So many bills filed, so few remain: almost-halftime status report on climate and energy legislation

Virginia statehouse, where the General Assembly meetsTuesday, January 5 marks “crossover” at the Virginia General Assembly, the date when House bills go over to the Senate, and Senate bills to the House. Any legislation that hasn’t made it through the gantlet to a successful vote in its starting chamber evaporates in a puff of smoke, if it has not already died due to causes natural or unnatural.

I’ve hot-linked the bill numbers to their pages in the Legislative Information Service; follow the links on the page to read the legislation or see vote results. The information below is based on what was available as of yesterday, February 3.

Many of the committee hearings were recorded on video.

Renewable energy bills

Solar Freedom, the bill to remove barriers to customer-owned solar statewide, met implacable resistance from Republicans in control of the Commerce and Labor committees, as did narrower bills focused just on power purchase agreements (PPAs). That meant the only significant renewable energy legislation moving forward is a bill negotiated between the rural electric cooperatives and solar advocates that will ease restrictions on customer solar in coop territory. See HB 2547 (Hugo) and SB 1769 (Sturtevant), below.

Two bills that would have provided financial support for solar have passed their committees, but only after the money part got taken out.

A watered-down municipal renewable energy bill survives, but in a disappointingly limited form. An interesting solar-on-schools bill now looks less interesting.

Legislation enabling localities to impose new decommissioning requirements on large solar farms will likely move forward.

Here is the status of the renewable energy bills I’ve been tracking, with a little color commentary sprinkled in:

 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.  Advocates gave this everything they had, with hundreds of citizens lobbying for the bill and showing up at the subcommittee hearings.But Republicans held firm for their utility friends. HB 2329 was defeated in Commerce and Labor 8-7 on a party-line vote with two Democrats absent and one (Lindsay) present but strangely not voting. The Senate companion was killed in Commerce and Labor on a 10-3 party-line vote. Some of the reforms in Solar Freedom also appear in weakened form in one bill (HB 2547 and SB 1769) that moves forward—but only for the electric cooperatives.   

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 in Commerce 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 1869 defeated 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 2117 defeated in Commerce 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.

STILL ALIVE: 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 remain stuck in the Committee on General Laws (not a good sign). 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 unanimously. 

STILL ALIVE:  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 contemplate the more common use of third-party power purchase agreements. HB 2192 was amended in General Laws, where it passed unanimously. It still 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. New language requires that renewable energy facilities must be on school property and cannot be used to serve any other property. PPAs are still not mentioned. Ambiguous language in these provisions may cause problems for schools. SB 1331 was amended with what appears to be the same language as its House counterpart. It reported unanimously from Finance.

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 in Commerce and Labor subcommittee 3 with only Democrat Mark Keam supporting it.

STILL ALIVE:  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. This bill was negotiated between the coops and the solar industry via the “Rubin Group.” You have to hand it to the coops, this is huge movement on their part, if not perfect, and it is too bad that Dominion and APCo held fast to their obstructionist position rather than allow their customers more freedom to install solar. 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. Delegate Hugo told me he tried to get Dominion and APCo to sign on to the coop deal but couldn’t persuade them—and I understand from others that he did make a real effort. But he scoffed at my suggestion that maybe Dominion shouldn’t have the final say. HB 2547 reported unanimously from Commerce and Labor. SB 1769 was amended to include the same stakeholder language requiring the mice to continue negotiations with the cat. It has now passed the Senate unanimously.

STILL ALIVE: 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. An amended version of HB 2621 reported from Counties, Cities and Towns unanimously. SB 1398 was incorporated into SB 1091.

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.

STILL ALIVE: 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; otherwise it was going to be sent to Appropriations to die. As amended it was reported Commerce and Labor unanimously.

STILL ALIVE: HB 2789 (O’Quinn) requires Dominion and APCo to apply for approval of three-year programs to incentivize low-income energy efficiency and solar totaling $25 million each. The efficiency spending comes out of the money utilities are required to spend under last year’s grid mod legislation. The solar spending is new money. Somehow I missed this bill in my earlier round-up. It passed the House 88-11. The nay votes are  all Republicans: Adams, L.R., Byron, Cole, Fariss, Freitas, Gilbert, Landes, Poindexter, Wright, Brewer and LaRock.

