Tag Archives: energy efficiency

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Virginia legislators look to tax breaks and barrier-busting to boost renewable energy

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Let's get these projects moo-ving. Photo credit NREL

Let’s get these projects moo-ving. Photo credit NREL

The orchestrated mayhem of the Virginia General Assembly session is well underway. Thirteen days are gone and only twenty-one days remain until what’s known as “Crossover,” after which any bill that hasn’t passed its own chamber is effectively dead. This year Crossover falls on February 16. After that, each chamber considers only bills already passed by the other.

By that measure, yours truly is one lazy blogger, because I’m only just getting to the renewable energy bills. On the other hand, bills were still being filed until Friday, and some bills are undergoing revisions before they are heard in committee. These are moving targets; advocates beware.

Removing barriers to investment 

Readers of this blog know that Virginia law is riddled with barriers that restrain the market for wind and solar in Virginia. This year several bills take aim at the policies holding us back.

HB 1286 (Randy Minchew, R-Leesburg, in Commerce and Labor) is barrier-busting legislation developed by the solar industry in consultation with the wind industry and solar advocates. It clarifies that renewable energy companies that sell to retail customers under power purchase agreements (PPAs) are not public utilities and don’t have to meet the statutory requirements for public utilities and suppliers. Customers can use third-party PPAs to purchase renewable energy electricity generated by facilities located on the customer’s property, everywhere in the state. The bill also lifts the one percent cap on net metering programs relative to total utility sales, and authorizes community net metering programs. It also expands the concept of “agricultural net metering” to cover other customers who want to attribute electricity from one facility to multiple meters on the customer’s property.

In addition, the bill amends the Commonwealth’s energy policy by adding the goals of encouraging private sector distributed renewable energy, increasing security of the electricity grid by supporting distributed renewable energy projects, and augmenting the exercise of private property rights by landowners desiring to generate their own energy from renewable energy sources on their lands. None of this language by itself forces action, but the State Corporation Commission takes note of energy policy in its decision-making.

SB 140 (John Edwards, D-Roanoke, in Commerce and Labor) attacks the standby charges that have been so controversial. It increases the size of electrical generating facilities operated by residential or agricultural net energy metering customers that are subject to a monthly standby charge from those with a capacity of 10 kilowatts to those with a capacity of 20 kilowatts. Since residential solar facilities that are net-metered are already limited to 20 kW, this would effectively repeal standby charges for residential net metering.

SB 139 (John Edwards, D-Roanoke, in Commerce and Labor) makes a small change to the existing agricultural net metering option.

SB 148 (John Edwards, D-Roanoke, in Commerce and Labor) replaces the pilot program enacted in 2013 that authorized a limited pilot program for third-party PPAs. generation facilities. The bill requires the State Corporation Commission to establish third-party power purchase agreement programs for each electric utility. The existing pilot program applies only to Dominion Virginia Power and sets the maximum size of a renewable generation facility at one megawatt; the programs authorized by SB 148 apply to all electric utilities and do not set limits on the size of facilities.

Although SB 148 is similar to HB 1286 in attempting to ensure the legality of third-party PPAs, solar advocates prefer HB 1286. Giving the State Corporation Commission authority here should not be necessary and might lead to higher costs and more regulations.

Community energy/solar gardens

It’s darned hard to buy renewable energy in Virginia if you are among the approximately 75% of residents who can’t put solar panels on your own roof or build a wind turbine out on the back forty. That’s an enormous untapped market.

SB 1286, above, contains a provision authorizing community energy programs In addition, HB 1285 (Randy Minchew, R-Leesburg, in Commerce and Labor) is a stand-alone bill that authorizes (but does not require) investor-owned utilities and coops to establish community energy programs.

HB 618 (Paul Krizek, D-Alexandria, referred to Commerce and Labor) would require the State Corporation Commission to adopt rules for “community solar gardens” that would let customers subscribe to a portion of the output of a solar facility located elsewhere in their area. The solar electricity and the renewable energy credits (RECs) would be sold to the local utility, which would then credit the subscribers on their utility bills.

