McAuliffe’s bright new energy plan still has that rotten-egg smell

Students protesting the new state motto.

Students protesting the new state motto.

Earlier this week, Virginia Secretary of Commerce and Trade Todd Haymore published an op-ed in the Roanoke Times boasting of the Commonwealth’s achievements on energy. It was a sad reminder that Virginia has trouble moving beyond “all of the above,” a phrase that seems to have become the state motto. But then on Wednesday, the McAuliffe Administration released a cheerful new version of the Virginia Energy Plan that reads like an extended love poem to solar power.

Haymore’s column more accurately reflects this Administration’s approach to energy: a lot of fracked gas, tricked out with bright snippets of solar. But I much prefer the Energy Plan. The entire first third of it is given over to trumpeting Virginia’s progress on developing solar energy. Though the amount of solar installed to date is still tiny, Virginia solar has terrific momentum, and McAuliffe can rightly claim a share of the credit.

The Plan also touches briefly on onshore wind (thanks to a single project from Apex Clean Energy), offshore wind power (nothing to see here, folks, move along), and an array of modest-yet-promising energy efficiency initiatives.

But the Energy Plan has its darker moments, too. If McAuliffe is in love with solar, he is still married to fossil fuels. The Plan continues to promote fracked gas infrastructure like Dominion’s Atlantic Coast pipeline, and insists that flooding the Commonwealth with natural gas is the key to economic prosperity.

Natural gas sneaks into other parts of the Energy Plan as well. The section on alternative fuel vehicles shows a preference for natural gas-fueled vehicles over electric vehicles, bucking the nationwide trend toward EVs. It’s another discouraging indication of just how powerful utility giant Dominion Resources has become in Virginia. Though we think of it as an electric utility, Dominion is a much bigger player in the gas world. You can run an EV on solar, but a natural gas vehicle commits you to fracking.

Locking us into natural gas in all parts of our lives serves Dominion’s purposes very well. But for Virginia, it means considerable pain down the road. With the world finally committed to tackling global warming, our failure to cut carbon now will mean deeper cuts forced on us later.

The Energy Plan does contain a short discussion of the need to fight climate change, but it fails to acknowledge the tension between embracing gas and cutting carbon. The Plan assures us that “Regardless of the outcome of litigation involving the [EPA’s Clean Power Plan], the Governor will work to identify a path toward further reducing Virginia’s carbon emissions and shifting to greater utilization of clean energy to power the Commonwealth economy.” But no hints follow as to how McAuliffe expects to accomplish this while expanding the use of a carbon-emitting resource like natural gas.

We’ve already seen that McAuliffe is capable of holding two contradictory thoughts in his head at the same time. The Governor frequently asserts that climate change is an urgent problem, then in the same breath brags that he persuaded EPA to soften Virginia’s targets under the Clean Power Plan to make compliance easier. He repeats this claim in the Energy Plan, and seems to expect applause.

Knowledgeable observers say EPA softened some initial state targets and tightened others to make the final Clean Power Plan more legally defensible. Regardless, for a man who believes in climate change, McAuliffe’s boast is exasperating. It’s like announcing you pulled off a bank heist when the evidence points to an inside job. Well-wishers can only cringe.

McAuliffe has a little more than a year left in the single term Virginia allows its governors. Here’s hoping he uses it to commit the Commonwealth more firmly to the solar energy he so loves, along with the other essentials of the 21st century energy economy: wind power, battery storage, and energy efficiency. That should make it easier to break with natural gas. Sure, fracked gas looks cheap today, but cheap is not the stuff of legacies.

*On a purely tangential note, Haymore’s column isn’t helped by the editing habits of the Roanoke Times. Like many newspapers these days, the Roanoke Times seems to believe its readers can’t handle full paragraphs. It presents almost all of the Secretary’s short sentences as separate paragraphs, as though insisting that each one should be mulled over individually. The result puts me in mind of the slips of paper inside Chinese fortune cookies, if the fortunes had been written by guys working for energy companies. (That is not, frankly, something I would like to see.)

Virginia, meet Paris. Things will never be the same.

By Tristan Nitot -, CC BY-SA 3.0,

By Tristan Nitot –, CC BY-SA 3.0,

After Republicans in Virginia’s General Assembly shut down the McAuliffe administration’s work on implementing the EPA Clean Power Plan last winter, Governor McAuliffe decided on an end run. He issued Executive Order 57, directing administration officials to recommend ways to reduce carbon pollution from the state’s power plants. The workgroup led by Secretary of Natural Resources Molly Ward is holding meetings this fall to gather information and advice.

This puts Ward in something of a pickle. Meeting the climate challenge requires Virginia to commit to a future with less fossil fuel, while McAuliffe is championing Dominion Power’s plans to radically expand fossil fuel investments in the Commonwealth.

Last week the European Union joined the United States, China, India, Canada, Mexico and dozens of other countries in ratifying the Paris climate accord, putting it over the threshold needed for it to take effect. The goal of the accord is to limit the increase in world temperatures to “well below” 2 degrees Celsius, 3.6 degrees Fahrenheit, a level beyond which climate effects are projected to be catastrophic. Given mounting concerns that 2 degrees isn’t sufficiently protective, the 197 signatory nations also agreed to a stretch goal of 1.5 degrees Celsius.

The U.S. is the world’s second highest emitter of CO2 after China, and our average emissions per person are two-and-a-half times that of the Chinese. No other country has contributed more to the problem. American leadership was key to bringing other countries on board, and it will be key to implementing solutions.

A few niggling details remain, like how we are actually going to do this. The EPA’s Clean Power Plan is a first step, but its scope is narrow. It addresses only carbon emissions from electric generating plants in use as of 2012, not new sources (though states can choose to do that). It doesn’t address emissions outside the electric sector. It also doesn’t address methane emissions from natural gas infrastructure, a climate threat that seriously undercuts the climate benefit of utilities switching from coal to gas. Its goal of reducing electric-sector carbon pollution by 30% by 2030 is nowhere near what’s needed.

To meet its Paris commitment, the U.S. will have to dramatically reduce fossil fuel use in everything from electricity and heating to manufacturing and transportation. The good news is that the technologies to do this exist, and they are getting better and cheaper by the day. The bad news is that even an all-hands-on-deck approach would need time to work, and there are still way too many hands sitting idle in their bunks below deck.

Future federal regulation that goes well beyond the Clean Power Plan is inevitable. Through whatever means—a carbon tax, removal of fossil fuel subsidies, new incentives, or simple mandates—renewable energy has to take over the power sector, with fossil fuels limited to a supporting role before being phased out altogether. Building codes must be dramatically strengthened to minimize energy consumption, and transportation must be electrified so vehicles run on wind and solar, not gasoline or diesel. And all this has to happen starting now.

With the U.S. committed to this path, it makes no sense for any state to pursue a fossil fuel-heavy strategy simply because federal mandates aren’t in place yet. The ratification of the Paris accord means all new fossil fuel investments—drilling machinery, fracking wells, pipelines, generating plants—must be evaluated against the likelihood that they will have to be abandoned well before the end of their useful life.

In Virginia this includes proposed new fracked-gas transmission pipelines; a new natural gas generating station that Dominion Power just received approval to build; as much as 9,000 megawatts more of natural gas generating plants that Dominion wants to build; and at least two new natural gas generating plants proposed by other developers, who would use the new gas pipelines to supply them. Altogether, these projects represent tens of billions of dollars in investments in infrastructure that would have to be shut down and left to decay within a decade or two.