STILL ALIVE: 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. The initial bill negotiated with the utilities was predictably much more limited than most localities wanted; further amendments have left it useful for only a few small on-site projects that don’t need PPAs. Fairfax County supervisor Jeff McKay testified in committee it would do nothing to help the county’s projects.Tran presented the amended bill in committee just a day or two after coming under fire from conservative Republicans for a bill that would ease one restriction on late-term abortions. In an obviously orchestrated attempt to demonstrate that conservative middle-aged white men still wield the power in Richmond, Delegate Hugo said he needed time to read the amendment. Committee chairman Terry Kilgore obliged, saying they would come back to it. Kilgore then kept Tran waiting through several hours of other bills, many of which also had new amendments, before letting her bill come back up. (Proving once again that middle school has nothing on the General Assembly.) As amended, HB 2792 reported from Commerce and Labor 19-2, with only Republicans Hugo and Head voting no.

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.

STILL ALIVE: 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. SB 1091 was amended to conform to the compromise language of HB 2621 and has passed the Senate unanimously.

Energy Efficiency (some of which have RE components)

We’re seeing modest progress in efficiency bills this year, mostly of the greasing-the-wheels variety. One of particular interest is Chap Petersen’s bill enabling Property Assessed Clean Energy (PACE) financing programs for residential buildings.

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.

STILL ALIVE: 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 2292 reported from Commerce and Labor with a substitute. SB 1662 passed the Senate with only 6 Republicans in opposition.

STILL ALIVE: HB 2293 (Sullivan) establishes a stakeholder process to provide input on the development of utility energy efficiency programs. Reported unanimously from Commerce and Labor with a substitute.

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.

STILL ALIVE: 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. Reported unanimously from Commerce and Labor with a substitute.

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.

STILL ALIVE: 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. Passed the Senate unanimously.

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.

Energy transition and climate

Bills designed to push Virginia towards a clean energy future died in the face of unanimous Republican opposition. House Republicans also united to pass a bill prohibiting Virginia from implementing its carbon reduction plan. But in a faint nod to reality, most Republicans and Democrats support legislation to help southwest Virginia develop renewable energy and energy storage (as long as it doesn’t cost anything).

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 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 in Commerce 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.

STILL ALIVE: 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 party-line vote.

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.

STILL ALIVE: 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. HB 2747 reported unanimously from Commerce and Labor and was referred to Appropriations, where it passed with a substitute (presumably removing its fiscal impact, though I haven’t looked closely enough to confirm that). SB 1707 reported from Local Government and then from Finance, also with a substitute, presumably the same one.

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, but there is no further information about it in the LIS.

Other utility regulation

 Bills that preserve, protect, and extend the monopoly power of our utilities are doing well. On the other hand, Dominion has so far failed to kill a bill strengthening the standards of review the SCC will use in considering whether to allow rate recovery for pipeline capacity. 

STILL ALIVE: 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. The discussion in the committee was lively. Delegate Ware assured the committee 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 committee 11-8, with Democrats Keam, Kory, Bagby, Toscano, Heretick, Mullin and Bourne joining Republicans Ware, Byron, Webert and Wilt in support.  Republicans voting against were Kilgore, Hugo, Marshall, Robert Bell, O’Quinn, Yancey, Ransone, and Head. Democrat Eileen Filler-Corn abstained. [UPDATE 2/5/19: HB 1718 passed the House on a bipartisan vote of 57-40, with Filler-Corn abstaining again. Here is the tally of who voted on which side.]

STILL ALIVE: 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. Reported from Commerce and Labor with a substitute. Democrats Bagby, Heretick, Mullin and Bourne joined the Republicans in support.

STILL ALIVE: 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. A substitute bill in Commerce and Labor removes this language but replaces it with other requirements designed to make it difficult for large customers to leave the embrace of their incumbent monopoly. The substitute passed 15-2, with only Delegates Filler-Corn and Keam opposed.

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.

STILL ALIVE: 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. A substitute bill has utilities only providing the capacity on their lines to private broadband suppliers, and makes the investment eligible for recovery as an electric grid transformation project (seriously!), but prevents utilities from going into broadband services themselves. The amended bill passed Commerce and Labor unanimously.

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.

STILL ALIVE: 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?  A substitute tightens the requirements somewhat without changing the basics. HB 2738 reported from Commerce and Labor 19-1 (Kory opposing, Keam abstaining). SB 1695 now has a similar amendment; it passed the Senate 34-6 and has been referred to House Commerce and Labor. The dissenting senators are an interesting mix of Rs and Ds: Chase, McPike, Newman, Peake, Spruill, and Suetterlein.

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.

The Commerce & Labor Committee did WHAT?

