Bills that passed, bills that failed, and how the General Assembly failed Virginia again on clean energy

Child on father's shoulders with sign reading "We need a healthy planet"

Photo credit Sierra Club.

When the General Assembly session opened January 9, legislators were presented with dozens of bills designed to save money for consumers, lower energy consumption, provide more solar options, and set us on a pathway to an all-renewables future. Almost none of these measures passed, while bills that benefited utilities kept up their track record of success.

Before I review the individual bills, it’s worth considering for a moment how very different Virginia’s energy future would look if the best of 2019’s bills had passed. In that alternate universe, Virginians could have looked forward to:

  • A freer and more open market for renewable energy at all levels, including unrestricted use of third-party financing for renewable energy, an end to punitive standby charges and arbitrary limits on customer solar, and new opportunities for local governments to install solar cost-effectively.
  • A mandate for utilities to achieve real energy efficiency results, not just to throw their customers’ money at programs.
  • An energy efficiency revolving fund to offer no-interest loans to local governments, public schools and public institutions of higher learning.
  • The right to choose an electricity supplier for renewable energy, instead of being restricted to more expensive and less desirable utility offerings (if available at all).
  • Tax credits for solar on landfills, brownfields and economic opportunity zones.
  • Rebates for low and moderate-income Virginians who install solar.
  • A new revenue source for spending on climate adaptation efforts, energy efficiency programs, and coalfields transition, made possible bythe auctioning of carbon allowances to power plants as part of joining the Regional Greenhouse Gas Initiative; half the lowered carbon emissions would have been achieved through installing wind and solar.
  • Movement towards an eventual phase-out of fossil fuels.
  • Stronger assurance that customers won’t be overcharged for the use of the Atlantic Coast Pipeline or other fracked-gas pipelines owned by utility affiliates.

But in a legislature still ruled by Dominion Energy and Republicans (in that order), what we mostly got instead were bills letting utilities charge their electricity customers for speculative development projects (HB 1840, HB 2738 and SB 1695) and rural broadband infrastructure (HB 2691), and another that would actually prevent the state from pursuing carbon reduction regulations (HB 2611).

A year ago legislators agreed that Dominion and Appalachian Power should propose hundreds of millions of dollars in energy efficiency programs, as a way to sop up some of those companies’ excess earnings instead of the unthinkable alternative of taking the money away from them. This year subcommittees killed bills (HB 2294, HB 1809) that would have insisted those programs be effective. (HB 2294 would have also made last year’s renewable energy goals mandatory.)

The energy efficiency bills that did pass were far more modest: making it harder for the SCC to reject utility-proposed programs (HB 2292 and SB 1662) and establishing a stakeholder group to provide input on programs (HB 2293).

“Energy Freedom,” and other similar legislation aimed at opening up the rooftop solar market, died on party-line votes in committee.

In fact, the party-line vote became a theme whenever bills came up that Dominion opposed. Anyone sitting through the House Commerce and Labor subcommittee hearing, watching one customer solar bill after another be unceremoniously killed, might have wondered if the vote buttons had gotten stuck.

The only significant renewable energy legislation to make it through the committee gauntlet was a long-negotiated Rubin Group bill that gives customers of Virginia’s rural electric cooperatives more opportunities to install solar, at the cost of accepting future new demand charges (HB 2547 and SB 1769). Whether it works in favor of all coop solar customers or not remains an open question. The coops would not provide advocates with any cost modeling and referred us to the solar industry trade association MDV-SEIA, which told us they couldn’t provide it either because of a confidentiality agreement within the Rubin Group.

But the bill does raise the limit on the amount of customer solar that can be built in those parts of the state served by rural electric coops. Customers of Dominion and APCo didn’t get even that much, though one bill—from a Republican—calls for those utilities to provide a total of $50 million in assistance to low-income, elderly and disabled customers for solar and energy efficiency. HB 2789 marks one of the rare bright spots of the 2019 session.

Two other minor renewable energy bills could make incremental progress for a handful of municipalities (HB 2792 and SB 1779) and school systems (HB 2192 and SB 1331).

And that, I’m sorry to say, is pretty much it for energy legislation this year.

Below is a final rundown of the bills that passed, followed by the ones that didn’t. Links in the bill numbers will take you to their summary pages in the Legislative Information Service. The summaries there should not be relied on, because amendments may make a bill quite different by the time it gets passed (or dies). Follow the links on a page to read the legislation or see vote results. Many of the committee hearings were recorded on video.

Bills that passed: renewable energy

HB 2192 (Rush) and SB 1331 (Stanley) is a school modernization initiative that includes language encouraging energy efficient building standards and net zero design. It also encourages schools to consider lease agreements with private developers (apparently there is one particular North Carolina firm that wants this). It does not provide for the more common use of third-party power purchase agreements. It has nice (but not mandatory) language on net zero schools. It allows leases with private developers who will construct and operate buildings and facilities. It permits public schools to contract with utilities for solar energy as part of the school modernization project. An amendment added language requiring that renewable energy facilities must be on school property and cannot be used to serve any other property. PPAs are not mentioned. Ambiguous language in these provisions may cause problems for schools. Both bills passed the House and Senate almost unanimously with Senator Black the only naysayer.

HB 2547 (Hugo) and SB 1769 (Sturtevant) make changes to the net metering program for customers of electric cooperatives. The overall net metering cap is raised from the current 1 percent to a total of 5%, divided into separate buckets by customer type and with an option for coops to choose to go up to 7%. Customers will be permitted to install enough renewable energy to meet up to 125% of previous year’s demand, up from 100% today. Third-party PPAs are generally legal for tax-exempt entities, with a self-certification requirement. However, the coops will begin imposing demand charges on customers with solar, to be phased in over several years, replacing any standby charges. This bill was negotiated between the coops and the solar industry via the “Rubin Group.” An amendment to the bill establishes a stakeholder group for further discussions with Dominion and APCo on net metering, a prospect that will appeal only to eternal optimists and amnesiacs who don’t remember the past five years of time-wasting, fruitless negotiations. SB 1769 passed both the Senate and House unanimously. HB 2547 passed the House unanimously and the Senate 36-4, with Black, Chase, Stuart and Suetterlein voting no this time, with no discernible reason for the change.

HB 2621 (Ingram) and SB 1398 (Stanley) authorize a locality to require the owner or developer of a solar farm, as part of the approval process, to agree to a decommissioning plan. This was a negotiated Rubin Group bill. SB 1398 was incorporated into SB 1091 (Reeves), which was amended to conform to the compromise language of HB 2621.

HB 2741 (Aird) establishes a rebate program for low and moderate-income households that install solar. Amended so it retains the structure of the program but removes funding. As amended it passed both House and Senate.

HB 2792 (Tran) and SB 1779 (Ebbin) establish a 6-year pilot program for municipal net metering for localities that are retail customers of investor-owned utilities. The initial bill negotiated with the utilities was much more limited than most localities wanted; further amendments whittled it down to a point where it won’t help localities with significant projects like landfill solar. However, we are told it will be useful for a few small on-site projects that don’t need PPAs. Even with the utilities on board, 21 House Republicans and one senator (Sutterlein) voted against the House bill, though only 12 House Republicans were hardcore enough to vote against the identical Senate bill when it crossed over. 

HB 2789 (O’Quinn) requires Dominion and APCo to develop pilot programs to offer solar and energy efficiency incentives to low-income, elderly and disabled customers. The energy efficiency money, totaling $25 million, is to come out of the amount the utilities are required to propose in efficiency spending under last year’s SB 966. The renewable energy incentives, also $25 million, cannot come out of that spending; the legislation is silent on how it will be paid for. Passed the House 90-9, with only Republicans as holdouts. Passed the Senate 37-3, with only Black, Stuart and Suetterlein in opposition.

Bills that passed: energy efficiency

HB 2292 (Sullivan) and SB 1662 (Wagner), dubbed the “show your work bill,” requires the SCC to provide justification if it rejects a utility energy efficiency program. As amended, the bills passed almost unanimously.

HB 2293 (Sullivan) establishes a stakeholder process to provide input on the development of utility energy efficiency programs. Passed both houses unanimously.