All this could happen without violating the Clean Power Plan, if Virginia takes advantage of a loophole allowing it to exclude new gas plants from its implementation plan. Dominion’s gas plants alone would increase carbon emissions from Virginia by as much as 83%. That won’t get us to Paris.

It seems obvious that these investments would be better channeled into carbon-free renewable energy and reducing energy use through efficiency and building improvements. These are the “no regrets” investments that make sense for human health and economic development reasons anyway. With the Paris accord, the decision has gone from no-regrets to no-brainer.

But Dominion clearly thinks a pipelines-and-gas-plants approach will make more money for its shareholders. Dominion is betting that regulators will allow it to bill customers for the costs of new fossil fuel infrastructure even if it turns out that using it means paying a high carbon tax, or not using it at all. Dominion counts on the prevalence of climate doubt and magical thinking within the Virginia legislature and the staff of the SCC to muffle the wake-up call from Paris.

This is a deeply irresponsible and immoral calculus.

To date, Governor McAuliffe has backed Dominion at every turn. With only a year and a half left in his term, the “jobs governor” wants to lure businesses to Virginia quickly with the promise of cheap natural gas. It’s a strategy that might backfire in the short run, as savvy businesses go to states better preparing for life after Paris. Surely, it will backfire in the long run, when Virginia is left paying off unwanted fossil fuel infrastructure. The Paris accord marks a good point for McAuliffe to change his allegiance.

Indeed, after Paris, nothing will ever be the same. The days of natural gas as a bridge fuel are rapidly ending, and the U.S. has committed itself to breaking from its fossil fuel past. Executive Order 57 offers Virginia an opportunity to map out a carbon-free strategy. Time is short. Allons-y!

Will Virginia run roughshod over local zoning power to help gas drilling companies?

Although Virginia’s 2017 General Assembly session is still more than three months off, fossil fuel interests will already be planning how to win more special favors from the legislature. In past years they’ve gotten subsidies or a relaxation of environmental safeguards. This year, it could be help dealing with pesky local governments that want to protect communities from fracking. Guest blogger Linda Burchfiel brings us the story.

Photo credit Virginia Sierra Club

Photo credit Virginia Sierra Club

Even in a Dillon Rule state like Virginia, where local governments have only the authority conferred on them by the state, localities have some authority over matters that affect the daily life of residents. Traditionally they have authority to enact zoning ordinances to maintain their sense of community. Recently, counties have started to use their authority to limit the ability of natural gas drilling companies to conduct fracking operations within their borders. Now the industry is pushing back—hard.

Indeed, any action that limits fracking sends the oil and gas industry into high gear. The industry is already working to undermine new state regulations governing disclosure of chemicals used in fracking operations. Based on the experience of other states, we expect to see the industry seek legislation in Virginia’s upcoming General Assembly Session to block local authority over fracking.

New forms of “unconventional drilling,” including hydraulic fracturing or “fracking,” make drilling for natural gas potentially profitable in parts of Virginia that have no history of oil and gas development. Fracking companies have been travelling to new areas, leasing acres of land and approaching local governments for permits. Before considering permits, some local governments have insisted on researching fracking and its consequences.

This happened in 2010 in Rockingham County, which sits in the Shenandoah Valley atop a sliver of the Marcellus Shale. When a Texas-based drilling company requested permits to conduct fracking operations there, county supervisors decided they had better educate themselves on the subject. A Republican board member took the lead, investigating the safety records of fracking companies in other states and sounding the alarm about his findings. Facing growing opposition and unwilling to wait, and with falling gas prices making fracking in the county less profitable, the drilling company eventually withdrew its request.

Fracking also threatens the Tidewater area, where the U.S. Geological Survey estimates the Taylorsville Basin may contain over a trillion cubic feet of shale gas in an area underlying parts of more than a dozen Virginia counties. (A map of the Taylorsville Basin can be found here.) But while the potential for industry profits may be good, the potential risks are much greater. This low-lying region is in the Chesapeake Bay watershed and contains the Potomac Aquifer, which supplies water for drinking, agriculture and industry for almost half of Virginia’s population. In recognition of these unique environmental challenges, the Virginia Oil and Gas Act includes special provisions to protect the Tidewater Region. Two such provisions are the requirement of an environmental impact assessment for a permit, and a prohibition of drilling for oil or natural gas within 500 feet of the Chesapeake Bay or any tributary.

To add further safeguards, the King George Board of Supervisors proposed an ordinance in August 2015 with specific restrictions intended to protect the community from the noise, traffic and environmental degradation of fracking. After the gas industry threatened to sue, the Board held a new public hearing this year, then passed the ordinance with only slight modifications. Restrictions include a prohibition on well drilling within 750 feet of a waterway or road or occupied building, limiting drill sites to four acres, prohibiting holes from being bored within 100 feet of a property line, and requiring each company interested in drilling to apply for a special exception permit and to submit extensive information.

Although the oil and gas industry had tried to influence the Board’s decision with the threat of long and expensive litigation, its legal theory is weak. A 2015 opinion by Attorney General Mark Herring affirms that municipalities have the authority to use zoning ordinances to restrict fracking, including authority to prohibit it entirely within a jurisdiction. His opinion overturned that of the previous Attorney General, Ken Cuccinelli, who had stated that localities could not “ban altogether” oil and gas exploration and drilling through zoning ordinances. Even Cuccinelli, however, had conceded that a county “may adopt a zoning ordinance that places restrictions on the location and siting of oil and gas wells that are reasonable in scope and consistent” with applicable state laws.

If the industry can’t win in court, though, it may attempt to use the legislature to pass legislation taking away local governments’ ability to limit fracking. Given the historic influence the fossil fuel industry has on Virginia’s General Assembly, this poses a serious threat to localities that want to control their own fate.

The industry has an ally in this effort: the American Legislative Exchange Council (ALEC), a lobbying organization heavily funded by the fossil fuel industry. ALEC counts many conservative Virginia legislators among its members, as well as utility giant Dominion Resources. ALEC members draft and share model state-level legislation that favors corporate interests. ALEC claims to support sending power back to the local level, but in fact it consistently favors unlimited fossil-fuel extraction and burning, regardless of ALEC’s ostensible principles. So if local governments want to restrict fracking, while state legislatures are less inclined to do so, ALEC will likely favor blocking local government restrictions.

A recent news account revealed that ALEC and its local government affiliate, the American City-County Exchange (ACCE) are working to block local government action in states where the state legislature is more corporate-friendly than local governments. Thus we should be prepared to see ALEC insert itself in Virginia’s legislative process to try to block local restrictions on fracking.

Indeed, ALEC has already been working in other states to stop local governments from restricting fracking. This includes Texas, which passed a preemptive ban on local government efforts to stop fracking in 2015. In Florida, a similar ALEC-supported ban was defeated after opponents pointed out that the measure threatened localities’ traditional control over other local issues, such as education.

Linda Burchfiel is the Fracking Issues Chair for the Virginia Chapter of the Sierra Club.

Even Appalachian Power doesn’t like its third-party solar option

Colleges in APCo territory want to use PPAs to install solar facilities like the one recently installed at the University of Richmond, in Dominion territory.

Colleges in APCo territory want to use PPAs to install solar facilities like the one recently installed at the University of Richmond, in Dominion territory.

