Tag Archives: Dominion Energy Virginia

Dominion Energy’s new choices are really about limiting choices

by
Trees clearcut.

Dominion’s renewable energy products contain copious amounts of biomass, also known as burning trees. Photo by Calibas, Creative Commons.

An annual survey conducted by Yale and George Mason universities shows concern about climate change is surging. Seventy-three percent of Americans think climate change is happening, and 69% are at least somewhat worried about it, the highest percentages since the surveys began in 2011.

Another Yale survey found that “a large majority of registered voters (85%) – including 95% of Democrats and 71% of Republicans – support requiring utilities in their state to produce 100% of their electricity from clean, renewable sources by 2050. Nearly two in three conservative Republicans (64%) support this policy.”

Yet here in Virginia, Dominion Energy expects to reduce carbon emissions less in the future than in the past, and it has no plan to produce 100% of its electricity from clean, renewable sources by 2050. For all the talk here of solar, Virginia still had one-seventh the amount of solar installed as North Carolina at the end of 2018 and no wind energy.

Dominion has developed a few solar projects and new tariffs to serve tech companies and other large customers, but ordinary residents still lack meaningful choices. So this spring, Dominion decided to do something about that.

The wrong thing, of course.

Dominion has asked the State Corporation Commission for permission to market two quasi-environmentally-responsible products. One is for people who are willing to pay a premium for renewable energy, and don’t read labels, and the other is for people who want a bargain on renewable energy, and don’t read labels.

There may be plenty of both kinds of customers out there, but that doesn’t mean the SCC should approve either product. Indeed, while the purpose of the bargain product is to offer a choice nobody wants, the purpose of the premium product is to close off better choices.

Let’s look first at the product for bargain-hunters, a super-cheap version of the utility’s Green Power Program. Dominion is calling it “Rider REC.” A better name for it would be the “You Call This Green? Power Program.”

Rider REC consists of the dregs of the renewable energy category, the stuff that isn’t good enough for the Green Power Program. That’s a low bar already, because the Green Power Program doesn’t sell green power. It sells renewable energy certificates (RECs), the “renewable attributes” of electrons from facilities labeled renewable.

Customers who pay extra for RECs still use whatever mix of energy their utility provides. For Dominion customers, that’s fracked gas, nuclear and coal, plus a tiny percentage of oil, biomass, hydro and solar.

Buying RECs lets good-hearted people feel better about using dirty power by donating money to owners of renewable energy facilities somewhere else. The facilities might be in Virginia, or they might be clear across the country.

For example, say a utility out west builds a wind farm because wind is the cheapest way to generate power. If the state doesn’t have a renewable portfolio standard that requires the utility to use the RECs for compliance (most windy states don’t), the RECs can be sold to buyers in liberal East Coast states, lowering energy prices for the utility’s own customers.

RECs don’t even have to represent clean sources like wind. Some RECs subsidize industries that burn trees (aka biomass), black liquor (a particularly dirty waste product of paper mills) and trash.

Dominion’s Green Power Program uses RECs that meet the standards of a national certification program called Green-e. Green-e requires that facilities be no more than 15 years old and meet minimum environmental standards, such as requirements that woody biomass be sustainably grown and that generators don’t violate state and federal pollution limits.

But Virginia’s definition of renewable energy is, shall we say, more forgiving than Green-e’s. Our law does not discriminate against decades-old facilities like hydroelectric dams, or energy from trees that have been clear-cut. (Nor does it recognize that burning trees produces even more lung-damaging, asthma-inducing pollution than coal, and more climate-warming CO2 as well.) Virginia’s definition of renewable energy even includes a vague category of “thermal” energy that may be another way paper mills profit from the REC racket.

This loose definition of “renewable” creates a business opportunity for anyone unscrupulous enough to seize it. Dominion proposes to package up these otherwise unmarketable RECs from sketchy sources across the continental United States and pawn them off on unsuspecting consumers here in Virginia.

