At long last, Dominion decides it’s game on for offshore wind

Offshore wind turbines

The Block Island wind farm in Rhode Island. Photo by Ionna22 via Wikimedia Commons.

When utility regulators gave Dominion Energy Virginia the go-ahead to build two offshore wind turbines last November, it was still unclear whether the pilot project might be the end as well as the beginning of offshore wind in Virginia.

Now, however, Dominion seems to have decided it’s game on. Although the company hasn’t issued any public statements about its intentions, its presentation to investors in March included $880 million in spending on offshore wind through 2023, over and above the cost of the pilot project.

This came as a surprise to everyone, including Virginia regulators at the State Corporation Commission. Commissioners were not pleased that Wall Street heard the utility’s plans before they did. Dominion’s 2018 Integrated Resource Plan did not propose building a full-sized offshore wind farm any time in the next 15 years.

Nor had the 2016 and 2017 IRPs, even though the company has been sitting on a lease for an area of ocean that could provide at least 2,000 megawatts of offshore wind power, enough for 500,000 homes.

At a hearing on the IRP this month, the company promised regulators it would submit detailed information in its future filings, and confirmed that it currently has its sights set on 2024 for the first commercial wind farm.

For now, however, Dominion remains focused on getting the two test turbines up and running in a state-held lease area 24 miles out to sea from Virginia Beach. If all goes according to plan, the Coastal Virginia Offshore Wind project will be up and running by late summer 2020.

The two, 6-MW turbines will contribute only enough electricity to the grid for about 3,000 homes, but they will be the first turbines in federal waters anywhere in the U.S.  (The nation’s first wind farm, off Block Island in Rhode Island, is closer to shore in state waters.)

With that finish line in sight, state officials, developers, business people and offshore wind researchers were at Old Dominion University in Norfolk Tuesday night to share their vision of how Virginia will leverage its baby steps into a multi-billion-dollar industry that could “reinvent” Hampton Roads.

The town hall forum, organized by the Sierra Club, emphasized the workforce, supply chain and port opportunities if Virginia succeeds in becoming a commercial hub for offshore wind farms all along the East Coast. Gov. Ralph Northam’s administration hopes to find success with this plan even if Virginia lags other states in building wind farms.

Thomas Brostrøm, president of Ørsted North America, the Danish developer that is partnering with Dominion to build its pilot, described the size of the opportunity. The “pipeline” for projects in the U.S. has now reached 20,000 MW, mostly in New England, New York, New Jersey and Maryland. A buildout of 1,000 to 1,500 MW per year is enough to support a U.S.-based supply chain, he said. This is important not just for American businesses but also for customers, since local manufacturing means lower costs.

Brostrøm also agreed with elected leaders and port officials at the forum that Virginia’s deep-water port and unobstructed access to open ocean makes it a particularly attractive base of operations for an industry that has to transport turbine blades the length of football fields.

According to Jennifer Palestrant, director of the SMART Center for Maritime and Transportation at Tidewater Community College, the area’s ability to provide a workforce and job training needed for the new industry is also a given.

“Virginia has been building ships for 300 years,” she told the audience. “We’ve got this.” Workforce training “is in the bag.”

No doubt Virginia’s port and workforce advantages merit this home-state boosterism, but leaders in other states make similar claims. Those states also aren’t leaving anything to chance; while dangling subsidies for offshore wind energy, they are requiring developers to work with local communities and businesses.

Dominion’s decision on whether and when to move forward with a commercial wind farm will thus have a huge impact on how much of the industry Hampton Roads can attract. Mark Mitchell, the company’s director of generation projects, told the town hall audience that one of the most important pieces of information the company wants to gain from CVOW is the capacity factor of the turbines — that is, how much electricity they produce as a percentage of their full “nameplate” capacity.

