The race to 100% renewable is on in Virginia: Floyd and Blacksburg lead in committing to energy transition (sort of)

On October 24, 2017, deep in the heart of Virginia, the mostly Republican supervisors of Floyd County (population 15, 755) issued a resolution proclaiming the county’s commitment to reduce greenhouse gas emissions by “replacing fossil fuels with renewable energy along with conservation and energy efficiency,” and “support[ing] the achievement of near zero greenhouse gas emissions through policies that shift the energy supply strategy of our County from fossil fuels to 100% clean renewable energy.” The vote in support was unanimous.

The vote made Floyd the first Virginia locality to join more than 70 cities, towns and counties across the U.S. that have committed to achieving 100% renewable electricity. At least five cities are already powered by renewable energy today, according to the Sierra Club. (And surprise! None of the five are in California.)

Floyd’s resolution does not set a date for accomplishing its goal, so some might call it more aspirational than committed. And even the residents of Floyd subsequently showed themselves more than a little conflicted. (I’ll get to that in a moment.)

But within three months, the Town of Blacksburg followed suit with its own resolution in favor of 100% renewable energy, and it upped the ante by setting a target date of 2050. The Blacksburg commitment is bolstered by the town’s previous work on a climate action plan and its own claim to fame as the location of Virginia’s first Solarize campaign.

As best I can tell, Floyd and Blacksburg are the only Virginia localities to take the pledge so far, but the idea is under consideration across the state. The Sierra Club launched its “Ready for 100” campaign in Virginia almost two years ago in an effort to persuade Arlington and Alexandria to set a target date of 2035 for both government and residents to be powered by 100% renewable electricity. Fairfax City and Charlottesville have also begun the conversation.

The 2035 target proposed for Arlington and Alexandria is both more and less ambitious than Blacksburg’s goal, since it covers only the electric sector. Moving to 100% renewable energy, as Blacksburg aims to do, also requires things like eliminating petroleum use in transportation and an end to heating by natural gas and fuel oil. These are harder in the near term but generally considered achievable by 2050, given the projections for electric vehicles, cost declines that make electricity from wind and solar competitive with fossil fuels, and a growing belief that combating climate change will soon push us towards a policy to “electrify everything.”

Not everyone agrees that abandoning fossil fuels is the right goal, including some of the same people who said it was. Immediately after passing the 100% resolution, supervisors in Floyd County contracted a case of buyers’ remorse when the local Tea Party found out and raised a ruckus. (The local newspaper had been covering the topic for months, but evidently it didn’t make Fox News.)

Barely six weeks later, on December 12, the board issued a hastily-prepared second resolution. It began by repeating several findings of the first resolution, including recognizing the threat of climate change and the role of humans in causing it. So far, so good. Then it took a sharp detour to praise fossil fuels and to pledge to “protect the freedom and economic interests” of residents by working for “viable, cost-effective, clean and reliable energy resources of all available types,” which the drafters seemed to think included fossil fuels. Only one supervisor voted no. They did not, however, repeal the first resolution. That leaves Floyd with its first-in-the-commonwealth status on embracing 100% renewable energy, but sadly paralyzed on putting it into action.

It is worth reading this second Floyd resolution to understand the underlying concerns of the noisy minority who pushed it through. It reveals that a belief in coal as a cheap fuel remains common, though it has been years since coal lost its competitiveness. And the reference to fossil fuels as “clean” is surely an echo of the “clean coal” propaganda that never had any truth behind it, but seemed to offer a free lunch. The very silliness of the phrase works in its favor: since no one would make up something so absurd, people figure, it has to be true.

The second resolution also reflects a genuine concern about the potential of an over-active government to infringe on individual liberties. Billy Weitzenfeld, President of Sustain Floyd, told me some local people who were opposed to the pro-renewable energy resolution expressed a fear that it would lead to the government taking away peoples’ wood stoves and forcing everyone to put solar panels on their houses. Thus the freedom from utility control that rooftop solar offers to consumers was turned on its head and made to look like a threat to individual liberty.

Weitzenfeld feels the Tea Party concerns are misplaced, but he also thinks the conflict could have been avoided by better dialog in the process. It was unfortunate, he said, that fear took over, and—at least temporarily—brought a halt to what had been an exciting momentum on clean energy initiatives.

Weitzenfeld has not thrown in the towel, though. He and other advocates in Floyd are getting back to doing “the proactive stuff that can really make a difference”: putting solar on rooftops through a second Solarize program, encouraging energy audits, engaging the public, and building what he calls “the constituency of practitioners,” people whose own experience with renewable energy will make them the ones to push back against fear and misinformation the next time around.

Looking on the bright side, even the rebelling Tea Partiers recognized the climate threat, which is also a theme common to the other Virginia resolutions. In other conservative states, more prosaic considerations have driven the decision. And by that, of course, I mean money. The Republican mayor of Georgetown, Texas, said economics pushed them to become one of the first cities in America to run entirely on wind and solar energy, when they found they could save money doing it. Bentonville, Texas, may become the second city in that state to achieve the 100% goal, on economic grounds as well as due to concerns over air quality associated with coal and gas burning.