HB 2332 (Keam) protects customer data collected by utilities while allowing the use of aggregated anonymous data for energy efficiency and demand-side management efforts. A substitute changed the bill to one requiring the SCC to convene a Data Access Stakeholder Group to review customer privacy and data access issues. As amended, the bill passed both Houses unanimously. 

SB 1400 (Petersen) would have removed the exclusion of residential buildings from the Property Assessed Clean Energy (PACE) program, which allows localities to provide low-interest loans for energy efficiency and renewable energy improvements on buildings. After passing the Senate unanimously, the bill was amended in the House to remove the residential PACE authorization (it does expand PACE to include stormwater improvements). As amended, it passed both houses unanimously. It’s probably cheating putting this one in the“passed” category, but I needed the win. 

Bills that passed: energy transition and climate

HB 2611 (Poindexter) would prohibit Virginia from joining or participating in RGGI without support from two-thirds of the members of the House and Senate, making it sort of an anti-Virginia Coastal Protection Act. Passed the House on a 51-48 party-line vote. Passed the Senate on a 20-19 vote. Only one Republican, Jill Vogel, voted against it. The Governor is expected to veto it.

HB 2747 (Kilgore) and SB 1707 (Chafin) create a Southwest Virginia Energy Research and Development Authority “for the purposes of promoting opportunities for energy development in Southwest Virginia, to create jobs and economic activity in Southwest Virginia consistent with the Virginia Energy Plan prepared pursuant to Chapter 2 (§ 67-200 et seq.), and to position Southwest Virginia and the Commonwealth as a leader in energy workforce and energy technology research and development.” Among the powers listed are promotingrenewable energy on brownfield sites, including abandoned mine sites, and supporting energy storage, including pumped storage hydro. Fossil fuel projects are not listed, but are also not excluded. Both bills passed unanimously.

Bills that passed: other utility regulation

HB 1840 (Danny Marshall) allows utilities to develop transmission infrastructure at megasites in anticipation of development, charging today’s customers for the expense of attracting new customers. The legislation was amended to change the language to the nicer-sounding “business park,” but it continues to allow utilities to recover costs for constructing transmission lines and substations to serve these speculative projects. It passed unanimously in the Senate and 82-18 in the House, with mainly the newer Democrats voting no.

HB 2477 (Kilgore) originally would have eliminated one of the few areas of retail choice allowed in Virginia by preventing large customers from using competitive retail suppliers of electricity, including for the purpose of procuring renewable energy, in any utility territory with less than 2% annual load growth. A substitute bill removed most of the bad provisions and confined its operation to APCo, but also left it incomprehensible, so I can’t possibly tell you what it does. As far as I was able to determine, no customers opposed the final bill, which passed the House and Senate unanimously.

HB 2691 (O’Quinn) originally would have established a pilot program for electric utilities to provide broadband services in underserved areas, and raise rates for the rest of us to pay for it. The bill was amended so utilities can only provide the capacity on their lines to private broadband suppliers. The investment is eligible for recovery as an electric grid transformation project under last year’s SB 966, presumably so it is paid for out of utility overearnings instead of a new rate increase.The amended bill passed both houses almost unanimously.   

HB 2738 (Bagby) and SB 1695 (Wagner) authorizes utilities to acquire rights of way for sites that the Virginia Economic Development Partnership Authority decides could be developed to attract new customers, and allows utilities to recover costs from existing customers. A substitute tightened the requirements somewhat, but it remains another giveaway to utilities in the name of speculative development, at the expense of landowners and consumers.The House bill passed 85-13with mostly newer Democrats in opposition, then passed the Senate 37-3, with McPike, Spruill and Suetterlein voting no. The Senate bill passed 34-6; although the bills appear to have been identical, Chase, Newman and Peake also voted no. The House vote on SB 1695 was 84-13.

And now for the also-rans.

Bills that failed: renewable energy

HB 2329 (Keam) and SB 1456 (McClellan and Edwards) is the Solar Freedom bill that would have removed 8 barriers to renewable energy installations by utility customers, including lifting the 1% net metering cap, removing PPA caps, and allowing municipal net metering. HB 2329 was defeated inCommerce and Labor 8-7 on a party-line vote. The Senate companion was killed in Commerce and Labor on a 10-3 party-line vote.

HB 1683 (Ware) gives electric cooperatives greater autonomy, including authority to raise their total system caps for net metering up to 5% of peak load. Amended to remove the net metering language, then withdrawn by patron.

HB 1809 (Gooditis) follows up on last year’s HB 966 by making the renewable energy and energy efficiency provisions mandatory. If utilities don’t meet annual targets, they have to return their retained overearnings to customers. Defeated inCommerce and Labor subcommittee 3 on party-line vote, with only Democrats supporting.

HB 1869 (Hurst), SB 1483 (Deeds) and SB 1714 (Edwards) creates a pilot program allowing schools that generate a surplus of solar or wind energy to have the surplus credited to other schools in the same school district. HB 1869defeated in Commerce and Labor subcommittee 3 on party-line vote. In Senate Commerce and Labor, SB 1714 was incorporated into SB 1483, then defeated unanimously.

HB 1902 (Rasoul) would provide a billion dollars in grant funding for solar projects, paid for by utilities, who are required to contribute this amount of money through voluntary contributions (sic). Killed in Appropriations subcommittee on party-line vote.

HB 1928 (Bulova) and SB 1460 (McClellan) expands utility programs allowing third-party power purchase agreements (PPAs) for renewable energy while continuing to restrict the classes of customers who are allowed to have access to this important financing tool. In committee hearings, utility lobbyists claimed there was no need for the legislation because there is “plenty of room left” under the existing caps. Industry members testified that there is a lot more in the queue than is public, and caps will likely be reached this year. HB 1928 killed in Commerce and Labor subcommittee 3 by a 6-4 vote; Republican Tim Hugo voted with Democrats in support of the bill. SB 1460 killed in Senate Commerce and Labor 10-3, with only Democrats supporting.

HB 2117 (Mullin) and SB 1584 (Sutterlein) fixes the problem that competitive service providers can no longer offer renewable energy to a utility’s customers once the utility has an approved renewable energy tariff of its own. Now that the SCC has approved a renewable energy tariff for APCo, this is a live issue. HB 2117defeated inCommerce and Labor subcommittee 3 on party-line vote. Although the patron of SB 1584, David Sutterlein, is a Republican, his bill died in Senate Commerce and Labor 11-1, with only fellow Republican Ben Chafin voting for it, and Republican Stephen Newman abstaining.

HB 2165 (Davis and Hurst) and HB 2460 (Jones and Kory), and SB 1496 (Saslaw) provide an income tax credit for nonresidential solar energy equipment installed on landfills, brownfields, in economic opportunity zones, and in certain utility cooperatives. This is a Rubin Group bill. HB 2165 and HB 2460 were left in the Committee on General Laws (i.e, they died there). SB 1496 was amended in Finance to change it from a tax credit to a grant-funded program, but with no money. Then it passed the committee and the Senate unanimously.  However, it was then killed unanimously in a House subcommittee of Commerce, Agriculture, Natural Resources & Technology.

HB 2241 (Delaney) establishes a green jobs training tax credit. Failed in House Finance subcommittee on party-line vote.

HB 2500 (Sullivan) establishes a mandatory renewable portfolio standard (RPS) for Virginia, eliminates carbon-producing sources from the list of qualifying sources, kicks things off with an extraordinarily ambitious 20% by 2020 target, and ratchets up the targets to 80% by 2027. Failed inCommerce and Labor subcommittee 3 with only Democrat Mark Keam supporting it.

HB 2641 (Gooditis) makes third-party power purchase agreements for distributed renewable energy resources legal statewide. Killed in Commerce and Labor subcommittee 3 by a 6-3 vote. Delegate Hugo, who had voted for Bulova’s narrower PPA bill, joined the other Republicans in voting against this broader one.

HB 2692 (Sullivan) allows the owner of a multifamily residential building to install a renewable energy facility and sell the output to occupants or use for the building’s common areas. Stricken from docket.

HJ 656 (Delaney) would have the Virginia Resources Authority study the process of transitioning Virginia’s workforce from fossil-fuel jobs to green energy jobs. Failed to report from Rules subcommittee on party-line vote, all Republicans voting against it.