Currently Dominion expects the test turbines to perform at a capacity factor of 42%. If the turbines do better than that, it means they can produce electricity at lower cost. If they perform less well, costs will be higher. Virginia is at a disadvantage compared to states further north, where stronger winds drive higher capacity factors. And with lower energy prices overall than northeastern states and no subsidies to offer, getting offshore wind to pencil out here is harder.

But Mitchell sounded confident about the future of the industry in Virginia.  As Dominion sees it, he said, offshore wind is important for achieving carbon reductions, and it complements solar “without solar’s land-use issues.” By 2024, he projects costs will fall enough to make an offshore wind farm attractive. “We see the economics coming in to support that,” he said.

This is wonderful news, and also a sudden and remarkable about face for a company that has worked at a snail’s pace since winning the development rights to the Virginia lease six years ago. Other states started later and are on track to finish earlier.

From this we draw two conclusions, one surprising and the other, not so much. First, IRPs are meaningless. Far from revealing the utility’s plans for 15 years, they don’t even tell the SCC what Dominion is thinking at that very moment.  Eat your hearts out, commissioners; to this company, you are irrelevant.

And, more obviously, Dominion follows the money. None of the reasons Virginians want offshore wind — clean energy, jobs, business development, climate mitigation — mattered until a pathway to profit opened up.

No doubt Dominion needs a new profit center. For years the company expected wealth to flow from a planned $19 billion nuclear reactor at North Anna, until the economics grew from challenging to impossible. Currently it’s gambling on the $7 billion-plus Atlantic Coast Pipeline, which is facing a similar cost spiral amid a morass of lawsuits and unresolved questions of whether it has any real customers.

Offshore wind offers an entirely new business opportunity with almost unlimited potential, and one with the added benefit of working with, not against, public opinion and advances in clean energy technology.

Building a commercial wind farm in Virginia may be just the beginning for Dominion. An industry source told me the utility’s parent company, Dominion Energy, is negotiating to buy a $400 million, offshore wind turbine installation vessel.

If true, investing in one of these specialized ships could be a canny business move, since the offshore wind industry is facing a severe shortage of them worldwide, and the U.S. currently has none at all. The purchase would indicate Dominion sees an opportunity to make money on the booming offshore wind market in the Northeast, regardless of what happens in Virginia.

Before the town hall, I asked Dominion for confirmation of its plans and received this response:

“Onshore construction activities associated with CVOW are slated to begin soon.  Additionally, the company is in the early phases of developing a construction operations plan for the larger commercial lease area and expects to have a high-level timeline soon.

“As the first approved offshore wind project in federal waters, CVOW has already provided many valuable lessons learned which will ultimately benefit our customers and the environment as we move through the dozens of required surveys, reports and assessments as part of the construction operation plan for larger scale development. Mark [Mitchell] will provide remarks next week [i.e., at the Sierra Club town hall] and we will share additional information as it becomes available.”

If this seems like disappointingly little information, take heart: you now know at least as much about Dominion’s offshore wind plans as the SCC does.

This article first appeared in the Virginia Mercuron May 30, 2019. 

 

Lies, damn lies, and advertising: Dominion goes for the green

Twet from Dominion Energy claiming its power is 85% green. Picture shows solar panels.

From Dominion Energy’s Twitter feed.

Recently I criticized a Dominion Energy advertisement that boasted, misleadingly and inaccurately, about the company’s investments in solar energy.

By contrast, the company’s investments in greenwashing are transparent and heartfelt. Dominion has suffered through several bad months here in Virginia and would very much like to change the conversation.

Indeed, the company’s problems keep mounting. In the course of just two days this month, SCC commissioners lit into the company for telling Wall Street one thing and regulators another; the corporate customers behind Virginia’s data center boom filed a letter saying they want no part of Dominion’s fracked-gas build-out; and a coalition of libertarian, environmental and social justice groups called for a breakup of Dominion’s monopoly.