In 2008, tiny Rock Port, Missouri, became the first locality in the U.S to be powered entirely by wind energy, taking advantage of a cheap and abundant resource in a windy farm community. Greensburg, Kansas, also went all-wind in 2013, and uses this and other green initiatives as a major branding tool.

All of these are small communities that control their own electricity supply, which gives them options most Virginia localities lack. Blacksburg residents get their electricity from Appalachian Power; most others have to deal with Dominion Energy Virginia or one of the rural electric cooperatives. So even if they achieve consensus within their communities on a goal of 100% renewables, meeting the goal will require navigating a range of barriers.

We are not alone there. A fair number of the cities on the Ready for 100 list are also located in the Southeast, and suffer from the same outdated monopoly utility structure that we do. Virginia localities can look for guidance to Atlanta, Georgia (100% renewable energy by 2035), and Columbia, South Carolina (100% renewable electricity by 2036).

Next week Sierra Club will launch its “100% Virginia Campaign” to encourage residents across the state to advocate for clean energy in their communities, with the hope that more localities will take up resolutions for 100% renewable electricity by 2035.

More generally, Sierra Club organizer Alice Redhead says the goal is to “build a movement for clean energy across the state and set the conditions for Virginia to transition to 100% renewable energy statewide by 2050. We are pushing for localities around Virginia to commit to 100% clean energy, but we are also making sure that the campaign is flexible rather than one size fits all and allows for locally-tailored initiatives that are strategic for the conditions in different areas of the state. Local campaign teams that are a part of the 100% Virginia network will develop unique plans to advocate for clean energy progress specific to their area.”

In an upcoming blogpost I’ll take a harder look at the obstacles facing Virginia localities, as well as the opportunities that make getting to 100 a viable option.

After losing a vote on the double dip, is Dominion losing Power?

An earthquake shook Richmond, Virginia on the afternoon of Monday, February 12, rocking the House of Delegates just as it was supposed to be passing HB 1558, Dominion Energy’s Ratepayer Rip-Off Act of 2018. The bill was intended to help the utility lock in stupendous unearned profits for its parent company, courtesy of the monopoly’s captive customers, under the guise of supporting clean energy and grid investments.

And the bill did pass the House, but only after delegates adopted an amendment offered by Minority Leader David Toscano stripping away a lucrative provision that Dominion both desperately wanted and swore didn’t exist: the infamous “double dip” that the SCC has said would allow Dominion to charge customers more than twice over for a large portfolio of infrastructure projects. With billions of dollars worth of projects on the drawing board, the double dip meant serious money.

Anyone who didn’t believe the double dip was real only needed to listen to Dominion lobbyist Jack Rust respond to repeated questions about it during a Senate Commerce and Labor Committee hearing two weeks earlier. It was a “yes or no” question that Rust wouldn’t answer with a yes or a no.

Obfuscation, however, was good enough for the Senate, which passed SB 966 last week by a bi-partisan vote of 26-13. It was good enough for Governor Northam, too, who had already pledged to sign the bill. A few environmental groups broke ranks to support the bill, too, cheering the provisions for energy efficiency and the promise of more renewables.

Admittedly, the Attorney General’s Office of Consumer Counsel remained opposed. So did other environmental and consumer groups, complaining not just about the double dip, but about ceding control over the future of Virginia’s electric grid to a profit-driven monopoly. But when has the General Assembly ever cared what environmental and consumer groups thought? So passing the bill through the House should have been easy.

And then Toscano called Dominion’s bluff. If the double dip is real, said Toscano, his amendment would fix it. If the bill doesn’t already allow for double-dipping, then making doubly sure of that does no harm.

The logic was unassailable, though bill patron and Friend of Dominion Terry Kilgore assailed it anyway. As the Associated Press reported, Kilgore tried to persuade legislators to reject Toscano’s amendment. Yet even some fellow Republicans deserted him on the vote, helping Democrats pass it 55-41. A quick-thinking Delegate Habeeb, apparently recognizing bad optics for the Republicans, called for a second vote, and this time the amendment passed 96-1, with even Kilgore supporting it.

By all accounts, the vote was unprecedented. Dominion does not lose floor votes. The vote rocked the House.

In hindsight, perhaps Dominion should have known a fault line had formed. Grassroots groups were agitating against the power of monopoly. A new group called Clean Virginia was agitating against the bill. Almost all the freshmen Democrats had pledged not to accept Dominion money—and there were a lot of them, thanks to last fall’s “blue wave” election. But the Republicans had already scuttled most of their bills; surely they had learned humility? They had not. They all supported Toscano’s amendment, and all but one followed him in opposing final passage of the bill, which passed 63-35.

The earthquake could be felt over at Dominion headquarters, where reporters could be seen inspecting the foundation for damage. CEO Tom Farrell called in his damage control specialists, heavy-hitting lobbyists Eva Teig Hardy and Bill Thomas, to persuade legislators to support the Senate version of the bill over the House version—or failing that, to lard it up with new favors to the utilities.

According to the AP, Kilgore continued to maintain after the vote that the double dip was “more perception than reality.” But he also said, “Toscano’s amendment takes ‘a lot of stuff out that needs to stay in’ the legislation. ‘I’m going to have to fix it.’”

