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Energy provider sets up showdown over Va. retail sales

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Energy provider sets up showdown over Va. retail sales

Direct Energy Services LLC received regulatory approval to operate as a competitive service provider in Virginia. The company, however, said it can't "effectively" sell electricity to customers in Virginia until regulators rule on a dispute with the state's electric utilities.

Direct Energy Services filed a petition for declaratory judgment with the Virginia State Corporation Commission in August 2016 as part of its plan to sell 100% renewable energy to customers in Dominion Virginia Power's service territory. The company wants permission to sell the electricity generated by wind and solar facilities to the Dominion Resources Inc. utility's customers even if Dominion pursues its own 100% renewable energy tariff.

Direct Energy said it is seeking approval to offer service "generally to all customers in a particular class (residential, commercial or industrial)."

Dominion Virginia Power, known legally as Virginia Electric and Power Co., claims that state law requires Direct Energy to "enter into individual, written agreements with its customers." In addition, Dominion argues that state law dictates exactly what the competitive service provider is allowed to do in the event that Dominion Virginia Power receives approval for a tariff to provide 100% renewable energy.

"Direct Energy may continue to provide renewable energy products to its existing customers only for the specified duration of their existing service contracts. But Direct Energy may not serve or market to any other customers in Dominion Virginia Power's service territory," Dominion wrote in a filing with the SCC.

American Electric Power Co. Inc. utility Appalachian Power Co. backs Dominion's stance in the case.

"It is of critical importance to Direct Energy that its disagreements with Dominion and Appalachian regarding the issues raised in this matter be resolved '[b]efore Direct Energy expends considerable resources in order to develop and refine business plans, market to potential customers, enter into contractual relationships with suppliers and customers, and take other significant and costly steps necessary to provide 100% renewable energy to residential, and possibly commercial and industrial, customers located in Dominion Virginia Power's service territory," Direct Energy wrote in a Jan. 26 filing with the SCC. "This clearly constitutes an 'actual antagonistic assertion and denial of right.'"

Direct Energy argues that its proposal is supported by the Virginia Energy Plan unveiled in October 2014, specifically as it pertains to the availability of clean, low-cost energy resources. In addition to supplying residential customers, the company also wants approval to provide 100% renewable energy to commercial and industrial customers whose demand for the previous calendar year exceeded 5 MW.

Virginia, in 2007, halted the transition to competition in its retail electricity market. The law retained the rights of large industrial users to seek competitive proposals and included a provision allowing customers seeking a 100% renewable product to take a competitive offer if the product is not offered by the incumbent utility.

"If, however, the commission approves a 100% renewable energy tariff for the incumbent utility, the incumbent utility's exclusive franchise in its service territory prevails," Dominion wrote in its response to Direct Energy's petition. (SCC docket PUE-2016-00094)