Fortunately, Dominion’s PR offensive was only just ramping up. A full-page newspaper ad, predictably light on detail, promises the company will cut its climate-heating methane emissions in half. That would be a nice trick from the company whose Atlantic Coast Pipeline will be responsible for more greenhouse gas emissions than all Virginia’s power plants put together.

In case you doubt the company’s sincerity, Dominion just joined a corporate coalition calling for a price on carbon. This must have been in the works about the same time Dominion was criticizing Virginia’s proposed entry into the Regional Greenhouse Gas Initiative, which actually puts a price on carbon.

Hey, The Washington Post fell for it. Greenwashing works.

And that brings us to the (literally) incredible claim that recently appeared in Dominion Energy’s Twitter feed: “The future of our planet depends on clean energy, which is why more than 85% of our generation comes from clean energy sources such as solar.”

Let us pause for a moment to reflect that this tweet comes from a company whose solar generation amounts to a rounding error.

Pie chart showing sources of electricity.

From Dominion Energy Virginia’s 2018 Integrated Resource Plan.

Dominion Energy Virginia’s most recent Integrated Resource Plan includes a handy pie chart revealing what is actually in its energy mix:

  • Nuclear: 33%
  • Natural gas: 32%
  • Coal: 18%
  • Purchased (wholesale) power: 10% (that’s coal and gas)
  • Non-Utility Generation (purchased under contract): 5% (more coal)
  • Renewable: 2% (almost all hydro and biomass, plus a smidgen of solar)
  • Oil: 0%

Now, it is true that Dominion Energy the holding company owns more generation than Dominion Energy Virginia the electric utility. For one thing, it just bought another utility in South Carolina. According to the information Dominion provided to investors in March, its South Carolina generation looks like this:

  • Natural gas: 39%
  • Coal: 36%
  • Nuclear: 21%
  • Hydro: 3%

Nobody looking at these figures could find a basis in reality for a claim of 85% clean energy. It is so preposterous that I just have to ask: Why only 85%?

I mean, seriously, if you have traveled this far into the realm of fantasy, why not claim 100%? Or heck, with a nod to Spinal Tap, why not 110%? Clearly the people making this stuff up are rank amateurs.

All of which is to say: come on, Dominion, you can do better.

Dominion keeps trying to pull the wool over our eyes

 

Sheep like these are used to keep grass mowed around solar panels.

Dominion’s ad would have done a better job of distracting us if it had included baby animals. Their failure is my opportunity! These lambs keep the grass short around the solar panels at a farm near New Hope, Virginia. Owners Ann and Riley Murray shared this picture.

When your kid greets you at the door with the cheery news that he’s swept the floor for you without being asked, you are probably right to wonder which breakable item is no longer in its usual place.

I have the same feeling about the series of full-page ads Dominion Energy has taken out in newspapers over the past few weeks bragging about the company’s investments in solar energy. The ads are misleading—I’ll get to that in a minute—but the more interesting question is what the company is up to that it hopes we’re too busy looking at solar panels to notice.

Here are some possible answers:

• It was recently reported that Dominion Energy paid no federal income tax for 2018, in spite of earning over $3 billion in U.S. income. In fact, the company received a $45 million rebate, making its effective tax rate -1%. That’s pretty sharp manipulation of the tax laws. No wonder CEO Thomas Farrell II is the highest paid executive in the utility sector, with a reported $20.6 million in income.

• Most of that untaxed income comes from customers here in Virginia, but not all of it is earned. Let’s recap just a few of the high points: In 2014, the General Assembly passed a law letting Dominion charge customers for hundreds of millions of dollars incurred in planning for a new nuclear plant the company isn’t building. Then in 2015 Dominion persuaded legislators to “freeze” regulators’ ability to examine the books and order refunds of what turned out to be hundreds of millions more in customer overpayments. Regulators said the number might eventually rise as high as a billion dollars. When grumbling about that reached a fever pitch, Dominion persuaded the still-compliant (!) legislature to pass another billlast year letting it spend the money instead of refunding it.