One might think Dominion and its allies would be embarrassed to defend a provision they say doesn’t exist. Reportedly they have pivoted to a different argument, that the company would have no incentive to invest in renewable energy if it isn’t allowed to rip off ratepayers in the process. Accordingly, they are holding solar investments hostage, knowing how much Democrats want them.

Dominion’s new argument is simply posturing. Its 2017 Integrated Resource Plan declared solar to be the cheapest form of energy in Virginia, and it had signaled via the Rubin Group its plan to build at least 3,000 MW of solar in the coming years. Saying now that it might take its ball and go home is a sign its lobbyists are out of good arguments.

In the past, good arguments were not a requirement for Dominion to get what it wants; political power has always been enough. It will be interesting to see now whether Dominion emerges with some semblance of its omnipotence intact, or whether this earthquake presages new shocks that could crack the fortress.

 

When a billion dollars is not enough: Dominion tries a hostile takeover of the SCC

I’d call this a dog of a bill, but this is my dog, and she’s pretty darned cute.

For this bill, we really need a different animal altogether. Photo credit bmani/Creative Commons.

 

We have seen the future, and it looks suspiciously like the past.

I’m referring, of course, to the much-anticipated legislation Dominion Energy Virginia’s friends are peddling in the Virginia legislature to replace the infamous rate rip-off of 2015 with a brand new way for utilities to skip regulatory oversight and avoid giving refunds.

Personally, I have to hand it to Dominion on this one. Its lobbyists spent the fall trying to convince legislators not to reverse the brilliantly—though falsely—named “rate freeze.” Dominion hoped legislators would ignore estimates that the utility would keep northwards of a billion dollars in unearned profit from it, not to mention the barrage of newspaper articles connecting Dominion’s campaign contributions to the votes of legislators in support of the law. Apparently, a lot of legislators made it clear they were done being snookered, because by December, Dominion had publicly announced that it, too, believed it was time to change the law.

So Dominion had a PR disaster on its hands, and what did it do? Offer massive refunds and a return to regulatory oversight? Heck, no. The new bill allows Dominion to avoid regulatory oversight pretty much forever, while rebating just a fraction of the loot. Awesome head fake, guys!

Mind you, there are a lot of great buzzwords in the bill. If you didn’t know any better—if you happen to be one of this year’s snookerees, as the rank-and-file legislators are meant to be—you might think this bill is intended to transform the grid and add massive amounts of solar energy and energy efficiency. It could have been written to do that, but it wasn’t.

For a fuller explanation of this legislation and how it fits into the long pattern of Virginia legislators giving away the store to Dominion, see this terrific analysis from Dan Casey of the Roanoke Times. As he demonstrates, this is not legislation aimed at transforming the business of energy in Virginia. It’s aimed at ensuring Dominion gains unfettered control.

If legislative leaders are serious about transforming our energy economy, they could amend the bill now to give the State Corporation Commission back its role in protecting consumers from unwise spending and by ordering refunds and rate reductions when utilities collect more than permitted by law. The current draft of the bill throws a small fraction of past overearnings back to customers, ignores 2017 overearnings altogether, and allows utilities to game the system so rates can only go up hereafter.

Grid transformation is indeed important—so important that it shouldn’t be left to profit-seeking utilities to decide what grid investments are in the public interest. This issue needs an independent study with in-depth analysis and extensive public input– the sensible approach that has been taken by numerous states across the country. Letting Dominion decide what investments to make guarantees we’ll see only the ones that allow Dominion to tighten its control over Virginia’s power supply.

The bill also tries to buy off environmentalists with a promise of up to 4,000 MW of solar by 2028, a figure that was already in play (and appears in other bills this year) as a result of negotiations between utilities and the solar industry. To put that in context, recall that The Solar Foundation analysis showed Virginia needs 15,000 MW of solar to equal just 10% of our electricity supply. Do the math: 4,000 MW is well under 5% under the best of circumstances. When a bunch of other states are getting 20% of their electricity from wind and solar resources today, the promise of less than 5% over ten years is not only grossly inadequate, it’s insulting. Perhaps we environmentalists can be bought, but not that cheaply.

But will legislators wise up in time? Senate Minority Leader Dick Saslaw’s version of the legislation (there are several), SB 967, runs for 22 pages of mind-numbing detail that can’t be fully understood by anyone but a lawyer specializing in electric utility regulation. I’m not one, and I’m grateful for the help of people who are. Saslaw’s bill was introduced Friday—the last possible day to file legislation—and did not appear online until Tuesday. The Senate legislation may come before the Commerce and Labor committee as soon as Monday, and House versions may be in subcommittee on Tuesday.

Not everyone is being snookered, to be sure. Senator Chap Petersen has renewed his earlier effort for a more straightforward repeal of the “rate freeze,” and a bipartisan group of 11 senators have fired off a letter to the SCC asking for a report on what effect the various bills will have “on refunds owed to rate payers for past payments” and “the effects on future rates.” Six House members have done the same.