Bills that failed: energy efficiency (some of which had RE components)

HB 2243 (Sullivan) creates an energy efficiency revolving fund to offer no-interest loans to local government, public schools, and public institutions of higher learning. Killed in Appropriations subcommittee on party-line vote.

HB 2294 (Sullivan) establishes mandatory energy efficiency goals for electric and gas utilities. Killed in Commerce and Labor subcommittee 3 on party-line vote.

HB 2295 (Sullivan) creates an energy efficiency fund and board to administer it. Killed in an Appropriations subcommittee on a party-line vote.

SB 1111 (Marsden) requires utilities to provide rate abatements to certain customers who invest at least $10,000 in energy efficiency and, by virtue of their lower consumption, end up being pushed into a tier with higher rates. Stricken at the request of the patron.

HB 2070 (Bell, John) provides a tax deduction for energy saving products, including solar panels and Energy Star products, up to $10,000. Stricken from docket in Finance subcommittee.

Bills that failed: energy transition and climate

HB 1635 (Rasoul, with 9 co-patrons) imposes a moratorium on fossil fuel projects, including export facilities, gas pipelines and related infrastructure, refineries and fossil fuel exploration; requires utilities to use clean energy sources for 80% of electricity sales by 2028, and 100% by 2036; and requires the Department of Mines, Minerals and Energy to develop a (really) comprehensive climate action plan, which residents are given legal standing to enforce by suit. This is being referred to as by the Off Act. Defeated on the floor of the House 86-12.

HB 1686 (Reid, with 14 co-patrons) and SB 1648 (Boysko) bans new or expanded fossil fuel generating plants until Virginia has those 5,500 MW of renewable energy we were promised. This is referred to as the Renewables First Act. HB 1686:Defeated inCommerce and Labor Subcommittee 3. 2 Democrats voted for it, 6 Republicans and 1 Democrat against. SB 1648 PBI’d 12-0 in Commerce and Labor.

HB 2501(Rasoul) directs the Division of Energy at DMME to include a greenhouse gas emissions inventory in the Virginia Energy Plan. Killed in Commerce and Labor subcommittee 3 on party-line vote.

HB 2645 (Rasoul, with 13 co-patrons), nicknamed the REFUND Act, prohibits electric utilities from making nonessential expenditures and requires refunds if the SCC finds they have. It also bars fuel cost recovery for more pipeline capacity than appropriate to ensure a reliable supply of gas. Other reforms in the bill would undo some of the provisions of last year’s SB 966, lower the percentage of excess earnings utilities can retain, and require the SCC to determine rates of return based on cost of service rather than peer group analysis. Democrat Steve Heretick voted with Republicans to kill the bill in Commerce and Labor subcommittee 3.

HB 2735 (Toscano) and SB 1666 (Lewis and Spruill) is this year’s version of the Virginia Coastal Protection Act, which would have Virginia formally join the Regional Greenhouse Gas Initiative (RGGI). It dedicates money raised by auctioning carbon allowances to climate adaptation efforts, energy efficiency programs, and coalfields transition. HB 2735 died in Commerce and Labor subcommittee 3 on party-line vote. SB 1666 met the same fate in Agriculture, Conservation and Natural Resources, with Democrat Rosalyn Dance abstaining.

HJ 724 (Rasoul) is a resolution “Recognizing the need for a Green New Deal in Virginia which promotes a Just Transition to a clean energy economy through lifting working families.” This was referred to Commerce and Labor subcommittee 3, where it was left without a hearing.

Bills that failed: other utility regulation

HB 1718 (Ware) requires an electric utility to demonstrate that any pipeline capacity contracts it enters are the lowest-cost option available, before being given approval to charge customers in a fuel factor case. Delegate Ware testified in committee that the bill was not intended to stop the Atlantic Coast Pipeline, but would simply guide the SCC’s review of a rate request after the pipeline is operational. Dominion’s lobbyist argued the legislation was unnecessary because the SCC already has all the authority it needs, and it shouldn’t be allowed to look back to second-guess the contents of the ACP contract. The bill passed the House 57-40. Do look at the votes; this is the most interesting energy vote of the year, as it neatly separates the Dominion faction from the pro-consumer faction. Unfortunately, the bill was then killed in Senate Commerce & Labor, where the Dominion faction runs the show, so most senators didn’t have the opportunity to demonstrate whose side they’re on.

HB 2503 (Rasoul) requires the State Corporation Commission to conduct a formal hearing before approving any changes to fuel procurement arrangements between affiliates of an electric utility or its parent company that will impact rate payers. This addresses the conflict of interest issue in Dominion Energy’s arrangement to commit its utility subsidiary to purchase capacity in the Atlantic Coast Pipeline.  Stricken from docket.   

HB 2697 (Toscano) and SB 1583 (Sutterlein) supports competition by shortening the time period that a utility’s customer that switches to a competing supplier is barred from returning as a customer of its utility from 5 years to 90 days. HB 2697 died in House Commerce and Labor subcommittee 3 on a party-line vote, with all the Republicans voting against it. SB 1583 died in Senate Commerce and Labor 11-2, with only Republicans Newman and Chafin voting for it. Democrats Saslaw, Dance and Lucas joined the rest of the Republicans in demonstrating their Dominion-friendly bonafides.

SB 1780 (Petersen) requires, among other things, that utilities must refund to customers the costs of anything the SCC deems is a nonessential expenditure, including spending on lobbying, political contributions, and compensation for employees in excess of $5 million. It directs the SCC to disallow recovery of fuel costs if a company pays more for pipeline capacity from an affiliated company than needed to ensure a reliable supply of natural gas. It requires rate reviews of Dominion and APCo in 2019 and makes those biennial instead of triennial, and provides for the SCC to conduct an audit going back to 2015. It tightens provisions governing utilities’ keeping of overearnings and provides for the allowed rate of return to be based on the cost of providing service instead of letting our utilities make what all the other monopolists make (“peer group analysis”).  Killed in Commerce and Labor 12-1, with only Republican Richard Stuart supporting the bill.

Your guide to 2019 climate and energy bills

Virginia statehouse, where the General Assembly meetsUpdated (again!) January 23.

Clean energy and climate action are mainstream concepts with the public these days, but at Virginia’s General Assembly they have yet to gain much traction. Last year saw one renewable energy bill after another die in committee, along with legislation mandating lower energy use through energy efficiency and climate measures like having Virginia join the Regional Greenhouse Gas Initiative (RGGI).

The only major energy legislation to pass the GA in 2018 was the infamous SB 966, the so-called “grid mod” bill that included spending on energy efficiency and a stipulation that 5,500 megawatts (MW) of utility-owned or controlled solar and wind is “in the public interest.” But the bill didn’t actually mandate any efficiency savings or renewable energy investments, and it contained no support for customer-owned solar.

So clean energy advocates and climate activists are trying again, though the odds against them look as tough as ever. Republicans hold a bare majority of seats overall, but they dominate the powerful Commerce and Labor Committees that hear most energy bills. And Republicans overall (though with some exceptions) are more hostile to clean energy legislation than Democrats, and more willing to side with utilities against customers and competitors.

In particular, the House energy subcommittee has been a regular killing field for renewable energy bills. It consists of 7 Republicans and 4 Democrats, and last year every clean energy bill but one lost on party-line votes. Bills don’t advance to the full committee, much less to the House floor, unless they garner a majority in the subcommittee.

Over at Senate Commerce and Labor, Republicans hold an 11-4 majority on the full committee, and none of the Democrats are what you would call environmental champions. The electric utility subcommittee does not appear to be active this year.

A scattering of other clean energy and climate bills have been assigned to House Rules (which Republicans dominate 11-6) and Appropriations (12-10), where a subcommittee will several energy-related bills with fiscal impacts (at least three have been assigned to date). Some Senate bills will go to Finance.

Of course, this is an election year in Virginia, with every House and Senate seat up this fall. Legislators have reason to worry that the 2017 “blue wave” could turn into a 2019 flood tide that sweeps out not just vulnerable Republicans, but Democrats facing primary challenges from the left.

Will that persuade some of them to finally support clean energy, or at least some of the pragmatic initiatives that have broad popular support?

That’s the hope driving a number of bills framed around supporting market competition and customer choice, enabling private investments in renewable energy, and saving money for consumers and taxpayers. These are themes that appeal as much to conservatives as to liberals.