Today the Republican-controlled House Commerce & Labor Committee endorsed the most sweeping energy transformation package in history by passing Democratic Delegate Sam Rasoul’s HB 1635, a bill known as the “Off Act” that would transition Virginia away from fossil fuels by 2035.

Or rather, they passed the bill. Saying they endorsed it: I’m making that up. The Republicans who run Commerce & Labor are wholly indebted to the fossil fuel companies whose campaign contributions keep them in office. Most of them don’t even believe in human-caused climate change. They cannot conceive of an economy reshaped around clean energy.

They didn’t allow this bill to pass out of committee because they support it, but because they want a bigger venue in which to kill it.

The Off Act is serious climate action. It starts with a complete fossil fuel moratorium and goes from there. The Republicans think it is so extreme that even most Democrats will vote against it when push comes to shove. And a vote on the floor of the House is a great place for verbal pushing and shoving. They intend to create some serious theater in the cause of preserving America’s dependence on dinosaur-based hydrocarbons.

How do we know this is the plan? Let’s play the video of the committee hearing.

First, Delegate Rasoul introduces the bill, and a cross-section of Virginia residents step up to testify in support—women, men, black, white, Asian-American. They are followed by a line of older white men representing fossil fuel interests. Each of these highly-paid lobbyists explains how this radical bill will cost too much and hurt poor people.

Then the committee members vote, and gradually we understand that the reason this bill, and this bill alone, did not go to the usual subcommittee to die, is that the Republicans have selected it as the vote they will take to the floor. To do that, they need just one of their members to vote in support.

Tim Hugo, who won reelection by only about 110 votes last year and will be in the crosshairs of grassroots progressives this fall, is the R designated to vote in favor. You will notice, however, that he does not speak in favor of the bill in committee, and as a conservative and close ally of Dominion Energy there is no way he actually supports it (though he will trumpet his vote when he needs to, come November).

But the Republicans screw up the first vote; it is 8-8, not enough to pass the bill. Kathy Byron, who voted against it, calls for a re-vote, and this time withholds her vote, allowing it to pass.

The smile on committee chair Terry Kilgore’s face afterwards seems to be recognition that the snafu revealed the plan all too well.

Update: You all will be shocked–shocked!–to know that the bill died on January 31 after a very vigorous debate on the House floor. 

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. 

It’s time for the General Assembly to side with customers, not utilities, on solar

Solar canopy over a parking lot

Solar panels on parking lots, landfills, rooftops and other sites could provide a lot of clean electricity if policy barriers are removed.

Last winter, the Virginia General Assembly passed legislation giving utilities the green light to develop 5,500 megawatts (MW) of wind and solar energy. This marks a milestone for Virginia, offering the possibility for an amount of solar equal in output to Dominion Energy’s newest gas-fired power plant in Greensville.*

Amid the general celebration of this support for utility solar and wind, few legislators noticed that the bill did nothing to help residents and businesses that want to build renewable energy for their own use. Private investment drives most of the solar market in many other states, so leaving it out of the picture means squandering an opportunity.

Customers—and the solar companies who depend on small-scale solar— hope it’s their turn this year. They’d like to see the General Assembly give customer-built solar the same level of love in 2019 that it gave utility solar in 2018.

Unfortunately, that doesn’t square with the agenda of our utilities, which want to protect their monopolies on electric generation. Over the past few years, Dominion Energy and its fellow utilities have blocked dozens of bills aimed at removing some of the policy barriers stifling the market.

Just one example: Fairfax County, like many jurisdictions across the state, owns a closed landfill. It can’t be used for most purposes, but it could hold a solar array large enough to power multiple county buildings.

Yet no fewer than four different provisions of Virginia’s net metering law keep a cost-effective project from moving forward: a 1 MW limit on commercial solar arrays; a requirement that electricity from a solar facility must be used onsite; a rule that a solar facility can’t be larger than needed to meet the site’s electric demand over the preceding year; and a prohibition on meter aggregation that keeps a customer with solar on one building from sharing it with another building.

These would all be simple legislative fixes, but for years now Dominion and the other utilities have opposed the reforms.

Other reforms are needed, too. The solar industry faces a ceiling on the total amount of solar customers can own under the net metering program; utilities killed bills that would raise the ceiling. Businesses tried to lift restrictions on third-party financing using power purchase agreements. Utilities killed the bills. Homeowners tried to get out from under the oppressive fees called standby charges that utilities impose to keep customers from putting up more than 10 kilowatts (kW) of solar panels. Utilities killed the bills.

