January 20, 2015

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Dominion Community Solar (DCS) Pilot FAQs

What is the DCS Pilot? The DCS Pilot program will enable qualifying customers to voluntarily purchase electric energy from a 2 MW (DC) Dominion-owned solar distributed generation facility in Virginia. Why is Dominion proposing the pilot program? The DCS Pilot will provide an option for customers who want to support and purchase electric energy produced by a solar distributed generation facility but may not have the ability or desire to install solar generation facilities on their homes or businesses. The pilot will allow Dominion to gather information about the appeal to customers of a subscription-based solar distributed generation model, which promotes the development of renewable energy in Virginia. What are the advantages of Dominion owning and operating the facility? Dominion can offer a pilot to potential participants that is easily accessible (no credit score qualification, no capital outlay), convenient (no long term commitment), flexible and customizable (ability to change subscription level at any time) with high performance standards. The participants will know they are purchasing solar electric energy from a trusted provider with a long history of delivering safe and reliable service. How will the DCS Pilot work? As proposed, participants would purchase a specified number of DCS Blocks (each representing 100 kWh) of electric energy from a dedicated 2 MW solar DG facility located in the Company’s service territory through a subscription-based program. Customers will have the ability to opt into the pilot without a long-term commitment during the two-year pilot term. Customer participation will renew automatically month-to-month, and subscription termination requires only one month’s notice. How much does each 100 kWh block cost? The price for both commercial and residential customers is $4.00 per 100 kWh block and will remain fixed for the term of the pilot. Each $4.00 block will be an additional amount to a customer’s bill. How is the block price determined? The block price is determined by calculating the cost of the solar energy from the DCS facility then subtracting certain credits to lower the cost for participating customers. The credits being applied to offset the cost to the customer are the amount of “traditional” grid power being replaced and the sale of the Renewable Energy Certificates (RECs) associated with the distributed solar generation from the facility. Who can participate in the DCS Pilot? As proposed, the pilot will be available to residential and commercial customers, with the exceptions of our largest customers, who have an existing option to purchase renewable energy under Schedule RG, and customers receiving temporary service. Customers also participating in other Dominion program options, such as net energy metering, the Solar Purchase Program and the Dominion Green Power® program will be eligible to participate in the pilot.

January 20, 2015

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Are there limits to how many blocks can be purchased? Dominion is proposing a maximum of five blocks per month for residential customers and ten blocks per month for commercial customers to manage the allocation of the 2 MW (DC) solar distributed generation facility’s electric energy output. For each month under the two-year pilot term, residential participants can purchase between one and five blocks and non-residential participants can purchase between one and ten blocks. If approved by the State Corporation Commission (SCC), when will the pilot be available to customers? The pilot will begin subscribing customers within 90 days of SCC approval, or when the distributed generation solar facility is installed and fully operational. Dominion anticipates a Q4 2015 launch. How long will the DCS Pilot be available? Dominion is proposing an initial two-year pilot term to evaluate customer interest and efficacy of the pilot structure. At the end of the pilot term, or sooner depending on customer interest, Dominion may file for an expansion of the DCS Pilot or approval of a permanent program. What are the overall benefits of the pilot? In addition to expanding the range of renewable energy options available to customers, the DCS Pilot also enhances fuel diversification in Dominion’s generation portfolio, provides economic benefits such as job creation and tax revenues and promotes solar energy in Virginia through distributed generation. What are the participant benefits of the pilot? The pilot provides customers with a highly flexible option to purchase electric energy from a Dominion-owned solar generation facility and to directly support renewable energy generated in Virginia. Additionally, participants will not have to worry about upfront capital expenditures, ongoing or long-term costs associated with operating and maintaining customer-owned solar generation facilities, inadequate rooftop conditions or property owner association rules and regulations they may otherwise have to deal with if installing solar facilities on their own homes or businesses. Commercial customers who lease their space, but who may not be allowed to install solar facilities in their leased spaces, the common areas or buildings surrounding their leased spaces, will have an option to purchase distributed solar generation for some of their electricity needs under the DCS Pilot. Why is Dominion proposing to restrict participation in the pilot? By narrowly tailoring the participation restrictions, Dominion can more easily evaluate customer interest and test the pilot structure before growing the pilot into a full-fledged program. If customer interest results in reaching pilot capacity within the two-year pilot period, Dominion may seek Commission approval to expand or modify the program and offer more Dominion solar distributed generation facilities for voluntary subscription to meet customer interest. Where will the 2MW solar PV facility be located? Dominion anticipates that the facility will be a ground-mounted, 2 MW (DC) solar PV distributed generation facility located in the Company’s Virginia service territory. Currently several sites are under consideration and we expect to have the facility in service by the end of the year. Will the DCS Pilot impact rates for all customers? As designed and proposed, the DCS Pilot should not impose additional costs on non-participants.