But whereas customers who have solar panels one their own roof get credited at full retail value and own the associated renewable energy credits, HB 618 allows the SCC to devise rules that could result in a much worse deal for solar garden subscribers, including allowing the utility to impose a “reasonable charge” to cover ill-defined costs.

That’s an unfortunate invitation to the utilities to pile on fees. Unless the utilities involved really want to make the program work for their customers, it’s hard to imagine this turning out well. We would not expect to see viable programs in Dominion or APCo territory if this passes. On the other hand, some municipal utilities have been more responsive to the interests of their customers, so it could work for them.

Tax credits and exemptions

An important tax bill to watch this year is HB 1305 (Jackson Miller, R-Manassas, referred to Finance), which changes the state and local tax treatment of solar and wind energy facilities. It exempts utility solar and wind from taxation, but lowers from 20 MW to 1 MW the size of other solar projects that are exempt from local machinery and tools tax (a kind of personal property tax; securing that exemption was a major win for the solar industry in 2014). The bill replaces the hard-won 100% exemption with an 80% exemption. The change is very nice for utilities (Virginia is always very nice to utilities), but it makes the economics worse for third-party owned facilities in the 1 MW to 20 MW range—exactly the ones the state should be trying to attract.

SB 743 (Frank Wagner, R-Virginia Beach, referred to Agriculture, Conservation and Natural Resources) helps solar projects below 5 MW qualify for the above-mentioned tax exemption passed in 2014. The bill makes the Department of Mines, Minerals and Energy the agency that certifies solar projects as “pollution control equipment and facilities,” eligible for exemption from state and local taxation. This exemption from state sales tax and local machinery and tools taxes is one of the few perks Virginia can offer commercial-scale solar developers here, where margins on projects are very thin compared with projects in North Carolina or Maryland with stronger incentives.

Tax credits are also on the agenda this year. Tax credits fell into disfavor in Virginia following an audit that revealed that many tax credits aren’t achieving their objectives (see: tax subsidies for coal mining). Senate Finance Committee members resolved to end them just about the same time the solar industry came asking for one themselves two years ago, with unhappy results for solar. But tax credits are legislative candy, and there’s no telling how long the diet will last. Hopeful persons may as well put out their own plate of chocolates. If the diet is off, then the main problem with this year’s bills, from the point of view of the Republicans who make up the majority of our legislature, is simply that they come from Democrats.

HB 480 (Rip Sullivan, D-Arlington, referred to Finance) establishes a 35% tax credit for renewable energy property, to be claimed over 5 years, with a $5 million program cap. The credit would apply not just to wind and solar but also some biomass, combined heat and power, geothermal and hydro systems.

SB 142 (John Edwards, D-Roanoke, referred to Finance) and HB 1050 (Sam Rasoul, D-Roanoke, referred to Finance) establish a tax credit of up to 30% for solar thermal systems used for water heating or space heating and cooling. Solar PV systems are not included in the bill.

State funding through carbon cap and trade

SB 571 (Donald McEachin, D-Richmond, referred to Agriculture, Conservation and Natuaral Resources) and HB 351 (Villanueva, R-Virginia Beach, referred to Commerce and Labor) would require the Governor to join the Regional Greenhouse Gas Initiative (RGGI), the cap-and-trade program that has successfully ratcheted down carbon emissions in the northeastern states. Funds generated by auction allowances would fund sea level rise adaptation in coastal areas, economic transition efforts for southwest Virginia, energy efficiency for low-income families, and distributed renewable energy programs.

Financing

HB 941 (David Toscano, D-Charlottesville, referred to Counties, Cities and Towns) expands the authorization for Property Assessed Clean Energy (PACE) programs to include residential and condominium projects. This would allow localities to offer low-interest financing to homeowners for both energy efficiency and renewable energy investments.