Killing bills clearly must get tedious. So, this year, Dominion is using the occasion of a report to the General Assembly on solar energy last month to launch a propaganda campaign against the whole radical idea of customers producing their own energy supply.

The 44-page, glossy brochure boasts photographs of sunlight slanting across solar panels nestled in fields of dandelions. Much of it is devoted to touting Dominion’s own progress in installing solar. Dominion claims its 1,600 MW of solar make it a national leader, though that might have to be taken with a grain of salt given that the U.S. now has more than 58,000 MW of solar.

And of course, most of Dominion’s solar is in other states; and of the solar in Virginia, most is being built in response to demand from the state government and corporate customers. Only a few of the solar farms Dominion includes will actually serve ordinary ratepayers.

The achievements amount to even less for Dominion’s customer-sited projects. The company’s Solar Partnership Program for commercial customers built only 7.7 MW out of the 30 MW the SCC approved five years ago. The Solar Purchase Program that Dominion once hoped might replace net metering has produced a grand total of 2 MW.

And then there are the 18 schools across the commonwealth that are the lucky recipients of solar panels in Dominion’s “Solar for Students” program. Each school gets 1.2 kW worth of solar panels, or roughly enough to run an old refrigerator. (In fairness, those old refrigerators are electricity hogs. If you have one, replace it.)

If these programs demonstrate Dominion’s level of competence building rooftop solar, that seems like reason enough to open up the private market.

It’s also worth keeping in mind that the reason customers are trying so hard to remove Virginia’s policy barriers is that they don’t just want electricity, they want solar. Yet absolutely none of the solar energy from any project Dominion builds or buys, even those paid for by Virginia ratepayers, will stay in Virginia to meet our voluntary renewable portfolio standard (RPS).

If that surprises you, check out a different document Dominion filed last month, with significantly less fanfare than it gave the solar report. The other filing, Dominion’s annual report to the State Corporation Commission (SCC) on renewable energy, confirms that Dominion sells the “renewable attributes” of solar energy produced here to utilities in other states in the form of renewable energy certificates (RECs).

Then, for the Virginia RPS, Dominion buys cheaper RECs from facilities like out-of-state, century-old hydro dams, biomass (wood) burners, trash incinerators, and a large but mysterious category called “thermal” that is nowhere defined but definitely has nothing to do with solar. So other states get the bragging rights to our solar, and we get dams, trash and wood, plus a mystery ingredient.

But regardless of who gets to claim it, all solar is good solar in a world threatened by climate change. That’s my attitude, anyway, and I only wish Dominion shared it. But, returning our attention to the glossy solar brochure, we find Dominion instead doing its darnedest to undermine the idea of solar built by anyone but the lovable monopoly itself.

The report offers up a poll that concludes: “Solar power is the most popular energy source of all those tested in this polling (Nuclear, Wind, Solar, Natural Gas, and Coal).” But then it goes on to suggest customers don’t understand solar, don’t want to spend much money on it, and don’t really value it very highly after all.

For example, the report follows news of solar’s 82% positive rating with this caveat: “However, when asked to choose what is most important to them regarding their own electricity provider . . .customers chose as follows: dependability and reliability 53%; affordability 28%; investing in renewable energy 16%.”

The poll apparently didn’t give respondents the option of choosing solar andreliability andaffordability. Pollsters must not have told folks that customers in other states enjoy all three at once, or that solar actually has a positive effect on grid reliability and customer savings.

If the question had been, “How biased is this poll?” I bet they could have scored 100%.

After delivering a few more similarly manipulated polling results, the report goes on to discuss the results of last summer’s solar stakeholder process. Readers may recall that Dominion hired consultant Meridian Institute to convene a series of meetings to get feedback on renewable energy policy questions. Hundreds of Virginians took the trouble to attend in person or by phone to share their expertise and opinions.

The result, presented in an 18-page appendix to Dominion’s report, is impressive only for how completely inane it is.

Here, for example, is how Meridian opens its summary of stakeholder feedback:

Most stakeholders who expressed a general opinion about the expansion of renewable energy in Virginia indicated that they support such expansion. Others indicated that their support for renewable energy was dependent on a variety of factors. Some stakeholders did not express a general opinion about the expansion of renewable energy in Virginia.

I am sorry to say it goes on like that for pages.

If you persist in reading the Meridian summary, the most you will get out of it is what we all knew going into it: utilities disagree with customers and the solar industry about whether existing restrictions on customer solar are good or bad.

Except, the report does not even say that. It only says the “participants” in the solar stakeholder process disagreed on these questions. Putting it that way leaves open the possibility that some customer, somewhere, in one of those meetings, might have taken the utilities’ side.