Finally, this afternoon Governor Northam weighed in, saying he has “significant concerns about the bill that is on the table.” An email from the Governor’s office laid out goals that echo what critics have been saying. First, more money should be refunded to ratepayers. Grid modernization should be defined, the focus on clean energy increased, and the SCC should be involved to make sure Virginians “are getting the best bang for the buck.” And perhaps most critically, the legislation should “restore the SCC’s authority to ensure that Virginia families and businesses do not pay more for power than they should under state law.”

Perhaps having the Governor weigh in will put a stop to the plan to turn electric utility regulation over to the monopolies themselves. Associated Press reporter Alan Suderman quotes Dominion spokesman David Botkins as saying by way of response that the legislation is a “work in progress.”

But why is this up for negotiation? Legislators should insist on a return to regular order, put an independent agency in charge of grid transformation, and set mandatory targets for decarbonizing our electricity supply. It’s time for the snookering to stop.

Virginia legislators face a flood of new solar bills

Photo courtesy of Department of Energy, via Wikimedia Commons.

It’s true that Republicans remain in control of the General Assembly, and the way things run in Richmond, having only the narrowest of margins diminishes the majority’s power remarkably little. Yet the Blue Wave swept in a set of younger, more diverse, and more progressive delegates, many of whom are as interested in reforming energy policy as they are in social and economic issues.

As a result, I count more than 50 bills dealing with solar, energy efficiency, electric vehicles and battery storage; several more that affect clean energy by addressing carbon emissions; and still others that deal with utility regulation in ways that have implications for renewables and storage. And bills are still being filed.

In this post, I cover just the renewable energy bills of general interest filed to date, saving energy efficiency, storage, EVs and climate for later.

Most of these bills cover renewable energy generally. Bills submitted by the Rubin Group (the private negotiating group consisting mostly of utilities and solar industry members) are limited to solar.

One bill this year takes a new run at a mandatory renewable portfolio standard (RPS). This is Delegate Sullivan’s HB 436, which narrows the kind of resources eligible for the program (now mostly wind, solar and hydro) as well as making it mandatory. As currently drafted it is so ambitious that it would likely mean utilities would have to buy a lot of Renewable Energy Certificates from out of state to meet the early year targets, but changes to the bill may be in the works.

Delegate Sullivan has also proposed HB 54, which would provide a state tax credit of 35% of the cost of installing certain kinds of renewable energy property, up to a maximum credit of $15,000.

Several bills enable community solar programs, to provide options beyond the utility-controlled program passed last year that more closely resembles a green tariff. SB 313 (Edwards) SB 311 (Edwards) offer two different customer-controlled models. SB 586 (Gooditis) would authorize, but not require, utilities to set up utility-controlled programs; it differs from last year’s bill in that customers would have a direct connection with a specific renewable energy project. Since it would not be limited to solar, it could open a new option for community wind.

The Rubin Group drafted three pieces of legislation. The centerpiece bill, SB 284 (Saslaw) and HB 1215 (Hugo) raises from 500 megawatts (MW) to 4,000 MW (by 2024) the amount of large-scale solar utilities can build or buy that is deemed to be “in the public interest,” a designation that takes this determination away from the State Corporation Commission. The bill also makes it in the public interest for utilities to own or buy up to 500 MW of small-scale solar projects (under 1 MW each). These will be distributed projects, but utility-controlled, along the lines of Dominion’s not-very-successful Solar Partnership Program.

SB 284 and HB 1215 don’t actually require the utilities to do anything, but the legislation is widely seen as signaling their intent to move forward with additional solar development. While a very welcome signal, legislators should keep in mind that a Solar Foundation analysis earlier this year noted it would take as much as 15,000 MW of solar to provide just 10% of Virginia’s electricity supply.

Recognizing this reality, Delegate Mark Keam has introduced HB 392, which declares it in the public interest for the Commonwealth to get 10% of its electricity from solar, and raises to 15,000 MW the amount of utility solar in the public interest.

The two other Rubin Group bills deal with land use, putting language into the code giving people the right to put up solar panels on their own property for their own use, except where local ordinances specifically prohibit it, and subject to setback requirements, historic districts, etc. The bills are SB 429 (Stanley), its companion bill HB 508 (Hodges), SB 179 (Stanley) and companion bill HB 509 (Hodges).

The Rubin Group tried and failed to negotiate changes to Virginia’s net metering program, which affects most customer-sited solar projects, including residential rooftop solar. This is hardly a surprise; a group that works on consensus gives every member veto power. With utilities hostile to any perceived incursion on their monopoly power, and solar advocates pledged to protect the rights of residents, there aren’t a whole lot of opportunities for consensus here.

