Moving to block competition, Dominion files its own sort-of-green energy tariff

Just a couple of the great things that count as “renewable energy” in the Virginia Code.

Dominion Virginia Power has filed for permission from the State Corporation Commission (SCC) to offer a 100% renewable energy tariff to commercial and industrial customers with peak loads of over 1,000 kilowatts. In a footnote, Dominion states that it intends to propose a similar tariff for residential customers in the future. The case is PUR-2017-0060.

Customers who want only carbon-free energy like wind and solar will likely be disappointed. Dominion intends to use a “portfolio of resources” that will include “dispatchable resources”—i.e., hydropower and stuff that can be burned. Dominion promises the sources it uses will meet Virginia’s definition of renewable. That’s not reassuring. Under Virginia law, renewable energy can include sources like landfill gas and municipal solid waste, as well as “biomass, sustainable or otherwise (the definitions of which shall be liberally construed).”

Dominion’s filing comes scarcely one month after an SCC decision confirmed the right of independent renewable energy provider Direct Energy to offer its products to Dominion customers, but only so long as Dominion lacks its own green tariff for those customers. The SCC order (explained here) made clear that under Virginia law, a competitor like Direct Energy would be blocked from taking on new customers once Dominion has an approved tariff.

Dominion’s filing looks suspiciously like an effort to cut Direct Energy off at the knees. If the upstart competitor follows through with its plans to offer Virginia residents a renewable energy option, Dominion will surely propose a residential renewable energy tariff. SCC approval of Dominion’s tariff would shut out Direct Energy, which is targeting only residential consumers for its product. Under the language of the Code, it does not appear to matter whether a competitor can offer a better product, or a better price.

For the moment, Direct Energy is not backing down. The company has set up a web page to gauge the interest of residential consumers while it deliberates its next move. Ron Cerniglia, Director of Corporate and Regulatory Affairs for the Mid-Atlantic Region, told me he thinks the timing of Dominion’s filing is “curious,” given that “Dominion has had ten years to file a renewable energy tariff and hasn’t. We’re concerned about the implications of limiting choice for consumers. We don’t know if the move will actually offer a choice consumers want, or if it is just closing doors on others.”

Indeed, ten years have passed since Virginia enacted its current utility law, which includes the right of a customer to “purchase electric energy provided 100 percent from renewable energy” from another supplier if its own utility isn’t offering it. During most of that time, Dominion has sold Renewable Energy Certificates to customers under its “Green Power Program,” but it has never offered residential customers an opportunity to buy actual renewable energy. (See “Is a Green Power program worth your money?”)

This is slated to change as the utility works with the solar industry on implementing a new solar option under legislation passed this year. However, the new law specifies that the solar option will not count as a tariff for “electric energy provided 100 percent from renewable energy,” so it does not block competitive offerings like Direct Energy’s.

Dominion was agreeable to excluding the solar program because it interprets the Code’s reference to “electric energy provided 100% from renewable electricity” to mean the electricity must come from renewables 100% of the time, an interpretation almost no one else shares.

This seems to be the reason Dominion intends to include carbon-emitting sources into its renewable energy offering, even though it’s safe to say there are no customers clamoring to get their electricity from garbage or the clear-cutting of forests. It also means the new tariff will likely be priced higher than one that included only solar, because electricity from biomass is more expensive today than harvesting the sun. (No word from Dominion on why it doesn’t just assign a portion of its pumped storage capacity to serve an all-wind-and-solar product.)

But if customers want only wind and solar, they are also likely to be disappointed in Direct Energy’s product. Cerniglia says his company includes baseload sources like “cleaner biomass” in its renewable energy product to provide 24/7 power. He estimated that the initial mixture would consist of “50% to 60% municipal waste biomass (Pennsylvania and Virginia sourced) and 40% to 50% wind (Pennsylvania sourced) . . . We are also committing to not utilize virgin wood / clear cut wood biomass in our product mix at any time.”

Direct Energy also has not determined the pricing of its product yet, but Cerniglia said it would be “equal to or lower than what Dominion Virginia Power residential customers pay for ‘brown’ power.”

Perhaps most importantly, he noted, “The benefit of a competitive market is that customers can leave us at any time. They’re not captive.”

 

Update: On June 21, a Hearing Examiner for the SCC recommended rejection of a similar application for a renewable energy tariff filed last year by Appalachian Power. See my discussion here for how this may affect Dominion’s application. 

10 thoughts on “Moving to block competition, Dominion files its own sort-of-green energy tariff

  1. Running up the white flag- they win in all corners and I am done. Just what they want but I am done with trying….
    Bernie was our best hope and now the Republican Oligarchy wins.

  2. No despair allowed, Laura! When even Dominion admits that solar is the cheapest resource for electricity, you know the end of the fossil fuel era is coming. At some point the company will understand it has to change or die. It’s too bad they intend to take every possible wrong turn on the way to doing the right thing–but look at it this way: they keep giving us things to laugh at.

  3. What about those of us who get power from coops like Shenandoah Valley Electric Co-op? Shouldn’t we be on a mission to convince our electric coops to organize utility-scale solar and maybe wind since it is more efficient than domestic rooftop?

    Problem is, in 5 or 10 years solar will be so much cheaper that early adopters will be made to look like fools, having locked in at the higher cost systems.

    Suggestions appreciated,

    Thanks for a great newsletter and website!

    -Ned Wulin

    • Yes, one of the advantages of a coop is that the members can insist on the changes they want to see. One coop–BARC–even has the first community solar program in the state.

      I’ve never heard anyone say they regretted going solar when they did. And while solar will indeed keep coming down in price, the 30% federal tax credit will expire in a few years. Why wait if you can save now?

