SCC denies Walmart’s efforts to purchase third-party power

Published February 26, 2019 by Jessica Sabbath

The Virginia State Corporation Commission (SCC) on Monday denied Walmart’s request to purchase power from third-party suppliers.

The retailer had requested permission to leave utility companies Dominion Energy Virginia and Appalachian Power Co. to purchase power elsewhere.

The SCC determined Walmart’s departure would harm Dominion and APCo’s residential and small-business customers, who do not have the legal right to leave utilities to seek lower rates. The commission said the retailer’s departure would increase prices $65 million for Dominion customers and $4 million for APCo customers during the next 10 years.

In considering Walmart’s request, the commission said it also considered monthly bill electric bill increases during the past 10 years, which rose by $48, or 73 percent, for APCo customers, and $26, or 29 percent, for Dominion customers.

The SCC also said customer rates are likely to increase because of requirements of Senate Bill 966, which overhauled the state’s utility regulations. Provisions under that law automatically granted some large-demand customers of Dominion the right to a 2 percent cut, which shifts costs to smaller businesses and residential customers, the commission said in a release.

The commission stated: “In conclusion, given the context of a decade of rising rates and the likelihood of even higher rates in the future, we do not find it consistent with the public interest for captive customers who do not have the legal ability to obtain lower rates — predominantly residential and small business — to suffer from the cost-shifting identified [in this case] by enabling a large-demand customer to seek its power supply elsewhere…”

A new provision of the law allows single customers that use more than 5 megawatts of power to leave the utility system to purchase power from a third-party vendor. The law allows customers, subject to commission approval, to aggregate demand from multiple retail locations to meet that 5-megawatt threshold.

Walmart applied to aggregate the power of 140 locations that use Dominion power and 44 locations that use APCo. In its initial filing, Walmart said the total would make up 70.52 megawatts of power.

In February 2018, the SCC approved the first request to seek approval to purchase third-party approval under the same provision. Reynolds Group Holdings asked to aggregate six locations to meet the threshold. Those six locations aggregated 10.12 megawatts.