With the Rubin Group out of the net metering space, legislative champions have stepped into the vacuum to propose a host of bills that would support customers who install solar for their own use:

  • HB 393 (Keam) removes the 1% cap on net metered projects, and provides that when net metered projects reach 1% of a utility’s electric load, the SCC will conduct a study of the impact of net metering and make recommendations to the General Assembly about the future of the program. HB 1060 (Tran) simply removes the cap.
  • SB 191 (Favola) provides that Virginia customers who wish to self-generate electricity with renewable energy using the net metering provisions of the Code may install up to 125% of their previous 12 months’ electric demand, or in the case of new construction, of the electric demand of similar buildings. A 2015 law currently limits customers to 100% of previous demand.
  • HB 421 (Sullivan) allows owners of multifamily residential buildings to install renewable energy facilities and sell the output to occupants. This bill does not provide for the electricity to be net metered.
  • HB 930 (Lopez) requires the SCC to establish a net metering program for multifamily customer-generators, such as condominiums, apartment buildings, and homeowner associations.
  • HB 978 (Guzman) requires utilities to justify standby charges with a value of solar study. As currently written, the bill does not appear to have retroactive effect, so it might not repeal the existing, much-hated standby charges already approved by the SCC.
  • SB 82 (Edwards) expands the agricultural net metering program, increasing the project size limit from 500 kW to 1 MW, providing that the electricity can be attributed to meters on multiple parcels of land, and repealing the 2017 law ending agricultural net metering in coop territory.

Finally, several bills once again tackle third-party power purchase agreements (PPAs), which the Virginia Code appears to make legal, but which utilities have consistently maintained are a violation of their monopoly on the sale of electricity. HB 1155 (Simon) reaffirms the legality of PPAs. SB 83 (Edwards) replaces the existing PPA pilot program that dates from 2013 and directs the SCC to establish a broader program.

HB 1252 (Kilgore) replaces the existing pilot, which has different rules for Dominion and APCo, with a new program renamed “net metering power purchase agreements” that would be consistent for both utilities. It would open up APCo territory more than at present, by allowing any tax-exempt entity to participate rather than just the private colleges and universities that won inclusion last year. However, as currently drafted, it would narrow the program as it exists in Dominion territory by eliminating the eligibility of for-profit customers. Although it is the least customer-friendly option among the PPA bills, Kilgore’s position as chairman of House Commerce and Labor, which will hear the bill, gives it the strongest chance of passage.

Note that most of the renewable energy bills (other than those dealing with tax credits and land use) will go to the Commerce and Labor committees. In the House, a subcommittee usually meets once to hear all the bills (and typically to kill all but the ones anointed by chairman Terry Kilgore). While the schedule is not set, in the past the subcommittee meeting has been held in early February.


Important dates:

First Day of Session: Wednesday, January 10

Bill filing Deadline: Friday, January 19

Crossover (last day on which bills passed in one chamber can go to be heard in the other): Wednesday, February 14

Sine Die (end of Session): Saturday, March 10 

How to research a bill:

I’ve hot-linked the bills discussed here, but you can also find them all online pretty easily. On the home page of the General Assembly website, you will see options at the lower right that direct you to the Legislative Information Service, or LIS. If you know the number of a bill, you can type it into the first box (omitting spaces), and click “GO.” This will take you to a page with information about the bill, including a summary of the bill, the bill’s sponsor (called a “patron” in Virginia), the committee it has been assigned to, and its current status. Follow links to learn more about the committee, such as who is on it and when it meets. You will also see a link to the full text of a bill as a PDF.

Always read the full text of a bill rather than simply relying on the summary. Summaries sometimes contain errors or omit critical details, and bills can get amended in ways that make them very different from what the summary says. For the same reason, make sure you click on the latest version of the bill’s text.

If you don’t know a bill number, the General Assembly home page also lets you search “2018 Regular Session Tracking.” When you hit “GO,” this button brings you to a page with options for finding a bill, including by the name of the legislator (“member”), the committee hearing it, or the subject.

When you click on the name of a committee, you will see the list of bills referred to that committee, with short descriptions. It also tells you who is on the committee, when the committee meets and where. You can click on “Agendas” to see which bills are scheduled to be heard at the next committee meeting. Unfortunately the agendas are not set until a day or two before the meeting.

 

Northern Virginia governments look at major renewable energy energy purchase

If the Northern Virginia Regional Commission has its way, local jurisdictions will buy power from a solar or wind farm in the near future. Photo credit Christoffer Reimer.

The Northern Virginia Regional Commission has selected a consultant to assist area localities in a joint procurement of renewable energy. Participating cities and counties will be able to aggregate their demand to get the kind of economies of scale that have allowed corporations like Amazon and Facebook to lower their energy cost by investing in large solar and wind farms.

On November 17, NVRC announced that Customer First Renewables, a national expert in matching large energy users with renewable energy projects, will serve as its technical advisor. Customer First Renewables and NVRC plan to issue a Request for Proposals (RFP) to identify one or more “shovel-ready,” large scale projects to present to NVRC’s thirteen member governments. Those local governments will individually decide whether to participate in the group purchase.

According to a Request for Qualifications that NVRC issued in its search for a consultant, the project(s) to be selected must be greater than 10 megawatts in size and result in new renewable energy capacity added to the grid. Preference will go to projects located in Virginia or in the regional grid that serves Virginia, known as PJM.

NVRC will act as a central contact and facilitator, but it will be up to the participating localities to negotiate a contract. NVRC Director Robert Lazaro said discussions with representatives of area localities indicate the interest is there for a major renewable energy buy like this. Arlington, Alexandria, Manassas Park, and Falls Church are among the jurisdictions most interested, with others possibly joining as they learn more.