If so, the customer’s name was Tooth Fairy.

I have little doubt Dominion provided a copy of its pretty solar report to every legislator in Richmond, and is already using it in its fight against expanding the rights of customers in Virginia to go solar. Dominion will point to its report as proof that customers are too stupid and too conflicted to be allowed to make their own decisions. Ergo, Dominion should control all solar in Virginia, on rooftops as well as elsewhere.

Legislators should indeed read the report. And then after they’ve had a good laugh, they should tell Dominion no.

——————

*That equivalence is because Dominion projects its 1,588 MW Greensville plant will run at 80% of its full capacity. Solar farms, generating only during daylight hours, achieve capacity factors in the range of 25%, while rooftop solar comes in a little less.


This post originally appeared in the Virginia Mercury on December 7, 2018.

After the grid mod bill, the SCC wants to know how much authority it still has over utility spending

offshore wind turbines

Offshore wind turbines, Copenhagen, Denmark. Dominion Energy has asked the SCC for permission to proceed with building two wind turbines off the Virginia coast as a test project. Photo by Ivy Main.

It’s no secret the State Corporation Commission didn’t like this year’s big energy bill, the Grid Transformation and Security Act. SCC staff testified against SB 966 in committee, and their objections played a major role in amendments removing the “double dip” provision that would have let Dominion Energy Virginia double its earnings on infrastructure projects. Since passage of the bill, the SCC has raised questions about the constitutionality of the law’s provisions favoring in-state renewable energy, and its staff has issued broadsides about the costs of the legislation.

Now the SCC is mulling the question of how much authority it still has to reject Dominion’s proposals for spending under the bill. Dominion has filed for approval of a solar power purchase agreement (case number PUR-2018-00135) and two offshore wind test turbines it plans to erect in federal waters 24 nautical miles out from Virginia Beach (PUR-2018-00121). The utility has also requested permission to spend a billion dollars on grid upgrades and smart meters (PUR-2018-00100).

In an order issued September 12, the SCC asked participants in the solar and offshore wind cases to brief them on legal issues arising from the legislation. The SCC has focused in on two new sections of the Virginia Code. One is the language making it “in the public interest” for a utility to buy, build, or purchase the output of up to 5,000 megawatts (MW) of Virginia-based wind or solar by January 1, 2024. The SCC noted that subsection A of the provision says such a facility “is in the public interest, and the Commission shall so find if required to make a finding regarding whether such construction or purchase is in the public interest.”

The other new Code section gives a utility the right to petition the SCC at any time for a “prudency determination” for construction or purchase of a solar or wind project located in Virginia or off its coast, or for the purchase of the output of such a project if developed by someone else.

Together these sections give Dominion a good deal of latitude, but they don’t actually force the SCC to approve a project it thinks is a bad deal for ratepayers. In other words, wind and solar may be in the public interest, but that doesn’t mean every wind and solar project has to be approved.

The SCC asked for briefs on seven questions:

  • What are the specific elements that the utility must prove for the Commission to determine that the project is prudent under Subsection F?
  • Is the “prudency determination” in Subsection F different from the “public interest” findings mandated by Subsections A or E?
  • Do the public interest findings mandated by either Subsections A or E supersede a determination under Subsection F that a project is not prudent? If not, then what is the legal effect of either of the mandated public interest findings?
  • If the construction (or purchase or leasing) is statutorily deemed in the public interest, is there any basis upon which the Commission could determine that such action is not prudent? If so, identify such basis or bases.
  • In determining whether the project is prudent, can the Commission consider whether the project’s: (a) capacity or energy are needed; and (b) costs to customers are unreasonable or excessive in relation to capacity or energy available from other sources?
  • Do the statutorily-mandated public interest findings under either Subsections A or E override a factual finding that the project’s: (a) capacity or energy are not needed for the utility to serve its customers; and/or (b) costs to customers are unreasonable or excessive in relation to capacity or energy available from other sources, including but not limited to sources of a type similar to the proposed project?
  • Does the utility need a certificate of public convenience and necessity, or any other statutory approval from the Commission, before constructing the proposed projects?

Even if the Commission decides it has latitude in deciding which wind and solar projects to approve, that doesn’t necessarily spell disaster for the two projects at issue. The SCC could still decide they meet the standard for prudency and approve them.

Oral argument on the issues is scheduled for October 4.

Should approval of smart meters depend on how the meters will be used?