But a lot of these bills have the same problem they’ve always had. Dominion Energy opposes them, and Dominion controls the legislature.

Both Dominion and elected leaders maintain the fiction that it’s the other way around. That fiction allowed Senator Wagner and Delegate Kilgore, the chairmen of the Commerce and Labor Committees, to “refer” solar bills for secret negotiation between utilities and the solar industry via the private, closed-door Rubin Group.

About that Rubin Group

Frankly, I’ve never understood the notion that the solar industry ought to be able to work things out with the utilities so legislators don’t have to make decisions themselves. Solar installers negotiating with Dominion is like mice negotiating with the cat. The cat is not actually interested in peaceful coexistence, so it’s hard to imagine an outcome that makes life better for the mice.

And however much they insist they support solar, Kilgore, Wagner and company act like they’re secretly pleased that Kitty is such a good mouser. I don’t know how else to explain the way they lecture the mice on the virtues of compromise.

The Rubin Group has managed to produce legislation where the interests of the utilities and the solar industry align, primarily in ways that help utility-scale solar farms. When it comes to net metering and customer solar generally, however, Dominion hasn’t been willing to give up anything unless it gets something in return—and as it already has everything but the crumbs, progress seems to have stalled. I hear negotiations remain ongoing, however, so this isn’t the last word.

On the other hand, the solar industry did reach an accommodation with the electric cooperatives this year over customer solar. As member-owned non-profits, the coops are sometimes more responsive to the desires of their customer-owners, and this seems to be evidence of that. (Though see this blogpost from Seth Heald about the failures of democracy and transparency at Virginia’s larges coop, an issue now in litigation before the SCC.)

With the solar industry stalled in its talks with Dominion and a sense of urgency mounting, customer groups and other solar industry alliances have stepped into the void. Several bills seek to preserve and expand the market for customer solar with bills removing policy barriers. The most comprehensive of these is the Solar Freedom legislation put forward by Delegate Keam (HB 2329) and Senators McClellan and Edwards (SB 1456), removing 8 non-technical barriers to renewable energy deployment buy customers. Other net metering bills have similar provisions that tackle just one barrier at a time.

Another group of bills don’t seem intended to win Republican support, much less Dominion’s. Bills that will dramatically alter our energy supply, put Virginia at the forefront of climate action and rein in utility power have no chance of passage this year, but may become part of a platform for strong climate action next year if a pro-environment majority wins control of the GA.

The list below may look overwhelming, so let me just note that this is not even comprehensive, and additional bills may yet be filed.

I’ve separated the bills into categories for easier reference, but watch for overlap among them. I’ve put Solar Freedom up first (because I can!); after that, bills are ordered by number, with House bills first.

Solar Freedom 

HB 2329 (Keam) and SB 1456 (McClellan and Edwards) is the Solar Freedom bill that removes barriers to renewable energy installations by utility customers, mostly in the net metering provisions, and adds language to the Commonwealth Energy Policy supporting customer solar. The 8 provisions are:

  • Lifting the 1% cap on the total amount of solar that can be net metered in a utility territory
  • Making third-party financing using power purchase agreements (PPAs) legal statewide for all customer classes
  • Allowing local government entities to install solar facilities of up to 5 MW on government-owned property and use the electricity for other government-owned buildings
  • Allowing all customers to attribute output from a single solar array to multiple meters on the same or adjacent property of the same customer
  • Allowing the owner of a multi-family residential building or condominium to install a solar facility on the building or surrounding property and sell the electricity to tenants
  • Removing the restriction on customers installing a net-metered solar facility larger than required to meet their previous 12 months’ demand
  • Raising the size cap for net metered non-residential solar facilities from 1 MW to 2 MW
  • Removing standby charges for residential and agricultural net metering customers

Other renewable energy bills

HB 1683 (Ware) gives electric cooperatives greater autonomy, including authority to raise their total system caps for net metering up to 5% of peak load.

HB 1809 (Gooditis) follows up on last year’s HB 966 by making the renewable energy and energy efficiency provisions mandatory. If utilities don’t meet annual targets, they have to return their retained overearnings to customers.

HB 1869 (Hurst), SB 1483 (Deeds) and SB 1714 (Edwards) creates a pilot program allowing schools that generate a surplus of solar or wind energy to have the surplus credited to other schools in the same school district.

HB 1902 (Rasoul) would provide a billion dollars in grant funding for solar projects, paid for by utilities, who are required to contribute this amount of money through voluntary contributions (sic).

HB 1928 (Bulova) and SB 1460 (McClellan) expands utility programs allowing third-party power purchase agreements (PPAs) for renewable energy while continuing to restrict the classes of customers who are allowed to have access to this important financing tool.

HB 2117 (Mullin) and SB 1584 (Sutterlein) fixes the problem that competitive service providers can no longer offer renewable energy to a utility’s customers once the utility has an approved renewable energy tariff of its own. Now that the SCC has approved a renewable energy tariff for APCo, this is a live issue.

HB 2165 (Davis and Hurst) and HB 2460 (Jones and Kory), and SB 1496 (Saslaw) provide an income tax credit for nonresidential solar energy equipment installed on landfills, brownfields, in economic opportunity zones, and in certain utility cooperatives. This is a Rubin Group bill.

HB 2192 (Rush) and SB 1331 (Stanley) is a school modernization initiative that includes language encouraging energy efficient building standards and net zero design. It also encourages schools to consider lease agreements with private developers, but does not seem to contemplate the more common use of third-party power purchase agreements.

HB 2241 (Delaney) establishes a green jobs training tax credit.

HB 2500 (Sullivan) establishes a mandatory renewable portfolio standard (RPS) for Virginia, eliminates carbon-producing sources from the list of qualifying sources, kicks things off with an extraordinarily ambitious 20% by 2020 target, and ratchets up the targets to 80% by 2027.

HB 2547 (Hugo) and SB 1769 (Sturtevant) makes changes to the net metering program for customers of electric cooperatives. The overall net metering cap is raised from the current 1 percent to a total of 5%, divided into separate buckets by customer type and with an option for coops to choose to go up to 7%. Customers will be permitted to install enough renewable energy to meet up to 125% of previous year’s demand, up from 100% today. Third-party PPAs are generally legal, with a self-certification requirement. However, the coops will begin imposing demand charges on customers with solar, to be phased in over several years, replacing any standby charges. In the House version only, one additional provision allows investor-owned utilities (Dominion and APCo) to ask the SCC to raise the net metering cap if they feel like it, but I’m told it is not expected to be in the final legislation. This bill was negotiated between the coops and the solar industry via the “Rubin Group.”

HB 2621 (Ingram) and SB 1398 (Stanley) authorize a locality to require the owner or developer of a solar farm, as part of the approval process, to agree to a decommissioning plan. This is a Rubin Group bill.

HB 2641 (Gooditis) makes third-party power purchase agreements for distributed renewable energy resources legal statewide.

HB 2692 (Sullivan) allows the owner of a multifamily residential building to install a renewable energy facility and sell the output to occupants or use for the building’s common areas.

HB 2741 (Aird) establishes a rebate program for low and moderate-income households that install solar.

HB 2792 (Tran) and SB 1779 (Ebbin) establishes a 6-year pilot program for municipal net metering for localities that are retail customers of investor-owned utilities.

HJ 656 (Delaney) would have the Virginia Resources Authority study the process of transitioning Virginia’s workforce from fossil-fuel jobs to green energy jobs.

SB 1091 (Reeves) imposes expensive bonding requirements on utility-scale solar farms, taking a more drastic approach than HB 2621 (Ingram) and SB 1398 (Stanley) to resolving the concerns of localities about what happens to solar farms at the end of their useful life.

Energy Efficiency (some of which have RE components)

HB 2243 (Sullivan) creates an energy efficiency revolving fund to offer no-interest loans to local government, public schools, and public institutions of higher learning.

HB 2292 (Sullivan) and SB 1662 (Wagner), dubbed the “show your work bill,” requires the SCC to provide justification if it rejects a utility energy efficiency program.

HB 2293 (Sullivan) establishes a stakeholder process to provide input on the development of utility energy efficiency programs.