Utility cost recovery

HB 1220 (David Yancey, R-Newport News, referred to Commerce and Labor) is billed as a technical fix for language added to the Code last year that encourages utilities to invest in solar. The bill clarifies that a utility that purchases a solar facility is allowed cost recovery on the same favorable terms it would get by building the facility itself.

Energy storage

Energy storage is emerging as the hot new energy technology area, about where solar was five years ago. Interest in it has been driven by recent price declines as well as the success of wind and solar and the growing awareness that these carbon-free sources are likely to make up a significant portion of our electricity supply in coming years. So while the use of storage is by no means limited to renewable energy applications, I include it here because it will interest those who follow wind and solar policy.

HB 452 (Patrick Hope, D-Arlington, in Commerce and Labor) and SB 403 (Ebbin, D-Alexandria, in Commerce and Labor) create the Virginia Energy Storage Consortium to promote research, development, commercialization, manufacturing and deployment of energy storage. It’s a great idea.

HB 1137 (David Toscano, D-Charlottesville, in Commerce and Labor) directs the State Corporation Commission to develop a program to enable commercial and industrial customers to sell battery storage services to the grid. If you’ve heard of the concept known as “vehicle-to-grid” (using electric cars to put power back on the grid as well as drawing from it), you’ll understand what this is about. It would allow these and other “energy balancing devices” to provide value to the grid in the form of spinning reserves, frequency regulation, distribution system support, reactive power, demand response, or other electric grid services. It’s an idea whose time has come.

Biomass

Wind and solar have several less popular relatives with more tenuous claims on the renewable energy family name. Virginia’s definition of “renewable” embraces them all, regardless of merit. It treats biomass to a special place of honor, including even the burning of trees that haven’t been harvested sustainably, and regardless of how much pollution gets spewed into the atmosphere.

SB 647 (Barbara Favola, D-Arlington, in Commerce and Labor) and HB 973 (Alfonso Lopez, D-Arlington, in Commerce and Labor) would change that to require that electricity from new biomass plants, to qualify as renewable energy, would have to meet a minimum efficiency level. Burning wood from trees would generally meet that standard only when it produces both electricity and heat (or, through the magic of science, cooling).

Consumer choice

HB 444 (Manoli Loupassi, R-Richmond, in Commerce and Labor) and SB 745 (Frank Wagner, R-Virginia Beach, in Commerce and Labor) would expand the current requirement that utilities inform ratepayers about their options for purchasing renewable energy.

Which might lead you to ask, “what options?” since for most of us here in Virginia they are sadly lacking. But maybe this year’s session will start to change that.

A note about House Commerce and Labor: Bills noted above that have been assigned to the House Committee on Commerce and Labor have all been assigned to its Subcommittee on Energy. This powerful subcommittee typically meets only once or twice before Crossover. I’m told it will meet on the afternoon of Tuesday, February 9, likely continuing well into the evening due to the number of bills assigned.

February 9 is also Clean Energy Lobby Day, when members of the renewable energy and energy efficiency industries descend on Richmond to educate legislators about the need for sound reforms. This year the solar industry trade association MDV-SEIA is organizing the lobby day, which is free to participants. The organization has also created a petition to support third-party financing of solar in Virginia.

UPDATE:

Senator McEachin files bill for mandatory RPS. SB 761 Donald McEachin (D-Richmond) would make Virginia’s pathetic, voluntary RPS into a mandatory RPS that would rank as one of the best in the country. It would require utilities to meet an increasing percentage of electricity sales from solar, onshore wind, offshore wind, and energy efficiency, reaching 25% of base year sales by 2025 (and deleting the current, obnoxious slight-of-hand that leaves nuclear out of the equation, but keeping a base year of 2007). By 2017, half of it would have to come from sources located within Virginia.

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2016 bills show Virginia might finally get serious (sort of) about energy efficiency

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Clive Upton/Wikimedia Commons

Clive Upton/Wikimedia Commons

Energy efficiency: it’s the resource that everyone praises and few pursue. If Dominion Virginia Power approached efficiency programs with the enthusiasm it devotes to building natural gas plants, then—well, it wouldn’t need the new gas plants.