Facing a withering report from a Virginia hearing examiner recommending denial of its request for a renewable energy “Rider RGP,” Appalachian Power Company (APCo) has responded with a simple message to the State Corporation Commission: um, never mind.

APCo proposed Rider RGP as an alternative to third-party power purchase agreements (PPAs) for customers wanting to install rooftop solar. The proposal would have put APCo in the middle of the deal and created a buy-all, sell-all scheme. But the proposal was roundly criticized at last year’s hearing and in witness statements as convoluted and expensive.

On September 19 APCo asked to withdraw its application, citing changed circumstances. In reality, of course, nothing has changed since the Hearing Examiner’s August 31 report, other than APCo learning it was about to lose.

The company probably doesn’t mind being rejected for a program that witnesses said no one would sign up for. The much bigger issue for the company is that if the SCC adopts the hearing examiner’s view, APCo could lose its battle to block PPAs in its service territory.

For those of you just coming to the story, here’s the Cliff Notes version (this earlier post has the unabridged telling): APCo’s customers want the ability to install solar on their property through PPAs, a financing arrangement in which a solar developer installs and owns the panels, selling the electricity that’s generated to the customer. Often this means the customer can reduce its electricity bills without incurring an up-front cost. For tax-exempt institutions like colleges that can’t take advantage of the federal 30% tax credit for solar, the PPA model means the developer can take the tax credit and pass along the savings.

Virginia utilities say this arrangement violates their monopoly on the sale of electricity. Customers point to two statutory provisions that make PPAs legal. One provision allows customers to buy renewable energy from third parties if their utility doesn’t offer it. (No utility in Virginia does.) The other provision defines a net metering customer to include one who contracts with someone else to install and operate a solar facility on the customer’s property—an apt description of a PPA arrangement. Customers would seem to have the better of the argument, surely, but no bank will finance a PPA when a deep-pocketed utility is threatening to sue.

Dominion temporarily settled the issue in its territory with a pilot program that allows some PPAs, but APCo declined to participate. Under pressure from educational institutions that want solar, APCo proposed Rider RGP as an alternative for its territory. Customers and solar advocates seized the opportunity to seek a clear ruling from the SCC on the legality of PPAs. They argued, and the Hearing Examiner agreed, that Rider RGP wasn’t just badly designed, but unnecessary, given the provisions of the statute that already allow PPAs.

APCo doesn’t want the SCC commissioners to confirm this conclusion. It hopes that by withdrawing Rider RGP, the SCC will dismiss the case and not reach the merits of the argument on PPA legality. It is urging the SCC not to consider the point at all, or if it does so, not to take it up until it considers APCo’s plan, announced in April, to offer a green tariff to customers.

That green tariff is the “changed circumstances” APCo says makes Rider RGP unnecessary. If the SCC approves the green tariff, APCo will offer to sell real renewable energy to customers who want it. APCo clearly believes that having that tariff available to customers closes off the statutory provision that allows customers to go to third-party sellers if their own utility doesn’t offer renewable energy.

The green tariff would not, however, affect the legality of PPAs under the other statutory provision, the one that defines net metering customers to include those who have renewable energy facilities located on their property but owned and operated by someone else. Nor does the offer of a green tariff seem likely to satisfy customer demand for PPAs; buying electricity from a utility through a green tariff is a very different animal from having solar panels on your own roof.

The SCC is considering APCo’s request to withdraw its proposal for Rider RGP. It issued an order asking the parties to the case to comment by September 26. Advocates are expected to oppose APCo’s request and to ask the SCC to rule definitively on the legality of PPAs. By doing so, the Commission would finally bring legal clarity to an issue that has been holding back solar development in Virginia.

Update: September 26, Dominion Virginia Power filed a motion to intervene out of time, with a brief begging the SCC not to even look at the legality of PPAs, or if it did, to reject the hearing examiner’s reading of the statute on the grounds that her opinion disagrees with Dominion’s.  Dominion’s brief notes that it wrote its own opinion into a tariff, which the SCC approved, and therefore that ought to be more important than whatever the General Assembly actually said.

On October 7, the SCC allowed APCo to withdraw its proposal, ducking the issue of PPA legality and ensuring that more time and money will be wasted on future proceedings.

Your 2016 guide to Virginia wind and solar policy

Photo credit: Sierra Club

Photo credit: Sierra Club

I could make short work of this year’s update by saying that not much has changed in the way of Virginia renewable energy policy in the past year. The General Assembly punted on almost all of the relevant bills that were presented this winter, and a subcommittee that was formed to review those bills has taken no action to date.

But if the policies haven’t changed, the landscape has. While our legislators sat on their hands, everyone else embarked on what, for Virginia, amounts to a solar binge. Dominion Virginia Power began making good on a pledge to install 400 megawatts (MW) of solar in state by the end of the decade. The Governor has taken the first steps to fulfill a pledge to have state agencies meet 8% of their electric demand with solar. Large corporations suddenly want to take advantage of low solar prices and favorable tax policies to do deals in Virginia. Residents are flocking to bulk purchasing cooperatives for rooftop solar. A few universities and schools are using third-party power purchase agreements (PPAs) to install solar under the limited provisions of Dominion Power’s pilot program.

Very little of this is reflected in the statistics—yet. According to the Solar Energy Industries Association, Virginia increased its total renewable energy capacity from 14 MW at the end of 2014 to 22 MW at the end of 2015. A few years ago, an increase of more than 50% would have been amazing. Today we just have to point out that 22 MW is how much solar capacity North Carolina installs on average every single week.

  1. The further we go, the behinder we get
Maryland North Carolina W. Virginia Tennessee Virginia
Solar* 465 2,294 3.4 132 22
Wind** 190 0 583 29 0
Total 655 2,294 586 161 22

Installed capacity measured in megawatts (MW) at the end of 2015. One megawatt is equal to 1,000 kilowatts (kW).

*Source: Solar Energy Industries Association **Source: American Wind Energy Association 

This year we will show real progress. Based on the projects announced to date, Virginia will likely have more than 200 MW of solar online by the end of 2016, with more projects in the queue for 2017. So we are headed in the right direction, but these numbers still represent only a tiny fraction of what we could see if we removed the barriers currently holding back private investment in the solar industry and pushed our utilities to make renewables central to their planning.

Moreover, we still have no wind farms in the state, and neither of our investor-owned utilities included Virginia wind in their latest Integrated Resource Plans (with the exception of Dominion Power’s two pilot offshore wind turbines, which probably won’t get built). The one bright spot on wind energy is that Apex Clean Energy continues to move forward with its Rocky Forge wind farm, scheduled for completion next year.

We also have to view Virginia’s progress on solar in the broader context of energy development. Dominion Virginia Power will have built 4,300 MW of new natural gas generation by the end of the decade and has indicated its interest in building far more. The company will add this to a portfolio that’s already 96% fossil fuel and nuclear. This summer two more companies announced plans to build natural gas plants in Virginia, aiming to burn some of the fracked gas that Dominion plans to bring through the Atlantic Coast Pipeline. When the state’s dominant utility is all-in on natural gas, it’s hard for a different energy model to find elbow room.

But we do have good solar and wind resources, and plenty of demand. What we need are policies that welcome participants to the market.

  1. Virginia utilities won’t sell wind or solar to customers*

(*except those with billions of dollars and famous CEOs—see section 14)

Currently, the average Virginia resident can’t pick up the phone and call their utility to buy electricity generated by wind and solar farms. Worse, they can’t buy renewable energy elsewhere, either.

