Virginia commercial electricity: the 5 MW line

Five megawatts decides the market, not the state

Virginia gets filed under deregulated states and it is not one, for most businesses. The 2007 General Assembly passed Senate Bill 1416 and House Bill 3068, which re-established retail rate regulation for most electricity customers in the Commonwealth; the State Corporation Commission's own summary of the regime says so in one sentence, alongside the single exception the legislation kept. Section 56-577 A 3 of the Code of Virginia permits only individual nonresidential retail customers of a Phase I or Phase II utility, regardless of customer class, whose noncoincident peak demand during the most recent calendar year exceeded five megawatts, to buy electric energy from a supplier licensed to sell retail energy in Virginia. Two adjectives in that sentence carry the weight. Nonresidential excludes every household. Noncoincident peak is the account's own highest demand, not its share of a system peak, so the number that decides eligibility is a metered maximum on the customer's side of the meter.

• The same subdivision bars any nonresidential customer whose noncoincident peak load is at or below 150 kW from purchasing under the section at all, which is a floor beneath the ceiling.
• Eligibility follows the account and its utility, so a 3 MW site is not qualified by belonging to a company that also owns a 40 MW plant.
• The SCC's competitive-supplier roster lists registration by local distribution company territory and by customer type, which is how a buyer checks whether a supplier is actually registered where the building sits.
• A licensed supplier must hold an SCC licence, register with the serving utility, and renew the licence annually by 31 March.

Each site is its own customer, until the Commission says otherwise

The obvious move for a distributed business is to add its sites together, and the statute closes that door before opening a window. Subdivision A 3 b provides that the demands of individual nonresidential retail customers may not be aggregated or combined for the purpose of meeting the demand limitations, and that each noncontiguous site constitutes an individual retail customer even where one person owns several of them. Forty stores drawing 150 kW apiece add up to six megawatts of load and to no eligibility whatsoever. Subdivision A 4 then supplies the only route: two or more nonresidential customers whose individual demand did not exceed five megawatts may petition the Commission to aggregate their demands, and the Commission may approve if neither the incumbent utility nor the customers who decline to shop are adversely affected in a manner contrary to the public interest, and if approval is itself consistent with the public interest. Approval comes with periodic monitoring and reporting obligations, and the Commission may revoke it if the group stops meeting the demand test. The aggregation is an administrative proceeding with a docket number, a hearing and a continuing duty, not a checkbox on an enrolment form.

• Aggregation is petitioned, not elected: the group becomes a single customer for the purposes of the section once approved.
• The petition turns on harm to the utility and to non-shopping customers, which is an evidentiary question rather than a formality.
• Every site in the group must keep meeting the demand limitations, and the reporting obligation continues after the contract is signed.

The return trip is eighteen months long

The commitment that surprises buyers is not the supply term; it is the exit. Subdivision A 3 c provides that a customer who buys from licensed suppliers after the expiration or termination of capped rates is not entitled to buy from the incumbent utility again without giving eighteen months' advance written notice, unless it proves to the Commission, on clear and convincing evidence, that its supplier failed to perform, anticipatorily breached, or is about to fail through no fault of the customer, and that no alternative supplier offers service at reasonable rates. Any customer that does return is then subject to a minimum stay of twelve months. Dominion's own supplier page describes the practical version of the same rule: since 1 July 2019 a twelve-month minimum stay applies to accounts with an annual peak demand of 500 kW or greater that return to company supply, with carve-outs for accounts abandoned by a supplier and for purchases of 100 percent renewable energy. Eighteen months is longer than most supply contracts sold into the market, so a twelve-month agreement still leaves an eighteen-month decision behind it. That asymmetry belongs in the first conversation, not the last one.

• Dominion publishes an eligible customer list once a year, with a 31 January cutoff and the updated list issued in February; a customer can opt out and reverse the decision before the next update.
• The utility also records demand at the account, so the evidence for the eligibility test is a utility record rather than the customer's own estimate.
• A business planning a sale, a closure or a reorganisation inside two years should treat the notice clock as a balance-sheet item.

The class ladder that prices delivery

Dominion's business rates page states which schedules a retail-access customer can sit on: Virginia Jurisdictional Rate Schedules 1, GS-1, GS-2, GS-3, GS-3EV, GS-4, 5C, 24, 27 and 28. The four that carry most commercial load are separated by two numbers. Schedule GS-1 serves nonresidential demand under 30 kW and bills no separate demand charge. GS-2 applies where the account has at least three peak measured demands of 30 kW or more within the current and previous eleven billing months, and no more than two such demands of 500 kW or more. GS-3 takes secondary-voltage service at 500 kW or above, reached in at least three of those twelve months, and GS-4 applies the same test to primary or transmission voltage. The schedules are sticky in both directions: a GS-3 customer whose demand falls below 500 kW stays on GS-3 until every month in the current and previous eleven has stayed below it, so a plant that downsizes keeps the large-service demand structure for a year.

• GS-2 bills demand charges only in months when usage exceeds 200 kWh per kW of demand, which is a load-factor gate of roughly 27 percent on a 730-hour month; below it the account pays on the non-demand rate.
• GS-4 bills a distribution demand only where the normal service delivery voltage is below 69 kV, so a transmission-voltage customer sees a different bill from a primary-voltage neighbour on the same schedule.
• Dominion's filed tariff also references a Rate Schedule GS-5 for very large load, and the GS-3 sheet carries a clause keyed to it.