• After getting authority to spend all that customer money, one of Dominion’s first moves was to interpret “spending” as “keeping.” Instead of the massive spending on energy efficiency that the legislature put into the law, Dominion tried to discount the number by 40 or 50% so it could keep the rest as “lost revenue.”

• Dominion’s Atlantic Coast Pipeline could shape up to be a huge profit center for the company, but also a huge financial burden for utility customers. Dominion fought hard against a bill this year that would have protected customers if and when the pipeline ever gets built. The company eventually defeated the bill in a Dominion-friendly Senate committee, but not before voting revealed deep fault lines in the House.

• Slides from a presentation to an investor meeting in March show Dominion bragging about Virginia having a favorable regulatory environment (read: utilities get their way).

• That presentation caught the interest of several House Democrats for another reason: it boasted customer-funded spending numbers at least $3 billion higher than it gave its regulators at the State Corporation Commission just two weeks before. In a news release May 2, the seven delegates demanded Dominion produce a full accounting of its future spending plans. Del. Elizabeth Guzman, D-Prince William, whose office issued the release, said “Dominion’s days of facing no consequences when telling Virginians one thing and Wall Street another are coming to an end. The SCC is right to uncover Dominion’s inconsistencies and hold the monopoly accountable since it is Virginia ratepayers who will ultimately pay the price.”

• The delegates also noticed Dominion has decided it wants to make even more profit from its Virginia customers. This spring the company asked the State Corporation Commission to raise its rate of return on common equity from 9.2% to 10.75%, an astounding increase at a time of low interest rates and easy access to capital. Dominion may believe that by overreaching, it will win some middle ground. In the March presentation, Dominion told shareholders the company expects to earn an average 10.2% return on equity from its Virginia investments, still a full percentage point higher than the utility is currently authorized to earn.

• The Virginia Attorney General’s Office is fighting Dominion’s attempts to collect $247 million from ratepayers for environmental upgrades at its Chesterfield power plant, calling the spending “imprudent” given that it will provide “little or no value to customers.”

All of this should feel pretty brazen to Virginia leaders and the public, but when you want something you don’t deserve, it helps to be shameless.

Yet at least some Dominion leaders seem to be aware that other people think the company should be ashamed of its greed, and that some of these people are voters who may eject its friendly legislators from office this fall. Their answer is to run an ad about solar panels to distract us and change the conversation.

But the ad just starts its own conversation — and not in the intended way.

The ad brags, “At Dominion Energy, we’ve increased the number of solar panels in Virginia from 5,250 to over 2 million since 2015. And we’re now the 4th largest solar producer in the nation.”

First off, a minor point, but a symptomatic one: that “fourth largest” claim doesn’t hold up. As of last September, a ranking of the largest solar owners put Dominion in 10th place. Even using the updated number (2,600 MW) from Dominion’s March 2019 investor presentation wouldn’t get the company to fourth place unless other companies have been hastily selling off projects. It does appear Dominion can rightly claim to be the fourth largest solar owner among energy holding companies that own electric utilities. But so what?

The Virginia number catches our attention, though. Two million solar panels sounds like a lot. It’s just that — well, somebody check my math here, but if those are average 300-watt panels, that comes out to 600 MW, which is a pitifully small amount compared to Dominion’s fossil fuel investments. We’re glad to have any solar at all, but it isn’t something to write friends in California about (they’ve got 24,000 MW of solar and counting).

Speaking of California, that and North Carolina are where the rest of Dominion’s solar projects are, in case you’re wondering. The laws are better there. Dominion didn’t write their laws.

Also, while we are at it, almost none of the solar Dominion is developing is for ordinary residents, in spite of what the ad implies. Almost all of it is for data centers and other large customers. Dominion is counting the 350 MW of solar it is developing for Facebook towards the commitment it made to the General Assembly last year to develop 3,000 MW of renewable energy by 2022.