This wasn’t supposed to happen. Section 56-577(A)(6) of the Virginia code allows utilities to offer “green power” tariffs, and if they don’t, customers are supposed to be able to go elsewhere for it. Ideally, a utility would use money from voluntary green power programs to build or buy renewable energy for these customers. However, Virginia utilities have not done this, except in very tiny amounts. Instead, utilities pay brokers to buy renewable energy certificates (RECs) on behalf of the participants. Participation by consumers is voluntary. Participants sign up and agree to be billed extra on their power bills for the service. Meanwhile, they still run their homes and businesses on regular “brown” power, which is not what they want.

In Dominion’s case, these RECs meet a recognized national standard, and some of them originate with wind turbines, but they primarily represent power produced and consumed out of state, and thus have no effect on the power mix in Virginia. For a fuller discussion of the Dominion Green Power Program, see What’s wrong with Dominion’s Green Power Program.

Appalachian Power’s “green pricing” program is even worse, offering RECs from an 80 MW hydroelectric dam in West Virginia. No wind, and no solar.

Other REC programs are available to Virginia consumers. If you’re considering this route, read this post first.

The State Corporation Commission has ruled that REC-based programs do not qualify as selling renewable energy, so under the terms of §56-577(A)(6), customers are currently permitted to turn to other licensed suppliers of electric energy “to purchase electric energy provided 100 percent from renewable energy.”

So you should be able to go elsewhere to buy wind and solar—say, from a solar facility on someone else’s land, or even from a facility on your own rooftop that someone else owns and operates for you. (For more on that, see section 10 on third-party power purchase agreements.) But Virginia utilities claim that the statute’s words mean that not only must another licensed supplier provide 100% renewable energy, it must also supply 100% of the customer’s demand, all the time. Obviously, the owner of a wind farm or solar facility cannot do that. Ergo, say the utilities, a customer cannot go elsewhere.

On August 31, however, a hearing examiner for the SCC rejected this reading. If the SCC agrees, Virginia residents might have new options.

Anticipating the possibility of an adverse ruling from the SCC, this spring APCo filed a proposal with the SCC for a new tariff under of §56-577(A)(6). Instead of RECs, APCo now proposes to offer real green power, combining wind, solar and hydro. None of the power will come from new projects; partly as a result, the tariff will cost more. The SCC will hold a hearing on the proposal this fall. If approved, APCo customers would finally be able to order renewable energy from their utility. But it would also likely close off customers’ ability under the statute to turn to other suppliers of renewable energy.

Dominion has not yet followed APCo’s lead on this one. If the SCC rules that the statute means what it says, we would expect Dominion to offer a green power program consisting of true renewable energy. Indeed, Dominion seems to be working on a green tariff this fall that it is calling “community solar” (see next session). Its real interest may well be the same as APCo’s.

We hope the SCC will require both APCo and Dominion to follow best practices recommended by groups like Advanced Energy Economy Institute: “Utility renewable energy tariff programs must require that utilities build, purchase or contract for a portfolio of renewable energy through a competitive process, and charge customers according to the actual cost of the portfolio, whether that be a net premium or net savings for customers.”

  1. Community solar? Not hardly

Last year Dominion received SCC approval for a program it billed as an offer to sell electricity from solar panels. Notwithstanding its name, however, the “Dominion Community Solar” program is not an offer to sell electricity generated from solar energy, and reading the details, one can only conclude it would attract customers only to the extent they were deceived about it. Perhaps someone within Dominion pointed out to the brass how close this looks to consumer fraud; at any rate, a year has passed and the company still hasn’t launched it.

As for true community solar, only one Virginia utility offers it: a member-owned rural electric cooperative in southwestern Virginia called BARC. The rest of you are out of luck at the moment. Every year for the past several years, legislation has been introduced to support community solar, and every year it has died in the face of utility opposition.

A few bills this year would have enabled community solar, but they were “carried over to 2017”—i.e., killed. A small working group put together by the solar industry association and the utilities is currently trying to come up with a program that utilities will find acceptable. The group has issued a “Request for Information,” available online, and is holding public meetings this fall to get input on a proposal that looks much more like a green tariff than like community solar. (Clearly Dominion likes the name “community solar”–just not, you know, actual community solar.) Another group, the Distributed Solar Collaborative, which includes all stakeholders except utilities, is also evaluating models from other states and plans to put forward a true community solar alternative.

  1. Virginia’s Renewable Portfolio Standard (RPS) is a miserable sham

Many advocates focus on an RPS as a vehicle for inducing demand. In Virginia, that’s a mistake. Virginia has only a voluntary RPS, which means utilities have the option of participating but don’t have to. Any costs they incur in meeting the goals can be charged to ratepayers. Until a few years ago, utilities even got to collect bonus money as a reward for virtue, until it became clear that there was nothing very virtuous going on.

Making our RPS mandatory rather than voluntary would do nothing for wind and solar in Virginia without a complete overhaul. The statute takes a kitchen-sink approach to what counts as renewable energy, so meeting it requires no new investment and no wind or solar.

The targets are also modest to a fault. Although nominally promising 15% renewables by 2025, the statute sets a 2007 baseline and contains a sleight-of-hand in the definitions section by which the target is applied only to the amount of energy not produced by nuclear plants. The combined result is an effective 2025 target of about 7%.

The RPS is as impotent in practice as it is in theory. In the case of Dominion Virginia Power, the RPS has been met largely with old hydro projects built prior to World War II, trash incinerators, and wood burning, plus a small amount of landfill gas and—a Virginia peculiarity—RECs representing R&D rather than electric generation.

There appears to be no appetite in the General Assembly for making the RPS mandatory, and efforts to improve the voluntary goals have repeatedly failed in the face of utility or industry opposition. The utilities have offered no arguments why the goals should not be limited to new, high-value, in-state renewable projects, other than that it would cost more to meet them than to buy junk RECs.

But with the GA hostile to a mandatory RPS and too many parties with vested interests in keeping the kitchen-sink approach going, it is hard to imagine our RPS becoming transformed into a useful tool to incentivize wind and solar.

That doesn’t mean there is no role for legislatively-mandated wind and solar. But it would be easier to pass a bill with a simple, straightforward mandate for buying or building a certain number of megawatts than it would be to repair a hopelessly broken RPS.

  1. Customer-owned generation: for most, the only game in town

Given the lack of wind or solar options from utilities, people who want renewable energy generally have to build it themselves. A federal 30% tax credit makes it cost-effective for those with cash or access to low-cost financing, and bulk purchasing through nonprofits VA-SUN and LEAP makes the process easier and reduces costs.

Last year the GA passed legislation enabling Property Assessed Clean Energy (PACE) loans for commercial customers. Localities now have an option to offer low-cost financing for energy efficiency and renewable energy projects at the commercial level. A bill to extend PACE authorization to residential customers did not get out of committee this year.

Virginia offers no cash incentives or tax credits for wind or solar. The Virginia legislature passed a bill in 2014 that would offer an incentive, initially as a tax credit and then as a grant program, but it did not receive funding. The same bill, reintroduced in 2015, died in a subcommittee.

The lack of a true RPS in Virginia means Virginia utilities generally will not buy solar renewable energy certificates (SRECs) from customers. SRECs generated here can sometimes be sold to utilities in other states (as of now only Pennsylvania) or to brokers who sell to voluntary purchasers.