There is always money to be made by suckering well-meaning folks, but that’s not a good enough reason for the SCC to let Dominion do it. The case is PUR-2019-00081. Public comments are due by Aug. 15.

So what about the more expensive quasi-environmentally responsible product? “Rider TRG” consists of real, straight-from-the-facility electricity on the power grid serving Virginia, not RECs from out west. And while it is not dirt-cheap like Rider REC, Rider TRG would cost residential customers a premium of only about $50 per year.

Unfortunately, Virginia’s kitchen-sink definition of renewable energy means the sources still don’t have to be new or carbon-free or sustainable. It appears most of them won’t be.

Dominion’s filing indicates the program will use the energy from the Gaston hydroelectric dam built in 1963; the Roanoke Rapids hydro station built in 1955; the Altavista, Southampton and Hopewell power stations that were converted from coal to wood-burning in 2013; and several solar farms the company has already built or contracted for.

In addition, Dominion proposes to allocate to the program the portion of electricity from its Virginia City coal plant representing the percentage of wood that is burned along with the coal.

That’s right, Dominion intends for renewable energy buyers to subsidize its coal plant. The idea is cynical enough to have come from the Trump administration.

Dominion knows full well that customers who want renewable energy want new wind and solar, so why is its first product for residential customers so loaded with dirty biomass and old hydro?

The answer is that Dominion doesn’t care if no one signs up for Rider TRG. The point isn’t to give customers what they want, it’s to prevent them from shopping elsewhere for better options. Like Appalachian Power before it, Dominion wants to close off the narrow opening provided by Virginia law that allows customers to shop for 100% renewable energy from other providers only if their own utility doesn’t offer it. The SCC approved APCo’s renewable energy tariff some months ago. Dominion is following APCo’s successful strategy.

Yet APCo’s product consists of hydro, wind and solar, so it is nefarious, but not actually bad. Dominion’s is nefarious and bad.

An SCC decision in 2017 confirmed customers’ right to shop for renewable energy as long as the incumbent utility doesn’t offer it. Currently at least two other providers, Direct Energy and Calpine Energy Solutions, offer renewable energy to commercial customers in Dominion territory. Yet according to documents provided by Direct Energy, Dominion is refusing to let its customers transfer to Direct Energy and Calpine, triggering competing petitions to the SCC.

Dominion no doubt hopes to resolve the dispute permanently by terminating its customers’ right to switch providers at all.

The case is PUR-2019-00094. Comments may be submitted until Nov. 14, and a public hearing will be held on Nov. 21.

 

This article first appeared in the Virginia Mercury on July 22, 2019.

 

UPDATE November 5: The SCC approved Dominion’s Rider REC, the Green Power For Suckers program, on October 31, disregarding the recommendation of SCC staff to deny it. It hasn’t yet ruled on Rider TRG. However, the SCC staff has pointed out that if Dominion left the controversial biomass elements out of the program, it would cost less than half as much.

How Virginia could build 5,000 megawatts of wind and solar, and still have no wind or solar

by
Pie graph showing Dominion Energy Virginia energy mix 2017

No amount of new solar would enlarge the sliver of renewables in Dominion’s energy mix if it sells the RECs. Graph is from Dominion Energy Virginia’s 2018 Integrated Resource Plan.

With the passage of SB 966 earlier this year, the Virginia General Assembly declared 5,000 megawatts (MW) of utility solar and wind energy in the public interest, spreading optimism that Virginia is beginning its slow transition to a clean energy economy. All indications are that Dominion Energy Virginia, the state’s largest utility, intends to make good on that number. Yet under Virginia law, as interpreted by the State Corporation Commission, Virginia utilities could build all that wind and solar and still not be able to claim it in the energy mix serving Virginia residents.

That peculiar result is possible if Dominion and other utilities sell the renewable energy certificates (RECs) associated with the electricity generated from the wind or solar project, transferring to their buyers the legal right to call it renewable energy. The likely buyers are utilities in other states that need RECs to meet mandates for renewable energy under the laws of those states. If the RECs get sold this way, Dominion Energy can build one solar farm after another in Virginia, without ever adding solar to our electricity mix.