What the demand clauses do after you shop

Shopping changes the supply line; it does not change the arithmetic that produces the distribution demand. In Dominion's filed Schedule GS-3, the Distribution Demand billed each month is the highest of three numbers: the highest average kW measured at the location in any 30-minute interval across the current and previous eleven billing months, a 500 kW floor, or, for a customer new to the schedule since 1 January 2022 or one that has requested more capacity, 70 percent of the kVA capacity of the normal service transformer. A power factor below 85 percent can establish a minimum distribution demand of not less than 85 percent of maximum kVA demand. The supply side has its own ratchet: on-peak supply demand is the highest of the current month's on-peak maximum, 75 percent of the highest on-peak demand recorded in the preceding June through September, and a 100 kW floor. Off-peak supply demand is billed only on the kW above 90 percent of the on-peak supply demand. One bad summer interval therefore prices a year of supply, and the only number the customer controls is the one the meter records.

• On-peak runs 10 a.m. to 10 p.m. Monday to Friday from June through September, and 7 a.m. to 10 p.m. Monday to Friday from October through May.
• The distribution number is a trailing eleven-month high, not a percentage ratchet, so it decays only as old months roll out of the window.
• A transformer sized for a hoped-for expansion sets a floor at 70 percent of its kVA capacity, which is the cost of requesting capacity before using it.

The 25 MW clause, and the docket behind it

The GS-3 sheet filed to take effect for usage on and after 1 January 2026 adds a paragraph for high-load customers and dates it. From 1 January 2027, the demand determination in Paragraph VIII applies to a nonresidential customer whose maximum measured demand reaches or exceeds 25 MW in at least three of the current and previous eleven billing months, or that contracts for demand of 25 MW or more, and that does not qualify for Rate Schedule GS-5. Under Paragraph VIII the distribution demand becomes the higher of the trailing eleven-month high or 85 percent of contracted demand, and the on-peak supply demand becomes the highest of the current month's on-peak maximum, 75 percent of the prior summer's high, or 85 percent of contracted demand, with customers who buy supply from a competitive supplier subject to the contracted-demand test. The same schedule requires a delivery-only customer to execute an Agreement for Electric Service with a minimum term of at least one year. None of this is speculative tariff archaeology: the Commission has run a proceeding on electric utility and data centre load growth, PUR-2024-00144, including a technical conference on large-load flexibility, and the questions in it are the questions a very large buyer now has to answer in its own contract.

• Twenty-five megawatts at a 60 percent load factor implies roughly 1.5 times that in contracted capacity, so the clause reaches accounts that never touch the number on a normal day.
• A contracted-demand floor bills capacity the site has reserved rather than capacity it has used, which changes how a phased build should be scheduled.
• The one-year minimum delivery agreement runs on its own clock, separate from the supply term and separate from the eighteen-month return notice.

The renewable route, and why it is shut at Dominion

Subdivision A 5 preserves a different door: individual retail customers, regardless of customer class, may buy electric energy provided 100 percent from renewable energy from a licensed supplier if the incumbent utility does not offer an approved tariff for 100 percent renewable energy. That conditional is the whole clause. Dominion's energy choice page records that the Commission approved the company's 100 percent renewable tariff, Rider TRG, on 2 July 2020, so the condition that opens the renewable route fails at Dominion and a 400 kW office cannot shop for green power under it. The route is not decorative: where a utility has no approved tariff, it is the only way a sub-five-megawatt business buys from a competitive supplier at all. A buyer who has been told that any Virginia business can buy renewable supply should ask which utility tariff the statement assumes, and whether that tariff has been approved.

• Rider TRG appears on the filed rider exhibit beside the other non-bypassable charges, so the renewable product is a tariff line rather than a supply contract.
• Where the renewable route does apply, the supplier is still a licensed competitive supplier registered with the local distribution company.

Gas runs on a separate programme

The 2007 legislation did not stop at electricity. The Commission's energy regulation page records that the same legislation continued the policy allowing retail customers of Virginia's two largest gas companies, Columbia Gas and Washington Gas Light, to select other companies to provide their gas supply; Washington Gas Light's Virginia service is carried under its Shenandoah Gas division. Gas choice is therefore a second licence, a second registration and a second set of customer types on the Commission's roster, where suppliers are listed against WGL, SG and CGV rather than against an electric territory. A business that shops both fuels is running two enrolments with two effective dates, and the electricity clock described above has no gas equivalent.

• The roster distinguishes competitive suppliers from aggregators, and a single firm can hold both authorisations.
• Customer type on the roster is coded commercial, industrial, governmental or residential, which is how a buyer confirms an offer covers its class.

What to assemble before an RFP

The eligibility question can be answered from utility records before any supplier is approached, and doing it first saves a round of quotes that cannot be executed. Assemble the twelve most recent bills for each account, the rate schedule and rider list printed on them, the transformer capacity and any contracted demand, and evidence of the noncoincident peak the utility recorded for the most recent calendar year. Then separate the accounts by serving utility, because a cooperative or municipal territory does not offer this route at all and a site inside one should be excluded rather than aggregated. Finally, write down the date on which the business could live with an eighteen-month return notice, because that date, not the contract term, is the real length of the commitment.

• Ask the utility in writing for the recorded noncoincident peak and the schedule assignment; both are the utility's determination, not the customer's.
• List every site with its serving utility and note which are in cooperative or municipal territory before any portfolio arithmetic.
• Keep the interval data if the meter produces it; the demand clauses above are read off 30-minute intervals.

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