And that’s the crux of the problem. Virginia’s utilities earn more money by building stuff than by not building it, and the excuse to build new stuff comes when demand for electricity increases. If people use less electricity—say, by buying more efficient lighting and appliances—that’s good for consumers, but bad for utility profits.

The Virginia State Corporation Commission hasn’t helped matters; it takes a skeptical view of utility-sponsored energy efficiency programs, rarely approving the kind of programs that would be needed for Virginia to make progress towards its modest goal of lowering electricity use 10% by 2022. Changing the SCC’s attitude through legislation is hard; doing so without the support of the utilities is impossible.

This is where the Governor finds his opportunity for modest progress. Terry McAuliffe has been very, very good to Dominion. He’s supported its fracked-gas pipeline, its budget-busting nuclear ambitions, its new gas plants, and even the rate boondoggle it secured last year that allows it to pick the pockets of Virginia ratepayers to the tune of a billion dollars.

So the least Dominion can do is to support the Governor’s efforts to improve Virginia’s dismal record on energy efficiency, reflected in HB 1053 (referred to House Commerce and Labor) and SB 395 (Senate Commerce and Labor). In a sign the utility may have acquiesced, the bills patrons are Delegate Terry Kilgore, the powerful chairman of the House Commerce and Labor Committee, and Senator Kenny Alexander, a Democrat on Senate Commerce and Labor who has shown no previous interest in reforming energy policy—but who, like Kilgore, ranks utilities among his top donors.

The legislation replaces an ineffective lost-revenue provision in the Code with an incentive-based approach intended to reward investor-owned utilities for success. According to a fact sheet the Administration is sharing with legislators, the utilities will reap bonuses in proportion to the amount of energy saved through implementing cost-effective programs:

  • An additional 1% of the actual costs of the program, if the utility achieves a levelized cost of saved energy (LCSE) for the program at or below six cents per kilowatt-hour;
  • An additional 2% of the actual costs of the program, if the utility achieves a LCSE for the program at or below five cents per kilowatt-hour;
  • An additional 3% of the actual costs of the program, if the utility achieves a LCSE for the program at or below four cents per kilowatt-hour;
  • An additional 4% of the actual costs of the program, if the utility achieves a LCSE for the program at or below three cents per kilowatt-hour.

These two Administration bills have the most momentum behind them, but they are not the only legislation out there looking for ways to make serious energy efficiency gains. The best of the bills is HB 576 (Rip Sullivan, D-Arlington, in Commerce and Labor). It requires the SCC to approve cost-effective efficiency programs and, more significantly, establishes robust new energy efficiency goals that utilities would be required to meet.

Sullivan has clearly spent a lot of time this year thinking about the policy barriers to energy efficiency. He correctly pegs SCC procedure as one of the problems.

HB 575 (in Commerce and Labor) as well as HB 352 (Lee Ware, R-Powhatan, also in Commerce and Labor) take aim at the way the SCC evaluates energy efficiency programs. Sullivan’s bill would make it easier for a program to meet the SCC’s standards. As currently written, Ware’s would actually make it harder; however, we hear this may be a drafting error, so we will be watching for amendments that would make this a bill to support.

Two more good bills from Sullivan also deserve mention. HB 1174 (in Commerce and Labor) requires the SCC to report on Virginia’s progress towards our 10% energy reduction goal. HB 493 (referred to Appropriations) creates an Energy Efficiency Revolving Fund to provide no-interest loans to localities, school divisions, and public institutions of higher education.

Freshman Delegate John Bell (D-Chantilly) has introduced a modest bill of such remarkable common sense that it shouldn’t be needed (but is). HB 808 requires government agencies to use LED light bulbs instead of incandescent bulbs when installing, maintaining or replacing outdoor light fixtures. The bill has been referred to the Committee on General Laws.