COMMONWEALTH OF VIRGTNIA

STATE CORPORATION COMMISSION

AT RICHMOND, AUGUST 7, 2015 _ . ^ '~ r ' r - " r OiTlC-NTER

APPLICATION OF '' ^ ~^ P '2: 39 a

VIRGINIA ELECTRIC AND POWER COMPANY CASE NO. PUE-2015-00005 W

For approval of a pilot and experimental rate, designated Rider DCS, to enable customer purchases of distributed solar generation pursuant to § 56-234 B of the Code ofVirginia

1 Section 56-234 B of the Code ofVirginia provides in part that "...no provision oflaw shall be deemed to preclude voluntary rate or rate design tests or experiments, or other experiments involving the use of special rates, where such experiments have been approved by order of the Commission after notice and hearing and a finding that such experiments are necessary in order to acquire information which is or may be in furtherance of the public interest."

~ Application of Virginia Electric and Power Company, For approval of a Community Solar Power Program and for certification of proposed distributed solar generation facilities pursuant to Chapter 771 of the 2011 Virginia Ads of Assembly and §§ 56-46.1 and 56-580 D ofthe Code of Virginia, Case No. PUE-2011 -00117, 2012 S.C.C. Ann. Rept. 328, Order (Nov. 28, 2012).

3 Exhibit ("Ex.") I (Application) at 1-2, 15.

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FINAL ORDER

On January 20, 2015, Virginia Electric and Power Company d/b/a Dominion Virginia

Power ("Dominion Virginia Power" or "Company"), pursuant to § 56-234 B 1 of the Code of

Virginia, filed with the State Corporation Commission ("Commission") an application for

approval of the Dominion Community Solar Pilot ("DCS Pilot") and experimental rate,

designated Rider DCS - Dominion Community Solar (Experimental) ("Rider DCS"), to enable

voluntary customer purchases of 100 kilowatt-hour blocks of solar generation from a

Company-owned, 2 megawatt ("MW") direct current distributed solar generation ("Solar DG")

facility sited in Virginia ("Application"). The Company states in its Application that this Solar

DG facility would be constructed under the blanket certificate of public convenience and

necessity that the Company received in Case No. PUE-2011-001172 to construct and operate up

to 30 MW of Solar DG facilities in its service territory ("Solar Partnership Program").3

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The Application states that the proposed DCS Pilot would allow the Company to assess P a

the level of interest of customers who want to support the development of Solar DG in the

Commonwealth, but may not be able or willing to install solar generation facilities on their

homes or businesses.4 Dominion Virgmia Power states that the proposed DCS Pilot would

further the Company's ability to study the impacts and assess the benefits to its customers of

Solar DG on the Company's distribution system and would complement the following currently

approved voluntary renewable energy programs: the Solar Partnership Program, the Dominion

Green Power® program,5 the Solar Purchase Program,6 and the Renewable Generation Pilot

Program.7 Further, the Company believes that the DCS Pilot would advance the policy goals of

Chapter 771 of the 2011 Virginia Acts of Assembly to promote solar energy through distributed

generation.8

On February 9, 2015, the Commission entered an Order for Notice and Hearing, which,

in part, docketed the Application, provided an opportunity for interested persons to file notices of

participation or to comment on the Application, established a procedural schedule, scheduled a

public evidentiary hearing, and appointed a Hearing Examiner to conduct all further proceedings

in this matter on behalf of the Comniission. Notices of participation were filed by Appalachian

* Id. at 2.

