Author Archives: Ivy Main

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Virginia’s amazing year in energy: gas rises, coal falls, and solar shines (but it’s still not okay to say “climate change”)

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Virginians rally in front of U.S. EPA Headquarters in Washington, DC in support of the Clean Power Plan

Virginians rally in front of U.S. EPA Headquarters in Washington, DC in support of the Clean Power Plan

Nobody laughed a few years ago when former governor Bob McDonnell dubbed Virginia the “Energy Capital of the East Coast”; we were all too astounded by the hyperbole. And today, even “Energy Suburb” still seems like a stretch. Yet, if you measure achievement by the sheer level of activity, Virginia is making a play for importance. The year’s top energy stories show us fully engaged in the worldwide battle between fossil fuels and renewable energy. Of course, while the smart money says renewables will dominate by mid-century, Virginia seems determined to drown rather than give up its fossil fuel addiction.

Coal falls hard; observers disagree on whether it bounces or goes splat. Nationwide, 2014 was a bad year for the coal industry. Coal stocks fell precipitously; mining jobs continued to decline; and the one thing electric utilities and the public found to agree on is that no one likes coal. Even in Virginia, with its long history of mining, coal had to play defense for what may have been the first time ever. So when Governor McAuliffe released the state’s latest energy plan in October, what was otherwise a paean to “All of the Above” omitted the stanza on coal. And this month, the governor proposed a rollback of the subsidies coal companies pocket by mining Virginia coal.

Of course, coal is not going quietly; Senator Charles Carrico (himself heavily subsidized by Alpha Natural Resources) has already responded with a bill to extend the subsidies to 2022.

EPA opens a door to a cleaner future, and Republicans try to brick it up. Speaking of hard times for coal, in June the EPA unveiled its proposal to lower carbon emissions from existing power plants 30% nationwide by 2030. Instead of targeting plants one-by-one, EPA proposed a systemic approach, offering a suite of options for states to reach their individualized targets.

The proposal drew widespread support from the public, but Virginia’s 38% reduction target set off howls of protest from defenders of the status quo. The staff of the State Corporation Commission claimed the rule was illegal and would cost ratepayers $6 billion. Republicans convened a special meeting of the House and Senate Energy and Commerce Committees, where they tried out a number of arguments, not all of which proved ready for prime time. The rule, they said, threatens Virginia with a loss of business to more favored states like—and I am not making this up—West Virginia. Also, Virginia should have received more credit for lowering its carbon emissions by building nuclear plants back in the 1970s when no one was thinking about carbon emissions.

Meanwhile, the Southern Environmental Law Center analyzed the rule and concluded that actually, compliance will not be hard. Virginia is already 80% of the way there, and achieving the rest will produce a burst of clean-energy jobs coupled with savings for consumers through energy efficiency.

Undaunted, Republicans have already introduced a thumb-your-nose-at-EPA bill developed by the fossil fuel champions at the American Legislative Exchange Council.

The “solarize” movement takes Virginia by storm. For the last few years, solar energy has been exploding in popularity across the U.S., but Virginia always seemed to be missing the party. So it surprised even advocates this year when pent-up consumer demand manifested itself in the blossoming of local solar buying cooperatives and other bulk-purchase arrangements. “Solarize Blacksburg” made its debut in March, going on to sign up hundreds of homeowners for solar installations. It was followed in quick succession by the launch of similar programs in Richmond, Charlottesville, Harrisonburg, Northern Virginia, Halifax, Floyd, and Hampton Roads.

The main reason for the solarize programs’ success was the steep decline in the cost of solar energy. 2014 saw the cost of residential installations in Virginia fall to record low prices, making the investment worthwhile to a broad swath of homeowners for the first time.

Utilities say maybe to solar, but only for themselves. Virginia still boasts no utility-scale solar, but utilities elsewhere signed long-term power purchase contracts for solar energy at prices that were sometimes below that of natural gas: under 6.5 cents/kilowatt-hour in Georgia, and under 5 cents in Texas. Compare that to the estimated 9.3 cents/kWh cost of power from Dominion Virginia Power’s newest and most up-to-date coal plant, the Virginia City Hybrid Energy Plant, and you’ll understand why Dominion has suddenly taken an interest in solar projects. Sadly, it’s own foray into rooftop solar so far stands as an example of what not to do, and a testament to why the private market should be allowed to compete.

Yet Virginia utilities continued their hostility to customer-owned solar. Dominion put the kibosh on a bill that would have expanded access to solar energy through community net-metering, while Appalachian Power matched Dominion’s earlier success in imposing punitive standby charges on owners of larger residential systems.

Fracking, pipelines, and gas plants, oh my! Renewable energy may be the future, but the present belongs to cheap natural gas. Yes, the fracking process is dirty, noisy and polluting, and yes, methane leakage around gas wells is exacerbating climate change. But did we mention gas is cheap?

2014 saw proposals to drill gas wells east of I-95, while the Virginia government began updating its regulations to govern fracking. Dominion Power started construction on a second new gas power plant, and talked up its plans for a third. The utility giant, a major player in the gas transmission business, also got approval to turn its liquefied natural gas import terminal in Cove Point, Maryland, into an export terminal. With visions of customers dancing in its head, it also announced plans for a major new pipeline to bring fracked gas from West Virginia through Virginia and into North Carolina—one of three proposed pipelines that would cut through the Virginia countryside and across natural treasures like the Appalachian Trail. The pipeline created an instant protest movement but gained the wholehearted approval of Governor McAuliffe.

Flooding in Hampton Roads becomes the new normal; it’s still not okay to ask what’s causing it. A cooler-than-normal year for the eastern United States gulled many landlubbers into believing that global warming was taking a breather, but meanwhile the ocean continued its inexorable rise along Virginia’s vulnerable coastline. It’s one thing to shrug off the occasional storm, said residents; it’s harder to ignore seawater that cuts off your parking lot at every high tide. 2014 will go down as the year everyone finally agreed we have a problem—even in the General Assembly, which passed legislation to develop a response to the “recurrent flooding.” But while the bill recognized that the problem will just get worse, it avoided noting why.

The public gets it, though. The Richmond Times-Dispatch reports that climate change was the number one topic of interest to writers of letters to the editor in 2014. And loud cheers greeted Governor McAuliffe’s announcement that he would reestablish the state’s commission on climate change, which Bob McDonnell had disbanded. As one environmental leader quipped, “People in Tidewater are tired of driving through tidal water.”

Public corruption: in Virginia, it’s not just for politicians. Everyone can agree that it was a really bad year for the Virginia Way, that gentlemanly notion that persons of good character don’t need no stinkin’ ethics laws. But we also saw plenty to prove the adage that the real scandal is what’s legal. As we learned, Virginia law allows unlimited corporate contributions to campaigns, and puts no limits on what campaigns can spend money on. So if some legislators act more like corporate employees than servants of the public, well, that’s how the system was set up to work.