That’s right: if you sell the RECs from a solar facility, you can’t say you are using electricity from solar.

This scenario is not just possible, but likely, based on earlier State Corporation Commission (SCC) rulings. The first time Dominion received permission to develop solar, based on a 2013 law enabling the utility to build up to 33 MW of distributed solar (dubbed the Solar Partnership Program), the SCC insisted that Dominion sell the RECs to reduce the cost of the program to ratepayers.

What about Virginia’s voluntary renewable portfolio standard (RPS), which requires participating utilities to get a portion of their electricity from renewable energy sources, including solar? Dominion continues to meet its annual targets, which gradually rise to 15% of non-nuclear electricity by 2025, measured against 2007 demand.

But here, too, the SCC does not want ratepayers to have to spend a dime more than necessary on meeting the RPS. It requires utilities to sell higher-value RECs and replace them with the cheapest RECs available that still meet the Virginia definition of renewable energy. This practice, known as REC “optimization” or arbitrage (selling high, buying low), is common in states with loose RPS laws, and is sometimes used in the private sector as well.

The use of REC optimization, paired with Virginia’s kitchen-sink approach to what qualifies as renewable energy, renders Virginia’s RPS meaningless. Making it mandatory wouldn’t make it meaningful.

chart showing fuel types used to show RPS compliance by Dominion Energy Virginia

Fuel types used to meet compliance with Virginia RPS. From Dominion’s Annual Report to the SCC on Renewable Energy, November 2017. (MSW=municipal solid waste incineration.)

Dominion’s 2017 Annual Report to the State Corporation Commission on Renewable Energy records the company’s progress on meeting the RPS as well as describing its other renewable energy investments. The report confirms both Dominion’s ongoing use of REC optimization for the RPS and its practice of selling RECs from solar projects to reduce ratepayer costs.

Nothing in the 2018 legislation speaks to RECs generated by the 5,000 MW of utility wind and solar that are now declared to be in the public interest. One might suppose the General Assembly intends for utilities to build those projects for ratepayers, not to sell off the legal right to claim we have wind and solar in our mix. But then again, it is entirely possible most legislators never gave the topic a moment’s thought.

If one were to raise it with them now, some might even prove quite comfortable with the idea. As long as we get the jobs and economic development associated with new energy projects, and we use the clean energy to reduce the burning of fossil fuels, they might say heck yeah, let Maryland or New Jersey buy the bragging rights for their state RPS requirements and subsidize our energy costs.

If taking advantage of the flaws in other state’s laws feels like the wrong way to make progress, there is an alternative. We could reform Virginia’s RPS to make it less like corporate welfare for producers of the least valuable forms of renewable energy, and more like a transition plan to a clean energy economy. Put that together with a plan for true grid transformation, and we will have something to brag about ourselves.

Virginia regulators reject Dominion renewable energy tariff

by

Virginia’s State Corporation Commission (SCC) has rejected Dominion Energy Virginia’s application for approval of a new rate schedule “CRG” under which it would offer renewable energy to large users of energy.

The SCC concluded Dominion had failed to show the tariff would result in “just and reasonable rates.” The Commission focused especially on two issues. First, the tariff relied on a formula made up of a long list of unknown variables including half a dozen different cost and price forecasts, producing “simply too much uncertainty and subjectivity.”

Second, Dominion proposed to collect a profit on the renewable energy it purchased for customers, equivalent to the return on equity it is allowed to charge on projects it builds. This would be unusual (typically the costs of purchased power are simply passed through to customers), and the Commission wasn’t having it.

This puts Dominion back at square one in developing a renewable energy tariff it can offer to large customers other than the Amazons and Facebooks of the world, who negotiate their own terms.

On the one hand, that’s good for customer choice and free market competition; as long as the utility does not have an approved tariff for 100% renewable energy, customers are allowed to buy renewable energy from other providers.