The SCC is also mulling over its authority in the grid modernization docket. One day after it asked lawyers in the solar and offshore wind cases to weigh in on the meaning of prudency, it issued a similar order asking for input on what the new law means by “reasonable and prudent” in judging spending under the grid modernization provisions. (Yes, the grid mod section of the law insists that spending be “reasonable” in addition to “prudent,” begging the question of whether spending can be prudent but not reasonable. Perhaps thankfully, the SCC order does not pursue it.)

The SCC’s questions to the lawyers show an interest in one especially important point: Dominion wants to spend hundreds of millions of dollars of customer money on smart meters, without using them smartly. Smart meters enable time-of-use rates and customer control over energy use, and make it easier to incorporate distributed generation like rooftop solar. None of these are in Dominion’s plan. Is it reasonable and prudent for Dominion to install the meters anyway, just because they are one of the categories of spending that the law allows?

Or as the SCC put it:

If the evidence demonstrates that advanced metering infrastructure enables time-of- use (also known as real-time) rates and that such (and potentially other) rate designs advance the stated purposes of the statute, i.e., they accommodate or facilitate the integration of customer-owned renewable electric generation resources and/or promote energy efficiency and conservation, may the Commission consider the inclusion or absence of such rate designs in determining whether a plan and its projected costs are reasonable and prudent?

Reading the tea leaves at the SCC: Staff comments on Dominion’s IRP

The SCC’s question about smart meters surely indicates how the commissioners feel about the matter: they’d like to reject spending on smart meters, at least until Dominion is ready to use them smartly. If the SCC concludes it has the authority to reject this part of Dominion’s proposal as not “reasonable and prudent,” it seems likely to do so.

It is harder to know where the SCC might land on the solar and offshore wind spending. The SCC’s staff, at least, are skeptical of Dominion’s plans to build lots of new solar generation. In response to Dominion’s 2018 Integrated Resource Plan (IRP), Commission staff questioned whether Dominion was going to need any new electric generation at all, given the flattening out of demand. But if it does, according to the testimony of Associate Deputy Director Gregory Abbott, Dominion ought to consider a new combined-cycle (baseload) gas plant, not solar. (Combined-cycle gas was the one generating source Dominion almost completely ruled out.)

Abbott criticized Dominion’s presentation of the case for solar, though he took note of the technology’s dramatic cost declines. Instead of seeing that as a reason to invest, however, he suggested it would be better to wait for further cost declines, or at least leave the construction of solar to third-party developers who can provide solar power more cheaply than the utility can. Remarkably, he also suggested Dominion offer rebates to customers who install solar, urging that Dominion’s spending under the grid transformation law “is designed specifically to handle these [distributed energy resources].”

Abbott also seemed supportive of Dominion’s venture into offshore wind. The only offshore wind energy in the IRP is the 12 MW demonstration project known as CVOW, but as Abbott noted, “the Company indicated that it will pursue a much larger roll-out of utility-scale offshore wind, beginning in 2024, if the demonstration project shows it to be economic.”

This suggests staff are inclined to support Dominion’s spending on the CVOW project, but for Abbott, it was one more reason Dominion should not invest in solar. He concluded, “If the demonstration project proves that utility-scale offshore wind is economic compared to solar, then it may make sense to get the results of the CVOW demonstration project before deploying a large amount of solar.”

This post originally appeared in the Virginia Mercury on September 24.

On the heels of its big legislative win, what kind of grid does Dominion want to build for us?

white electric tower

Photo by Pixabay on Pexels.com

Note: This post originally appeared in the Virginia Mercury on July 23. Virginia Mercury is a nonprofit, independent online news organization that launched just this summer. Subscribe to its free daily newsletter here.

Imagine that you have hired a builder to design and build a three-story house for you. He brings you the plans for the first floor and proposes to start work right away. “These look okay,” you say, “but I need to see the plans for the whole house.”

“Don’t you worry about that,” says the builder. “I have it all figured out. I’ll show you the second floor when the first is done, and the third floor after that.”

You argue with the builder, pointing out that as it is your money, you have the right to assure yourself the result will be what you want. If you haven’t even seen the blueprint for the whole house, how can you approve the ground floor? Heck, you can’t even judge if all the stuff he wants to put in is actually needed. (It looks awfully expensive.)

“Please,” says the builder, now deeply offended. “I’m an expert. You should trust me.”