But the system only works when corporations get their money’s worth from the politicians, and that quid pro quo usually comes at the public’s expense. For example, take Dominion Power’s North Anna 3 shenanigans (please). In an exceptionally bold exploitation of the Virginia Way, Dominion Power secured passage of legislation allowing it to bill customers for hundreds of millions of dollars it had spent towards a new nuclear plant that it is unlikely to build. (And the irony is that ratepayers will still be better off throwing the money down that rathole than they will be if Dominion does manage to build it.)

So as we look ahead to 2015’s energy battles, anyone wondering who the winners and losers will be needs only one piece of guidance: in Virginia, just follow the money.

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Fiscal and environmental sanity get a boost as McAuliffe proposes to roll back coal subsidies

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Your taxpayer dollars at work!

Your taxpayer dollars at work!

Thanks to the state’s budget deficit, Virginia may finally scale way back a notorious fossil fuel subsidy that currently transfers tens of millions of dollars annually from taxpayers to the pockets of corporations that mine Virginia coal. The Richmond Times Dispatch reports that if Governor McAuliffe has his way, the Virginia Coal Employment and Production Incentive Tax Credit and the Coalfield Employment Enhancement Tax Credit will be limited to $500,000 per year, saving the government $20 million per year.

The refundable tax credits were intended to make Virginia coal cheaper for utilities to buy, and thus more competitive with coal mined in other states. In theory, that was supposed to mean more coal mining jobs in southwest Virginia. In practice, the subsidies meant some coal companies paid no state taxes, and actually received significant cash handouts, even as coal jobs declined. And because the subsidies are based on tons of coal mined and not on the number of people employed, mining companies suffered no penalty from capital investments that maximized production while cutting jobs.

Critics of the subsidies thought they had won their point three years ago when the Joint Legislative Audit and Review Committee (JLARC) issued a critique of the various Virginia tax credits that was especially critical of the handouts to coal companies. As it describes beginning on page 67, the subsidies did not stop coal employment from falling 54% since 1990, or slow the steady decline in production:

“The precursor to one of the current coal credits was in place before the decline began, while the other was enacted shortly thereafter. It is important to note that with or without the credits, the decline in Virginia coal production was predicted by numerous analysts because over two-thirds of recoverable coal reserves in Virginia have already been mined.”

Indeed, the report continued, coal employment and production was actually worse with the credits in place:

“In the process of developing and refining the credit, analysts projected that coal employment and production would decline by 28 percent between 1996 and 2005 without the credit. However, actual mining employment was substantially lower than expected during this period, declining 36 percent.”

In spite of this damning analysis, in 2012 the General Assembly actually extended the expiration date of the coal subsidies until 2017. Insiders say Senate Democrats were persuaded to vote for the extension as a favor to coalfields senator Phil Puckett, who needed the backing of coal companies to hold his seat in 2013 and keep Democrats in control of the Senate. (Some might say he failed to return the favor.)

The coal subsidies have long infuriated environmentalists and community activists in the Coalfields region. In their view, Virginia taxpayers should not be forced to reward mining companies for blowing off the tops of our mountains, filling ancient stream valleys with rubble, poisoning wells and rivers, and destroying homes to get at the last, thin seams of Virginia coal.

So Coalfields activists welcomed the Governor’s proposal as a “good first step” in planning a future where coal is no longer the economic engine it once was. “We need to take our heads out of the sand and invest heavily in diversifying our economy in Southwest Virginia,” said Wise County resident Jane Branham, Vice President of Southern Appalachian Mountain Stewards. “Supporting outdoor recreation, tourism, sustainable agriculture, reforestation and a new generation of entrepreneurs is the path forward in the mountains, not subsidizing bad actor coal companies that continue to poison the natural resources our future depends on.”

Renewable energy advocates have also complained that by making coal cheaper, the subsidies make it harder for other forms of energy to compete. One would expect this argument to resonate with free market advocates, a category that supposedly includes all Virginia Republicans and a lot of the Democrats. Yet in spite of criticism from some Democrats, the subsidies have not faced serious opposition before now.

Acquiescence in such an expensive and counter-productive corporate welfare program mostly reflects the influence of the Virginia coal industry. (See last week’s post for a sampling of how coal companies work to buy votes with campaign cash.) But the drafters sweetened the deal with a provision that siphons off a portion of the excess cash to fund the Virginia Coalfield Economic Development Authority (VACEDA), which is supposed to help the region diversify beyond coal. (It might work better if coal executives didn’t sit on the board.)

Under McAuliffe’s proposal, VACEDA would get a direct appropriation of $1.2 million to replace the money it would lose by the scaling back of the tax credits. That should satisfy those legislators whose primary concern is helping residents of southwest Virginia.

Those whose primary concern is helping coal companies, however, aren’t likely to be happy. Congressman Morgan Griffith has already been quoted as suggesting Governor McAuliffe’s proposal to scale back the coal subsidies amounts to a “war on coal.”

He expressed no concern about coal’s war on the people of southwest Virginia. For those who care about that, Governor McAuliffe’s move feels like a breath of clean air.

——————–

Addendum: Senator Bill Carrico (R-Alpha Natural Resources) has now filed a bill, S741, to extend the coal subsidies until 2022. 

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Tiny Virginia subcommittee tasked with deciding future of bills related to EPA’s Clean Power Plan; meeting set for December 17

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Photo credit: Sierra Club

Photo credit: Sierra Club

The EPA’s proposed Clean Power Plan could reshape Virginia’s energy future for the next fifteen years, and possibly permanently. If the state takes advantage of this opportunity, it will reduce carbon pollution, improve human health, save money for consumers, drive job creation in the fast-growing technology sector, and make our grid stronger and more secure.

If the state doesn’t act, EPA will design its own plan for Virginia, ensuring reduced carbon emissions but without the flexibility the state would have by doing it for itself.

This presents a conundrum for Virginia’s General Assembly, which is not known for embracing federal environmental regulations. The usual skepticism was on display on November 19, when the Senate and House Commerce and Labor Committees met in a joint session to take up the Clean Power Plan—or more precisely, to give utilities and the State Corporation Commission staff the chance to attack it.

At the conclusion of that meeting, the two Republican committee chairs, Senator John Watkins and Delegate Terry Kilgore, named three members of each committee—two Republicans and one Democrat from each chamber—to a special subcommittee tasked with deciding what kind of legislative action the General Assembly should take in response to the Clean Power Plan. Kilgore also put himself on the subcommittee, which will now take up any bills that Virginia legislators introduce related to the Plan.

This subcommittee has scheduled its first meeting for December 17 at 1:00 p.m. in Senate Room A of the General Assembly building in Richmond. By law, all committee meetings are open to the public.

According to General Assembly procedure, before anyone else in the entire legislature can consider a bill, it will have to pass muster with these seven men. So who are these hugely important people, and what is the likelihood that they will seize this historic opportunity to make Virginia a leader in clean energy?