On the other hand, the SCC opinion also seems to suggest that when Dominion comes back with a new proposal, it might have to be one that, while cheaper, could be even less appealing to customers than the already-questionable CRG tariff. Pointing to the very broad definition of renewable energy in § 56-576 of the Code, the SCC makes the peculiar assertion that “The Commission must find that the energy provided by the proposed tariffs meets the General Assembly’s definition of renewable energy, not an individual customer’s preferred definition of such.”

This language concerns Cale Jaffe, Assistant Professor of Law at the University of Virginia and the Director of the Environmental and Regulatory Law Clinic. He says:

I take that as a not-so-thinly veiled criticism of Tier 1 renewables like wind and solar by the Commissioners.  I.e., Va. Code 56-576 defines “renewable energy” to include, “biomass, sustainable or otherwise, (the definitions of which shall be liberally construed), energy from waste, landfill gas, municipal solid waste….” I read the Commission as advising Dominion that if it comes back with another 100% Renewable Energy tariff, it needs to include “cheaper” options (if externalities are excluded), which the Commission would define to include unsustainable biomass along with other Tier 3 resources (e.g., waste to energy).

For customers, the result could be the worst of both worlds if a tariff with a mix of cheap, crummy stuff won SCC approval. It would close off the market to competition, yet probably not attract many takers.

Taking the optimistic view, though, there’s little out there in the renewable energy world that can compete with today’s wind and solar prices, with the exception of hydropower in places that have a lot of it. If Dominion’s prices are high, that’s because it insists on mixing in high-cost biomass to satisfy its own insistence that a renewable energy tariff consist of renewable energy 100% of the time.

The SCC’s focus on cost to customers has implications for Dominion’s proposed Schedule CRG-S, which would offer residential and smaller non-residential customers a mix of renewable sources at a fixed price that would increase the bills of participating residential customers by nearly 18%, or more than $20 per month for someone using 1,000 kWh. (Again, it’s that insistence on “100% of the time” that appears to be driving up the price.) This is a greater increase than the similar tariff Appalachian Power proposed, and the SCC rejected as too high, just a year ago.

For Dominion, the answer to every problem is more gas

by

Dominion Energy Virginia just released its 2018 Integrated Resource Plan (IRP), and the message it conveys could not be clearer: no matter what happens, the utility plans to build more fracked gas generation.

The IRP lays out five scenarios for meeting electric demand over the next 15 years, each one responding to a different set of assumptions. Yet weirdly, no matter which assumptions you choose, Dominion’s plan involves building a little bit of solar and a lot more gas.

Dominion Energy Virginia IRP; table showing alternatives considered

Dominion’s “Alternative Plans” (from page 24 of the IRP) prove to be very short on actual alternatives.

Everywhere you see “CT” in the table, that’s another gas plant–and they show up in every “alternative.” Assume no carbon tax? Great, Dominion will build gas. What if Virginia follows through on plans to cut carbon by joining the Regional Greenhouse Gas Initiative (RGGI)? No problem, Dominion will build gas. How about if the Feds impose a national carbon plan? Alrighty then, Dominion will build gas!

Seriously, folks, if fracked gas is always the answer, somebody isn’t asking the right question.

The question we’d like to see addressed is how the utility intends to help Virginia transition to a clean energy economy. The question Dominion seems to be answering is how to create a need for the Atlantic Coast Pipeline.

This isn’t a surprise; Dominion’s parent company, Dominion Energy, is the majority partner in the pipeline, and the pipeline’s approval was premised on the utility “needing” the pipeline to serve its gas plants. It’s a blatant conflict of interest that the SCC should have addressed by now, but it declined to do so. (The Sierra Club has taken the SCC to court over this dereliction of duty.)