It’s also worth noting that two bills I previously included in the roundup of climate-related legislation would also have a significant impact on energy efficiency investments. HB 351 (Ron Villanueva, R-Virginia Beach, referred to Commerce and Labor) and SB 571 (Donald McEachin, D-Richmond, referred to Agriculture) would direct the Governor to join the Regional Greenhouse Gas Initiative (RGGI), the cap-and-trade plan that the northeastern states have used successfully to reduce carbon emissions and raise funds to further the RGGI goals. In Virginia, these funds would include millions of dollars for energy efficiency.

Finally, there’s a bill expanding Virginia’s authorization for Property Assessed Clean Energy (PACE) programs, which allow localities to loan money to property owners for energy efficiency and renewable energy. HB 941 (David Toscano, D-Charlottesville) expands the authorization for PACE programs to include residential and condominium projects.

 

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Surprise endings to a week of bad news on energy and climate bills

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The fourth annual Clean Energy Lobby Day on February 3d brought representatives from businesses across the state to Richmond. Photo courtesy of MDV-SEIA.

The fourth annual Clean Energy Lobby Day on February 3d brought representatives from businesses across the state to Richmond. Photo courtesy of MDV-SEIA.

More than a hundred representatives of energy efficiency and renewable energy businesses descended on Richmond Tuesday for Clean Energy Lobby Day. After meetings with legislators, many of them stayed to attend a critical subcommittee meeting where most of this year’s clean energy bills came up for votes. And they came away with one overpowering impression: the only bills that can make it out of committee are the ones supported by the state’s utilities, especially Dominion Power.

But that wasn’t quite the end of the story. Because by the end of the week, they also found that the groundwork they had laid with their lobbing, and their tenaciousness before the subcommittee, created an opening they would not otherwise have had.

First, the bad news, and plenty of it

Things started bleakly. The House Commerce and Labor Subcommittee on Energy turned back multiple proposals that would have benefited Virginia’s small renewable energy and energy efficiency businesses, as well as their customers. Going down to defeat were bills to improve the renewable portfolio standard (HB 1913), create an energy efficiency resource standard (HB 1730), require a more rigorous study before utilities can impose standby charges (HB 1911), make third-party PPAs legal across the state (HB 1925), and enable an innovative vehicle-to-grid (V2G) project (HB 2073).

Left in limbo for the day was Delegate Minchew’s community solar bill, HB 1636. Minchew wasn’t ready to give up on it, but he had not found a way to get the utilities to back off their opposition. It went without saying that, without Dominion’s buy-in, the subcommittee members wanted nothing to do with it. Out of respect for a fellow Republican, however, they were willing to give him a couple of days’ grace. (On Thursday they killed the bill off.)

One small success was the raising of the cap for individual commercial renewable energy projects from the current 500 kilowatts to 1 megawatt (MW) (HB 1950). Bills to increase it to 2 MW were discarded. The bill was also passed out of the full committee on Thursday.

Also reported out was HB 2267, creating the Virginia Solar Development Authority. It passed in the full committee on Thursday but was then referred to the Committee on Appropriations.

With a few exceptions, the good bills lost on party-line voice votes following testimony from utilities in opposition to the measures. Republican committee members repeatedly expressed their concern about the potential impact on other ratepayers of bills that would make it easier for utility customers to generate their own power, or that would require utilities to buy a smidgeon more renewable energy.

Indeed, anyone who thinks Republicans don’t care about poor people should have been in that room. The outpouring of concern for struggling families was tremendously affecting. These brave souls made it abundantly clear that nothing that could be construed as a subsidy would sneak by on their watch.

Those of us who had seen some of the same delegates vote just last week to continue giving tens of millions of dollars annually in subsidies to coal companies, could not help noting the inconsistency.

Then a funny thing happened on the way to rubber-stamping Dominion’s solar bill

The anti-subsidy rhetoric was further undercut when, a few minutes later, the subcommittee unanimously approved Delegate Yancey’s bill (HB 2237) declaring it in the public interest for the state’s largest utility to install up to 500 MW of solar and offshore wind projects. Chairman Terry Kilgore did ask Dominion Power’s lobbyist if it would raise rates, but he was easily satisfied with the assurance that it would not—even though solar was “marginally more expensive.”