The Senate members consist of Republicans Frank Wagner and Benton Chafin and Democrat Dick Saslaw. Wagner and Saslaw were obvious choices given their seniority on the committee and active role on energy issues. Chafin—well, we’ll get to him in a moment.

Frank Wagner is from Virginia Beach and is known for his interest in energy generally, and especially in promoting new projects. He sponsored the legislation that led to the Virginia Energy Plan in 2006 and has been an important supporter of offshore wind development, perhaps reflecting his undergraduate degree in Ocean Engineering and his Tidewater residence.

The General Assembly website says Wagner is the president of Davis Boatworks, a vessel repair facility whose principal customer is the Defense Department. Living in the Hampton Roads area, Wagner is aware of how real sea level rise is; presumably he understands the connection to climate change.

In spite of his interest in offshore wind, coal rules when it comes to funding Wagner’s political campaigns. The Virginia Public Access Project shows coal giant Alpha Natural Resources was Wagner’s second-best donor over the years, with a total of $43,643 in campaign money since 2003, ahead of Dominion Power’s $37,350. Energy and mining interests combined gave gifts totaling $188,152. Of this, $350 came from Highland New Wind Development LLC back in 2008 and $250 came from the offshore wind company Seawind in 2010.

Of course, who gives money to an elected official does not necessarily dictate how that official votes. But it probably should be mentioned that for the 2014 session, Wagner earned an F on the Sierra Club’s Climate and Energy Scorecard, disappointing clean energy advocates who have sometimes had reason to see him as an ally.

Also a low performer on the energy scorecard is Dick Saslaw, scraping by with a D. Saslaw is a career politician who was first elected to the GA in 1976, when he was 36. (He is now 74.) His biography lists his background as an owner and operator of gas stations.

Saslaw is the Senate Democratic Leader and used to be Chair of the Senate Commerce and Labor Committee, until his party lost the Senate. In theory, his leadership position in the Democratic Party should make him a defender of President Obama’s climate initiative. In practice, not so much.

Although he is a Fairfax County Democrat, Saslaw does not share his constituents’ enthusiasm for wind and solar, nor in general, their concern for the environment. Somebody once told him that renewable energy costs a lot; that’s been his story ever since, and he’s sticking with it, facts be damned.

Saslaw is proud of his close ties to Dominion Virginia Power, whose interests reliably predict his votes on any given bill. The Virginia Public Access Project reports that Dominion has given more money to Saslaw than to any other legislator. In 2014 alone, Dominion gave Saslaw $25,000. Over the years, Dominion’s contributions to Saslaw have totaled $240,508, making the utility Saslaw’s top donor.

Saslaw has also received more money from Appalachian Power than any other Democrat–$44,000–even though that utility does not provide service anywhere in his district. In addition, coal interests gave him $90,250, natural gas companies ponied up $50,250, and the nuclear industry chipped in $28,000.

A single contribution of $250 makes up the only entry under “alternative energy.”

This brings us to new Senator Ben Chafin, the Republican delegate from Southwest Virginia who replaced Democratic Senator Phil Puckett (he of the Tobacco Commission scandal). Chafin is a lawyer and farmer, and as his website informs us, “Ben Chafin has a proven record fighting for the coal industry. Ben sponsored successful legislation (House Bill 1261) to fight against Obama EPA’s effort to kill the industry through over-regulation. Ben will continue to work in Richmond to protect coal and grow other Southwest industries like natural gas.”

Not surprisingly, coal interests led all other industry donors to Chafin’s 2013 campaign for Delegate and his 2014 campaign for Senate ($59,000 altogether), though he did pretty well by natural gas, too ($14,150). As a delegate, Chafin earned a gentleman’s C on the Sierra Club scorecard, but it would probably be a mistake to pin our hopes on his becoming a clean energy champion. His role on the subcommittee is surely to give Coal a voice.

On the other hand, Chafin must recognize that the economics of fracked gas and ever-more competitive wind and solar means Virginia coal has no chance of ever regaining its former glory. Southwest Virginia now needs to craft a strategic retreat from mining and work on economic diversification. That’s not inconsistent with the Clean Power Plan.

On the House side—but here I have to digress for a moment to comment on the seemingly random composition of the House Commerce and Labor Committee. The Senate side is bad enough; any Democrat who has evinced environmental sympathies over the years has been dumped from the Senate Commerce and Labor, and when he was in power, Saslaw did a lot of the dumping.

But it’s worse over at the House. The leadership keeps reshuffling its energy committee, as if in a frantic effort to make sure nobody learns anything, while the delegates who actually came to the job with an interest and knowledge of energy never seem to get a turn. Energy law is a hard area to learn. It’s complicated, and if you don’t have time to master it, you are even more likely to accept guidance from either the party leader who tells you how he wants you to vote, or the glib industry lobbyists who assure you they have the public’s welfare at heart just as much as you do. (Plus they give you money!)

So Chairman Terry Kilgore had little enough to work with on his committee. The three delegates he named to this incredibly important subcommittee, though they are undoubtedly smart and hardworking people, bring no discernable expertise on either climate or energy to the General Assembly’s review of the Clean Power Plan.

Well, digression over.

Terry Kilgore himself is a lawyer and a 20-year member of the House from the coalfields region of southwest Virginia. Dominion is his top individual donor, at $122,000, but coal interests together make up the single biggest category of givers to his campaigns, at $243,188, with electric utilities at $218,680, natural gas at $97,830, the oil industry at $16,400, and nuclear energy at $8,500. Just since 2013, he’s taken in over $136,000 from energy and mining interests.

That’s awfully good money for a safe seat, and his votes have reflected it. His energy votes earned him a D on the Sierra Club scorecard. It’s unlikely that he will abandon his coal friends, but like Senator Chafin, he will serve his constituents best if he works to attract new business to his struggling region. Home weatherization and energy efficiency programs would be popular there, and solar energy is one of the fastest-growing industries in America.

The other House subcommittee members Kilgore appointed are Republicans Jackson Miller and Ron Villanueva and Democrat Mathew James. Jackson Miller is a Manassas Realtor and former police officer who has been in the House since 2006. The bills he has introduced primarily reflect his interests in real estate and criminal law, although he also introduced legislation supporting uranium mining. He has received a total of $79,252 from energy and mining companies since 2010, primarily electric utilities, natural gas, coal, nuclear, and uranium. He earned a D on the Climate and Energy Scorecard. Why he is on this subcommittee is anyone’s guess, but certainly Northern Virginia stands to gain a lot of technology jobs if the state develops its clean energy industries as it should.

Virginia Beach Republican Ron Villanueva has not been as popular with the energy and mining companies, whose donations to his campaigns have totaled $20,550. Villanueva’s website says he was the first Filipino-American elected to state office in Virginia when he became a delegate in 2009. Villanueva has been friendly to the solar industry, and while he received a D on the scorecard, he also received an award from the Sierra Club for his work on a bill to provide a tax credit for renewable energy projects. (The bill was converted to a grant in the Senate but not funded.)