HB 2294 (Sullivan) establishes mandatory energy efficiency goals for electric and gas utilities.

HB 2295 (Sullivan) creates an energy efficiency fund and board to administer it.

HB 2332 (Keam) protects customer data collected by utilities while allowing the use of aggregated anonymous data for energy efficiency and demand-side management efforts.

SB 1111 (Marsden) requires utilities to provide rate abatements to certain customers who invest at least $10,000 in energy efficiency and, by virtue of their lower consumption, end up being pushed into a tier with higher rates.

SB 1400 (Petersen) removes the exclusion of residential buildings from the Property Assessed Clean Energy (PACE) program, which allows localities to provide low-interest loans for energy efficiency and renewable energy improvements on buildings.

HB 2070 (Bell, John) provides a tax deduction for energy saving products, including solar panels and Energy Star products, up to $10,000.

Energy transition and climate

HB 1635 (Rasoul, with 9 co-patrons) imposes a moratorium on fossil fuel projects, including export facilities, gas pipelines and related infrastructure, refineries and fossil fuel exploration; requires utilities to use clean energy sources for 80% of electricity sales by 2028, and 100% by 2036; and requires the Department of Mines, Minerals and Energy to develop a (really) comprehensive climate action plan, which residents are given legal standing to enforce by suit. This is being referred to as by the Off Act. (Update: HB 1635 passed Commerce and Labor on January 23 and heads to the floor of the House. Read this blogpost to understand what’s going on.)

HB 2735 (Toscano) and SB 1666 (Lewis and Spruill) is this year’s version of the Virginia Coastal Protection Act, which would have Virginia formally join the Regional Greenhouse Gas Initiative (RGGI). It dedicates money raised by auctioning carbon allowances to climate adaptation efforts, energy efficiency programs, and coalfields transition. The Governor has made this bill a priority.

HB 1686 (Reid, with 14 co-patrons) and SB 1648 (Boysko) bans new or expanded fossil fuel generating plants until Virginia has those 5,500 MW of renewable energy we were promised. This is referred to as the Renewables First Act.

HB 2611 (Poindexter) would prohibit Virginia from joining or participating in RGGI without support from two-thirds of the members of the House and Senate, making it sort of an anti-Virginia Coastal Protection Act.

HB 2501 (Rasoul) directs the Division of Energy at DMME to include a greenhouse gas emissions inventory in the Virginia Energy Plan.

HB 2645 (Rasoul, with 13 co-patrons), nicknamed the REFUND Act, prohibits electric utilities from making nonessential expenditures and requires refunds if the SCC finds they have. It also bars fuel cost recovery for more pipeline capacity than appropriate to ensure a reliable supply of gas. Other reforms in the bill would undo some of the provisions of last year’s SB 966, lower the percentage of excess earnings utilities can retain, and require the SCC to determine rates of return based on cost of service rather than peer group analysis.

HB 2747 (Kilgore) and SB 1707 (Chafin) create a Southwest Virginia Energy Research and Development Authority which will, among other things, promote renewable energy on brownfield sites, including abandoned mine sites, and support energy storage, including pumped storage hydro.

HJ 724 (Rasoul) is a resolution “Recognizing the need for a Green New Deal in Virginia which promotes a Just Transition to a clean energy economy through lifting working families.”

Other utility regulation

HB 1718 (Ware) requires an electric utility to demonstrate that any pipeline capacity contracts it enters are the lowest-cost option available, before being given approval to charge customers in a fuel factor case.

HB 1840 (Danny Marshall) allows utilities to develop transmission infrastructure at megasites in anticipation of development, charging today’s customers for the expense of attracting new customers.

HB 2477 (Kilgore) would eliminate one of the few areas of retail choice allowed in Virginia by preventing large customers from using competitive retail suppliers of electricity, including for the purpose of procuring renewable energy, in any utility territory with less than 2% annual load growth. (I haven’t confirmed this, but that might be Dominion as well as APCo.)

HB 2503 (Rasoul) requires the State Corporation Commission to conduct a formal hearing before approving any changes to fuel procurement arrangements between affiliates of an electric utility or its parent company that will impact rate payers. This addresses the conflict of interest issue in Dominion Energy’s arrangement to commit its utility subsidiary to purchase capacity in the Atlantic Coast Pipeline.

HB 2691 (O’Quinn) establishes a pilot program for electric utilities to provide broadband services in underserved areas, and raise rates for the rest of us to pay for it, proclaiming this to be in the public interest.

HB 2697 (Toscano) and SB 1583 (Sutterlein) supports competition by shortening the time period that a utility’s customer that switches to a competing supplier is barred from returning as a customer of its utility from 5 years to 90 days.

HB 2738 (Bagby) and SB 1695 (Wagner) authorizes utilities to acquire rights of way on land that the Virginia Economic Development Partnership Authority decides could attract new customers to the site, and allows utilities to recover costs from existing customers. Because, you know, having utilities seize Virginians’ land for speculative development is already going so well for folks in the path of the pipelines. Who could complain about paying higher rates to help it happen more places?

SB 1780 (Petersen) requires, among other things, that utilities must refund to customers the costs of anything the SCC deems is a nonessential expenditure, including spending on lobbying, political contributions, and compensation for employees in excess of $5 million. It directs the SCC to disallow recovery of fuel costs if a company pays more for pipeline capacity from an affiliated company than needed to ensure a reliable supply of natural gas. It requires rate reviews of Dominion and APCo in 2019 and makes those biennial instead of triennial, and provides for the SCC to conduct an audit going back to 2015. It tightens provisions governing utilities’ keeping of overearnings and provides for the allowed rate of return to be based on the cost of providing service instead of letting our utilities make what all the other monopolists make (“peer group analysis”).


This article originally appeared in the Virginia Mercury on January 17, 2019. I’ve updated it to include later-filed bills and one or two that I missed originally. 

There’s a lot to like in Northam’s energy plan, but missed opportunities abound

electric vehicle plugged in

Vehicle electrification gets a boost under the energy plan.

There is a lot to like in the Northam Administration’s new Virginia Energy Plan, starting with what is not in it. The plan doesn’t throw so much as a bone to the coal industry, and the only plug for fracked gas comes in the discussion of alternatives to petroleum in transportation.

The 2018 Energy Plan is all about energy efficiency, solar, onshore wind, offshore wind, clean transportation, and reducing carbon emissions. That’s a refreshing break from the “all of the above” trope that got us into the climate pickle we’re in today. Welcome to the 21stcentury, Virginia.

But speaking of climate, the Intergovernmental Panel on Climate Change (IPCC) just released a special report that makes it clear we need “rapid, far-reaching and unprecedented changes in all aspects of society” to keep warming below 1.5 degrees Celsius. That’s only half again the amount of warming that has already brought us melting glaciers, a navigable Arctic Ocean, larger and more destructive hurricanes, and here in Virginia, the swampiest summer in memory. The fact that things are guaranteed to get worse before they get better (if they get better) is not a happy thought.

Perhaps no Virginia politician today has the courage to rise to the challenge the IPCC describes. Certainly, Governor Northam shows no signs of transforming into a rapid-change kind of leader. But as we celebrate the proposals in his Energy Plan that would begin moving us away from our fossil fuel past, we also have to recognize that none of them go nearly far enough, and missed opportunities abound.

Let’s start with the high points, though. One of the plan’s strongest sections champions offshore wind energy. It calls for 2,000 megawatts (MW) of offshore wind by 2028, fulfilling the potential of the area of ocean 27 miles off Virginia Beach that the federal government leased to Dominion Energy. In the short term, the Plan pledges support for Dominion’s 12-MW pilot project slated for completion in 2020.

Other East Coast states like Massachusetts and New York have adopted more ambitious timelines for commercial-scale projects, but the economics of offshore wind favor the Northeast over the Southeast, and they aren’t saddled with a powerful gas-bloated monopoly utility.  For Virginia, a full build-out by 2028 would be a strong showing, and better by far than Dominion has actually committed to.

Another strong point is the Administration’s commitment to electric vehicles. The transportation sector is responsible for more carbon emissions even than the electric sector, and vehicle electrification is one key response.

