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Va. regulators reject, modify Dominion's demand-side management programs

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Va. regulators reject, modify Dominion's demand-side management programs

The VirginiaState Corporation Commission, in an April 19 order, said Dominion Virginia Power'snew demand-side management programs, as proposed, "are not in the public interest."But the regulators indicated that they would approve a modified version of one ofthe programs and approved the continuation of another DSM initiative.

The subsidiary,known legally as Virginia Electricand Power Co., submitted an application to state regulators in August2015 seeking approval to implement two new DSM programs, extend a "peak-shaving"residential air conditioner program and continue two rate adjustment clauses.

DominionVirginia Power hoped to implement a residential programmable thermostat programand a small-business improvement program for the five-year period of May 1, 2016-April30, 2021. The company proposed a five-year spending cap for the "Phase V"programs, at approximately $51.4 million.

"Wefind that the Company has not established that its Phase V programs, as proposed,are in the public interest," the SCC said in its order. "Specifically,we find that the Small Business Improvement Program is only in the public interestwith modifications to the program. We further find that the Residential ProgrammableThermostat Program is not in the public interest and, thus, deny the program atthis time."

The SCCin April 2015 rejected the small-business improvement, or SBI, program and approvedmodified versions of severalother programs proposed by the utility.

The regulatorssaid Dominion "has addressed the concerns" with the small-business program,"including providing needed detail regarding eligibility and implementationcriteria."

"Therefore,based on the record in this proceeding, we find that the SBI Program should be approved,subject to certain modifications," the SCC said. The commission approved theprogram for the proposed five-year period subject to its performance.

"Ifthe SBI Program underperforms once implemented, the Commission may consider shorteningthe approval period in a future case," the order stated. "Second, we findthat, to be in the public interest, the SBI Program shall be limited to $23.5 million,which represents approximately half of the Company's proposed five-year budget."

In rejectingthe thermostat program, the commission said regulatory staff "raised legitimateconcerns that the … assumptions include an unreasonably low level of free-ridershipgiven recent thermostat sales data and raised questions associated with the studyrelied upon by the Company to support the free-ridership assumption."

In addition,the regulators noted that based on the total cost of the program, estimated at approximately$3.6 million, and the 5,870 thermostats that would be installed, the customer costper thermostat will be approximately $600.

"TheCommission finds that this is an unreasonable burden on customers when the eligiblethermostats have a retail price of between $100 to $200," the SCC said.

The regulatorsapproved the continuation of the company's residential AC Cycling Program throughApril 30, 2021. The program's costs are being recovered through base rates.

The SCCapproved a total revenue requirement of approximately $45.9 million for the ridersattached to the previously approved and new DSM and energy efficiency programs forthe 2016-2017 rate year. Dominion proposed a total revenue requirement of approximately$49.6 million for the riders.