Like Delegate James and Senator Wagner, Villanueva lives in an area that is feeling the effects of climate change sooner than any other part of Virginia, so his constituents know how much the Clean Power Plan matters. For that matter, his day job as a partner with SEK Solutions, a military contractor, should mean he’s aware of the Pentagon’s focus on climate change as a national security issue, as well as a threat to its coastal assets.

Portsmouth Democrat Matthew James also hasn’t been especially popular in the energy industry. Since 2009, when he first ran for delegate, he has accepted a mere $5,000 from Dominion, $3,500 from coal interests, and $3,350 from the natural gas companies—token amounts by Virginia standards, but they may be due for a sudden increase.

James does not seem to have introduced any energy-related bills. However, his votes earned him an A on the Sierra Club scorecard. James is listed as the President and CEO of the Peninsula Council for Workforce Development. Maybe he will see an opportunity in the Clean Power Plan to develop jobs in the solar, wind, and energy efficiency industries, which have outperformed the economy generally.

So there you have the five Republicans and two Democrats who get first crack at any bill either facilitating Virginia’s compliance with the Clean Power Plan, or hostile to it. If they like a bill, it moves to the full Commerce and Labor committees. If they scuttle a bill, no one else in the entire legislature will get to vote on it.

That’s how it works, or doesn’t, in the Old Dominion.

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Virginia regulators approve Appalachian Power’s “solar tax”

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Virginia homeowners had better tell their solar installers to keep it under 10 kW. Photo credit Gray Watson

Virginia homeowners had better tell their solar installers to keep it under 10 kW. Photo credit Gray Watson

The State Corporation Commission has granted Appalachian Power Company’s request to be allowed to impose “standby” charges on residential customers with solar systems over 10 kilowatts. The charges can range up to more than $100 per month, regardless of how much electricity the homeowner actually draws from the grid.

In its Final Order in case number PUE-2014-00026, dated November 26, the SCC ruled that APCo’s standby charge complies with § 56-594 F of the Virginia Code, which provides for standby charges for net-metered residential systems between 10 and 20 kW. (The law does not allow for net metering of residential systems over 20 kW.)

Environmental groups intervened in the case and ran a grassroots campaign that generated over 1500 comments to the SCC, opposing what has been dubbed a “tax on the sun.” The result, however, was never in much doubt. The SCC has repeatedly demonstrated a willingness to accept without scrutiny utility assertions that solar customers impose costs on other customers.

Attorneys at the Southern Environmental Law Center, who argued against the standby charges on behalf of the Sierra Club and other groups, say the SCC’s reasoning is flawed. According to Cale Jaffe, Director of the SELC’s Virginia office, “Appalachian Power actually conceded during the hearing that it was ‘not in a position’ to determine whether solar customers had ‘a positive or negative impact to the distribution cost of service.’  In other words, Appalachian Power said that solar customers might be having a positive impact in helping to reduce APCo’s distribution costs, but that the power company didn’t have the data and didn’t know one way or the other.”

Jaffe added, “We saw that piece of evidence as a fatal concession, at least with respect to the distribution portion of the charge.” Yet a reading of the Final Order suggests the Commission never even considered the point.

The SCC allowed APCo, like Dominion before it, to consider only transmission and distribution costs, ignoring generation costs for now. Advocates urge that solar systems produce power at times of peak demand, reducing the need for utilities to buy expensive peak power, and therefore actually saving them money. The utilities dispute this, but it is worth noting that APCo’s most recent Integrated Resource Plan from March of this year projects that solar power will be cheaper than its avoided cost of energy by 2019. But of course, the point of standby charges isn’t about the cost of solar, but about preventing customers from generating their own power.

In spite of all the time and money APCo has spent to get approval for the standby charges, the utility has said that only five existing customers will be affected. The real impact will be to limit the number of homeowners who choose to install large solar systems going forward. The prospect of paying high standby fees will likely discourage APCo customers from buying systems over 10 kW, as has happened in Dominion’s territory after the SCC allowed Dominion Virginia Power to impose similar standby fees a year ago.

Although a 10 kW system is bigger than the average Virginia home needs by itself, people with electric cars can find their demand exceeds that limit. Moreover, Dominion Virginia Power has signaled that it would like to impose standby charges on all of its solar customers, regardless of system size.

The actions of Virginia utilities and the SCC put the commonwealth in the thick of a nationwide battle over customer-owned, “distributed” solar. While most studies analyzing the value of solar have concluded that distributed solar benefits the public and the grid, utilities fear it will eat into their profit margins. They see Virginia as a good place to establish a precedent friendly to the utility viewpoint, due to the commonwealth’s history of allowing its utilities to dictate energy policy. So far, this episode proves them right.

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Dominion ditches plans for onshore wind in Virginia, but grows bullish on solar

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Not for you, Virginia.

Not for you, Virginia.

Well, now it’s semi-official: in spite of what it has been telling customers for years, Dominion Power is not going to build onshore wind in Virginia. Speaking at an Edison Electric Institute conference in Dallas on November 13, Dominion Resources Executive Vice President and CFO Mark Gettrick spelled it out:

“When the wind business first got started, a decade, a decade and a half ago, we built two wind projects early on [Mt. Storm, in West Virginia, and Fowler Ridge, in Indiana], and we elected not to build any more. We steered away from wind. We do not think wind would ever be a good resource on land, in Virginia anyway, and so we elected not to pursue incremental wind projects.”

Someone should probably let the rest of the company in on the secret. Dominion’s website still insists the company has three Virginia onshore wind projects in development, and it included 247 megawatts’ worth in its latest Integrated Resource Plan (IRP). But the plan reflects the company’s cooling enthusiasm for wind energy, with the projects now slated for 2022-2024.

This is disappointing news, but it certainly isn’t a surprise. Dominion proposed its Virginia wind farms back before fracking caused natural gas prices to nosedive, undercutting the economic case for wind. At that point, Virginia’s lack of a real RPS meant Dominion had no incentive to build higher-priced generation, and every reason to believe the State Corporation Commission would reject a wind project, as it did similar proposals from Appalachian Power.

But though it is abandoning wind, the company is enthusiastic about solar. Gettrick said Dominion sees “gas and solar” as the way to comply with the EPA’s Clean Power Plan, which will require states to lower their carbon emissions from electric generating plants. Gettrick said:

“We see a growing need in Virginia to install solar for native load compliance with carbon. So that’s what we’re doing . . . So watch where we go with solar. We like the technology, the cost continues to drop, and we see it as a cornerstone for future development in Virginia.”

Advocates may wonder, why solar and not wind? Wind would seem to be cheaper, after all, and a single utility-scale turbine provides more power than hundreds of home solar systems.

The IRP offers part of the answer. For a utility, not all power is equal. Dominion has plenty of power for times when demand is low; the challenge is filling in the peaks and valleys of demand above that minimum level. Dominion needs the most power on summer days when solar produces well but wind does not.