  1. Limits to net metering hamper growth

Section 56-594 of the Virginia code allows utility customers with wind and solar projects to net energy meter. System owners get credit from their utility for surplus electricity that’s fed into the grid at times of high output. That offsets the grid power they draw on when their systems are producing less than they need. Their monthly bills reflect only the net energy they draw from the grid.

If a system produces more than the customer uses in a month, the credits roll over to the next month. However, at the end of the year, the customer will be paid for any excess credits only by entering a power purchase agreement with the utility. This will likely be for a price that represents the utility’s “avoided cost” of about 4.5 cents, rather than the retail rate, which for homeowners is closer to 12 cents. This effectively stops most people from installing larger systems than they can use themselves.

Legislation passed in 2015 makes it less likely that new solar owners will have any surplus. At Dominion’s insistence, the definition of “eligible customer-generator” was amended to limit system sizes to no larger than needed to meet the customers demand, based on the previous 12 months of billing history. The SCC wrote implementing regulations (see 20VAC5-315-10 et seq.) but failed to address what happens with new construction. The solar trade association MDV-SEIA continues to work towards a solution to that problem.

The new limitation is a problem for other reasons as well. Some solar customers want to install larger systems than they previously needed because their business is expanding or they plan to buy an electric car. But the limitation is also stupid. If customers want to install more clean, renewable energy than they need and are willing to sell the surplus electricity into the grid at the wholesale power price, why would you stop them from performing this service to society? I can understand that the paperwork isn’t worth the hassle for very small amounts of excess electricity, but if there isn’t an app for that yet, I bet some Virginia Tech students could make one.

  1. Aggregated net metering allowed for farms only

Under a bill introduced by Delegate Randy Minchew (R-Leesburg) and passed in 2013, owners of Virginia farms with more than one electric meter are permitted to attribute the electricity produced by a system that serves one meter (say, on a barn) to other meters on the property (the farmhouse and other outbuildings). This is referred to as “agricultural net metering.” Efforts to expand aggregated net metering beyond farms have not succeeded.

  1. Standby charges hobble the market for larger home systems and electric cars

Dominion Power and Appalachian Power are at the forefront of a national pushback against policies like net metering that facilitate customer-owned generation.

The current system capacity limit for net-metered solar installations is 1 MW for commercial, 20 kW for residential. However, for residential systems between 10 kW and 20 kW, a utility is allowed to apply to the State Corporation Commission to impose a “standby” charge on those customers.

Seizing the opportunity, Dominion won the right to impose a standby charge of up to about $60 per month on these larger systems, eviscerating the market for them just as electric cars were increasing interest in larger systems. (SCC case PUE- 2011-00088.) Legislative efforts to roll back the standby charges were unsuccessful, and more recently, Appalachian Power instituted even more extreme standby charges. (PUE-2014-00026.)

The standby charges supposedly represent the extra costs to the grid for transmission and distribution, though there is a great deal of disagreement on that score, and a lot of suspicion that utilities’ real concern is that they will make less money as demand for their dirty energy product falls.

In the summer of 2013, in a filing with the SCC (PUE-2012-00064, Virginia Electric and Power Company’s Net Metering Generation Impacts Report), Dominion claimed it could also justify standby charges for its generation costs, and indicated it expected to seek them after a year of operating its Solar Purchase Program (see discussion below). As far as I can tell, it hasn’t carried out this threat yet, and it would likely need legislation to do so.

  1. Good news for residential solar: homeowner association bans are largely a thing of the past

Homeowner association (HOA) bans and restrictions on solar systems have been a problem for residential solar. In the 2014 session, the legislature nullified bans as contrary to public policy. The law contains an exception for bans that are recorded in the land deeds, but this is said to be highly unusual; most bans are simply written into HOA covenants. In April of 2015 the Virginia Attorney issued an opinion letter confirming that unrecorded HOA bans on solar are no longer legal.

Even where HOAs cannot ban solar installations, they can impose “reasonable restrictions concerning the size, place and manner of placement.” This language is undefined. The Maryland-DC-Virginia Solar Energy Industries Association has published a guide for HOAs on this topic.

  1. Virginia utilities continue their fight against PPAs; now a losing battle?

One of the primary drivers of solar installations in other states has been third-party ownership of the systems, including third-party power purchase agreements (PPAs), under which the customer pays only for the power produced by the system. For customers that pay no taxes, including non-profit entities like churches and colleges, this is especially important because they can’t use the 30% federal tax credit to reduce the cost of the system if they purchase it directly. Under a PPA, the system owner can take the tax credit (as well as accelerated depreciation) and pass along the savings in the form of a lower electricity price.

The Virginia Code seems to sanction this approach to financing solar facilities in its net metering provisions, specifically §56-594, which authorizes a “customer generator” to net meter, and defines an eligible customer generator as “a customer that owns and operates, or contracts with other persons to own or operate, or both, an electrical generating facility that . . . uses as its total source of fuel renewable energy. . . “

Notwithstanding this provision, in 2011, when Washington & Lee University attempted to use a PPA to finance a solar array on its campus, Dominion Virginia Power issued cease and desist letters to the university and its Staunton-based solar provider, Secure Futures LLC. Dominion claimed the arrangement violated its monopoly on power sales within its territory. Secure Futures and the university thought that even if what was really just a financing arrangement somehow fell afoul of Dominion’s monopoly, surely they were covered by the exception in §56-577(A)(6) available to customers whose own utilities do not offer 100% renewable energy. (See Section 2, above.)

Yet the threat of prolonged and costly litigation was too much. The parties turned the PPA contract into a lease, allowing the solar installation to proceed but without the advantages of a PPA.

After a long and very public fight in the legislature and the press, in 2013 Dominion and the solar industry negotiated a compromise that specifically allows customers in Dominion territory to use third-party PPAs to install solar or wind projects under a pilot program capped at 50 MW. Projects must have a minimum size of 50 kW, unless the customer is a tax-exempt entity, in which case there is no minimum. Projects can be as large as 1 MW. The SCC is supposed to review the program every two years beginning in 2015 and has authority to make changes to it. I’m not aware the SCC has reviewed the program to date.

Appalachian Power and the electric cooperatives declined to participate in the PPA deal-making, so the legal uncertainty about PPAs continues in their territories. In June of 2015, Appalachian Power proposed an alternative to PPAs. An evidentiary hearing was held September 29, 2015. A veritable parade of witnesses testified that APCo”s program was expensive, unworkable and unnecessary, given the plain language of the statute allowing PPAs.

Almost a year later, on August 31, 2016, the hearing examiner finally issued her report, recommending that APCo’s application be rejected, both because it is a lousy program and because she, too, reads the Code to allow PPAs currently, making a utility alternative unnecessary. If the commissioners agree with her, this would be a victory for the solar industry and customers. How useful it will be depends on the scope of the final order, however, and on how they view APCo’s effort to close off the opening afforded by §56-577(A)(6) by offering its own renewable energy product.

The problem cries out for a legislative fix. Advocates pushed hard for legislation this year that would open the Virginia market to private investment through third-party PPAs; but as previously noted, the Commerce and Labor committees ducked their responsibilities and failed to act on the bills.

Meanwhile, Secure Futures has developed a third-party-ownership business model that it says works like a PPA for tax purposes but does not include the sale of electricity, and therefore should not trigger a challenge from Appalachian Power or other utilities. Currently Secure Futures is the only solar provider offering this option, which it calls a Customer Self-Generation Agreement.