Dominion would prefer we talk about its plans for more solar. It is true the 2018 IRP proposes more solar generation than the 2017 IRP did. Last year’s IRP revealed that solar had become the lowest-cost energy in Virginia, but it forecast only 240 MW per year. This year’s IRP shows solar increasing over the next few years to a maximum of 480 MW per year beginning in 2022 (about half of what North Carolina installed in 2016). To put that in perspective, Microsoft recently announced it was contracting for 350 MW of Virginia solar to be built in one fell swoop, to serve just its own operations.

Meanwhile, the IRP notes that Dominion’s newest combined-cycle gas plant, the 1,585 MW Greensville behemoth, will enter service next year. Running at full capacity, it would provide the equivalent amount of electricity to 13 years’ worth of planned solar construction, since the expected output of a solar farm is about 25% of its “nameplate” capacity. (To be fair, the Greensville plant will likely run at more like 75-80% capacity. But it follows three other new gas plants Dominion built this decade. Together the four plants add a total of  4,862 MW. And those are nowhere near all the gas plants Dominion operates.)

The fact that all of Dominion’s IRP scenarios look alike and rely heavily on gas seems to be intended to send a message not to the SCC but to Governor Northam. Dominion doesn’t like the carbon reduction rulemaking now underway at the Department of Environmental Quality, which aims to lower emissions from Virginia power plants by 30% between 2020 and 2030. So the IRP “assumes” Dominion will comply by purchasing dirtier power from states not subject to regulation, actually driving up both cost and carbon emissions. Meanwhile, it’s going to build gas no matter what.

Welcome to Dominion’s game of hardball, Governor Northam.

Of course, the IRP is only a planning document. The SCC may approve it but still reject a proposed facility when the utility asks for permission to build it. Market watchers will question whether Dominion will be able to justify all—or any—of the 8 proposed gas combustion turbine facilities in hearings before the SCC. Virginia has too little solar now to need combustion turbines for back-up, and by the time there is enough to challenge the capabilities of the grid, experts predict battery storage will be the better and cheaper choice.

But never mind that; for Dominion, what matters now is justifying the Atlantic Coast Pipeline.

How Virginia localities will get to 100% renewable

by

Supporters of clean energy gathered in Richmond on April 25 to launch the 100% Virginia Campaign. Photo courtesy of the Sierra Club.

Last week a coalition led by the Sierra Club launched a “100% Virginia” campaign designed in part to encourage more localities to follow the lead of Blacksburg and Floyd in committing to a 100% renewable energy future. For many people this energy transition now feels inevitable, at least in the long run. In the short run, though, it still feels very difficult.

Consider the obstacles we face in Virginia. Most localities have to deal with Dominion Energy Virginia (Dominion) or Appalachian Power (APCo), which have monopolies in their service territories. With few exceptions, customers can’t just sign up with another supplier who will offer a cleaner energy mix. And most local governments themselves buy electricity collectively from Dominion under a contract that gives them an attractive price but constrains their ability to generate power for themselves.

Our utilities themselves show no interest in abandoning fossil fuels. Dominion Energy Virginia’s parent company, Dominion Energy, is heavily invested in natural gas transmission, storage and export. The parent company needs the electric utility it owns to keep burning fracked gas for electricity so it can fill pipelines like its $6 billion Atlantic Coast Pipeline. Dominion has sunk billions of dollars of its customers’ money into new gas generating plants, which it won’t want to close early. And Dominion’s 2017 Integrated Resource Plan (IRP) showed the company expected to see its CO2 emissions actually increase over the next 25 years.

For its part, APCo is a subsidiary of Ohio-based American Electric Power (AEP). AEP has reduced its use of coal in recent years and plans major investments in renewable energy, but it won’t reach its planned 80% reduction in CO2 emissions until 2050. Meanwhile it is increasing its use of fracked gas.

Both Dominion Energy Virginia and APCo make money by building new infrastructure, so they need customers to use more energy, not less. They oppose mandatory efficiency savings as well as customer-owned and third-party owned solar, both of which would reduce their own sales. One result is Virginia’s abysmal showing on energy efficiency rankings.

