On April 17, 2015, Appalachian Power (“APCo”) filed an application with the Virginia State Corporation Commission requesting approval for a voluntary program pursuant to which a non-residential customer can purchase renewable energy generated by a facility, located on or adjacent to its metered property, that is owned and operated by a third party developer.
Under the program, APCo will purchase the energy and capacity from the facility that is owned and operated by the third party developer and will then charge that same amount to the customer. APCo, the participating customer, and the third party developer will execute a power purchase and sale agreement which will establish, among other things, the rate in which APCo is to pay the developer, and which the customer will pay to APCo. Pursuant to the program, participating customers are required to continue purchasing all of their energy and capacity needs under their standard rate schedules from APCo; however, in addition, the customers are obligated to pay an amount equal to the amount that APCo pays the applicable third party developer. These two amounts will appear on separate lines on the customers’ bill, along with the market-based credit for the energy and capacity generated from the renewable energy resource. This credit approximates the market-based pricing the facility would experience if the credit were sold into the PJM market, which means that this credit will vary each month.
By structuring the program in this manner, the customer assumes the risk with respect to fluctuations in the price, and therefore, could result in a net increase or decrease in a customer’s bill. This rider, if approved, will be available to all of APCo’s non-residential customers with an aggregate load between 250 kW and 2,000 kW. APCo will close the program to new entrants at the earlier of, June 1, 2017 or when the participating facilities total 25MW.