  1. Tax exemption for third-party owned solar proves a market driver

In 2014 the General Assembly passed a law exempting solar generating equipment “owned or operated by a business” from state and local taxation for installations up to 20 MW. It did this by classifying solar equipment as “pollution abatement equipment.” Note that this applies only to the equipment, not to the buildings or land underlying the installation, so real estate taxes aren’t affected.

The law was a response to a problem that local “machinery and tools” taxes were mostly so high as to make third-party PPAs uneconomic in Virginia. In a state where solar was already on the margin, the tax could be a deal-breaker.

The 20 MW cap was included at the request of the Virginia Municipal League and the Virginia Association of Counties, and it seemed at the time like such a high cap as to be irrelevant. However, with solar increasingly attractive economically, Virginia’s tax exemption rapidly became a draw for solar developers, including Virginia utilities.

In 2016 Dominion proposed changing the exemption to benefit its own projects at the expense of those of independent developers. In the end, the statute was amended in a way that benefits utility-scale projects without unduly harming smaller projects. Many new projects will now be only 80% exempt, rather than entirely exempt. However, the details are complex, with different timelines and different size classes, and anyone looking to use this provision should study it carefully.

  1. Dominion “Solar Partnership” Program encounters limited success

In 2011, the General Assembly passed a law allowing Dominion to build up to 30 MW of solar energy on leased property, such as roof space on a college or commercial establishment. The SCC approved $80 million of spending, to be partially offset by selling the RECs (meaning the solar energy would not be used to meet Virginia’s RPS goals). The program has resulted in several commercial-scale projects on university campuses and corporate buildings. Unfortunately, it has also been plagued by delays and over-spending.

The program was supposed to proceed in two phases, with 10 MW in place by the end of 2013, and another 20 MW by December 31, 2015. However, the program got off to a very slow start. In August of 2014 the company acknowledged it was behind schedule and would likely not achieve more than 13 or 14 MW of the 30 MW authorized before it ran out of money. On May 7, 2015 Dominion filed a notice with the SCC that it needed to extend the phase 2 end date to December 31, 2016, and confirmed that it would install less than 20 MW altogether.

Although Dominion’s web page suggests that it is still taking applications, I’m doubtful.

  1. Dominion’s Solar Purchase Program: bad for sellers, bad for buyers, and not popular with anyone

The same legislation that enabled the “Solar Partnership” initiative also authorized Dominion to establish “an alternative to net metering” as part of the demonstration program. The alternative turned out to be a buy-all, sell-all deal for up to 3 MW of customer-owned solar. As approved by the SCC, the program allows owners of small solar systems on homes and businesses to sell the power and the associated RECs to Dominion at 15 cents/kWh, while buying regular grid power at retail for their own use. Dominion then sells the power to the Green Power Program at an enormous markup.

I ripped this program from the perspective of the Green Power Program buyers, but the program is also a bad deal for most sellers. Some installers who have looked at it say it’s not worth the hassle given the costs involved and the likelihood that the payments represent taxable income to the homeowner. There is also a possibility that selling the electricity may make homeowners ineligible for the 30% federal tax credit on the purchase of their system. Sellers beware.

And then there’s the problem that selling the solar power means you aren’t powering your home or business with solar—which is the whole point of installing it, right?

  1. Dominion’s Renewable Generation tariff for large users of energy finds no takers; Amazon forces a change, with a new tariff in the works that will be available to others

Currently non-utility renewable energy facilities are subject to a size limit of 1 MW for net-metered projects. These limitations constrain universities, corporations, data centers, and other large users of energy that might want to run on wind or solar. On top of this, the utilities’ interpretation of Virginia law prohibits a developer from building a wind farm or a solar array and selling the power directly to users under a power purchase agreement.

In 2013, Dominion Power rolled out a Renewable Generation Tariff (PUE-2012-00142) to allow customers to buy larger amounts of renewable power from providers, with the utility acting as a go-between and collecting a monthly administrative fee.

From the start the program appeared cumbersome and bureaucratic, and Dominion confirmed to me this summer that they have never had any takers. Then suddenly last year, Amazon Web Services made Dominion’s tariff irrelevant. Amazon contracted directly with a developer for an 80 MW solar farm, avoiding Dominion’s monopoly restrictions with a plan to sell the electricity directly into the PJM (wholesale) market. Dominion Energy (an affiliate of Dominion Virginia Power) then bought the project, and Dominion Virginia Power negotiated a special rate with Amazon for the power. This contract became the basis for an “experimental” tariff that Dominion proposes to offer to customers with a peak demand of 5 MW or more, with a program cap of 200 MW. A hearing examiner at the SCC has recommended approval of the special rate.

Dominion used a different model for its deal this year with Microsoft. After the SCC turned down Dominion’s application to charge ratepayers for a 20-MW solar farm in Remington, Virginia, Dominion reached an agreement with Microsoft and the Commonwealth of Virginia under which the state will buy the output of the project, while Microsoft buys the RECs.

Dominion has a strong incentive to make deals with large corporations that want a lot of renewable energy: if they don’t like what Dominion is offering, they can do an end run around the utility. Amazon has shown other companies how to use PJM rules that let anyone develop projects for the wholesale market regardless of utility monopolies, and then “attribute” the solar or wind energy to their operations in any state. With the tax exemption discussed in section 11, Virginia projects apparently now pencil out pretty well.

  1. Dominion moves into utility-scale solar

Well before Amazon and Microsoft showed an interest in large-scale solar projects here, Dominion had announced it wanted to develop 400 MW of solar in Virginia. In 2015, at the utility’s behest, two bills promoted the construction of utility-scale solar by declaring it in the public interest for utilities to build solar energy projects of at least 1 MW, and up to an aggregate of 500 MW. The bill was amended at the solar industry’s behest to allow utilities the alternative of entering into PPAs for solar power prior to purchasing the generation facilities at a later date, an option with significant tax advantages.

Dominion’s first solar project will be a 20 MW solar farm in Remington, Virginia; however, the SCC rejected the company’s plan to charge ratepayers for the project because the company had not considered cheaper third-party alternatives. Governor McAuliffe helped save the project by working out a deal with Microsoft, as discussed above. Meanwhile, Dominion had also solicited bids for additional projects. To date, three have been announced, totaling 56 MW.

Although Dominion will be able to charge ratepayers for these projects, the SCC insists that the RECs be sold—whether to utilities in other states that have RPS obligations, or to customers who want them for their own sustainability goals, or perhaps even to voluntary green power customers. The result is that Dominion still won’t have any solar in its fuel mix. That’s the weird world of RECs for you.

  1. Governor McAuliffe promises the state will purchase 110 MW of solar

Following a recommendation by the Governor’s Climate Change and Resiliency Commission, on December 21, 2015, Governor McAuliffe announced that the Commonwealth would commit to procuring 8% of its electricity from solar, with 75% of that built by Dominion and 25% by private developers.

The first deal that will count towards this goal is an 18 MW project at Naval Station Oceana, announced on August 2, 2016. The Commonwealth will buy the power and the RECs. (The Remington Project did not count, because as the buyer of the RECs, only Microsoft can claim the right to be buying solar power.)

  1. Will a Solar Development Authority help?

One of the MacAuliffe Administration’s initiatives last year was a bill to establish the Virginia Solar Development Authority. The Authority is explicitly tasked with helping utilities find financing for solar projects; there is no similar language about supporting customer-owned solar. So far, nothing seems to have come of it.