Even better would have been a commitment to smart growth strategies to help Virginians get out of their cars. Overlooking this opportunity is a costly mistake, and not just from a climate standpoint. Today’s popular neighborhoods are the ones that are walkable and bikeable, not the ones centered on automobiles. If we want to create thriving communities that attract young workers, we need to put smart growth front and center in urban planning—and stop making suburban sprawl the cheap option for developers.

Speaking of developers, how about beefing up our substandard residential building code? Lowering energy costs and preparing for hotter summers requires better construction standards. Houses can be built today that produce as much energy as they consume, saving money over the life of a mortgage and making homes more comfortable. The only reason Virginia and other states don’t require all new homes to be built this way is that the powerful home builders’ lobby sees higher standards as a threat to profits.

The Energy Plan mentions that updated building codes were among the recommendations in the Virginia Energy Efficiency Roadmap that was developed with funding from the U.S. Department of Energy and published last spring. I hope the only reason the Energy Plan doesn’t include them among its recommendations is that the Administration is already quietly taking action.

Meanwhile, it is not reassuring to see that the section of the plan devoted to attaining Virginia’s ten percent energy efficiency goal simply describes how our utilities will be proposing more efficiency programs as a result of this year’s SB 966 (the “grid mod” bill).

States that are serious about energy efficiency don’t leave it up to companies whose profits depend on a lack of efficiency. They take the job away from the sellers of electricity and give it to people more motivated. So if the Governor’s plan is merely to leave it up to Dominion and APCo without changing their incentives, we should abandon all hope right now.

Indeed, it is strange how often the Energy Plan finishes an in-depth discussion of an issue with a shallow recommendation, and frequently one that has the distinct odor of having been vetted by Dominion.

That observation leads us straight to grid modernization. The plan opens with a very fine discussion of grid modernization, one that shows the Administration understands both the problem and the solution. It opens by declaring, “Virginia needs a coordinated distribution system planning process.” And it notes, “One important rationale for a focus on grid modernization is that the transitions in our electricity system include a shift away from large, centralized power stations to more distributed energy resources.”

Well, exactly! Moreover: “The grid transformation improvements that the Commonwealth is contemplating include a significant focus on the distribution system, but our current resource planning process (Integrated Resource Plan or IRP) does not fully evaluate the integration of these resources. One overarching focus of this Energy Plan is the development of a comprehensive analysis of distributed energy resources.”

But just when you feel sure that the plan is about to announce the administration is setting up an independent process for comprehensive grid modernization, the discussion comes to a screeching halt. The plan offers just one recommendation, which starts out well but then takes a sudden turn down a dead-end road:

To ensure that utility investments align with long-term policy objectives and market shifts, Virginia should reform its regulatory process to include distribution system level planning in Virginia’s ongoing Integrated Resource Planning requirement.

Seriously? We need regulatory reform, but we will let the utilities handle it through their IRPs? Sorry, who let Dominion write that into the plan?

It’s possible the Administration is punting here because it doesn’t want to antagonize the State Corporation Commission (SCC). The SCC pretty much hated the grid mod bill and resented the legislation’s attack on the Commission’s oversight authority. And rightly so, but let’s face it, the SCC hasn’t shown any interest in “reforming the regulatory process.”

The Energy Plan’s failure to take up this challenge is all the more discouraging in light of a just-released report from the non-profit Grid Lab that evaluates Dominion’s spending proposal under SB 966 and finds it sorely lacking. The report clearly lays out how to do grid modernization right. It’s disheartening to see the Administration on board with doing it wrong.

Dominion’s influence also hobbles the recommendations on rooftop solar and net metering. This section begins by recognizing that “Net metering is one of the primary policy drivers for the installation of distributed solar resources from residential, small business, and agricultural stakeholders.” Then it describes some of the barriers that currently restrain the market: standby charges, system size caps, the rule that prevents customers from installing more solar than necessary to meet past (but not future) demand.

But its recommendations are limited to raising the 1% aggregate cap on net metering to 5% and making third-party power purchase agreements legal statewide. These are necessary reforms, and if the Administration can achieve them, Virginia will see a lot more solar development. But why not recommend doing away with all the unnecessary policy barriers and really open up the market? The answer, surely, is that Dominion wouldn’t stand for it.

Refusing to challenge these barriers (and others—the list is a long one) is especially regrettable given that the plan goes on to recommend Dominion develop distributed generation on customer property. Dominion has tried this before through its Solar Partnership Program, and mostly proved it can’t compete with private developers. If it wants to try again, that’s great. We love competition! But you have to suspect that competition is not what this particular monopoly has in mind.

The need to expand opportunities for private investment in solar is all the more pressing in light of the slow pace of utility investment. Legislators have been congratulating themselves on declaring 5,000 megawatts (MW) of solar and wind in the public interest, and the Energy Plan calls for Dominion to develop 500 MW of solar annually. I suspect our leaders don’t realize how little that is. After ten years, 5,000 MW of solar, at a projected capacity factor of 25%, would produce less electricity than the 1,588-MW gas plant Dominion is currently building in Greensville, operating at a projected 80% capacity.

Offshore wind capacities are in the range of 40-45%, so 2,000 MW of offshore wind will produce the amount of electricity equivalent to one of Dominion’s other gas plants. It won’t quite match the 1,358-MW Brunswick Power Station, or even the 1,329-MW Warren County Power Station, but Dominion also has several smaller gas plants.

But at this point you get the picture. If all the solar and wind Virginia plans to build over ten years adds up to two gas plants, Virginia is not building enough solar and wind.

That gets us back to climate. The Administration can claim credit for following through on developing regulations to reduce carbon emissions from power plants by 30% by 2030, using the cap-and-trade program of the Regional Greenhouse Gas Initiative (RGGI) of the northeastern states. If successful, that still leaves us with 70% of the carbon emissions in 2030, when we need to be well on our way to zero. And for that, we don’t have a plan.

Of course, Ralph Northam has been Governor for only nine months. He has some solid people in place, but right now he has to work with a legislature controlled by Republicans and dominated by Dominion allies in both parties, not to mention an SCC that’s still way too fond of fossil fuels. Another blue wave in the 2019 election could sweep in enough new people to change the calculus on what is possible. In that case, we may yet see the kind of leadership we need.

 

This article first appeared in the Virginia Mercury on October 15, 2018.

Solar tours this weekend will showcase much more than solar panels

solar panels on a house

This house looks ordinary, but it boasts a superpower: its solar panels produce all the energy the homeowners use.

Innovative lighting, rain gardens, mini-split heat pumps, electric vehicles, and high-tech appliances—what do these have to do with solar panels? They will all be featured at homes and businesses opening their doors to the public on Saturday and Sunday, October 6 and 7, as part of the National Solar Tour.

You can find open houses and tours near you using this map or the listing on this site. For those in Northern Virginia, a downloadable booklet describes more than 40 solar and green homes participating in the Metro DC tour. The website also tells you where you can buy a hard copy if you prefer. Some homes didn’t make it into the booklet, which went to press over the summer.

The American Solar Energy Society (ASES) started the National tour more than two decades ago, but the Washington metro area tour is now in its 28thyear. This is pretty astonishing if you think about where solar technology was in 1990.

As a “tourist” during the early days, I remember the gee-whiz feeling I got exploring the handiwork of early solar adopters. It is the tragedy of my life that I live in the woods and can’t have my own solar panels. Fortunately, the tours have always been about more than just generating electricity. Back then, they had to be, because not many people could afford solar PV. Good design and energy efficiency took center stage.

Through the tours I learned about passive solar houses, solar hot water, insulation made from old blue jeans, natural light via “daylighting,” the incorporation of recycled materials into beautiful tile and countertops, eco-friendly siding materials, and how to live with nature using native plants and rain gardens. More recently the tours have branched out to include electric vehicles and green roofs.

This year’s Metro DC tour booklet includes new homes built to Passive House standards and loaded with cool features, but to my mind the more interesting entries are ordinary homes that have undergone a thoughtful retrofit. Here is a description of one of the latter:

This 1950s ranch house has solar PV, solar hot water, solar space heating, a cupola/solar chimney, solar daylight tubes, solar attic fan, solar sidewalk lights, south facing energy efficient windows, 2 highly efficient energy star minisplit heat pumps (26-SEER), a fireplace insert wood stove, exterior insulation finishing system (EIFS), CFL/LED lighting, kitchen counter tops made from recycled glass, and recycled floor tiles in the foyer and basement. The yard has a 1000-gallon cistern, food forest, 2 rain gardens, permeable walkways, 2 rain barrels, and 2 compost piles. There is also an aquaponics system, a Chevy Volt and a plug-in Prius. Installation by Greenspring Energy.

