Va. Elec. & Power Co. v. State Corp. Comm'n

• Decision Date: 15 July 2021
• Docket Number: Record No. 201172
• Citation: 300 Va. 153,861 S.E.2d 47
• Court: Virginia Supreme Court
• Parties: VIRGINIA ELECTRIC AND POWER COMPANY v. STATE CORPORATION COMMISSION, et al.

300 Va. 153

861 S.E.2d 47

VIRGINIA ELECTRIC AND POWER COMPANY

v.STATE CORPORATION COMMISSION, et al.

Record No. 201172

Supreme Court of Virginia.

JULY 15, 2021

Brooks M. Smith, Richmond, (Andrew J. Flavin ; Paul E. Pfeffer; David J. DePippo ; Troutman Pepper Hamilton Sanders; Virginia Electric and Power Company, on briefs), for appellant.

Alisson P. Klaiber(John F. Dudley ; State Corporation Commission, on brief), for appelleeState Corporation Commission.

Brian R. Greene, Richmond (Laura K. Musick, Richmond; Creighton-Elizabeth R. Boggs; GreeneHurlocker, on brief), for appelleeConstellation NewEnergy, Inc.

PRESENT: Lemons, C.J., Mims, Powell, Kelsey, McCullough, and Chafin, JJ., and Russell, S.J.

OPINION BY JUSTICE TERESA M. CHAFIN

Virginia Electric and Power Company("VEPCO") appeals from a declaratory judgment of the State Corporation Commission("SCC" or "Commission") in which the Commission found that a pumped storage hydroelectric facility (or "pumped storage") generates "renewable energy" under the former definition in Code§ 56-576, and that the amended definition would not apply to contracts executed before the amendment's effective date.VEPCO argues that the Commission erred in its interpretation of the former definition and in refusing to apply the amended definition prospectively from its effective date.For the reasons that follow, we disagree and affirm the Commission's decision.

I.

Constellation NewEnergy, Inc.("Constellation") is a competitive service provider participating in the retail choice program of Code § 56-577(A)(5)("Subsection (A)(5)").Subsection (A)(5) permits individual retail customers to "purchase electric energy provided 100 percent from renewable energy" from licensed suppliers if the incumbent electric utility does not offer the same.Code§ 56-577(A)(5)(a).

In December 2019, Constellation began contracting with customers to provide electricity from renewable energy as permitted by Subsection (A)(5)."Renewable energy" is a defined term within the statutory scheme, as set out in Code§ 56-576.At the time Constellation entered into its contracts, renewable energy was defined as

energy derived from sunlight, wind, falling water, biomass, sustainable or otherwise, (the definitions of which shall be liberally construed), energy from waste, landfill gas, municipal solid waste, wave motion, tides, and geothermal power, and does not include energy derived from coal, oil, natural gas, or nuclear power.Renewable energy shall also include the proportion of the thermal or electric energy from a facility that results from the co-firing of biomass.

Code§ 56-576(2019).In contracting with its retail customers, Constellation agreed to provide "100% Renewable Electricity Supply," which was set out as being sourced from a "facility ... that generates electricity using [wind, solar, falling water (pumped storage hydroelectric or hydroelectric) or any other resource that generates electricity that meets the definition of ‘Renewable Energy’ under ... Code§ 56-576 ](collectively, ‘Renewable Generation Facilities’)."(Brackets in original.)The provision further specified, "Seller reserves the right to substitute supply from any other Renewable Generation Facilities without prior notice to Customer."

That same month, Constellation notified VEPCO of its Subsection (A)(5) customer enrollment, and VEPCO requested documentation confirming that Constellation would provide customers with electricity sourced "100 percent from renewable energy."Constellation responded that it intended to supply its customers with energy sourced from wind and pumped storage hydroelectric facilities, contending that pumped storage "generates electricity from falling water," consistent with the statutory definition.¹Attached to its response, Constellation provided copies of its wholesale contracts, including the contract with the pumped storage hydroelectric facility that took effect on February 8, 2020.On April 1, 2020, VEPCO replied that it disagreed with Constellation's position regarding pumped storage, asserting that pumped storage did not meet the statutory definition of renewable energy "except in the case of any run-of-river production that can be quantified and verified."

In the meantime, the General Assembly enacted the Virginia Clean Economy Act ("VCEA") during its 2020 session.2020 Acts chs. 1193, 1194.As part of the VCEA, and to become effective July 1, 2020, the General Assembly amended the definition of renewable energy in Code§ 56-576.The definition maintained the language referenced above, but added a new sentence: " ‘Renewable energy’ does not include waste heat from fossil-fired facilities or electricity generated from pumped storage but includes run-of-river generation from a combined pumped-storage and run-of-river facility."Code§ 56-576(current).

