PUR-2025-00028

Key events and scheduled submissions in the Appalachian Power Company (APCo) shared solar program proceeding (Case No. PUR-2025-00028) include:

- February 10, 2025: The State Corporation Commission issued an order initiating proceedings regarding APCo’s shared solar program minimum bill proposal 1.

- April 1, 2025: APCo filed its petition for approval of a minimum bill, tariffs, and agreements to implement the shared solar program 2, 1.

- April 11, 2025: The Commission entered a procedural order establishing the procedural schedule for the case 2.

- April 23, 2025: Original deadline for APCo to publish notice in newspapers of general circulation. This was rescheduled to April 24, 2025, due to publication constraints 2.

- May 1, 2025: Deadline for notices of participation by interested persons/entities wishing to be respondents in the proceeding 2, 3.

- May 7, 2025: Deadline for proof of notice and service 2.

- May 12, 2025: Deadline for respondent and staff testimony submissions 2.

- May 21, 2025: Deadline for rebuttal testimony 2.

- May 27, 2025: Deadline for interested person written comments and for public witnesses to register to provide testimony 2, 3.

- June 9, 2025: Public witness hearing at 10 a.m. (telephonic), followed by an evidentiary hearing for testimony and evidence from the company, respondents, and staff at the Commission’s Richmond office 2, 3.

- July 1, 2025: Statutory deadline for APCo to file any tariffs, agreements, or forms necessary for implementation of the shared solar program 4, 5.

Further proceedings may be required after the conclusion of APCo’s net energy metering case, as the shared solar minimum bill may be revisited pursuant to legislative enactments 4, 5.

The docket concerns the petition of Appalachian Power Company (APCo) to the Virginia State Corporation Commission for approval of a minimum bill, tariffs, and an agreement to implement a shared solar program, pursuant to section 56-594.4 of the Code of Virginia. The case is docketed as PUR-2025-00028 1.

Key issues include:
- APCo's proposed minimum bill and shared solar tariff sheets, which are intended to ensure that subscribing customers pay a fair share of electric service costs and to quantify the benefits of shared solar to the grid and the Commonwealth. The proposal includes all relevant utility infrastructure, administrative, and other necessary costs 2.
- Significant debate over the company's methodology for calculating the costs and benefits of the shared solar program. Staff and intervenors argue that APCo's analysis excludes important benefits such as avoided energy and capacity costs, societal cost of carbon, and other economic, social, and environmental impacts. These omissions could undervalue the benefits of shared solar and affect the cost-effectiveness of the program 3, 4, 5.
- Staff recommends only a temporary adoption of APCo's proposed minimum bill due to unresolved issues in a related net metering (NEM) proceeding. After a final order in the NEM case, the Commission may re-evaluate the minimum bill and consider more comprehensive benefit calculations in a future proceeding 4, 5.
- The shared solar program is capped at 50 MW or 6% of peak load and is designed to allow customers to subscribe to offsite solar facilities and receive monetary bill credits. Program requirements and definitions are set by statute 5.

In summary: The docket addresses APCo's shared solar program implementation, the setting of a minimum bill, and related tariff structures. There is ongoing debate about how to correctly value the benefits of shared solar, with a temporary solution recommended pending resolution of related regulatory matters.

The main financial and timeline risks and concerns discussed in this docket include:

Financial Risks and Concerns:
- There is uncertainty about the appropriateness of the company's avoided costs methodology for calculating "benefits credits" to be deducted from the gross minimum bill. Staff have concerns that the analysis excludes key economic, social, and environmental benefits (such as the societal cost of carbon and RPS load reduction potential), and does not fully reflect the grid benefits of shared solar. This could result in an inaccurate or unfair minimum bill for subscribers 1, 2.
- The company is not proposing an avoided energy benefit for the shared solar program, arguing that including such credits (as in the net metering case) would prevent the company from recovering sufficient costs from subscribing customers. This approach may undervalue the financial benefits of shared solar and affect project economics 1.
- The company may require financial security from subscriber organizations if there is a reasonable expectation of net financial impact due to failure of those organizations to reimburse the company for related charges. The amount of security will be commensurate with the risk assumed by the company 3.
- There are concerns that adopting a high minimum bill (about $50 for a typical residential customer) could eliminate the cost-effectiveness of shared solar projects for all customer classes, risking non-compliance with Virginia Code § 56-594.4 4.