5 Apptication of Virginia Electric and Power Company d/b/a Dominion Virginia Power, For approval of its Renewable Energy Tariff, Case No. PUE-2008-00044, 2008 S.C.C. Ami. Rept. 539, Order Approving Tariff, (Dec. 3, 2008).

6 Petition of Virginia Electric and Power Company, For approval of a special tariff to faciiilate customer-owned distributed solar generation pursuant to Chapter 771 of the 2011 Virginia Acts of Assembly, Case No. PUE-2012-00064, 2013 S.C.C. Ann. Rept. 269, Order (Mar. 22, 2013).

7 Ex. I (Application) at 3-5, 6-10; Application ofVirginia Electric and Power Company, For approval to establish a renewable generation pilot program pursuant to § 56-234 of the Code of Virginia, Case No. PUE-2012-00142, 2013 S.C.C. Ann Rept. 346, Final Order (Dec. 16, 2013).

8 Ex. 1 (Application) at 3.

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Power Coinpany ("APCo"), the Office of the Attorney General's Division of Consumer Counsel

("Consumer Counsel"), and the Virginia, Maryland & Delaware Association of Electric

Cooperatives ("Association").

On April 2, 2015, Dominion Virginia Power filed the direct testimony of Brett A. Crable,

Nathan J. Frost, and Bonnie P. Horton. On May 19, 2015, the Commission Staff ("Staff') filed

the direct testimony of Britton P. Ellis and Allison F. Samuel. On June 3, 2015, the Company

filed the rebuttal testimony of Brett A. Crable, Nathan J. Frost, and Mark C. Stevens.

On June 15, 2015, Staff filed a Motion for Ruling on Jurisdiction. Dominion Virginia

Power and Consumer Counsel filed responses to the Motion for Ruling on Jurisdiction on

June 19, 2015.

On June 23, 2015, Dominion Virginia Power and Staff filed a Stipulation and

Recommendation ("Stipulation"), which resolved ail issues between Staff and the Company and

addressed Staffs Motion for Ruling on Jurisdiction.9 Specifically, the Stipulation states in part

that: (i) Staff and the Company agree to modifications to the Rider DCS tariff language to add

further clarity to the Rider DCS offering; (ii) the Rider DCS revenues will be collected during

the two-year term of the DCS Pilot and the Company will fully amortize such amounts collected

under Rider DCS over the two-year term of the DCS Pilot and include the associated

accumulated amortization balance as a reduction to rate base; (iii) Staff withdraws its Motion for

Ruling on Jurisdiction; (iv) the Company will provide Staff with copies of all marketing and

promotional material prior to its publication for Staffs review; and (v) the Company will provide

updates to the Commission in September of each year of the DCS Pilot.10

9 The Stipulation was first filed on June 22, 2015, but due to an administrative oversight, two attachments to the Stipulation were inadvertently not included with the June 22, 2015 filing.

1 0 Ex. 3 (Stipulation) at 1-3.

The public hearing was convened on June 23, 2015. Counsel for Dominion Virginia

Power, the Association, Consumer Counsel, and Staff attended the hearing." At the conclusion

of the hearing, no party objected to or opposed the Stipulation.