Legislators who thought Dominion would build a lot of solar for regular folks when they agreed to last year’s boondoggle bill should find that disappointing. If they didn’t get solar for their constituents, what exactly did they get?

Unfortunately for Dominion, that brings us back to the long list of things the company was hoping we would ignore while we look at bright shiny objects. Ads about solar panels aren’t enough to distract people from the billions of dollars Dominion is taking from our pockets.

Perhaps the executives at Dominion will conclude the ad just wasn’t good enough. Next time they could try putting sheep in the picture with the solar panels. Especially baby sheep.

Maybe they thought about it and were afraid it would remind Virginians they were getting fleeced.

But they had better try something. Because right now, frankly, no one is distracted.

This article first appeared in the Virginia Mercury on May 6, 2019. 

A revised generation plan leaves Dominion’s case for its pipeline in shambles

In December of last year, regulators at the State Corporation Commission (SCC) took the unprecedented step of rejecting Dominion Energy Virginia’s Integrated Resource Plan (IRP). Among other reasons, the SCC said the utility had over-inflated projections of how much electricity its customers would use in the future.

On March 8, Dominion came back with a revised plan. And sure enough, when it plugged in the more realistic demand projections used by independent grid operator PJM, and accounted for some energy efficiency savings, the number of new gas plants it planned for dropped in half. Instead of 8-13 new gas combustion turbines, the revised plan listed only 4-7 of these small “peaker” units.

Yet there is a good chance Dominion is still overinflating its demand numbers.  Although the re-filed IRP is short and vague, it appears Dominion isn’t figuring in the full amount of the energy efficiency programs it must develop under legislation passed last year.

SB 966 required Dominion to propose $870 million in energy efficiency and demand-response programs designed to reduce energy use and the need for new generation. But Dominion has proposed just $118 million in its separate demand-side management filing (case PUR-2018-00168).

Moreover, the company has concocted a theory whereby it can satisfy that $870 million requirement by spending just 40 or 50 percent of it and pocketing the rest. In its DSM case Dominion argues that since the Virginia Code allows a utility to recover lost revenue resulting from energy efficiency savings, it can simply reduce the required spending by the amount of lost revenue it anticipates.

It’s a great theory, and suffers only from being wrong. (Oh, and also from infuriating legislators, energy efficiency advocates, and pretty much everyone else who was involved in crafting SB 966.)

It also indicates that Dominion’s demand figures in the IRP are based on plans to spend just a fraction of the $870 million in energy efficiency, achieving much less demand reduction than backers of the law envisioned.

If the SCC decides Dominion can’t withhold hundreds of millions of dollars in efficiency spending, that additional spending will have to be factored into demand projections. Thus the IRP’s demand projection can only go down—and with it, the number of gas plants that might be “needed.”

And yet even the resulting number is likely too high. Several of Dominion’s large corporate customers have been trying to leave its fond embrace to seek better renewable energy offerings elsewhere. (The SCC recently rejected Walmart’s effort to defect.) If they were allowed to leave, how much would that further reduce the need for new generation?

For that matter, those customers and many others, including many of the tech companies responsible for what demand growth there is, say they want renewable energy, not fossil fuels. Dominion claims the renewable generation will have to be backed by gas peaker plants, but energy storage would serve the same purpose and further reduce the need for gas. The SCC will rule on that question when—and if—Dominion ever requests permission to build one of those peakers. It is possible the utility will never build another gas plant.

That’s bad news for Dominion Energy’s other line of business, gas transmission and storage. With demand for new gas generation falling off a cliff, Dominion’s ability to rely on its customer base as an anchor client for the Atlantic Coast Pipeline becomes increasingly doubtful.

Dominion may actually have conceded as much in its re-filed IRP. In response to the SCC’s order that Dominion include pipeline costs in its modeling of the costs of gas generation, Dominion merely stated, without discussion, that it is using the tariff of the pipeline owned by the ACP’s competitor Transco, which supplies gas to Dominion’s existing plants.