If this scenario sounds far-fetched, that’s because you don’t live in the world of Virginia utility regulation. In that world, Dominion Energy Virginia, the state’s largest utility, has just filed a plan with the State Corporation Commission (SCC) to spend almost $1 billion of its customers’ money for the first phase of what it says will be three phases of grid modernization, amounting to $3.5 billion. The company maintains that all the things it plans to do now are necessary to the overall strategy, but it isn’t saying what that strategy is.

“During Phase 1 of the Plan,” writes Dominion Energy Senior Vice President Edward Baine, “the Company will focus on installing the foundational infrastructure that will enable all other components of the Grid Transformation Plan.” That sounds like it ought to lead into a discussion of what the grid of the future will look like, but sadly, the other “components” turn out to be just more spending.

That might in fact be the whole plan: spend money, lots of it. Baine explains the “drivers” of the plan, like recognizing threats to the grid, and he describes how it will “enable” things like new rate structures and integrating renewable energy. But new rate structures and renewable energy integration aren’t actually part of the plan Dominion wants the SCC to approve.

This will make it very hard for the SCC to judge whether the investments are “reasonable and prudent,” as Virginia law requires. Knowing this, Baine argues the SCC shouldn’t impose a cost-benefit test on its plans. Already that position has drawn sharp criticism even from supporters of the legislation that authorized the spending.

Take smart meters, also known as “advanced metering infrastructure” (AMI). Smart meters don’t just measure electricity use, but do so on an hourly or more frequent basis, and they provide two-way communication instead of just one-way reporting to the utility.

Properly designed and deployed, smart meters are central to the grid of the future. Dominion proposes to spend over $500 million to provide all its customers with this advanced technology during Phase 1. Unfortunately, that doesn’t include making full use of their potential.

Where ordinary electric meters mostly just tell the utility how much electricity a customer has used, smart meters provide detailed information that can be used to help pinpoint power outages and spikes in demand. That’s helpful for the utility, but just using them that way, as Dominion proposes, leaves most of the benefits of smart meters untapped.

Justifying the expense of smart meters requires using them to allow customers to control how and when they use electricity, as well as to make the most efficient rate designs and determine how to get the most benefit from solar panels, batteries and electric vehicle charging. That only happens where a utility offers time-of-use rates and other incentives to change behavior and prompt investments by consumers.

Using smart meters this way would result in lower energy use, more customer-investments in solar and batteries, and savings for everyone. But time-of-use rates and similar incentives aren’t in Phase 1, and they don’t look to be part of Phases 2 or 3 either.

Dominion seems to think it can get approval to spend money on smart meters based on how they could be used, rather than on how the company actually plans to use them. Baine notes that smart meters can tell customers how much electricity they’re using in any 30-minute period. “Customers will be able to choose their preferred mode of communication,” writes Baine, “and then receive high usage alerts when their energy usage exceeds a certain level.”

Yes, and then what? Baine doesn’t say.

It’s not just a matter of wanting to take it slow. Since 2009, 400,000 of its customers have received smart meters, Dominion tells us, giving it ample time to try out all these features. It hasn’t.

Merely installing another 1.4 million smart meters isn’t going to lead to grid nirvana.

Grid “hardening” is another example. Physical upgrades in the name of security and resilience make up more than $1.5 billion of Dominion’s proposed spending. This is not grid transformation, it’s the opposite: beefing up the old grid. Most of the proposed investments are the same kind of capital investments Dominion makes routinely, with nothing modernized about it. Unfortunately, Dominion wrote the law to give itself permission to use customer money for grid hardening, so all the SCC can do is ask whether the specific spending proposals are reasonable and prudent.

Again, since Dominion isn’t telling us what kind of grid it is building for us, there is no way to know whether any given project will contribute to it, or even be necessary at all. If the grid of the future will be based on distributed energy, microgrids, and consumer control, we might not need the substation Dominion wants to make into an impregnable fortress. Modern solutions like solar-plus-storage, demand response, and energy efficiency could provide greater resiliency and security at a lower cost.

Of course, we have every reason to suspect Dominion is not interested in building a grid that empowers consumers, lowers energy use and spurs private investment in solar and storage. Its business model depends on keeping control over the grid and getting people to use more energy rather than less. If it can’t do that, it figures, the next best thing is to find ways to spend our money.

The amount of customer money at stake makes the SCC’s oversight role very important. It can insist Dominion lay out its full vision for the grid, demonstrate how each spending item fits that vision, and prove it meets a consumer cost-benefit test. With a little dose of courage, it could even go further, and insist on seeing a plan that makes full use of smart meters, including time-of-use rates and other incentives for efficiency, solar and storage.