“We see this as a way to green the grid, save money, and assist the solar industry in Virginia,” said Lazaro.

Niels Crone, Senior Vice President for Business Development at Customer First Renewables, said his company was excited to be involved in the procurement effort. “We are delighted to work with NVRC to help Northern Virginia jurisdictions get affordable, large-scale renewable energy,” he said.

NVRC is following an ambitious timeline. A project workshop for local government staff is scheduled for December 11, and a Request for Proposals (RFP) is due January 2, 2018.

How does a group purchase work?

Amazon and other large corporations have become major drivers of new wind and solar projects in PJM, including several large solar farms in Virginia. The steadily-tumbling costs of wind and solar make it possible for the companies to green their energy supply while lowering their overall energy costs using innovative financing approaches. Not all of these would work in Virginia, but one that does is the wholesale, or “virtual” power purchase agreement.

A virtual PPA allows a customer to buy and sell energy in the wholesale market, avoiding potential obstacles such as a utility’s monopoly on the retail sale of electricity.

Local governments in Virginia buy electricity from Dominion Energy Virginia at retail under a contract negotiated by the Virginia Energy Purchasing Governmental Association (VEPGA). That contract makes Dominion their only electricity supplier, and Dominion currently does not offer wind or solar as an option. A virtual PPA would not change this relationship; Dominion will continue to supply localities with electricity from its (decidedly un-green) power plants.

A virtual PPA would, however, let participating localities contract for the output of a renewable energy project, with the electricity sold into the wholesale market rather than delivered to the localities. Given the right project, the price for the electricity in the wholesale market could exceed the price paid to the project owner under the PPA, allowing the localities to pocket the difference—indirectly lowering their energy costs. The localities would also receive an additional benefit in the form of renewable energy certificates generated by the projects, demonstrating they have legally “greened” their energy supply.

There is some financial risk involved, since the PPA price is fixed, while wholesale prices fluctuate. Part of Customer First Renewables’ job will be to find the best project economics with the least risk. Corporate buyers, universities and large institutions around the country have used this approach successfully to lower their energy costs and meet their sustainability goals.

As members of the Metropolitan Washington Council of Governments (MWCOG), Northern Virginia localities are committed to reducing greenhouse gas emissions to 80 percent below 2005 levels by 2050, with an interim goal of 20 percent by 2020. MWCOG’s 2017-2020 Regional Climate and Energy Action Plan (available here) also sets a target of meeting 20 percent of the region’s electric consumption from renewable sources by 2020.

As the report notes, however, “There needs to be an immense undertaking to meet the 2020 and 2050 goals.” Here’s hoping Northern Virginia is ready to do its share.

Electric Co-op Seeks to Double Fixed Access Charge in Move Against Solar

IMG_0042

A residential solar installation in REC’s rural territory.

In a little-noticed move earlier this year Rappahannock Electric Cooperative applied for a rate increase and restructuring that will make homeowner solar less attractive, and disproportionately affect many low-income customers in the process. REC, Virginia’s fourth largest electric utility, asked the State Corporation Commission to approve doubling the monthly access charge all residential customers must pay. The SCC hearing in the case is set for for October 31. REC’s move has received virtually no attention in the media despite its potential large impact on consumers and the commonwealth’s utility and solar industries.

A utility rate increase by itself might not be big news. What’s unusual is that the new revenues REC says it needs would come mostly from hefty access-charge increases for all residential and small-commercial customers. The access charge is the fixed monthly amount all consumers pay just for having a meter hookup, regardless of how little or how much electricity they consume. In what will surely be a shock to many low-income and low-consumption REC customers, the co-op’s residential access charge would double from $10 to $20 per month.

REC cites rising costs in delivering power as the reason for seeking more revenue. In a speech at the co-op’s annual meeting last August, REC president and CEO Kent Farmer claimed that the main reason for redesigning its rates so as to double access charges is that “[w]e’ve got a lot of customers who are installing solar panels.” But REC employee Matthew Faulconer acknowledged in the co-op’s SCC filing just last week that in fact only 0.3 percent of REC’s customers have thus far installed any form of distributed generation.

So REC’s move to restructure how it collects revenues appears to be an effort to stall the growth of future solar (and efficiency), rather than an attempt to solve any rate-design problem that the co-op currently has. REC’s low-usage customers, most of whom don’t have solar, will still see large increases in their monthly bills. They’ll be collateral damage in the co-op’s effort to slow solar growth. In his August speech REC’s Farmer emphasized that customers with average (not to mention higher) monthly electricity usage may not pay all that much more, since “by increasing that customer [access] charge we were able to reduce the kilowatt hour charge. So hopefully the net effect of what you will pay assuming the Commission approves our rate increase is just slightly more than what you are currently paying.” Yes, “hopefully,” that is assuming your monthly usage is average or above.

But of course, unlike children in Lake Wobegon, not all REC customers are above average. A good number of the co-op’s members obviously use less electricity than the average co-op member’s 1,283 kWh monthly consumption. And it’s a safe bet that a good number of those low-usage customers have lower incomes than those who consume more than average. Low-usage consumers will see a much bigger percentage jump in their bills.