This statement continues a pattern of Dominion avoiding any mention of the ACP in SCC proceedings, lest it invite hard questions. But Dominion can’t have it both ways. If it will use Transco, it doesn’t need the ACP. If it plans to use the much more expensive ACP and just isn’t saying so, it has lowballed the cost of gas generation and is misleading the SCC.

This is unfair to customers, and it may backfire on Dominion. The ACP received its federal permit on the strength of contracts with affiliate utilities, but Dominion hasn’t yet asked the SCC to approve the deal. Leaving the ACP out of the discussion in the IRP year after year makes it harder to win approval. When and if the company finally asks the SCC for permission to (over)charge ratepayers for its contract with the ACP, it will not have built any kind of a case for a public need or benefit.

This is not just a risk that Dominion Energy chose to take, it is a risk of the company’s own creation. It defied the Sierra Club’s efforts to have the SCC review the ACP contract early on, knowing it would face vigorous opposition from critics. But since then, its chances for approval have only gotten worse. Back then, the pipeline cost estimate came in at $3 billion less than it is today, Dominion Virginia Power was halfway through a massive buildout of combined-cycle gas plants, and the IRP included several more big, new, gas-hungry combined-cycle plants.

Now the ACP’s cost has climbed above $7 billion and may go as high as $7.75 billion, excluding financing costs, CEO Tom Farrell told investors last month in an earnings call. Meanwhile, the IRP includes an ever-shrinking number of gas plants, to be served by a different pipeline.

One investment management company told clients in January the spiraling price tag may make the ACP uncompetitive with existing pipelines. And Farrell faced a host of cost-related questions in his call with investors.

But Farrell downplayed the risk when it came to a question from Deutsche Bank about the need for SCC approval. Managing Director Jonathan Arnold asked, “On ACP, when you guys are talking about customers, does that include the anchor utility customers, your affiliate customers? Does whatever you’re going to negotiate with them need to be approved by the state regulatory bodies?”

Farrell’s answer sounds nonchalant. “In Virginia, it’s like any other part of our fuel clause. It will be part of the fuel clause case in 2021 or 2022 along with all the other ins and outs of our fuel clause.”

Oh, Mr. Farrell, it is not going to be that easy.

An earlier version of this article first appeared in the Virginia Mercury on March 20, 2019.

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

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

Photo credit Sierra Club.

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

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

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

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

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

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

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

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

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

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

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

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

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

Bills that passed: renewable energy

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

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

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

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

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

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

Bills that passed: energy efficiency

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

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

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

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

Bills that passed: energy transition and climate

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

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

Bills that passed: other utility regulation

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

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

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

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

And now for the also-rans.

Bills that failed: renewable energy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bills that failed: energy transition and climate

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

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

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

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

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

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

Bills that failed: other utility regulation

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

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

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

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

Growth in data centers overpowers Virginia’s renewable energy gains

 

Greenpeace rebranded National Landing, the future home to Amazon’s HQ2, with a human-sized Alexa, lamppost signs and street posters highlighting the company’s stalled progress towards its commitment to power its cloud with 100% renewable energy. Photo credit Greenpeace.

 

More than 100 massive data centers, over 10 million square feet of building space, dot the Northern Virginia landscape around Dulles Airport in what is known as “Data Center Alley.”

And the industry is growing fast.

Local governments welcome the contribution to their tax revenue, but these data centers come with a dark downside: they are energy hogs, and the fossil fuel energy they consume is driving climate change.

A new report from Greenpeace called Clicking Clean Virginia: The Dirty Energy Powering Data Center Alley describes the magnitude of the problem:

“Not including government data centers, we estimate the potential electricity demand of both existing data centers and those under development in Virginia to be approaching 4.5 gigawatts, or roughly the same power output as nine large (500-megawatt) coal power plants.”