The other part of the answer is price. This will surprise people who have seen the rock-bottom prices of wind power in places like Iowa and Texas, where wind outcompetes even natural gas. But it’s cheap to build wind among cornfields or on open rangeland, where access is easy. It’s more expensive to do it in the eastern mountains, where narrow, winding roads pose logistical challenges. The result is that wind power in the Southeast will cost about double what it costs in the Plains, according to the most recent Lazard analysis.

By contrast, Lazard calculates that utility scale solar power costs only about 20% more in the Southeast than it does in the dry, sunny Southwest, where utility-scale solar has reached grid parity. So while the best wind prices are well below the best solar prices nationwide, solar may be cheaper than wind in Virginia.

Lazard’s analyses are based on actual projects, but it also makes some predictions about where prices are headed. It projects unsubsidized utility-scale solar prices of six cents per kilowatt-hour by 2017, confirming predictions of widespread grid parity made by other analysts like Citibank and Deutsche Bank.

If you’re concerned about meeting EPA carbon emissions rules, or just concerned about the environment, period–or you want a reliable and stable-priced resource to hedge gas–solar makes very good sense.

Given these price trends, Dominion’s enthusiasm is entirely understandable. But surely it has some explaining to do, after years of trashing solar to legislators and the SCC. It has gone so far as to slap standby charges on customers who generate their own solar power. And as we’ve seen, its own forays into rooftop solar can’t be counted a success.

But perhaps we could all let bygones be bygones. If Dominion would focus its efforts on utility-scale solar while allowing the removal of barriers constraining the private market for commercial and residential solar, all of us would be winners.

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Dominion Virginia Power says its 30 MW Solar Partnership Program likely to top out at “13 or 14” MW

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Photo credit Christoffer Reimer

Photo credit Christoffer Reimer

At a stakeholder meeting in Chesterfield, Virginia, on Monday, Dominion Virginia Power revealed that it expects to have installed a total of 6 megawatts (MW) of distributed solar generation by year’s end, out of the 30 MW approved by the General Assembly. But the program, which Dominion calls its Solar Partnership Program, may achieve only a total of “thirteen or fourteen megawatts” before it exhausts the $80 million that the State Corporation Commission authorized the company to spend on it.

Dominion had originally requested $110 million for the program, under which it develops large solar facilities on rooftops it leases from commercial, industrial or institutional customers in selected areas. But many solar industry members and advocates, including yours truly, argued that it should be possible to install 30 MW of solar for much less. It turns out that we were right that the private sector could do it for less, but wrong in thinking Dominion could.

The $80 million price tag works out to a cost of between $5.70 and $6.15 per watt, a number that is at least two and a half times what a commercial customer would expect to pay if it purchased a system directly. It’s vastly higher even than what residential customers are paying under the popular “solarize” programs that have sprung up around the state this year, which are producing contracts for home systems at $2.90-3.55 per watt.

Dominion analyst Nate Frost told me at the meeting that the SCC required the company to include all the related costs of the program, including financing and O&M as well as the cost of leasing rooftops from participants. But this still puts the price far above what similar projects would cost if built and owned by a private sector firm, according to an industry insider I consulted.

I followed up with Mr. Frost by email to ask for a cost breakdown, and to find out whether unique factors might have driven up the cost. Mr. Frost referred me to the company’s August 29 filing with the SCC (which, due to the SCC’s impossibly user-unfriendly website, I cannot link you to, although you can look it up yourself on the website by searching under case PUE-2011-0017).

That filing does not, unfortunately, answer any of the questions I put to Mr. Frost. But reading it does give a strong impression that the company had expected to be able to install the full 30 MW under the cost cap, and was as surprised and dismayed as the rest of us to find they were proceeding with projects way too slowly while blowing through their budget way too fast.

Of course, the point of the Solar Partnership Program is not to show whether Dominion is capable of competing with private companies, but to give the utility a chance to examine how solar integrates with the existing grid. This is important because solar is such a new and untried technology that the utility could not possibly know what might happen if it just scattered twenty or thirty megawatts’ worth of it into a system with tens of thousands of megawatts of fossil fuel generation. Sure, critics might suggest Dominion could get that information from New Jersey, which has over 1,300 MW of solar in a state half the size of Virginia. But what the critics fail to understand is that unlike Virginia, New Jersey actually encourages solar, making its electrons highly suspect. This is why we need our own study.

Monday’s stakeholder meeting revealed more bad news about Dominion’s progress on solar. Also behind schedule is the Solar Purchase Program, under which solar owners who would otherwise be eligible to net meter (using their solar power themselves) are offered 15 cents per kilowatt-hour to sell their green electricity to Dominion for resale to the Green Power Program, while purchasing “brown” power for their own use at the standard rate. Although the program has been open for more than a year and has a capacity of 3 MW, to date it has signed up only 703 kilowatts.

Solar industry members and analysts had criticized the design of the program from the outset. But again, the company’s SCC filing (included with the Solar Partnership Program filing) reveals Dominion’s surprise and chagrin that the great majority of customers who initially signed up for the program changed their minds.

Nor are customers jumping to take advantage of Dominion’s “Schedule RG,” which makes the utility a middleman for sales of renewable energy from producers to large customers, like the consumer-conscious corporations that have driven big solar installations in many other states. Thus far there have been no takers. That’s not a huge surprise to observers; Schedule RG was criticized at the time of its proposal for its cumbersome design. (Yes, we are seeing a pattern here.)

By contrast, reported Mr. Frost, the net metering option that allows customers to install solar on their own property and for their own use has attracted 1,080 customers, who have installed a total of 8 MW to date, with 86% of these customers residential.

These aren’t huge numbers either, but they probably don’t include more than a few of the home systems currently under development through the solarize programs, which will add significantly to our residential total this year. Two projects using third-party power purchase agreements (PPAs) will also add as much as a megawatt.

The lesson seems to be that customers are doing a better job installing solar than Dominion is. If Virginia is serious about increasing renewable energy in the state, it should free the private market to build distributed generation like rooftop solar: serving every kind of customer of every size, everywhere in the state. If the utilities want to compete on a level playing field, let them. Otherwise, they should be encouraged to focus on developing multi-megawatt, utility-scale projects for the grid. There is plenty of room for both, and we need it all.

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“Virginia Climate Fever” shows us where we’re going, and why we don’t want to go there

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The mid-Atlantic enjoyed one of the most delightful summers in memory this year, causing a lot of snickering to the effect that if climate change means moderate temperatures and low humidity, then bring it on, baby! Elsewhere on the planet, though, “bringing it on” translated into a whole lot of hot. For a good laugh at our own parochial mindset, check out the map of relative temperatures that accompanies this article about NOAA declaring 2014 on track to be the hottest year on record.