The General Assembly, too, has a role to play, by filling a vacancy on the SCC this summer. If legislators are unhappy with Dominion’s cavalier approach to spending, they have one last chance to appoint a commissioner who will side with consumers, and send Dominion back to the drawing board.

Solar map locates Northern Virginia on the dark side of the metro region

people standing by solar panels on a high school.

The 90 kW of solar panels on the roof of Wakefield High School represent almost 5% of Arlington’s solar total. Arlington schools have been a bright spot in Northern Virginia’s otherwise lackluster solar performance. Photo credit Phil Duncan.

Those of us who’ve lately become bullish on Virginia solar got a rude wake-up call this week when the Northern Virginia Regional Commission (NVRC) updated its map showing the amount of solar installed in every locality in Northern Virginia and the greater Washington region. Stunningly, every single suburban Maryland jurisdiction did better than every single Virginia jurisdiction. So did Washington, DC.

The map reveals that as of the end of 2017, Fairfax County had the most solar of any Virginia locality measured, reflecting its status as Virginia’s most populous county. Fairfax boasted a cumulative capacity of 2,104 kilowatts (kW) of solar, edging out Virginia’s richest county, Loudoun, which came in with 1,878 kW, as well as much smaller but more liberal Arlington with 1,785 kW.

All the Northern Virginia jurisdictions together (which also included Prince William, Manassas, Alexandria, and Falls Church) boasted a total of 8,443 kW, spread across 1,112 systems. That’s an average of about 7.5 kW per system, meaning these are overwhelmingly rooftop solar installations on homes and businesses. (An average home solar system is about 5 or 6 kW. Using solar for all of a home’s electricity needs might require 8-10 kW or more, especially if the home is heated with electricity or includes an electric vehicle.)

NoVa’s 8,443 kW is about as much as Prince George’s County, Maryland alone had five years ago. Today, PG County leads the region with 136,507 kW. Added together, the Maryland suburban localities finished the year with 272,688 kW of solar, over 32 times the suburban Virginia total. Washington, with 40,954 kW, beat all of suburban Virginia almost five times over.

So what do Maryland and DC have that Virginia doesn’t have? One answer is incentives. Maryland and DC have mandatory renewable portfolio standards (RPS) that require utilities to buy a certain percentage of their electricity from solar generated in state, including from their own customers. As the percentage requirement increases year after year, the forces of supply and demand set prices for solar renewable energy certificates (SRECs) that make solar a profitable investment for consumers. In DC, the value of SRECs is currently so high that a home solar installation can pay for itself in less than four years. In Virginia, with the federal 30% tax credit but no RPS or SREC market, payback may take ten years.

Ten years is still not a bad payoff for solar panels that can produce free electricity for 40 years or more. That points to the other advantage Maryland and DC have over Virginia: pro-solar policies. Virginia law does provide for net metering, the policy that lets a solar customer put surplus power onto the grid during the day and receive a credit for it that is used against the same amount of power drawn from the grid at night. Without net metering, we would have very little rooftop solar at all.

But a whole host of restrictions apply to net metering in Virginia. Homeowners are limited to a 20 kW system, and utilities can (and do) apply punitive fees known as “standby charges” to residential systems over 10 kW. Commercial customers are limited to 1,000 kW, no matter how much space they have or how much electricity they use. Sharing solar arrays among customers is prohibited. A building owner cannot install solar and sell the electricity to tenants. A local government cannot install solar on a vacant lot and use it to power a building across the street. Only certain customers can use third-party ownership financing.

And if the market flourishes anyway, Virginia law puts a ceiling on the total capacity of net-metered systems. Once the total reaches 1% of a utility’s sales, the program will come to a screeching halt. Think of it as an anti-RPS.

This year the Virginia General Assembly passed legislation that encourages Virginia utilities to develop solar, but the bill failed to address the barriers holding back private investments in solar. Other bills that would have opened up the market failed in the Republican-controlled (and utility-friendly) Commerce and Labor committees.

Barrier-busting bills will certainly be back again next year, and local governments that want more solar in their communities should make sure these reforms are part of their legislative wish list. Meanwhile, there is room under current law for local governments and schools to install a lot more solar than they have to date. Leading by example is a powerful tool to capture the attention of the public, educate residents on the benefits of solar, and instill pride in the community.

Localities can also help residents and businesses go solar by promoting solar coops like Solarize NoVa, offering low-cost financing via commercial PACE loans(as Arlington is doing), and setting expectations for developers.

Maryland and DC may still beat Virginia on solar over the next few years, but it shouldn’t happen without a fight.