These renovations suggest an important point: reducing energy use doesn’t require us to tear down our homes and start over. And thank heavens for that, since most of us aren’t going to do that anyway.

Besides which, existing homes make up so much of our housing stock that making big efficiency gains depends on how well we retrofit and weatherize old homes. So if a house built in the 50s can be turned into a solar energy showcase, the rest of us should be taking notes.

Workshop Explores Local Government Clean Energy Financing Alternatives

Representatives from six local governments in Northern Virginia attended a workshop on budget-neutral, clean energy alternative financing options for local governments at the Fairfax County Government Center on September 7.

Presenters discussed financing approaches that can help local governments meet their energy and climate goals while saving taxpayer dollars. Specifically, the workshop covered Power Purchase Agreements (PPAs) for solar projects and Energy Savings Performance Contracts (ESPCs) for a range of energy efficiency retrofits. These budget-neutral tools allow local governments to invest in long-term energy savings without the up-front costs.

Elected officials and local government staff, as well as representatives of the Northern Virginia Regional Commission and community members attended the workshop organized by the Great Falls Group of the Sierra Club with the assistance of Fairfax Supervisor John Foust. The workshop was also televised for remote viewing.

The workshop video and background materials are available online.

Clean Energy Financing Workshop

More than 50 local government staff and community members attended the workshop organized by the Great Falls Group of the Sierra Club

Solar PPAs available for most Northern Virginia localities

 A PPA is a contract in which a local government agrees to purchase solar-generated energy from a solar developer at a set price over the term of the contract (typically 15-25 years). In his presentation, Eric Hurlocker of the GreeneHurlocker Law Firm explained why PPAs are attractive to local governments; they require no capital outlay, involve no fuel price risk, and make effective use of tax incentives, allowing local governments to focus on their core functions.

Eric Hurlocker

Eric Hurlocker attributes the surge in VA PPA projects to approaching sunset of the federal solar tax credit

Patricia Innocenti, Deputy Procurement Director for Fairfax County, stated the county will send out its first solar PPA request for proposals (RFP) for the Reston Community Center before the end of the year. This RFP also will encompass other Fairfax County government buildings. Fairfax County plans to draft the RFP so that other jurisdictions can ride the contract following contract award.

PPAs are governed by the terms of a pilot program applicable to customers of Dominion Energy Virginia, including localities that are members of the Virginia Energy Purchasing Governmental Association (VEPGA).

Click to view the fact sheet on on-site solar options for Virginia’s local governments.

Opportunities for local governments to receive state-level technical support for ESPCs

Nam Nguyen of the Virginia Department of Mines, Minerals, and Energy (DMME) presented the many advantages of ESPCs. The ESPC is a “financial mechanism to pay for today’s facility upgrades with tomorrow’s energy savings,” said Nguyen. Third-party contractors, called energy service companies (ESCOs), take on the investment risk, and state law requires the contractors to guarantee the energy savings for localities. DMME calculates that ESPCs have provided $860 million in energy savings in Virginia since 2001.

Nam Nguyen

Nam Nguyen, VA DMME, explains the many advantages of ESPCs and the technical and project management support his department provides to local governments

Nguyen made a Fact Sheet on ESPCs available to participants.

Justin Moss, Energy Coordinator for the Fairfax County Public Schools, said his department considers ESPCs “a very viable option to help replace aging equipment when we lack bond funding for that.” Their ESPC for 106 schools has saved $29 million in energy costs to date.

While smaller jurisdictions often know ESPCs could save them millions of dollars, they fear they lack staff and expertise to manage ESPC projects. This is where DMME comes in. Nguyen explained that his department provides technical and engineering support to ensure governments are empowered to negotiate good terms for the contract. DMME also provides hands-on project management support throughout the duration of the contract. Since there is no charge for requesting an initial energy audit to determine the feasibility of pursuing an ESPC project at government-owned facilities, it is a wonder why more Virginia localities do not take greater advantage of this financing tool.

Click to view the full-length workshop video.

More 2018 bills: energy efficiency, storage, and electric vehicles

 

This prototype of the 2020 Tesla Roadster is not among the EVs available for test drives at Conservation Lobby Day. I’m using the picture anyway because it is as close as I will ever come to owning one. Photo credit Smnt via Wikimedia Commons.

My post last week covered the significant renewable energy bills, especially solar bills, introduced by the end of the first week of the 2018 legislative session. In this post I tackle three other bill categories of interest to clean energy advocates: energy efficiency, energy storage, and electric vehicles.

There is more to some of these bills than my brief description indicates; I just highlight the points I think are most interesting. Also, as with the solar bills, there may be more bills added in the coming week, so keep checking back for updates.

Energy Efficiency

Virginia’s woeful performance on energy efficiency was the subject of a recent guest post here by my colleague Melissa Christensen. A number of legislators have tried in recent years to turn this around, with remarkably little success.

Delegate Rip Sullivan has worked as hard as anyone on finding legislative fixes. He has several efficiency bills this year. HB 963 is the most impactful, requiring electric and gas utilities to meet energy efficiency targets, and to submit plans to the State Corporation Commission (SCC) for its approval describing how they will achieve the targets. The bill would also require utilities and the SCC to prioritize money-saving efficiency measures over proposals for new generation or transmission facilities.

Taking a narrower approach to the problem, two other Sullivan bills address the four tests the SCC uses to determine whether to approve an energy efficiency program proposed by a utility. The SCC has relied on the Ratepayer Impact Measure (RIM) test to reject programs that otherwise would provide cost-effective energy savings. HB 964 removes the RIM test from the list of tests the SCC is required to consider when determining that an energy efficiency program proposed by an electric utility is in the public interest. Instead, the SCC would consider whether the net present value of a program’s benefits exceeds the net present value of its costs as determined under the Total Resource Cost Test, the Utility Cost Test, and the Participant Test.

Taking a different tack, HB 965 defines the Total Resource Cost Test as a test to determine if the benefit-cost ratio of a proposed energy efficiency program or measure is greater than one. An energy efficiency program or measure that meets the Total Resource Cost Test is declared to be in the public interest. If it fails the test, it would then be reviewed under the other tests.

Delegate Tim Hugo’s HB 1261 proposes another way to undercut the SCC’s over-reliance on the RIM test. The bill provides that an energy efficiency program proposed by an electric utility is in the public interest if the net present value of the benefits exceeds the net present value of the costs as determined by any three of the existing law’s four benefit-cost tests. At least, that is surely the intent. Other reviewers say the bill’s wording could potentially be interpreted in a way that undermines its intent.

Two other Sullivan bills also deserve mention. HB 560 establishes a revolving fund to provide no-interest loans to any locality, school division, or public institution of higher education for energy conservation or efficiency projects. HB 204 would allow localities to adopt ordinances to assist commercial building owners in getting energy usage data for tenants in the building.

Finally, Delegate Bell’s HB 58 would generally require state agencies to use LED bulbs instead of incandescent light bulbs for new outdoor lighting fixtures or when replacing bulbs in existing fixtures.

Energy storage

Energy storage is one of the hot topics in energy today. In most states, the focus is on advanced battery technology, which can take the form of battery packs small enough for residential and commercial customers, or arrays large enough to provide utilities with an alternative to new generating plants. The value of customer-sited battery systems goes beyond being able to use solar energy at night; batteries can also provide grid services and help communities prepare for widespread power outages caused by storms or attacks on the grid.

In Virginia, Dominion Energy currently seems more interested in pumped storage hydropower, a decades-old technology that uses reservoirs to store surplus energy, traditionally energy generated at night from coal and nuclear plants, for use in the daytime. A 2017 law gives Dominion support for pumped storage using old coal mines, potentially a boost for the economy of Southwest Virginia but an unproven technology rife with questions about its economic viability and environmental impacts.