On April 17, 2020, Constellation petitioned the SCC for a declaratory judgment that procuring electricity from a pumped storage hydroelectric facility qualified as renewable energy under the definition in Code§ 56-576 in effect at the time, such that Constellation could rely on that electricity to meet its load requirements under the retail choice program of Subsection (A)(5).Constellation further requested a finding that the revised definition, which would become effective on July 1, 2020, "applies prospectively" and would not prohibit Constellation from relying on pumped storage "for the duration of its retail contracts."Constellation asserted that the issues raised in its petition could be decided without an evidentiary hearing and requested an expedited review in order for the Commission to consider the issues before the VCEA's effective date.

VEPCO filed a notice of participation and a subsequent response to Constellation's petition.VEPCO asserted that a pumped storage hydroelectric facility did not generate renewable energy under Code§ 56-576 because it was more akin to a battery that stores energy, unlike the rest of the sources in the statute which generated kinetic or potential energy.VEPCO further argued that if the Commission found that pumped storage was renewable energy under the former definition, Constellation should not be allowed to rely upon the former definition where the amendment was a valid exercise of the Commonwealth's police power.

By order on May 29, 2020, the Commission granted Constellation's petition for declaratory judgment.Applying rules of statutory interpretation, the Commission found that there was no ambiguity in the phrase "derived from ... falling water," and that electricity generated from a pumped storage hydroelectric facility is therefore "renewable energy" because it is derived from water that falls from a higher point to a lower point.Thus, pumped storage satisfied the statutory definition of renewable energy in effect at the time Constellation executed its contracts.With respect to the amended definition, the Commission declined to find that the amendment would apply "retroactively" to Constellation's 2019 contracts where the amendment would not take effect until July 1, 2020.The Commission relied on Bailey v. Spangler , 289 Va. 353, 358, 771 S.E.2d 684(2015), for the proposition that retroactivity is generally disfavored absent a manifest legislative intent to the contrary.VEPCO appealed to this Court, assigning error to both findings.

II.

VEPCO presents two primary arguments on appeal.First, VEPCO contends that the Commission erred in finding that a pumped storage hydroelectric facility met the definition of renewable energy under former Code§ 56-576.Second, VEPCO contends that the Commission erred in refusing to find that the amended definition of renewable energy applies to Constellation's existing contracts from July 1, 2020 onward.These arguments present issues of statutory interpretation and other issues of law that are subject to de novo review.SeeVirginia Marine Res. Comm'n v. Chincoteague Inn , 287 Va. 371, 380, 757 S.E.2d 1(2014);Anthony v. Verizon Va., Inc. , 288 Va. 20, 29, 758 S.E.2d 527(2014).On review in this Court, "the SCC's statutory construction ‘is entitled to the respect due judgments of a tribunal informed by experience.’ "City of Alexandria v. State Corp. Comm'n , 296 Va. 79, 93, 818 S.E.2d 33(2018)(quotingVirginia Elec. & Power Co. v. State Corp. Comm'n , 295 Va. 256, 263, 810 S.E.2d 880(2018) ).

A.

VEPCO, the Commission, and Constellation all contend that the plain language of the former definition is unambiguous but disagree as to its meaning.VEPCO argues that the language plainly excludes pumped storage from the definition, whereas the Commission and Constellation argue that the plain language squarely includes pumped storage.

"When the language of a statute is unambiguous, we are bound by the plain meaning of that language."Virginia Elec. & Power Co. , 295 Va. at 263, 810 S.E.2d 880."When construing a statute, our primary objective is to ascertain and give effect to legislative intent, as expressed by the language used in the statute."Id. at 262-63, 810 S.E.2d 880(quotingCuccinelli v. Rector & Visitors of the Univ. of Va. , 283 Va. 420, 425, 722 S.E.2d 626(2012) ).In doing so, we"consider the entire statute‘to place its terms in context,’ "REVI, LLC v. Chicago Title Ins. Co. , 290 Va. 203, 208, 776 S.E.2d 808(2015)(quotingEberhardt v. Fairfax Cnty. Emps. Ret. Sys. Bd. of Trustees , 283 Va. 190, 194, 721 S.E.2d 524(2012) ), because it is "our duty to interpret the several parts of a statute as a consistent and harmonious whole so as to effectuate the legislative goal,"id.(quotingVirginia Elec. and Power Co. v. Board of Cnty. Supervisors , 226 Va. 382, 387-88, 309 S.E.2d 308(1983) ).

"Renewable energy" is one definition among many contained in Code§ 56-576.These definitions are confined in application to "this chapter"—Chapter 23 of Title 56—otherwise known as the Virginia Electric Utility RegulationAct ("VEURA").Thus, the definition of...