This was all the committee wanted to hear, and a motion had already been made to report the bill when the members were suddenly treated to an earful from the solar industry—not in support of the bill, but in opposition. Francis Hodsoll of Virginia Advances Energy Industries and Jon Hillis of MDV-SIEA, the solar industry trade association, praised the goal but urged that the bill be amended to open up competition for building the solar projects. Utilities might prefer to build the projects themselves to earn their guaranteed return on investment, said Hodsoll, but ratepayers would benefit from lower costs and in-state jobs if independent companies were eligible to bid.

Tony Smith of Secure Futures, LLC, further explained that federal tax incentives strongly favor independent companies developing projects instead of the utilities doing it themselves. He said an independent firm that develops a 20 MW project can sell solar for 5 cents per kilowatt-hour, a far better price than a utility can achieve building the same project itself.

Andy Bidea of Sigora Solar put the case most simply. “This is America. Let’s give capitalism a chance, right?”

Catchy idea. The committee proceeded to report the bill without changes, but Kilgore encouraged the patron to work with the solar industry on possible amendments prior to the full committee meeting on Thursday.

The industry’s stand had an effect. When the bill was taken up on Thursday, it included an amendment allowing utilities to buy power from a third-party developer before purchasing the project itself. This should be significant because the SCC would presumably insist on the lowest-cost approach. In an email, Francis Hodsoll told me the industry now supports the bill, which passed the full committee.

With Dominion’s recent announcements of its plans to move forward with as much as 400 MW of large-scale solar projects in Virginia, this is a hopeful sign for utility solar in the state. Only one project has actually been announced, a 20 MW project in Remington, Virginia. It should also make it easier for Dominion to move forward on offshore wind, a major plus.

Admittedly, the struggle for distributed solar continues. The happy ending on the Yancey bill means little to members of the industry struggling to make a living doing residential and small commercial projects. They had pinned a lot of hope on the grant program that passed with such fanfare a year ago, only to sink like a stone in a House subcommittee this session.

On the other hand, those who take the long view believe that once Virginians get familiar with the benefits of solar, it will become an unstoppable force. The indicators point to success in coming years whether utilities like it or not.

Climate? What climate?

In addition to the clean energy bills, the subcommittee also took action on two climate bills Tuesday. It rejected Delegate Villanueva’s HB 2205, which would have had Virginia join the Regional Greenhouse Gas Initiative as a vehicle to reduce carbon emissions. (The Senate companion bill died on a party-line vote last week.) It was the only legislation this year that would have taken positive action to address climate change and raise some of the enormous sums of money that will be needed to address the consequences of sea level rise.

Instead, it passed HB 2291 (O’Quinn), a bill that would require the Department of Environmental Quality (DEQ) to get approval from the General Assembly before submitting to the U.S. EPA a plan to implement the Clean Power Plan. Since the Republican majority has made its hostility to the Clean Power Plan clear, this is widely seen as a way to keep the state from acting at all. The bill also passed the full committee Thursday on a straight party-line vote, a clear indication that it is about party politics and anti-Obama Administration sentiment, not climate change.

Over in the Senate, however, saner heads prevailed. Senator Watkins amended his companion bill, SB 1365, simply to give DEQ direction on what to consider in developing the plan, and to require it to consult with the SCC and to meet with General Assembly members. The substitute bill passed Senate Agriculture unanimously.

Dominion’s Ratepayer Rip-off Act hits a bump in the road

Meanwhile, Senator Wagner’s bill to protect utility profits and shield Dominion (and now APCo too) from SCC scrutiny through the end of the decade sailed through Senate Commerce and Labor in spite of sparking the kind of outrage and condemnation in the press usually reserved for bills on guns and abortion. Editorial boards excoriated the legislation; Wagner was forced to sell his Dominion stock. Environmental groups, which had first sounded the alarm, staged a protest outside the General Assembly on Thursday morning and spurred thousands of constituents to write letters opposing the ratepayer rip-off.