At any rate, energy storage will be playing an increasingly important role in Virginia as elsewhere, and three of this year’s bills address it. Delegate Toscano’s HB 1018 seeks to incentivize customer acquisition of energy storage systems with a tax credit of 30% of an energy storage system’s cost, up to $5,000 for a residential storage system or $75,000 for a commercial system. Delegate Habeeb’s HB 782 addresses energy storage at the utility level. It requires the SCC to establish a pilot program under which Dominion and APCo would submit proposals to deploy batteries, up to 10 MW for APCo and up to 30 MW for Dominion.

HJ 101 (Toscano) is a study bill. It tasks the Department of Mines, Minerals and Energy with conducting a two-year study to determine what regulatory reforms and market incentives are necessary to increase the use of energy storage devices in Virginia (including pumped storage hydropower).

Electric Vehicles

As with battery storage, electric vehicle technology is only just starting to register as an important topic in Virginia, and its impact—on utilities, the grid, air pollution and the economy—is just beginning to be discussed. This may be the year legislators become engaged. DriveElectric RVA, an electric vehicle advocacy group, plans to offer test drives of EVs at the capitol on January 22, Conservation Lobby Day.

Three bills deal with EVs this year. HB 469 (Reid) offers a tax credit of up to $3,500 for purchase of a new electric vehicle. HB 922 authorizes local governments to install charging stations and charge for the electricity (individuals and businesses can already do so). HJ 74 (Reid) requires a study of the impacts of vehicle electrification, including on workers in the automotive repair industry. One of the selling points for EVs is that they require minimal maintenance.

How Did Virginia Get So Far Behind on Energy Efficiency?

  • Dominion Energy ranks 50th in energy efficiency among the 51 largest electric utilities in the nation (ACEEE)
  • Virginia has captured only 2% of its efficiency potential (EPRI)
  • Robust energy efficiency policy in VA could increase employment by 38,000 jobs by 2030 (DMME Energy Plan 2014)
  • VA’s residential electricity bills ranked 10th highest in the U.S in 2015, commercial bills ranked 13th highest (U.S. Energy Information Administration)

In the past year, numerous reports from research institutes, industry think tanks, and government entities have exposed Virginia’s poor energy efficiency performance. Considering the clear economic and environmental benefits that energy efficiency provides to Virginia’s businesses and residents, and in light of Virginia’s untapped energy efficiency potential, electric utilities should prioritize meeting demand through improving energy efficiency rather than building new expensive power plants.

Virginia Utilities Are Significantly Underperforming in Achieving Energy Efficiency.

Virginia’s largest investor-owned utility, Dominion Energy, holds a very weak record on energy efficiency – ranking 50th (next to last) in efficiency efforts among the 51 largest electric utilities in the nation, according to the American Council for an Energy-Efficient Economy (ACEEE). In this utilities report, Dominion Energy earned only 11% of total energy efficiency points (5.5 out of 50) and performed far worse than peer utilities in the Mid-Atlantic region (MD, NJ, PA, and VA). In contrast, Maryland’s BG&E utility company ranks 4th in the nation. In addition, a 2016 independent survey of the 30 largest investor-owned utility companies ranked Dominion last for energy efficiency using two separate measures.

Virginia investor-owned utilities are not even close to reaching Virginia’s voluntary energy efficiency goal of reducing electricity use by 10% by 2022 (relative to 2006 base consumption – equal to a reduction of 10.76 million megawatt hours). According to the Virginia Department of Mines, Minerals, and Energy (DMME), utilities had achieved less than 10% of the reduction goal by the end of 2015. In Dominion’s 2017 Integrated Resource Plan (IRP), State Corporation Commission (SCC) staff witness Eichenlaub testified that, based on current programs, Dominion Energy could achieve only 80% of the 10% reduction target by 2032—still deficient a decade late.

Graphic1

Even the electric utility industry’s own research organization (Electric Power Research Institute, or “EPRI”) reveals how far behind Virginia is in energy efficiency efforts. EPRI’s recent report shows that Virginia has captured only 2% of its efficiency potential. Based on current programs, policies and activities, Virginia will only achieve 7% of its energy efficiency potential by 2035, ranking near the lowest in the nation – 48th out of 50 states and the District of Columbia.

Achieving Advances in Energy Efficiency Will Reap Great Benefits for Virginia.

Improving energy efficiency is the lowest cost and most readily available resource to save money and meet energy demand. Energy efficiency consistently ranks as the lowest-cost resource—averaging 3 cents per kilowatt hour—and is one-half to one-third the cost of building new power plants.[i] While improving energy efficiency will obviously conserve natural resources, reduce pollution, and mitigate adverse health effects from air pollutants, improvements will also bring direct economic benefits to Virginia through job creation, increased economic competitiveness, and reduced electricity bills.

Graphic2

Energy efficiency is a growing industry in Virginia. According to the Virginia Energy Efficiency Council (VAEEC), revenue generated from this sector has increased from nearly $300 million in 2013 to $1.5 billion today. Energy efficiency currently already supports over 75,000 jobs in Virginia but it could support more. Indeed, Virginia’s Energy Plan states that robust energy efficiency policy could increase employment by 38,000 jobs by 2030.

Energy efficiency can help maintain and attract business to Virginia. Almost half of Fortune 500 companies (48% in 2016) have set greenhouse gas emissions reduction and/or energy efficiency targets. In Dominion’s 2017 IRP case, a coalition of data center providers and customers in Virginia recently confirmed that their investors want them to reduce greenhouse gas emissions. Data centers constitute the largest share of Dominion’s forecasted load growth. Advanced Energy Economy confirms, “for many companies, the ability to control energy costs […] is a key factor when deciding where to locate or expand their operations.” By lowering greenhouse gas emissions, efficiency will make Virginia more attractive to businesses.

Improving energy efficiency will benefit consumers, especially low-income consumers vulnerable to increases in electricity bills. Dominion Energy claims to have among the lowest rates in the nation. Yet a report by the Virginia Poverty Law Center reveals that Dominion Energy’s rates are average and its bills have increased 30% between 2006 and 2016. Of that increase, 42% comes from rate adjustment clauses (RACs)[ii] – keeping the base rates low but resulting in higher bills. These increases impact low-income households more severely, as these households spend a greater proportion of their income on utilities than the average family. Rappahannock Electric Co-op recently confirmed that low-income customers often consume more electricity due to poor insulation and older, less efficient appliances.

Dominion Energy is planning several large new power plants to meet projected demand. Yet Virginia has great, untapped potential for reducing customers’ electric bills and meeting demand by pursuing energy efficiency instead. Advances in energy efficiency will grow Virginia’s economy, increase its economic competitiveness, and benefit consumers (especially low-income consumers).

Policy Recommendations

There are several regulatory obstacles to stronger utility energy efficiency action in Virginia. Other peer states have achieved significant advances through the following policies.

  1. Make the voluntary energy efficiency resource standard (EERS) a mandatory EERS.
  2. Broaden the State Corporation Commission’s cost-effectiveness criteria to include more energy efficiency benefits. This broadened definition would result in more energy efficiency programs being approved.
  3. Allow electric utilities to decouple their profits and sales, and provide utilities with performance incentives. (Decoupling has already occurred for Virginia natural gas companies.)

Key Recent Reports

 

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[i] For additional information on energy efficiency as a resource, see the Alliance to Save Energy’s Energy 2030 Reports, available at http://bit.ly/2BMHFl3, and McKinsey & Company’s 2009 report Unlocking Energy Efficiency in the US Economy, available at http://bit.ly/2hf3HAM.

[ii] For additional information on Rate Adjustment Clauses (RACs), see Virginia Energy Purchasing Governmental Association’s Elected Official’s Guide to Ensuring Fair Regulation for Electricity at http://vepga.org/wp-content/uploads/2017/06/VEPGA_16SummaryUpdate_ElectedOfficialsGuide.pdf. One example of RACs are fuel adjustment clauses that affect prices for fossil fuels, such as natural gas and coal. Thus, when prices spiked during the polar vortex several years ago, the price increase is reflected in an RAC.

 

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About Melissa Christensen

Melissa is an intern with the Virginia Sierra Club Legislative Committee researching opportunities in energy efficiency. Having grown up in Belgium and recently lived in Shanghai for two years, Melissa is passionate about accelerating the world’s transition to a sustainable economy.