  1. Any wind energy yet? Nope, still waiting

No Virginia utility is actively moving forward with a wind farm on land. Dominion Power’s website used to list 248 MW of land-based wind in Virginia as “under development,” without any noticeable progress. Now it just says 247 MW are “being evaluated.” That’s closer to reality, but they probably should put it in the past tense. There has been a lot of press about the standoff in Tazewell County, where supervisors blocked Dominion’s proposed wind farm. Today, Dominion’s advocacy for its project feels perfunctory. The company has signaled it prefers solar, and its 2016 IRP dismisses wind as too costly.

On the other hand, Appalachian Power’s IRP suggests an interest in wind as a low-cost renewable resource. The bad news is that it isn’t proposing to build any new wind in Virginia.

With no utility buyers, Virginia has not been a friendly place for independent wind developers. In previous years a few wind farm proposals made it to the permitting stage before being abandoned, including in Highland County and on Poor Mountain near Roanoke.

Nonetheless, Apex Clean Energy is in the development stages for the 75-MW Rocky Forge wind farm in Botetourt County. No customer has been announced, but the company believes the project can produce electricity at a competitive price, given its good location and improved turbine technology. Construction is planned for 2017.

As for Virginia’s great offshore wind resource, little progress has been made towards harnessing it, even as the nation’s first offshore wind project will begin generating electricity this fall in the waters off Rhode Island. In 2013 Dominion won the federal auction for the right to develop about 2,000 MW of wind power off Virginia Beach, and the company completed a Site Assessment Plan (SAP) this spring.

We had originally been told the federal government’s timeline would lead to wind turbines being built off Virginia Beach around 2020. Now, however, the Bureau of Ocean Energy Management says Dominion has five years from approval of the SAP to submit its construction and operations plan, after which we’ll have to wait for review and approval. Presumably the project will also require an environmental impact statement. So the whole process would be quite slow even if Dominion were committed to moving forward expeditiously. But in fact, it seems increasingly clear that Dominion is just going through the motions and has no interest in seeing the project through. Its 2016 Integrated Resource Plan (IRP) does not even include offshore wind in any of its scenarios for the next 15 years, except for the 12 MW that would be produced by the two test turbines of its VOWTAP project.

Yes, so what about VOWTAP? Dominion had been part of a Department of Energy-funded team to try out new technology, with the pilot turbines due to be installed in 2017. After a second round of bids to build the project still came in higher than expected, Dominion told DOE this spring it could not commit to construction even by 2020, upon which DOE pulled funding. Dominion executives swear the project isn’t necessarily dead, but that puts me in mind of the “ex-parrot” in the Monty Python skit, still on its perch only because it’s been nailed there.

  1. The Clean Power Plan tries to make it better to switch than fight

On August 3, 2015, EPA issued the final rule known as the Clean Power Plan. Under the rule, states with existing fossil-fuel generating plants must develop plans to reduce total carbon pollution from power plants, which could include using renewable energy as an offset to fossil fuel. In Virginia, the task of developing a state implementation plan (SIP) falls to the Department of Environmental Quality. Earlier this year the Supreme Court stayed implementation of the EPA rule while a Circuit Court considers a challenge, following which Virginia Republicans pushed through a budget provision prohibiting DEQ from developing a SIP while the federal rule is stayed.

Assuming the Clean Power Plan survives challenge, it could help incentivize construction of wind and solar facilities. While Virginia’s goals under the plan are modest, the rule means the state, utilities and the SCC must for the first time take carbon emissions into account in their planning. The EPA has signaled a strong interest in seeing wind and solar deployed as solutions.

Virginia hearing examiner says renewable energy PPAs are legal, but will the ruling stick?

A third-party PPA made it possible to build this solar facility at the University of Richmond. Appalachian Power Company contends that a project like this would be illegal in its territory.

A third-party PPA made it possible to build this solar facility at the University of Richmond. Appalachian Power Company contends that a project like this would be illegal in its territory.

A hearing examiner for the Virginia State Corporation Commission recommended on August 31 that the SCC reject Appalachian Power Company’s proposed alternative to third-party power purchase agreements (PPAs) for renewable energy, concluding the program is not in the public interest. The parties will have three weeks to comment before the recommendation goes to the Commissioners for a final decision. The case is PUE-2015-00040.

The ruling against APCo’s proposed Rider RGP is less important to customers than the reasoning behind it. In addition to finding a myriad of faults with the proposal, the Hearing Examiner concluded it isn’t needed because PPAs are already legal under the Virginia Code. This is an outcome long sought by the solar industry and environmental groups, and one supported by the Attorney General’s Office of Consumer Counsel.

However, the Hearing Examiner’s report is merely a recommendation. Nothing is final until the Commissioners rule, and they could make a decision about Rider RGP without addressing the current legality of PPAs. Moreover, earlier this year, APCo proposed another program that it clearly hopes will nip in the bud any surge of PPA activity that might result from a decision in the present case. (I’ll get to that in a moment.)

The rejection of Rider RGP won’t disappoint any would-be customers. A long line of witnesses testified at the hearing on September 29, 2015 that APCo’s expensive and convoluted program would find no takers. As the Solar Research Institute summarized it, the proposed Rider RGP “would require a customer interested in a solar PPA to first pay for 100% of their service under the standard tariff, pay for 100% of the solar energy generated, pay a $30 program fee, and receive excess payments back through a Renewable Output Credit.” Oh, and they still wouldn’t be using renewable energy. (Note that although solar energy was the focus of the discussion for participants, the decision applies to other forms of renewable energy as well.)

The SCC staff made some suggestions to improve the program, but the hearing examiner, Deborah Ellenberg, concluded it was really beyond saving. Not only that, but the plain language of the Virginia Code makes third-party PPAs legal in the state already. Thus, there is no need for a utility-sponsored alternative.

Ellenberg pointed to two statutory provisions that support the legality of third-party PPAs. First, Virginia Code §56-577 A 5 provides that customers may purchase renewable energy from third-party sellers if their own utility does not offer a tariff for renewable energy. Specifically, customers may:

[P]urchase electric energy provided 100 percent from renewable energy from any supplier of electric energy licensed to sell retail electric energy within the Commonwealth . . . if the incumbent electric utility serving the exclusive service territory does not offer an approved tariff for electric energy provided 100 percent from renewable energy. . . .

Until now, APCo has offered only a green power program that sells RECs, which the SCC says doesn’t count.

The language of §56-577 sounds clear enough, but APCo and Dominion Power have maintained that this section only allows customers to go elsewhere if the other supplier can provide 100% of their electricity from renewable energy, something that can’t be done with a solar facility or a wind turbine.

This flimsy reading of the statute was the basis on which Dominion challenged a PPA at Washington and Lee University back in 2011. The issue was temporarily resolved two years later when Dominion and the solar industry agreed to a pilot program that now allows a limited number of PPAs in Dominion territory, under tight parameters that exclude residential customers. The program never applied in APCo territory, however—a sore point to customers there. APCo has clung to its reading of §56-577, regardless of the growing clamor for renewable energy in southwestern Virginia.

Ellenberg’s report flatly rejects the utility interpretation. If the SCC adopts her reading, any customer in APCo territory would be free to buy renewable energy from third-party suppliers, until APCo offers a qualifying program.