As a consequence, SB 1349 ran into trouble on the Senate floor Thursday afternoon, and a substitute was introduced consisting of two pages of such dense regulatory detail that I cannot possibly tell you what it means. Anyone with the gumption to try to understand it may be wasting their time anyway, because I hear it remains in flux, with negotiations underway right now. Senator Donald McEachin reportedly is working to make it less objectionable. One thing seems certain: the senators who will be asked to vote on this will have no chance to review the language and reach their own conclusions.

It’s a lousy way to make sausage, but it’s ours.

 

 

 

 

 

 

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Your 2015 Virginia legislative session cheat sheet, part one: Clean energy bills

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photo credit: Amadeus

photo credit: Amadeus

I’m starting my review of 2015 energy legislation with a look at bills dealing with renewable energy and energy efficiency. Most of these bills will be heard in the committees on Commerce and Labor, though bills that cost money (tax credits and grants) usually go to Finance.

Bills referred to Senate Commerce and Labor are heard by the full committee, which meets on Monday afternoons. It consists of 14 members: 11 Republicans and 3 Democrats. They form a tough lineup; none of these senators received better than a “C” on the Sierra Club’s Climate and Energy Scorecard.

The House bills are typically assigned to the 13-member Special Subcommittee on Energy (10 Republicans and 3 Democrats, no fixed schedule). Bills that do not meet the approval of Dominion Power can expect a quick death here on an unrecorded voice vote, never to be heard from again. But on the plus side, the meetings are often quite lively, like old-fashioned hangings.

Net metering bills

Net metering is the policy that allows owners of solar (or other renewable) energy systems to be credited for the excess power they feed back into the grid when the systems produce a surplus; the owners use the credits when their systems aren’t supplying power and they need to draw electricity from the grid. Virginia law restricts who can use net metering, and how much. Expanding net metering is a major goal of renewable energy advocates, who argue it offers a free market approach to growth—give customers the freedom to build solar projects, get the utility out of the way, and solar will thrive.

This year’s initiatives include:

  • SB 833 and SB 764 (Edwards—apparently identical bills), HB 1950 (McClellan), and HB 1912 (Lopez) raise the maximum size of a commercial project eligible for net metering, from 500 kilowatts (kW) currently to 2 megawatts (MW). This is a much-needed expansion of the net metering program if Virginia is going to make real headway with solar. We are told Edwards plans to conform his legislation to HB 1622, below.
  • HB 1622 (Sullivan) raises the maximum size of a commercial project to 1 MW, and the maximum size of a residential system from the current 20 kW to a whopping 40 kW. But note that it does nothing to limit the standby charges utilities can charge for residential projects over 10 kW. Given that these charges are so punitive as to kill the projects, raising the cap wouldn’t create new market opportunities unless it is accompanied by a limit on the amount of standby charges that utilities can tack on.
  • HB 1911 (Lopez) amends the language allowing utilities to impose standby charges on residential and agricultural customers with systems over 10 kW to add the requirement that the State Corporation Commission conduct a “value of solar” analysis prior to approving the charges. Most solar advocates would rather see the legislature repeal the standby charge provision altogether, given how the utilities have abused it. Barring that, legislators should set a dollar limit of no more than five or ten bucks a month. But in the absence of any such reforms, it does make sense to at least require the SCC to do this more substantive analysis, ideally building on the framework developed over the summer by the Solar Stakeholder Group.
  • HB 1636 (Minchew) establishes “community net metering” as well as increasing the commercial project cap to 2 MW. This bill is a high priority for the solar industry and the environmental community. It provides the solution for owners with shaded roofs, renters and others who can’t install solar themselves by letting them subscribe to a community generation facility in their own or a neighboring county. Other forms of renewable energy are also allowed, so residents in windy areas could go in on a small wind turbine that wouldn’t make sense for a single household.
  • HB 1729 (Sullivan) creates “solar gardens” consisting of community organizations with 10 or more subscribers. The generation facility can be as large as 2 MW. The bill seems intended to accomplish much the same purpose as Minchew’s bill, although it is limited to solar. However, it allows the utility to impose “a reasonable charge as determined by the [State Corporation Commission] to cover the utility’s costs of delivering to the subscriber’s premises the electricity generated by the community solar garden, integrating the solar generation with the utility’s system, and administering the community solar garden’s contracts and net metering credits.” Boy, we’ve seen that movie before. Given what we’ve seen the SCC do with standby charges, the bill should be amended to put a cap on the amount of that “reasonable charge” so legislators know they aren’t writing a blank check.
  • SB 350 (Edwards) authorizes programs for local governments to use net metering for municipal buildings, using renewable energy projects up to 5 MW. It also allows a form of community net metering targeted to condominiums, apartment buildings, homeowner associations, etc., with a renewable energy facility located on land owned by the association. These customers would be exempt from standby charges.