Virginia lacks a mandatory renewable portfolio standard (RPS), relying on a weak and voluntary standard. As a result, Dominion Energy Virginia’s energy mix is currently less than 4% renewable energy, none of it from wind or solar. (Dominion does generate a tiny amount of solar energy but sells the renewable energy certificates, so legally it no longer qualifies as energy from solar. This will be an ongoing problem as Dominion builds more solar.) APCo has more wind in its energy mix than Dominion does, but also more coal.

Customers who want to generate their own renewable energy face a long list of policy barriers, and Virginia lacks incentives like tax credits, rebates, or a REC market that would spur private investment. Under pressure from Dominion, APCo and the rural electric cooperatives, the General Assembly routinely defeats proposals that would boost investment in rooftop solar. A recent report gave Virginia an F on solar policy, ranking us among the “10 States Blocking Distributed Solar.”

If the General Assembly is unhelpful, Virginia’s State Corporation Commission (SCC) is actively hostile to renewable energy and energy efficiency. The SCC cares about low rates and not much else.

It’s also hard for local governments to fill the policy gap. Virginia is a Dillon Rule state, meaning local governments have only the power granted to them by state government. A city or county can’t adopt a building code requiring homes to be more energy efficient than called for in the statewide code, or require new buildings to have solar panels or green roofs.

With all these obstacles, the prospects for meaningful change once looked grim. But two trends have converged to change the outlook. First, the economics of electric generation have now shifted decisively in favor of renewable energy and away from fossil fuels (though a lot of people don’t know it yet). And second, customer demand for renewable energy has surged across the political spectrum, with major corporations driving much of the action.

As a result, even in Virginia a number of trends favor renewable energy:

Dominion’s 2017 IRP dropped plans for new baseload gas plants before at least 2025, a sharp change from 2016. That IRP for the first time identified solar as the least cost resource in Virginia, though it proposed a build-out of only 240 MW per year. Dominion’s 2018 IRP, due out May 1, will almost surely call for more than that, in keeping with 2018 legislation, SB 966, putting more than 5,000 MW of wind and solar by 2028 in the public interest.

SB 966 also called for a billion dollars in new spending on energy efficiency programs, and limited the SCC’s ability to reject proposed efficiency programs. Meanwhile, localities are putting in place Commercial Property Assessed Clean Energy (C-PACE) lending programs that will allow businesses and non-profits to access low-cost financing for both energy efficiency and renewable energy.

Corporate demand has created new solar options, including some from Dominion but also some that don’t involve our utilities. For example, the 500 MW solar farm that will serve Microsoft and others appears to be structured to bypass Dominion entirely. The deal uses what is known as a wholesale power purchase agreement, an option increasingly popular with corporations, institutions, local governments, and other large purchasers of energy. The Northern Virginia Regional Commission is currently working with local governments in its area to do something similar.

Legislation passed in 2017 is also finally producing a solar option for Dominion customers that will likely be available by the end of this year. As proposed, it will offer electricity generated from solar facilities in Virginia at a cost comparable to that of Dominion’s wretched Green Power Program.

Offshore wind has not gotten much attention in Virginia recently, but Dominion’s partnership with the Danish company Orsted, the world’s leading offshore wind developer, puts Virginia’s 12-MW pilot project on track for completion in 2020, with the commercial lease area likely to see the full build-out of 2,000 MW occur during the 2020s.

Finally, the Northam Administration is finalizing new regulations designed to reduce greenhouse gas emissions from power plants by having Virginia utilities trade carbon allowances with those in states that are members of the Regional Greenhouse Gas Initiative (RGGI). It’s not clear yet how much this will incentivize utilities to build wind and solar.

Localities considering a commitment to 100% renewable energy should feel optimistic about these developments. As renewable energy costs continue to tumble, charting a path to 100% also means saving money for taxpayers.

