an Order Establishing 2014-2015 Fuel Factor Proceeding (“Order”) that, among other things, scheduled a public hearing on August 19, 2014, at 10 a.m. in the Commission’s Second Floor Courtroom located in the Tyler Building, 1300 East Main Street, Richmond, Virginia 23219, to receive testimony from members of the public and evidence related to the Application from the Company, any respondents, and the Commission’s Staff. Any person desiring to testify as a public witness at this hearing should appear 15 minutes before the starting time of the hearing and contact the Commission’s Bailiff. Individuals with disabilities who require an accommodation to participate in the hearing should contact the Commission at least seven (7) days before the scheduled hearing at 1-800-552-7945 (voice) or 1-804-371-9206 (TDD). The Commission also allowed the Company to place its proposed mitigated fuel factor of 3.018¢/kWh into effect for usage on and after July 1, 2014, on an interim basis. The public version of the Company’s Application, pre filed testimony, and exhibits are available for public inspection during regular business hours at all of the Company’s offices in the Commonwealth of Virginia. A copy of the public version of the Company’s Application also may be obtained, at no cost, by written request to counsel for Dominion Virginia Power, William H. Baxter, II, Esquire, Dominion Resources Services, Inc., 120 Tredegar Street, Richmond, Virginia 23219. If acceptable to the requesting party, the Company may provide the documents by electronic means. Interested persons also may review a copy of the public version of the Company’s Application in the Commission’s Document Control Center, located on the first floor of the Tyler Building, 1300 East Main Street, Richmond, Virginia 23219, between the hours of 8:15 a.m. and 5 p.m., Monday through Friday, excluding holidays. In addition, unofficial copies of the public version of the Company’s Application, Commission orders entered in this docket, the Commission’s Rules of Practice and Procedure (“Rules of Practice”), as well as other information concerning the Commission and the statutes it administers, may be viewed on the Commission’s website: http://www.scc.virginia.gov/case. On or before August 7, 2014, any interested person wishing to comment on the Company’s Application shall file written comments with Joel H. Peck, Clerk, State Corporation Commission, c/o Document Control Center, P.O. Box 2118, Richmond, Virginia 23218-2118. Any interested person desiring to file comments electronically may do so on or before August 7, 2014, by following the instructions on the Commission’s website: http://www.scc.virginia.gov/case. Compact discs or any other form of electronic storage medium may not be filed with the comments. All such comments shall refer to Case No. PUE-2014-00033. Any person or entity may participate as a respondent in this proceeding by filing a notice of participation on or before June 27, 2014. If not filed electronically, an original and fifteen (15) copies of the notice of participation shall be filed with the Clerk of the Commission at the address set forth above. A copy of the notice of participation as a respondent also must be sent to counsel for the Company at counsel’s address set forth above. Pursuant to Rule 5 VAC 5-20-80 B, Participation as a respondent, of the Commission’s Rules of Practice, any notice of participation shall set forth (i) a precise statement of the interest of the respondent; (ii) a statement of the specific action sought to the extent then known; and (iii) the factual and legal basis for the action. All filings shall refer to Case No. PUE-2014-00033. Interested persons should obtain a copy of the Commission’s Order for further details on participation as a respondent. On or before July 10, 2014, each respondent may file with the Clerk of the Commission and serve on the Commission’s Staff, the Company, and all other respondents any testimony and exhibits by which the respondent expects to establish its case. If not filed electronically, an original and fifteen (15) copies of such testimony and exhibits shall be submitted to the Clerk of the Commission at the address set forth above. In all filings, respondents shall comply with the Commission’s Rules of Practice, including 5 VAC 5-20-140, Filing and service; 5 VAC 5-20-150, Copies and format; and 5 VAC 5-20-240, Prepared testimony and exhibits. All filings shall refer to Case No. PUE-2014-00033. VIRGINIA ELECTRIC AND POWER COMPANY

RV52814  
Read more
Read more
Similar to
Popular now
Just for you