This sad reality check shows that global warming has not paused or gone away, and Virginians had better try to understand what’s coming so we can start preparing. It turns out our problems go well beyond sea level rise, as we learn this week from guest blogger Seth Heald.

Oh, and don’t miss the note at the bottom about the November 6 event. 

Featured imageVirginia climate activists (and indeed all Virginians) should cheer Stephen Nash, whose Virginia Climate Fever (just published by The University of Virginia Press) lays out clearly the costs of our decades of inaction on global warming. The book’s subtitle nicely sums up the point: How Global Warming Will Transform Our Cities, Shorelines, and Forests.

Why a climate book focused on just one state?

One of many confounding challenges of global warming is how to get people (and politicians and businesses) to take action commensurate with the size of the problem. As the popular British social scientist Roman Krznaric asks, “how can we close the gap between knowledge and action on climate change?” Krznarik’s answer is to seek ways to increase our empathy for people who live in distant places, or will live in future times. Certainly that is needed. (The U.S. edition of Krznarik’s book on empathy comes out in November.)

But since the day of increased empathy has yet to arrive, climate communications experts have focused on the need to get people to realize that climate change is happening here and now. It’s not just about our grandchildren, or even our children. It’s about us too. Now. And it’s not just about poor people living at sea level in Bangladesh, or the soon-to-disappear Maldives, or where melting glaciers threaten tens of millions of people’s water supply. Global warming is happening to us in America, and right here in Virginia. What’s more, it’s not limited to low-lying, frequently flooded parts of coastal Virginia, like Norfolk. Climate disruption is happening all across the commonwealth—from the shore to the tidal Potomac near Alexandria and Washington to the Piedmont to the mountains.

Climate communications experts agree that people are more likely to act (and demand that their leaders act) on global warming if they understand that it will have serious effects in their lives, and where they live.

Virginia Climate Fever does a superb job of bringing climate change home to Virginia. Nash, a journalist who writes with a deft touch, has taught at The University of Richmond since 1980, and he clearly knows Virginia well. He is is well versed in the science of climate disruption, and very good at explaining it. The book is filled with information gathered from interviews with scientists, including several at Virginia universities.

One leading climatologist featured prominently is Katharine Hayhoe, head of the Climate Science Center at Texas Tech University. As the book explains, she also happens to be an evangelical Christian whose faith informs and inspires her work. At Nash’s request, Hayhoe and a colleague prepared color maps of Virginia for Virginia Climate Fever, showing stunningly how much hotter our summers and winters are likely to be in the coming decades under different levels of future carbon emissions. It’s hard for me (at age 61) to look at these and contemplate my own hotter future here, much less my children’s.

Most disturbing to my mind was Nash’s description of the future of what those maps mean for our forests. We often hear about sea-level rise and how it will combine with more-severe storms to harm Virginia, especially in the Hampton Roads area. And well we should—the situation in Virginia’s coastal areas is dire indeed. But Nash reveals that our inland and mountain forests are just as threatened. And so not surprisingly are many plant and animal species that live in or near them. Many species face the prospect of extinction this century. Nash quotes the bioclimatologist Ron Neilson as saying that large areas of Virginia forest could “go into drought stress and potentially burn up,” resulting in “some very rapid conversions from forest to savannah.” Nash asked Neilson if this could happen in the next twenty or thirty years. Neilson’s answer: “How about now?”

Virginia Climate Fever is not strictly speaking a book about energy or energy policy. Rather it’s about climate impacts from our past, present, and future energy choices. But for those on the more well-informed side of the current “I’m not a scientist, what do I know?” climate-science-denial catchphrase, Virginia’s current and future energy choices will come to mind on every page of the book.

Nash does include a chapter on possible prescriptions for our climate fever. He tellingly notes: “we don’t lack for examples among other states,” citing North Carolina and Maryland as two of many states considerably farther along in addressing changing climate. He cites with approval Maryland’s efficiency and conservation measures, and its mandatory renewable portfolio standard, noting that Virginia is one of only nineteen states with no mandatory renewable standard at all. He mentions Maryland’s participation in the multistate Regional Greenhouse Gas Initiative. Again, “Virginia is not on the list.”

Nash asked Virginia’s Department of Environmental Quality about climate change and got this written response: “The Virginia [DEQ] does not have the expertise to study climate change issues.” One could not find a better sentence to sum up the four lost years of the McDonell-Cuccinelli administration’s climate denialism.

Governor Terry McAuliffe and Senator Mark Warner enthuse about a mindless “all of the above” energy policy that includes fracking (and associated pipelines), offshore oil drilling, coal exports, and ever more reliance on fossil fuels. (To his credit, Senator Tim Kaine has said that “all of the above” is not a strategy—yet nevertheless supports offshore oil drilling.) Virginia Climate Fever is a wake-up call for them, and for the “I’m not a scientist” crowd, and for all Virginians.

But of course there have been other such calls in the past few decades. The question is, when will enough Virginians hear them clearly, and begin to act with a sense of urgency?

Seth Heald is vice chair of the Sierra Club Virginia Chapter. He is a student in the Master of Science in Energy Policy and Climate program at Johns Hopkins University.

Note: Northern Virginians will have an opportunity on November 6 to meet Stephen Nash in Alexandria at an author talk and book signing. Details and RSVP form are here.

 

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Virginia’s SCC staff attacks EPA over the Clean Power Plan

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Virginians rally in front of U.S. EPA Headquarters in Washington, DC in support of the Clean Power Plan

Virginians rally in front of U.S. EPA Headquarters in Washington, DC in support of the Clean Power Plan

In recent years paleontologists have come to believe that the dinosaurs did not go extinct; they evolved into today’s chickens and other birds. It turns out, however, that some of them did not evolve. Instead, they took jobs at Virginia’s State Corporation Commission.

Now they’ve put their DNA on full display with comments they filed on the EPA’s Clean Power Plan. The proposed EPA rules, under section 111(d) of the Clean Air Act, would require states to reduce the power plant CO2 emissions driving climate change. The staffers assert primly that they “take no position on the broad policy issues,” but that they feel “compelled” to point out all the ways the plan is “arbitrary, capricious, unsupported, and unlawful.” These mostly boil down to their claims that the plan will force coal plant closures, raise rates significantly and threaten service reliability—claims experts say are badly off-base.

Note that the commissioners themselves didn’t sign onto these comments. They come from the career staff at the Energy Regulatory Division, led by Bill Stevens, the Director, and Bill Chambliss, the General Counsel. This is pretty peculiar. I can’t think of a single other agency of government where the staff would file comments on a federal rulemaking without the oversight of their bosses.

Bill and Bill acknowledge in a footnote that the staff comments represent only their own views and not those of the commissioners. But that distinction has already been lost on at least one lawmaker. Today Speaker of the House William J. Howell released a statement declaring, “The independent, nonpartisan analysis of the State Corporation Commission confirms that President Obama’s environmental policies could devastate Virginia’s economy.”