The exact path to 100% may not be clear, but it will likely involve a combination of some or all these options:

  • Prioritizing energy efficiency in both public and private buildings;
  • Investing in large offsite solar (and wind) facilities, and encouraging corporate and institutional customers to participate in similar investments;
  • Putting solar on rooftops and parking lots of municipal buildings and schools, using third-party PPA financing to avoid upfront capital costs;
  • Offering C-PACE financing to businesses for energy efficiency and solar;
  • Sponsoring and promoting “solarize” bulk purchasing programs that make it easier and cheaper for residential and commercial customers to install solar;
  • Promoting utility-sponsored renewable energy purchase options for residents and businesses as they become available; and
  • If adequate utility options don’t emerge, using municipal aggregation to purchase renewable electricity from another supplier.

Localities also have to do a better job advocating for clean energy at the General Assembly and with the Governor, where they are currently underrepresented in the energy debate. They need to become squeaky wheels about things like the barriers to customer-owned solar, the paucity of renewable energy options and our substandard residential building code.

But most of all, localities have to begin taking advantage of the efficiency and solar options that already exist. Too many boards of supervisors and city councils waste time dithering and second-guessing and deferring to unmotivated staff and wondering if, gee, maybe it would be better to wait for someone else to go first.

Getting to 100% may not be easy, but it’s impossible if you never start.

Hearing examiner rules Appalachian Power’s renewable energy tariff isn’t good enough

by

Appalachian Power’s plan to repackage power from existing renewable energy projects in its portfolio into a new, higher-priced green option hit a bump this week when a hearing examiner for the Virginia State Corporation Commission recommended rejection of the tariff, saying it wasn’t a good deal for consumers.

Approval of the tariff would have allowed APCo to block competition from other renewable energy suppliers. Virginia law provides that if a customer’s own utility doesn’t offer a tariff for 100% renewable energy, the customer has the right to buy from any other provider.

APCo had argued its tariff met the letter of the law, and that should be the end of the SCC’s inquiry. Since it was a voluntary tariff, customers could take it or leave it. Hearing Examiner A. Ann Berkobile disagreed. Because approval of the tariff would adversely affect competition and restrict the rights of customers, she found, the tariff could only be approved if APCo proved it was “in the public interest and its rate is just, reasonable and unlikely to prejudice customers.”

In this case, she concluded, APCo failed to do so, having “made no effort to establish the reasonableness of its proposed Rider REO rate.”

She went on: “Stated somewhat differently, Rider REO has the potential to suppress or even curtail customer access to 100 percent renewable energy by precluding sales by [Competitive Service Providers] while at the same time offering an incumbent utility alternative that is simply too costly for customers to bear. The overall price of Rider REO (and associated rate) should, therefore, be considered when deciding whether to grant approval.”

Testimony in the case had established that the existing wind farms APCo proposed to use were providing power at a higher price than could be obtained from new sources, which the Hearing Examiner suggested made the proposed tariff rate unreasonable. In addition, using old sources rather than new ones would not “promote the development of renewable energy in accordance with the objectives of the Commonwealth Energy Policy set forth in §§ 67-101 and 67-102 of the Code.”

The Hearing Examiner’s report is only a recommendation to the SCC, which will have the final say. The case is PUE-2016-00051.

Ruling could affect Dominion tariff

If the SCC adopts the Hearing Examiner’s recommendation, that could also affect the SCC’s evaluation of Dominion’s proposed 100% renewable commercial tariff. Dominion’s tariff will likely use biomass as a source because of Dominion’s insistence that a 100% renewable product must use sources that together produce renewable energy 100% of the time. But while Virginia’s overbroad definition of renewable energy includes “biomass, sustainable or otherwise,” biomass often doesn’t satisfy corporate sustainability goals. As the Hearing Examiner’s opinion suggests, it’s not enough for a tariff to meet the requirement of providing 100% renewable energy if it isn’t also good enough to attract customers.

The Hearing Examiner’s emphasis on the cost to consumers is also a relevant consideration. If the SCC affirms the APCo decision, Dominion would have to justify using higher-cost biomass over much cheaper wind and solar.

Update: On September 13, 2017, the SCC rejected APCo’s proposed tariff, focusing especially on its high cost.