Ellenberg also cited Virginia’s net metering statute. Virginia Code §56-594 authorizes “customer generators” to enter into behind-the-meter PPAs with third parties that own and operate a renewable facility for the customer. Code §56-594 B defines an eligible customer generator for net metering purposes as “a customer that owns and operates, or contracts with other persons to own or operate, or both, an electrical generating facility that . . . uses as its total source of fuel renewable energy . . .” (emphasis added).

Interpreting this provision takes no special legal talent, surely. It would seem to cover residential and commercial facilities installed and owned by third-party developers, including the familiar no-money-down contract offered to residential customers by Solar City. But again, APCo and Dominion Virginia Power claim the Code doesn’t mean what it says. For more than five years they’ve backed up their position with threats of lawsuits, creating the kind of uncertainty that is toxic to development deals.

If the SCC’s final order endorses the hearing examiner’s finding that PPAs are currently legal, the result could be to open up the Virginia solar (and wind) market to large amounts of private investment statewide.

However, Ellenberg’s finding that PPAs are currently legal appears in her discussion but not in her recommendations to the commissioners; her recommendations are limited to the actions she proposes (rejecting or modifying the tariff). The SCC does not have to rule on the question of PPA legality in order to decide this case. Surely, though, it would be strange if it were to duck the opportunity now that the issue has been fully briefed. With solar a hot commodity across the state, the current legal limbo has become a significant economic drag that the SCC ought not to ignore.

As I mentioned, though, APCo still has one card up its sleeve. This spring it proposed a new tariff to offer its customers 100% renewable energy derived from existing wind, solar and hydro projects. The product appears to meet the condition of §56-577. If approved, it would slam shut the door that the Hearing Examiner just opened (or rather, that she said was open all along, if you had dared to go through it into the toxic miasma where gray-suited lawyers lay in wait). APCo’s request for approval of the tariff (PUE-2016-00051) is scheduled to be heard by the SCC on November 15, with comments due by November 8.

Solar advocates take a dim view of APCo’s move. The new tariff won’t build any new facilities; it simply shifts the burden of paying for existing renewable energy projects onto volunteers, at a significant premium. In today’s market, third-party developers can offer electricity generated by new solar projects at competitive prices. So APCo’s tariff looks less like an accommodation to its eco-conscious customers, and more like a maneuver to prevent anyone from building solar on its turf.

It’s high time the SCC put a stop to this anti-competitive behavior and let Virginians build solar projects with their own money. The Commissioners can follow the Hearing Examiner’s advice, or they can take a pragmatic approach and recognize that PPAs are really just a way to finance projects. They don’t turn solar developers into utilities, and APCo should stop wasting everyone’s time and money blocking private investment in a part of the Commonwealth that desperately needs it.

The “fuel” that’s helping America fight climate change isn’t natural gas

You’ve heard the good news on climate: after a century or more of continuous rise, U.S. CO2 emissions have finally begun to decline, due largely to changes in the energy sector. According to the Energy Information Agency (EIA), energy-related CO2 emissions in 2015 were 12% below their 2005 levels. The EIA says this is “because of the decreased use of coal and the increased use of natural gas for electricity generation.”

Is the EIA right in making natural gas the hero of the CO2 story? Hardly. Sure, coal-to-gas switching is real. But take a look at this graph showing the contributors to declining carbon emissions. Natural gas displacement of coal accounts for only about a third of the decrease in CO2 emissions.

Courtesy of the Sierra Club Beyond Coal Campaign, using data from the Energy Information Agency.

Courtesy of the Sierra Club Beyond Coal Campaign, using data from the Energy Information Agency.

By far the biggest driver of the declining emissions is energy efficiency. Americans are using less energy overall, even as our population grows and our economy expands

Energy efficiency is sometimes called the “first fuel” because cutting waste is a cheaper and faster way to meet energy demand than building new power plants. Improvements in energy performance cut across all sectors of the economy, from industrial machines to home electronics to innovations like LED bulbs replacing famously wasteful incandescent light bulbs.

Energy efficiency’s stunning success in lowering carbon emissions should get more attention, and not just because it is cheaper than building new natural gas-fired power plants. Efficiency has no downsides. Natural gas has plenty. Indeed, when methane leakage from drilling and infrastructure is factored in, natural gas doesn’t look much like a climate hero at all.

And that’s not the full story. A growing share of the credit for carbon reductions also goes to non-carbon-emitting sources, primarily wind, and solar. Both sources exhibit double-digit growth rates. Wind power in the U.S. has grown from a little over 9,000 megawatts (MW) in 2005 to more than 74,000 MW by the end of 2015. In 2005, the solar market scarcely existed. By early this year, we had 29,000 MW installed.

The solar trend is particularly exciting because we are just starting to see the big numbers that result from solar’s exponential growth. In the first quarter of 2016, more solar came online in the U.S. than all other power sources combined. Analysts like Bloomberg New Energy Finance see solar becoming the world’s dominant energy source over the next 25 years, driving out not just coal but also a lot of gas generation as solar becomes the cheapest way to make energy.

For an inspiring look at how this will happen, check out this presentation by author Tony Seba. As Seba argues, solar isn’t a commodity like fossil fuels; it is a technology like computers and cell phones. When technologies like these take off, they take over. Seba refers to solar technology, battery storage, electric vehicles and self-driving vehicles as “disruptive” technologies that are advancing together to upend our energy and transportation sectors.

Another graph shows us how critical these advancements will be. The U.S. is on track to achieve President Obama’s goal announced last year of lowering carbon emissions 17% below 2005 levels by 2020, but we will need more aggressive measures to meet our Paris Agreement target of 26-28% below 2005 levels by 2025. After 2025, of course, we will have to cut greenhouse emissions even further and faster.

Slide4Given the urgency of the climate crisis, we don’t have the option of waiting around for the solar revolution to bankrupt the oil and gas industry and fossil-bound electric utilities. These companies will not go quietly; already they are maneuvering to lock customers into fossil fuels. Power producers are engaged in a mad rush to build natural gas plants, and wherever possible, to stick utility customers with the costs.

For Virginians who have felt especially under attack from fracked gas projects recently, this final graph shows it’s not your imagination: Virginia is second only to Texas in new gas plant development underway. And this graph captures only a fraction of the new gas that Virginia’s major utility, Dominion Virginia Power, wants to build. In presentations to state officials, it revealed plans for more than 9,000 megawatts of additional gas generating capacity.

Based on Energy Information Agency data. Chart excludes natural gas generating units already under construction as well as those scheduled to come online after 2020.

Based on Energy Information Agency data. Chart excludes natural gas generating units already under construction as well as those scheduled to come online after 2020.

Dominion and other gas-happy utilities are betting that once plants are built and consumers are on the hook, regulators won’t want to see them idled ten years from now just because renewable energy has made them obsolete.

Indeed, Dominion and other utilities, including Duke Energy, Southern Company, and NextEra in the Southeast and DTE Energy in the Midwest, even plan to use electricity customers to make money for the gas pipelines they are building, locking Americans further into gas.

This is madness. The only sound energy plan today is one that looks forward to an era of minimal fossil fuel use. It puts efficiency and renewables front and center, shifting natural gas and other fuels to supporting roles that will shrink over time.

The shift is inevitable. Delaying it means allowing the climate crisis to worsen, while sticking customers with higher bills for decades to come. That may suit some utilities just fine, but the cost is too high for the rest of us.