And really, “devastate”? But that’s the kind of hysteria you hear from opponents of the Clean Power Plan. While the rest of us see healthier air, huge opportunities for job growth in the clean energy sector, and the chance to avoid the worst effects of climate disruption, the Friends of Coal see only devastation. And no wonder: Howell accepted $14,000 from the coal industry just this year alone.

But back to what the Bills over at the SCC think about the Clean Power Plan. How did they arrive at their conclusion that it would raise rates? According to Cale Jaffe, a lawyer with the Southern Environmental Law Center who practices extensively before the SCC, “Staff never did an analysis of an actual plan to comply with the Clean Power Plan, which has a lot of flexibility built into it. Instead, the Staff simply took Dominion Virginia Power’s last Integrated Resource Plan from 2013 and used it as a proxy for a compliance plan. That’s a significant flaw that skews the Staff’s analysis.  The Dominion plan, after all, was released nearly a year before the EPA even announced its rule.”

Compounding the error, says Jaffe, the staff “artificially inflated the cost by assuming that the only compliance strategy would be for Dominion to build a new nuclear reactor: the most expensive resource, which is not a required compliance option.”

We can all agree with the staff that nuclear plants are appallingly expensive. That may be why the EPA doesn’t assume most states will build them as part of their compliance strategy. To the contrary, the expectation is that states will respond with energy efficiency, wind and solar—all resources that are plentiful in Virginia but largely untapped so far.

As Jaffe notes, “an independent analysis of the actual Clean Power Plan itself shows that Virginia can achieve its goals at a fraction of the cost while lowering Virginians’ bills by 8%.”

We have seen time and again that the SCC staff has never been friendly to either renewable energy or energy efficiency, so it’s no surprise that their comments dismiss them as unworkable. Indeed, it is clear from the comments they filed that their real interest is promoting an anti-EPA, pro-coal agenda. Otherwise it would be hard to understand why they would stray so far from their own area of practice to attack the very legality of the Clean Power Plan.

Jaffe lists a number of other ways the SCC staff screwed up, but you get the picture: careful, reasoned analysis wasn’t the point. Still, you’d think that if agency staffers decide to go rogue like this, they would be careful to get the facts right.

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Update: I have heard from some sources that the SCC staff had the blessing of at least one commissioner in putting forth their comments, and that all three commissioners may have known. If so, that’s even worse.

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McAuliffe’s Energy Plan has a little something for (almost) everyone

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On October 1, the Virginia Department of Mines, Minerals and Energy released the McAuliffe administration’s rewrite of the Virginia Energy Plan. Tomorrow, on October 14, Governor McAuliffe is scheduled to speak about the plan at an “executive briefing” to be held at the Science Museum of Virginia in Richmond. Will he talk most about fossil fuels, or clean energy? Chances are, we’ll hear a lot about both.

Like the versions written by previous governors, McAuliffe’s plan boasts of an “all of the above” approach. But don’t let that put you off. In spite of major lapses of the drill-baby-drill variety, this plan has more about solar energy, offshore wind, and energy efficiency, and less about coal, than we are used to seeing from a Virginia governor.

Keep in mind that although the Virginia Code requires an energy plan rewrite every four years, the plan does not have the force of law. It is intended to lay out principles, to be the governor’s platform and a basis for action, not the action itself. This is why they tend to look like such a hodge-podge: it’s just so easy to promise every constituency what it wants. The fights come in the General Assembly, when the various interests look for follow-through.

Here’s my take on some of the major recommendations: IMG_3954

Renewable energy. Advocates and energy libertarians will like the barrier-busting approach called for in the Energy Plan, including raising the cap on customer-owned solar and other renewables from the current 1% of a utility’s peak load to 3%; allowing neighborhoods and office parks to develop and share renewable energy projects; allowing third-party power purchase agreements (PPAs) statewide and doubling both the size of projects allowed and the overall program limit; and increasing the size limits on both residential (to 40 kW) and commercial (to 1 MW) net metered projects, with standby charges allowed only for projects over 20 kW (up from the current 10 kW for residential, but seemingly now to be applied to all systems).

It also proposes a program that would allow utilities to build off-site solar facilities on behalf of subscribers and provide on-bill financing to pay for it. This sounds rather like a true green power program, but here the customers would pay to build and own the project instead of simply buying electricity from renewable energy projects.

Elsewhere in the recommendations, the plan calls for “flexible financing mechanisms” that would support both energy projects and energy efficiency.

In case unleashing the power of customers doesn’t do enough for solar, the plan also calls for the establishment of a Virginia Solar Energy Development Authority tasked with the development of 15 megawatts (MW) of solar energy at state and local government facilities by June 30, 2017, and another 15 MW of private sector solar by the same date. Though extremely modest by the standards of Maryland and North Carolina, these goals, if met, would about triple Virginia’s current total. I do like the fact that these are near-term goals designed to boost the industry quickly. But let’s face it: these drops don’t even wet the bucket. We need gigawatts of solar over the next few decades, so let’s set some serious long-term goals for this Authority, and give it the tools to achieve them.

Finally, the plan reiterates the governor’s enthusiasm for building offshore wind, using lots of exciting words (“full,” “swift,” “with vigor”), but neglecting how to make it happen. Offshore wind is this governor’s Big Idea. I’d have expected more of a plan.

And while we’re in “I’d have expected more” territory, you have to wonder whatever happened to the mandatory Renewable Portfolio Standard that McAuliffe championed when running for office. Maybe our RPS is too hopeless even for a hopeless optimist.

Energy Efficiency. Reducing energy consumption and saving money for consumers and government are no-brainer concepts that have led to ratepayers in many other states paying lower electricity bills than we do, even in the face of higher rates. Everyone can get behind energy efficiency, with the exception of utilities that make money selling more electricity. (Oh, wait—those would be our utilities.) The Energy Plan calls for establishing a Virginia Board on Energy Efficiency, tasked with getting us to the state’s goal of 10% savings two years ahead of schedule. But glaringly absent is any mention of the role of building codes. Recall that Governor McDonnell bowed to the home builders and allowed a weakened version of the residential building code to take effect. So far Governor McAuliffe hasn’t reversed that decision. If he is serious about energy efficiency, this is an obvious, easy step. Where is it?

Fracking_Site_in_Warren_Center,_PA_04

Natural Gas. Did I say offshore wind was the governor’s Big Idea? Well, now he’s got a bigger one: that 500-mile long natural gas pipeline Dominion wants to build from West Virginia through the middle of Virginia and down to North Carolina. Governor McAuliffe gets starry-eyed talking about fracked gas powering a new industrial age in Virginia. So it’s not surprising that the Energy Plan includes support for gas pipelines among other infrastructure projects. As for fracking itself, though, the recommendations have nothing to say. A curious omission, surely? And while we are on the subject of natural gas, this plan is a real testament to the lobbying prowess of the folks pushing for natural gas vehicles. Given how little appetite the public has shown for this niche market, it’s remarkable to see more than a page of recommendations for subsidies and mandates. Some of these would apply to electric vehicles as well. But if we really want to reduce energy use in transportation, shouldn’t we give people more alternatives to vehicles? It’s too bad sidewalks, bicycles and mass transit (however fueled) get no mention in the plan.