  4. Ned
    As a solar installer I come across this argument all the time. It has been proven that the savings that are accrued are greater than the lower cost in later years it is simple economics. Plus if you factor in the escalating cost of utility power it is a no brainer. Also the 30% tax credit is set to expire in the near future

  5. Ivy, Dominion Virginia Power (DVP) is an electricity transmission monopoly. Every electricity customer in the state is required to pay DVP (it’s on your bill, called the Distribution Fee). Forcing Dominion to allow another energy company to sell its product on Dominion’s transmission network makes about as much sense as forcing FedEx to permit UPS to use its airplanes when UPS planes are undergoing maintenance (i.e., none).

    Here are a several more realistic options for you:

    1) Go off-grid and generate your own electricity, exclusively from the sun and wind. I would bet exactly zero individuals or businesses in Virginia are doing that, and there’s a reason why.

    2) Force Direct Energy to finance their own grid, and erect twice as many power poles and transmission towers. I’m sure no one in your beautiful state would have a problem with that.

    3) Force Dominion Generation (DG), DVP’s sister company, to sell exclusively renewables plans. Guess what: it’s not as easy as “just assigning a portion of its pumped storage capacity to serve an all-wind-and-solar product” – there isn’t remotely enough wind and solar in Virginia, even with assistance from pumped storage, to serve its citizens.

    4) Throw renewables subsidies in the toilet and give Dominion a green light on North Anna 3. Build Surry 3 and 4. Presto – 100% clean electricity in Virginia, day or night, windy or calm.

    In terms of realistic options for fighting climate change the only tenable option is #4. Yet like the misguided inventors of the 1890s who believed it was possible for people to fly by flapping their arms, you believe sheer willpower is capable of overcoming immutable physical truths, doggedly clinging to an impossible dream no one has ever realized, nor ever will.

  6. Bob, why are you setting up false choices? I know that you know that competition among electricity providers is the norm in many states. They decided there is no reason that a distribution utility must build and own the generation as well. Separating generation and transmission is one way to protect ratepayers from becoming the unwilling accomplices of a corporation that has bet the farm on natural gas. Indeed, if Dominion did not have captive ratepayers, would it have made this blunder in the first place?

    You’re also mistaken about the potential of wind and solar to provide all our electricity. Warren Buffet’s Mid-American utility will soon hit 85% wind energy for its customers. It won’t happen over night in Virginia, but a decade from now the discussion will be about how to close the rest of the gas plants we built this decade. And Dominion will be demanding recovery of those stranded costs!

    Your preferred all-nukes option would about triple electricity prices, require a ton of storage (because 24/7 power is a liability at 3 a.m.), and exacerbate a nuclear waste problem we still have no solutions for. At a time when states are being asked to subsidize existing nukes, those of you who continue to advocate for new nukes are a lonely tribe. It might be just you and Tom Farrell, now.

  7. Ivy, thanks for your response.
    1) You’re mistaken that separating generation and transmission is “one way to protect ratepayers from becoming the unwilling accomplices of a corporation that has bet the farm on natural gas”, and you somewhat admit it, noting customers expecting only wind and solar “are likely to be disappointed” by Direct Energy’s product.
    They’re guaranteed to be disappointed, because replacing 40 trillion watthours of Virginia electricity by burning “biomass” would be a both a health and carbon-emission disaster. Virginia, like California, is attempting to greenwash its sources of power by outsourcing them. In the case of Virginia, it’s to Pennsylvania. In California, to Wyoming and Utah. In both cases, they’re purchasing power from other corporations, in other states, with no way to verify how it was generated. Both Virginians and Californians are unwilling – and unwitting – accomplices to corporations who have bet the farm on coal.
    2) Warren Buffett said not three years ago: “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate…for example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” Wind is unprofitable, wind is intermittent, wind requires thousands of additional transmission towers and lines blighting the landscape, wind needs help from fossil fuels – wherever it blows – to be viable. Maybe you want to help Warren Buffett soak off America’s tax base – I don’t.
    3) I can’t – and refuse to try – to speculate on how renewable energy will succeed “10 years from now”, because I’ve been hearing that from the renewables community for 50 years. After $30 billion in subsidies, solar just topped 1% of American generation – pathetic. I’m tired of indulging a fantasy which only makes the U.S. more dependent on fossil fuels.
    4) I have no idea where you’re getting your information about nuclear, it’s nonsense.
    – A local example to contradict your “about triple” pricing theory: Edison customers in San Diego were promised that San Onofre Nuclear Generating Station would be replaced by renewable energy. It was instead replaced entirely by natural gas, adding 8 million tons of CO2 to California’s emissions profile. Within two years, San Diego Gas & Electric residential prices had risen 56%, and are now the highest rates in the continental U.S. (28¢/kWh).
    – Nuclear energy doesn’t require “a ton of storage”, it doesn’t require an ounce of storage. It’s completely capable of load-following customer demand, night and day, day and night. The good people of France generate 75% of their electricity carbon-free by doing just that, 24/7/365.
    – There is no “nuclear waste problem”. Repeat: there is no “nuclear waste problem”. Spent nuclear fuel has been stored for over half a century with not a single death or injury as a result. If you have data which contradicts, I love to be corrected; otherwise, I can only assume its source is the fearful Sierra Club antinuclear imagination.
    – Nuclear, with backup emissions included, produces fewer emissions than renewables – every single one of them (except onshore wind). Why would anyone argue for renewables subsidies but exclude nuclear? To salve their own irrational fears?

  8. Pingback: Hearing examiner rules Appalachian Power’s renewable energy tariff isn’t good enough | Power for the People VA

  9. Pingback: 2017 guide to Virginia wind and solar policy | Power for the People VA

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