As these data center operations continue to grow, they are providing the excuse for utilities, primarily Dominion Energy Virginia, to build new fracked-gas infrastructure, including gas generating plants and the Atlantic Coast Pipeline.

Many of these same tech companies have publicly committed to using renewable energy, and in some cases they have invested heavily in solar and wind power in other states. With the exception of Apple, however, all these data center operators are falling far short in meeting their Virginia energy demand with renewables. Intentionally or not, that makes them complicit in Dominion’s fossil-fuel expansion.

One tech company in particular stands out in the report, due to the sheer size of its operations. Greenpeace calculates that Amazon Web Services, the largest provider of cloud hosting services in the world, has a larger energy load than the next four largest companies combined.

For a while, it looked like AWS would provide leadership commensurate with its size. In 2015, AWS helped break open the solar market in Virginia with an 80-megawatt solar farm. A year later it added another 180 megawatts of solar here, as well as a wind farm in North Carolina in Dominion territory.

Then the investments stopped, while the data center growth continued.

Today, Greenpeace estimates that AWS uses close to 1,700 megawatts for its Virginia data centers. Adjusted for their capacity factors, the renewable energy projects total just 132 megawatts, or less a tenth of the energy the data centers use.

The capacity factor of an energy facility reflects how much energy it actually produces, as opposed to its “nameplate” capacity. A solar facility produces only in daylight, but a data center consumes energy 24/7. To match all of its energy demand with solar energy, AWS would need more than 7,000 megawatts of solar—at least 15 times the amount in all of Virginia today.

For a company whose website promises a commitment to 100 percent renewable energy, that’s a major fail.

The Greenpeace report shows Amazon is not alone in data center operators that are dragging their feet on clean energy. It is simply, by far, the largest. The next three biggest data center operators—Cloud HQ, Digital Reality, and QTS—have no renewable energy at all in Virginia.

Better-known names like Microsoft and Facebook also operate Virginia data centers. Although both have invested in Virginia solar farms, they also fall well short of meeting their energy needs with renewables.

The tech giants are not entirely to blame in all this. As the Greenpeace report details, many of them have asked the General Assembly and the State Corporation Commission for more and better options for purchasing renewable energy. Their requests have largely been ignored.

Virginia’s monopoly system makes it hard for the companies to buy clean electricity from other providers. Our number one monopoly, Dominion Energy, claims to be working hard to meet the large customers’ demand for renewable energy, but its extensive investments in gas infrastructure pose a clear conflict of interest.

Surely, though, if anyone can stand up to Dominion on its home turf, it should be Amazon — which, of course, plans to make Virginia its home turf as well.

And AWS does have options, including more solar as well as land-based wind from the Rocky Forge wind farm and offshore wind from Virginia or North Carolina.

The fact that Amazon doesn’t even seem to be trying should be of great concern to Virginians. As Greenpeace puts it, “AWS’ decision to continue its rapid expansion in Virginia without any additional supply of renewable energy is a powerful endorsement of the energy pathway Dominion has chosen, including the building of the ACP, and a clear signal that its commitment to 100 percent renewable energy will not serve as a meaningful basis for deciding how its data center are powered.”

Amazon has already fired back at the Greenpeace report. In a statement, it asserts that “Greenpeace’s estimates overstate both AWS’ current and projected energy usage.”

However, the statement did not offer a different estimate. It also points to its investments in Virginia renewable energy (the same ones described in the report) and concludes, “AWS remains firmly committed to achieving 100 percent renewable energy across our global network, achieving 50 percent renewable energy in 2018. We have a lot of exciting initiatives planned for 2019 as we work towards our goal and are nowhere near done.”

Well, that’s nice.

But meanwhile, those data centers are using electricity generated from burning fossil fuels, driving climate change, and providing an excuse for new fracked gas infrastructure. Given the rapid pace of data center construction in Virginia, it’s going to take a lot of exciting initiatives from AWS — and all the other data center operators — to make any kind of meaningful impact.

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.