On July 9, 2015, the Report of Alexander F. Skirpan, Jr., Senior Hearing Examiner

("Hearing Examiner's Report" or "Report") was fded. In his Report, the Hearing Examiner

stated that, "[bjased on the record developed in this proceeding and the unopposed Stipulation, I

find that the Stipulation should be adopted and that the proposed [DCS] Pilot and Rider DCS, as

modified by the Stipulation, should be approved."12

On July 16, 2015, Dominion Virginia Power and Consumer Counsel filed comments on

the Hearing Examiner's Report. Dominion Virginia Power filed comments supporting the

findings and recommendations made in the Hearing Examiner's Report and requesting that the

Commission approve the proposed DCS Pilot and Rider DCS. 1 3 In its comments, Consumer

Counsel stated that it "does not oppose the Company's Application or object to the Stipulation";

however, it "remains concemed that the DCS Pilot, if approved, may not be marketed clearly by

the Company."14 More specifically, Consumer Counsel "wishes to ensure that the DCS Pilot will

not be marketed as a solar energy tariff or as an option for customers to purchase electric energy

output from a renewable energy facility."15

NOW THE COMMISSION, upon consideration of this matter, is of the opinion and finds

that the proposed Stipulation is reasonable and should be accepted.

" Prior to the hearing, APCo indicated that it would not be attending the hearing.

1 2 Report at 13.

1 3 Letter of Dominion Virginia Power in Support of Hearing Examiner's Report at 1.

u Comments of Consumer Counsel on Hearing Examiner's Report at 1.

15 Id

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1 6 See Stipulation at Attachment 1.

1 7 As noted by Consumer Counsel, the Commission has also previously distinguished between (i) the direct purchase of renewable energy, and (ii) the purchase of attributes associated with renewable energy. See Application of Appalachian Power Company, For approval ofits Renewable Power Rider, Case No. PUE-2008-00057, 2008 S.C.C. Ann. Rept. 557, Order Approving Tariff (Dec. 3, 2008) (distinguishing between a retail customer's (i) direct purchase of electric energy from a renewable facility, and (ii) purchase of renewable energy credits procured from a renewable facility).

1 8 See Stipulation at 2-3.

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In addition, the Commission finds that Dominion Virginia Power's marketing of the H a

DCS Pilot must accurately reflect the DCS tariff provisions approved herein. Specifically, the p

tariff language proposed in the Stipulation, and ordered herein, allows a customer "to purchase a

portion ofthe Customer's energy requirements at a premium price ... to support the development

of additional Company-owned solar distribution generation facilities within Virginia."16

Accordingly, Rider DCS does not, under the express terms thereof, state that the retail customer

is making a direct purchase of any specific renewable energy output.17 In order for the DCS

Pilot reasonably to serve the experimental purpose for which it is approved herein, it must be

marketed in accordance with the specific terms of that approval. Further in this regard, we note

that the Stipulation, as ordered herein, directs "that the Cornpany shall provide the Staff with

copies ofall marketing and promotional material prior to its publication for the Staffs review."18

Accordingly, IT IS ORDERED THAT:

(1) The Company's Application for approval of the DCS Pilot and experimental rate,

designated Rider DCS, is granted as set forth herein.

(2) The Stipulation and Recommendation is reasonable and shall be adopted.

(3) The Company shall forthwith file a revised Rider DCS and supporting workpapers

with the Clerk of the Commission and with the Commission's Divisions of Energy Regulation

and Utility Accounting and Finance, as is necessary to comply with the directives set forth in this

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Final Order. The Clerk of the Commission shall retain such filings for public inspection in H

C3 person and on the Commission's website: http://www.scc.virginia.gov/case. p

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(4) Rider DCS, as approved herein, shall become effective on the first day of the month:

(a) after the 2 MW Solar DG facility is installed and becomes fully operational, or (b) within

ninety (90) days after the date of this Final Order, whichever is later.

(5) This docket shall remain open for the purpose of receiving ftiture filings and reports.

AN ATTESTED COPY hereof shall be sent by the Clerk of the Commission to all

persons on the official Service List in this matter. The Service List is available from the Clerk of

the State Corporation Commission, c/o Document Control Center, 1300 East Main Street, First

Floor, Tyler Building, Richmond, Virginia 23219. A copy shall also be sent to the Commission's

Office of General Counsel and Divisions of Energy Regulation and Utility Accounting and

Finance.