In the co-op’s SCC filing last week REC’s Faulconer, with a (metaphorical) wave of the hand, dismissed the basic fairness issue this poses for the co-op’s low-income customers. He argues that in fact REC’s low-income customers tend to consume electricity in higher-than-average amounts. What makes REC think this is the case? Faulconer says “a good indicator of income level is whether a consumer qualifies for state administered fuel assistance, which includes income as an eligibility factor.” And, Faulconer explains, “the typical REC member receiving fuel assistance used an average of 1,323 kWh per month, 40 kWh higher than the current residential class monthly average.”

Implicit in Faulconer’s and REC’s reasoning is that customers receiving state fuel assistance are a good proxy for all low-income customers. But that proposition is absurd on its face. Surely it would come as a surprise to those low-income customers who keep their electricity consumption low to live within their means without government assistance, or who heat with wood to save money, or who cannot afford or don’t want air conditioning.

Certainly consumer groups aren’t buying the notion that access-charge hikes don’t harm low-income customers. The American Association of Retired Persons (AARP) has opposed rate-restructuring efforts like REC’s that increase fixed monthly charges. Joining AARP in fighting such increases are the NAACP, Consumers Union, and the National Consumer Law Center. All these groups point out that increasing fixed fees makes it harder for customers to control their monthly bills.

The fact is, REC’s proposed rate restructuring, if approved, would be a significant wealth transfer from low-consumption customers to higher-consuming members. To accomplish such a fundamental shift in an effort to stall solar growth is very much in line with the philosophy of Koch brothers-funded groups such as the American Legislative Exchange Council (ALEC), Americans For Prosperity, and similar organizations. (REC through its membership in the National Rural Electric Cooperative Association (NRECA) supports ALEC.) Even if REC isn’t coordinating directly with these groups, the co-op seems to have internalized their way of thinking about the need to fight homeowner solar so utilities can keep burning fossil fuel.

In a Sierra Club filing in REC’s rate case Melissa Whited of Synapse Energy Economics notes that the co-op could raise the additional revenues it needs without raising access charges and thereby disproportionately favoring one group of customers over another. Whited points out that REC’s proposal, by favoring those who consume more over those who consume less, gives inefficient price signals that promote waste in electricity consumption.

Utilities across the country, working with Koch-affiliated groups, have been fighting distributed solar by attempting to roll back renewable energy mandates and net metering laws. They’ve also been trying to raise fixed monthly access charges, although often being denied or scaled back by their regulators. In these efforts utilities rarely mention the significant benefits of distributed solar, and REC certainly didn’t, either in Farmer’s speech to co-op members, or in the utility’s SCC filing. REC this summer sent out a number of “beat the peak” messages, asking customers to cut back their usage on hot sunny afternoons to save the co-op from having to buy expensive power during those peak hours. But the co-op never acknowledges that its customers with solar are helping the co-op in a big way during those peak hours. It’s certainly easier to make a case for solar-discouraging rate restructuring if you ignore the benefits that solar brings to the co-op and its members.

REC may also be seeking a rate restructuring before the SCC now as a stalking horse for Dominion Energy Virginia, which is also an ALEC member and also rarely passes up an opportunity to slow distributed solar. In 2009 the General Assembly, in a subtle anti-solar maneuver that seems to have attracted little notice, passed legislation allowing Virginia electric cooperatives to increase access charges without SCC approval, provided the overall rate change is revenue neutral (such as when higher access charges are offset by reduced kWh rates). REC temporarily waived its right to skip SCC scrutiny for access-charge increases as part of its acquisition of customers from Allegheny Power in 2010, but that temporary waiver ends in two years. So REC could have delayed its access-charge restructuring until then and skipped SCC review for it. But going before the SCC now can give REC’s board and management some cover against angry customers, and also can help Dominion and other utilities by setting a precedent, if the SCC approves.

If the SCC staff analyzed how REC’s access-charge doubling will disproportionately affect low-income customers, it hasn’t disclosed its reasoning. In his prefiled testimony in the rate case, SCC principal utilities analyst Marc A. Tufaro simply said: “Staff is generally not opposed to the proposed increases in the Access Charges by REC.”

Virginia Attorney General Mark Herring is also a party in the case, through the Office of Consumer Counsel. That office has yet to publicly reveal its position concerning the access charge.

Seth Heald is a member of REC. He received an MS degree in energy policy and climate this year and serves as chair of the Sierra Club Virginia Chapter.

UPDATE: November 1, 2017: 

The Sierra Club announced today that it and the other parties to the REC rate case reached a settlement, pending final SCC approval.  The settlement reduces the overall revenue increase from $22.2 million to $18 million and scales back the residential access-charge increase from 100% to 40%. “This settlement is a significant win for REC’s member-owners because doubling their fixed access charges would have disproportionately harmed members who have invested in clean energy and energy efficiency,” said Kate Addleson, Director of Sierra Club’s Virginia Chapter. “REC’s proposal also would have harmed many low-income customers who try to reduce their energy consumption to keep their bills affordable, and would have discouraged co-op members  from investing in energy efficiency and rooftop solar in the future.”