Timeline Risks and Concerns:
- The proceeding is affected by ongoing uncertainty regarding the outcome of the company's net metering (NEM) case (Case No. PUR-2024-00161). Many issues raised in this docket are contingent on the final order in the NEM case, leading staff to recommend only temporary adoption of the proposed minimum bill and a revisit of complex issues in a future proceeding after the NEM case concludes 1, 2, 1.
- The statutory timeframe set by the code for evaluating and implementing the shared solar program is limited, restricting parties' and staff’s ability to fully assess and resolve all issues before finalizing major program components 1.
- If there are legislative amendments or the shared solar facility is terminated or abandoned, there are procedures for suspending or ending company obligations and billing credits, which could have financial and operational impacts on program participants 3.

In summary, financial risk centers on incomplete benefit credit calculations and potential high minimum bills undermining project viability, while timeline risk is driven by legal and procedural uncertainties pending the outcome of related regulatory cases.

The docket identifies several financial and timeline risks and concerns:

Financial Risks and Concerns:
- There is uncertainty about the appropriateness of Appalachian Power Company's (APCo) avoided cost methodology for calculating "benefits credits," which directly affects the net minimum bill for shared solar subscribers. The company's modeling and avoided cost analysis are based on data and methods that remain under review in the pending net energy metering (NEM) case, so the accuracy and fairness of the financial structure are not yet determined 1.
- The company did not include certain benefit credits—such as avoided energy, capacity, societal cost of carbon, and other economic, social, and environmental benefits—in its minimum bill calculations. Staff recommends these be addressed in future proceedings, as their exclusion may undervalue the financial benefits to subscribers and the Commonwealth 1, 2.
- The company's use of outdated (2023) data for avoided transmission and ancillary service costs is a concern, as more recent data is available. Using outdated information may misrepresent the financial impact on both subscribers and non-participating ratepayers 1.
- The agreement allows APCo to require financial security from Subscriber Organizations (SOs) if there is a reasonable expectation of a net financial impact due to SO failure to reimburse shared solar-related charges. The amount is determined by the risk assumed by the company and may include letters of credit or other security arrangements 3, 3.

Timeline Risks and Concerns:
- The statutory deadline requires APCo to file shared solar program tariffs by July 1, 2025. However, it is unlikely a final order in the NEM case will be issued before this date. This creates significant uncertainty, as key foundational issues—such as the calculation of benefit credits—are unresolved, impacting both program design and participant costs 1, 1.
- The tight procedural schedule has provided limited time for robust discovery, evaluation, and record development. This constraint increases the risk of incomplete or suboptimal decision-making regarding the minimum bill and benefit calculations 1.
- After the NEM case concludes, legislation requires the Commission to initiate a proceeding within 30 days to recalculate the minimum bill. This means the adopted minimum bill is only temporary, furthering uncertainty for program participants and developers 1, 1.

In summary, unresolved financial modeling, exclusion of certain benefits, reliance on outdated data, potential requirements for additional financial security, and statutory timing pressures all present material financial and timeline risks in this proceeding.

The docket identifies several areas of growth and key considerations:

1. Load Growth and Electrification:
- There is a focus on the need to accommodate forecasted load growth due to increased electrification and the influx of data centers in Virginia. This includes managing higher electricity demand and ensuring grid reliability as more sectors (such as transportation and industry) electrify their operations.
- Key considerations: Minimizing line losses, deferring costly investments in transmission infrastructure, reducing reliance on volatile fossil fuel generation, and preparing the grid to handle higher demand and potential disruptions from extreme weather events 1.

