Virginia State Corporation Commission

Please note that all of the language in this submission remains as originally presented to the LTTF on November 9 or December 8, as appropriate. Readers will also note that the recommendations have been separated topically for ease of reference.

I. Metering & Billing.

• Overview: Establishes new section § 56-581.1, and amends §§ 56-580, 56-581, 56-585, 56-587, and 56-590. New § 56-581.1 contains the core of the Commission’s legislative proposal concerning competitive metering and competitive billing as reflected in its September 1, 1999 legislative report on this topic to the General Assembly.
• Proposal: Proposed § 56-581.1 authorizes the Commission to determine before January 1, 2002 whether and when electric metering services and electric billing services may be provided competitively. The Commission’s determinations may vary by service, type of seller, region, incumbent electric utility and customer group. The determinations are also subject to specific legislative guidelines, including requirements that the determinations (i) take into account customer readiness for such competition, and (ii) not jeopardize the safety, reliability or quality of electric service.

II. Municipal and State Aggregation.

• Overview: Amends § 56-589, an existing provision establishing authorization and structure for electric energy aggregation by the Commonwealth, municipalities, and other political subdivisions.
• Proposal: Clarifies the existing statute to provide that municipalities and other political subdivisions may aggregate intra- and inter-governmental load without the necessity of obtaining licensure as aggregators pursuant to § 56-588. Similarly, proposed language would clarify that the Commonwealth will not require licensure when aggregating its governmental load.
• Note: The Commission has been apprised of language advanced by the Virginia Municipal League concerning inter-governmental aggregation, and will not object to its adoption.

III. Aggregation; technical amendment.

• Overview/proposal: Makes a technical amendment to § 56-588, replacing an incorrect reference to "supplier" with the word "aggregator."

IV. Consumption tax; net metering.

• Overview. Amends § 58.1-2900, enacted in a companion bill (SB 1286) to the main restructuring bill, SB 1269. This section establishes per-kWh consumption taxes as replacements for the Commonwealth’s gross receipts tax, the Commission’s special regulatory tax, and localities’ gross receipts taxes on electric suppliers.
• Proposal: The proposed amendment stipulates that the tax liabilities of customer-generators who are net metering under the auspices of § 56-594 will be determined on a net basis. If adopted, this provision will eliminate potential necessity of customer-generators incurring the expense of obtaining two electric meters for the sole purpose of determining consumption tax liabilities.

V. Private right of action; technical amendments.

• Overview/proposal: Amends § 56-593 to make clear that private rights of action arise under subsection A of § 56-593.

VI. Wires charges; technical and clarifying amendments.

• Overview/proposal. Amends § 56-583, the restructuring act’s wires charge provision. The amendments are technical in nature, clarifying, for example, that customers subject to default service must also receive default service before they are obligated to pay wires charges under this provision.
• Note: At the LTTF’s request, the Commission and its staff have worked with AEP representatives to address the issue of "negative wires charges." AEP will be presenting to the LTTF proposed language resulting from that discussion.

VII. Rate Caps, rate cases prior to January 1, 2001, interim rates; payment of refunds with interest.

• Overview: Amends §56-582, the restructuring act’s capped rate provision. Under the section’s current provisions, utilities’ capped rates are those in effect as of July 1, 1999. However, with one exception, utilities may file rate cases to establish capped rates prior to January 1, 2001. The statute also provides that rates determined pursuant to such applications shall become effective on January 1, 2001.
• Proposal: The proposed amendment provides that capped rates established pursuant to rate applications made prior to January 1, 2001 will become effective on that date, but that these rates will be interim in nature and subject to refund with interest until the Commission has completed its investigations of these applications. This amendment would conform this special rate proceeding to current law with respect to the review of rates, and the refunding with interest of any amount of interim rates found to be excessive.

VIII. Consumer Education.

• Overview: Proposes new §56-592.1. The new section establishes a consumer education program for implementation in connection with electric utility restructuring.
• Proposal: The draft language is intended to provide authority to the Commission to implement its December 1 consumer education report and recommendations, as presented to the LTTF on December 8. The statute sets out the goals of this program, particularly that of enabling consumers to make rational and informed choices in a competitive market. The proposed statute also makes clear that the Commission would regularly consult with stakeholders and interested parties in implementing this statute. Additionally, the Commission would provide to the LTTF regular updates concerning the program’s status. The proposal also provides that the program would be funded through (i) the Commission’s current special regulatory revenue tax—the means by which the Commission’s operations are funded, and to which all public service companies (gas, telephone, and water companies as well as the electric utility industry) under the Commission’s regulatory jurisdiction are subject, and (ii) the special regulatory tax that will become effective January 1, 2001.