As part of the settlement, REC also agreed to work with the Sierra Club to implement specific methods and procedures to provide co-op members advance notice and an opportunity to provide in-person and written comments to REC’s board before access charges can be increased in the future.

 

 

A 5-year plan for economic growth: 10% solar and 50,000 new jobs

Source: The Solar Foundation

A new analysis from the non-profit Solar Foundation shows Virginia could create 50,400 jobs if it commits to building enough solar energy in the next five years to provide just 10% of our electricity supply.

The analysis takes the form of an “infographic” showing the implications of 10% solar. It would require building 15,000 megawatts of solar, divided among utility-scale solar farms, commercial installations, and the rooftops of houses. At the end of 2016, Virginia had a total of only 241 MW of solar installed, representing one-tenth of 1 percent of total electricity consumption. Getting to 10% by the end of 2023 would mean an annual growth rate of 61 percent. That would be impressive growth, but well below the 87 percent growth rate averaged by California and North Carolina over the past 6 years.

So 10% in five years should be doable. And indeed, viewed against the need to dramatically lower our carbon footprint, it seems like a very small step indeed. The McAuliffe administration wants to significantly cut statewide carbon emissions, and it is hard to see how we can do that without replacing the dirtiest fossil fuels with solar (and wind, and energy efficiency).

The good news is that the market is in our favor. Dominion Energy’s 2017 Integrated Resource Plan (IRP) identified utility-scale solar as the least-cost energy resource available in Virginia today. And participants in local cooperative buying programs for homeowners and businesses, known as “Solarize” programs, report payback times of under 10 years for rooftop solar, after which they will have nearly free electricity for 20 or 30 years.

Recent solar deals involving Amazon, Microsoft, and now Facebook show just how strong the demand is from customers. The very companies that our political leaders want so desperately to attract to Virginia are insisting on renewable electricity.

These deals demonstrate the direction of the market, and they will give an initial boost to solar employment, especially in the rural communities that are the best locations for solar farms. But restricting solar to a handful of new companies just coming into Virginia won’t get us to 15,000 MW and 10% solar. It’s also fundamentally unfair to the rest of us who are stuck with a dirty grid. Why should existing customers get left with polluting sources, while big tech companies get solar?

For us, Dominion’s IRP caps its solar plans at 240 MW per year, an amount it admits is arbitrary. In other words, Amazon got 260 MW, Facebook is getting 130 MW, but all the rest of Dominion’s customers put together will get just 240 MW per year.

As for customers who are determined to take matters into their own hands with rooftop solar, a host of unnecessary restrictions continue to limit growth. Virginia needs to put policies in place to push utilities to do more, to support local governments and schools that want solar, and to remove the barriers that limit private investment.

Solar companies around the state say if we can do that, they will do their part by hiring more Virginians. Here’s what some of them had to say about the 10% solar goal, and how to achieve it:

“We believe, as Virginians, that we can solve our energy challenges. Ours is a Virginia company founded and based in Charlottesville, and we are committed to building Virginia-based energy production facilities that benefit all Virginians. But the fact is that over the past few years our growth has come from business in other states. We have 26 employees in Virginia now, and we could increase that dramatically if Virginia promotes solar through policy changes that incentivize business owners to invest, allows competition, and supports the environmental message.” –Paul Risberg, President of Altenergy, Charlottesville

“The economics have never been better for solar in Virginia than they are right now. Prospect Solar has grown from two employees in 2010 to 16 full time employees today. Roles such as electricians, skilled labor, engineers, project managers, and sales people are integral to the success of each project. We hope Virginia will commit to a rapid, sustained buildout of all sectors of the solar industry, allowing us to continue adding local jobs.” –Andrew Skinner, Project Manager at Prospect Solar, Sterling

“Nationwide, the solar market was a 23 billion dollar industry in 2016. One out of every 50 new jobs in America was created by the solar industry last year. Sigora has been part of that. We have doubled in size in the past year and now employ 80 people in the Commonwealth.” –Karla Loeb, Vice President of Policy and Development for Sigora Solar, Charlottesville

“Local energy, local jobs, local investment. Our workforce is made up of local people—three of us went to Virginia Tech, one went to New River Community College, which has an Alternative Energy Program. An increase in demand of this scale would mean we’d hire more local people.” –Patrick Feucht, Manager of Baseline Solar, Blacksburg

“Residential and commercial rooftop solar has created most of the solar jobs in Virginia to date, and it has to be a part of the push to 10 percent. As we know, rooftop solar creates more jobs than utility solar, and these are good-paying, local jobs for local people. That’s one reason Virginia should lift the outdated 1 percent cap on net-metered solar, and leave the market open to anyone who wants to invest in their own home-grown energy supply.” –Sue Kanz, President of Solar Services, Virginia Beach

“Ten percent solar is a modest goal to shoot for given the strong economics of solar and the demand we are seeing from customers. Virginia has been held back by restrictive policies that have made it a ‘dark state.’ Reforming our policies would lead to a lot more economic development around solar.” –Tony Smith, President of Secure Futures LLC, Staunton