2. Shared Solar and Distributed Energy Resources:
- The expansion of shared solar programs is highlighted, especially in the context of providing economic relief for customers, enhancing grid reliability, and improving environmental outcomes.
- Key considerations: Ensuring that the minimum bill structure accurately reflects the benefits of distributed solar (such as avoided transmission costs, ancillary services, and renewable energy certificate value), addressing social and environmental benefits (including the societal cost of carbon and RPS load reduction potential), and integrating updated cost data for accurate benefit-credit calculations 2, 3, 4.

3. Economic and Social Impacts:
- Growth in shared solar is linked to job creation (for local salespeople, electricians, and installers), increased economic stability for participants (notably low-income households), and reductions in energy burdens as utility rates rise.
- Key considerations: The provision of federal investment tax credits (ITC) for solar project developers, which incentivizes growth and compensates for non-power attributes like economic development and energy independence, and ensuring that these benefits are not double-counted in program compensation 4, 4, 1.

4. Environmental and Public Health Outcomes:
- Shared solar's growth is associated with reduced reliance on polluting generation sources, which improves air and water quality and public health, particularly in overburdened communities.
- Key considerations: Accurately quantifying and incorporating these environmental and health benefits into program evaluations and rate structures, as well as addressing broader state clean energy and environmental justice goals 5, 1.

In summary, the docket’s areas of growth center on grid modernization to meet rising demand, expansion of shared solar, job and economic development, and environmental and public health improvements—with each area requiring careful consideration of how costs, benefits, and incentives are quantified and incorporated into regulatory and rate-making decisions.

The key stakeholders in the Appalachian Power Company (APCo) shared solar minimum bill docket (Virginia SCC Case No. PUR-2025-00028) are:

- Appalachian Power Company (APCo): The petitioning utility proposing the minimum bill, tariffs, and agreements to implement the shared solar program 1.
- Virginia State Corporation Commission (SCC) Staff: Evaluates APCo’s proposal, provides testimony, and makes recommendations on issues such as methodology for calculating minimum bills and benefits credits 2, 3, 3.
- Appalachian Voices: An intervenor in the proceeding 4.
- Coalition for Community Solar Access (CCSA): An intervenor and advocate for community solar interests. CCSA recommends a $0 minimum bill or, if benefits are to be added to the current structure, modifications to APCo’s minimum bill proposal 5.
- The Public: Represented by notice and public comment requirements, but not directly identified as taking a position in the provided excerpts 1, 1.

Positions:
- APCo supports its own minimum bill proposal, which largely follows the methodology approved for Dominion Energy’s shared solar program but is subject to criticism by other parties for excluding certain benefits from its calculations 1.
- SCC Staff is neutral but critical of elements of APCo’s proposal, recommending only temporary adoption until further data and the outcome of a related net metering (NEM) case can be incorporated. Staff suggests that APCo’s methodology excludes several potential societal and grid benefits and recommends re-evaluation after the NEM case concludes 2, 3.
- CCSA is against a substantial minimum bill and advocates for a $0 minimum bill, or at minimum, for inclusion of more benefits in the calculation to offset costs 5.
- Appalachian Voices' explicit position is not stated in the provided excerpts, but as a participant in procedural matters, they have not opposed scheduling modifications and are likely aligned with broader community solar interests 4.

Summary:
- APCo supports the proposed minimum bill.
- SCC Staff is conditionally supportive (temporary adoption), seeking more comprehensive inclusion of benefits.
- CCSA is opposed to a substantial minimum bill and advocates for significant modifications.
- Appalachian Voices’ specific stance is not detailed in these excerpts.