Photo credit Ed Brown, Wikimedia Commons.

Coal. Coal has fallen on hard times, indeed, when even Virginia’s energy plan makes no recommendations involving it. Oh, there’s a whole section about creating export markets for coal technology, as in, helping people who currently sell equipment to American coal companies find a living in other ways. These might be Chinese coal mining companies; but then again, they might be companies that mine metals in Eastern Europe, or build tunnels, or do something totally different. The Energy Plan seems to be saying that coal may be on its way out, but there’s no reason it should drag the whole supply chain down with it. Good thinking.

Nuclear. If you think the coal industry has taken a beating these past few years, consider nuclear. Nationwide, the few new projects that haven’t been canceled are behind schedule and over budget, going forward at all only thanks to the liberality of Uncle Sam and the gullibility of state lawmakers. But there it is in the Energy Plan: we’re going to be “a national and global leader in nuclear energy.” Watch your wallets, people. Dominion already raided them for $300 million worth of development costs for a third plant at North Anna. That was just a down payment.

Photo: U.S. Coast Guard

Photo: U.S. Coast Guard

Offshore drilling. As with nuclear, favoring offshore oil drilling seems to be some kind of perverse obsession for many Virginia politicians. Sure enough, the energy plan says we should “fully support” it. As for the downside potential for a massive spill of crude oil fouling beaches, ruining fishing grounds, destroying the coastal tourism economy, and killing vast numbers of marine animals, the plan says we must be prepared “to provide a timely and comprehensive response.” I bet Louisiana was at least equally prepared.

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Utilities’ pullout won’t affect “value of solar” study

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When Virginia’s utilities made a surprise announcement on September 5th that they would no longer participate in the state’s Solar Stakeholder Group (SSG), they may have hoped that doing so would stop the group’s Value of Solar study in its tracks. Not so: on Friday, at its first meeting since the utilities withdrew, the group agreed it would issue the report on schedule, although with no further input from members—thus guaranteeing that the report reflects only input submitted while the utilities participated.

This decision was essentially a moot point, because the group had actually wrapped up its work by that September 5th date in order to give the study authors time to incorporate comments, including those from the utilities. The resulting third draft of the report was provided to the remaining group members on September 29. It reflects the work of the full 49-member committee up to September 4.

Lead authors Damian Pitt and Gilbert Michaud of Virginia Commonwealth University will do some clean-up editing and draft a cover letter. Then, in accordance with the work plan established last summer, it will be submitted to the National Renewable Energy Laboratory (NREL) for review. The study is due in to the Senate Rules Committee by November 1. But as noted previously by Jim Pierobon, it’s not clear how much weight the study will have in the General Assembly now that the utilities have disavowed it.

The utilities have not said why they decided to withdraw from participation. They wrote no memos, offered no analysis, and sent no polite email to other members expressing regret or anything else.

The SSG grew out of an informal “Small Solar Working Group” that formed in 2013 as a way to bring together those with an interest in non-utility-scale solar.* Like the SSG, the Working Group included representatives from the solar industry, environmental groups, local government, academia, trade associations and the electric utilities. But while the Working Group set its own broad agenda, the SSG was formed in response to a specific letter request from the Clerk of the Virginia Senate to DEQ and DMME. The letter asked for a study of “the costs and benefits of distributed solar generation and net metering.”

From that description, and knowing that the utilities hastily decamped, you might think that the SSG actually calculated costs and benefits and came up with a value of solar, and that the result was good for solar advocates but bad for utilities. But in fact, the study reaches no conclusions at all. It could more accurately be described as a study about how you would conduct a study, were you so inclined. Which no one was, because then the utilities might have left. As they did, but only after ensuring the study incorporates their views.

Thus the study wraps up with statements like, “The SSG recognizes that the short- and long-term value of solar will be dependent on a wide range of conditions and perspectives.” And this: “With greater time, resource, and data access, future studies could produce actual values for the net VOS under each methodology.”

There is nothing wrong with such a limited approach, so far as it goes. Professors Pitt and Michaud did an excellent and comprehensive job in surveying the literature, comparing previous studies, and discussing the factors relevant to the issue of solar’s value to the grid, utilities, customers, and society at large. But given that this Value of Solar study came nowhere near assigning a value of solar, it’s hard to understand what the utilities might have objected to.

Nor had there been any hints the utilities were unhappy with the process or with the first two drafts of the report. At Friday’s SSG meeting, many of the other members expressed their surprise and frustration with the utilities’ pull-out. They noted that the utilities participated fully every step of the way and provided copious comments, which were reflected in the drafts. Indeed, three utility representatives served on the twelve-member steering committee that created the work plan and oversaw the study, making it as much their work as anyone else’s. (The other steering committee members were Professor Pitt, three representatives of local government, two conservation group reps., two solar industry members, and one citizen representative.)

So why did the utilities pull out? In retrospect, it may have been their plan all along. By pulling out, they could signal to their allies their disapproval of the study and try to prevent a follow-on study that would actually calculate a value for solar. And by waiting until the last moment to pull out, they maximized their influence over the study’s content, lest it have credence outside their sphere of influence.

But what the utilities lost by this clever maneuver is the trust of the rest of the group. The SSG, like the Small Solar Working Group before it, provided a forum for discussion among the many different parties with an interest in distributed solar. It is incredibly important in a forum like the SSG that people trust each other to act in good faith. Otherwise, 49 people are wasting their time.

The utilities’ decision to sacrifice this trust strikes me as both stupid and unnecessary. Many of us expected that the utilities’ lobbyists would quietly tell their friends in the legislature to ignore the Value of Solar study, that they participated just to be nice guys. Openly thumbing their noses at the study did nothing except prove they aren’t nice guys and cannot be trusted.

The rural electric cooperatives will have to answer to their members, who admittedly don’t seem to pay much attention. But Dominion Virginia Power and Appalachian Power are public utilities. They hold their monopolies by the grace of the people of Virginia, and are expected to act in the interest of the people they serve. In this case, they have manifestly failed to do so.

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* I was one of the founding members of the Small Solar Working Group and was responsible for asking the Department of Environmental Quality’s Carol Wampler to facilitate the meetings. Ms. Wampler had led other successful stakeholder groups and had a gift for guiding people with disparate interests towards consensus. (Unfortunately for the people of Virginia, she retired from DEQ this summer.) She brought in the equally-dedicated Ken Jurman from the Department of Mines, Minerals and Energy as a co-facilitator. The divide between the utility monopolies and everyone else proved too great to produce any consensus bills that could spur the flourishing of solar in Virginia, but it did develop a level of trust, unfortunately now compromised.