The docket identifies several areas of growth related to shared solar and the broader clean energy transition. The main areas and key considerations for each include:

1. Shared Solar and Distributed Generation
- Growth in shared solar is discussed, with emphasis on its technical and economic potential, impacts on the electric grid, and participation in programs designed to support Virginia's clean energy goals.
- Key considerations:
- Benefits to the electric grid and the Commonwealth, such as reducing energy burden for low-income customers, providing environmental benefits (carbon-free energy), and supporting workforce development and energy independence.
- Challenges in quantifying certain benefits, particularly those not directly tied to REC (Renewable Energy Certificate) values or grid operations.
- Need for updated cost and benefit data, and the importance of avoiding double-counting of benefits already embedded in REC values or federal tax credits 1 1.

2. Grid Infrastructure and Reliability
- Areas identified include the potential for shared solar to provide grid benefits like interconnection upgrades, improved hosting capacity, and enhanced system reliability, although site-specific data for quantification may be lacking.
- Key considerations:
- Most distribution circuits are not near planning limits, so the practical ability to defer distribution investment is limited.
- Upgrades funded by developers can have lasting grid value, but quantification of these benefits is often not possible without specific data 1 2.

3. Renewable Energy and Compliance Markets
- Growth in REC markets and associated price suppression as shared solar increases REC supply.
- Key considerations:
- Shared solar can exert downward pressure on REC prices, offering modest utility savings, especially where there are binding RPS (Renewable Portfolio Standard) targets.
- The role of federal incentives (like the investment tax credit) in compensating for solar attributes and influencing market adoption 2 1.

4. Economic and Social Development
- Growth opportunities related to economic development, job creation, local tax base increases, and energy affordability, particularly for low-income customers.
- Key considerations:
- Difficulty in quantifying benefits like construction jobs or local tax increases ahead of actual project build-out.
- Policy alignment with statutory requirements for environmental justice, economic development, and carbon reduction goals 1 2.

5. Policy and Regulatory Evolution
- The docket recognizes that benefit calculations and minimum bill structures are likely to evolve as more data becomes available and as related proceedings (such as net metering cases) conclude.
- Key considerations:
- The need for temporary adoption of current methodologies until further guidance is available.
- Statutory mandates require ongoing review and adjustment of programs and tariffs as new information is developed and as policy goals advance 3 1.

Overall, growth areas are interconnected with technical, economic, regulatory, and social considerations, and the docket emphasizes the need for ongoing analysis and policy evolution to capture the full range of benefits as the shared solar market matures.

Stakeholders in the Appalachian Power Company (APCo) shared solar program docket include:

- Appalachian Power Company (APCo): The petitioner seeking approval for its proposed minimum bill, tariffs, and agreements to implement the shared solar program.
- Virginia State Corporation Commission (SCC) Staff: Provides analysis, testimony, and recommendations to the Commission.
- Appalachian Voices: Identified as a current participant in the proceeding.
- Coalition for Community Solar Access (CCSA): Identified as a current participant and proposer of a minimum bill structure alternative to the company’s proposal.

Positions:

- SCC Staff: Recommends only a temporary adoption of APCo’s proposed minimum bill due to unresolved issues and the pending outcome of the net metering (NEM) case. Staff intends for the minimum bill to be re-evaluated in a future docket, particularly regarding the appropriateness of the avoided cost methodology and potential exclusion of certain benefits such as avoided energy, capacity costs, and the societal cost of carbon 1, 2, 2, 1.
- APCo: Supports its minimum bill proposal, which mirrors aspects of Dominion Energy’s approach and argues it reasonably addresses cost-shifting concerns and complies with statutory requirements 3, 2.
- CCSA: Previously proposed an alternative minimum bill structure in an earlier proceeding, favoring a lower minimum bill based on only the basic customer charge plus minimal administrative costs 4.
- Appalachian Voices: No explicit position stated in the provided excerpts, but actively participating in the proceeding 5.

There is no evidence in the excerpts of outright opposition from any specific stakeholder to APCo’s proposal, but Staff and CCSA prefer alternatives or recommend further review. All stakeholders referenced did not oppose APCo’s procedural motion regarding notice publication, indicating procedural cooperation at this stage 5.