Third-party power purchase agreements (PPAs)

HB 1925 (Lopez) and SB 1160 (Edwards) replace the current PPA program in Dominion territory with one that applies to both Dominion and APCo territories. It increases the project cap from the current 500 kW to 1 MW, and raises the overall program size to 100 MW from (50 MW). As with the current program, projects under 50 kW aren’t eligible unless the customer is a tax-exempt organization.

Utility-scale solar

HB 2219 (Yost) declares it to be in the public interest for Dominion Virginia Power or Appalachian Power to build up to 500 MW of solar power—a truly welcome objective—and authorizes the utilities to apply to the SCC for a certificate of public convenience and necessity for individual facilities of at least 20 MW in size, regardless of whether the facility is located in the utility’s own service territory.

“In the public interest” are the magic words that push the SCC to approve something it might not otherwise. Both utility giants have shown an interest in building and owning utility-scale solar, even as they have taught the SCC to believe that solar owned by anyone else burdens the grid. The magic words let them escape the corner they backed themselves into. That would be necessary here, given that our SCC wrongly believes the public interest requires the lowest cost energy regardless of the consequences to public health, the environment, national security, and the economy.

The solar industry has two concerns about HB 2219: the effect on ratepayers, since Dominion’s previous solar efforts have cost well above market rates; and the effect on the Virginia solar industry—or rather, the lack of an effect, since Dominion has hired only out-of-state companies. Virginia ratepayers could save money and the state could build more solar if legislation simply required the utilities to buy 500 MW of solar, and let the market decide who builds it. But of course, that’s now how things work in Virginia.

I also think it is unfortunate that the bill allows utilities to build solar plants that are not in the utilities’ own service territories, and that it does not require them to use Virginia contractors. Surely there would be more support for a bill promising projects that support local economies with jobs and tax revenues, and that requires the hiring of local installers. These seem like small enough things to ask.

HB 2237 (Yancey) allows Dominion or APCo to recover the costs of building or buying a solar facility in the state of Virginia of at least 5 MW, plus an enhanced rate of return on equity, through a rate adjustment clause. It also states that construction or purchase of such a facility, and the planning and development activities for solar energy facilities, are in the public interest. (The magic words again.)

This bill doesn’t require anything or make huge changes. It simply treats solar the way the Code currently treats other forms of generation, with the exception that the “in the public interest” language was previously used only to endorse a coal plant (what became the Virginia City Hybrid Energy Plant in Wise County). And note that this bill requires that the facility be in Virginia, and opens up the possibility of our utilities buying the facility rather than constructing it themselves, which could open the door to competition. This seems like a good way to proceed.

Grants and tax credits

HB 1728 (Sullivan) establishes a tax credit for renewable energy. Great idea, but last year the Senate Finance Committee made it clear they would not pass a new tax credit, so I assume this is a non-starter.

Last year’s renewable energy tax credit bill was amended to create a grant program instead. It passed both houses, but without funding and with the requirement that it be passed again this year. It is back this year as HB 1650 (Villanueva). (It has been assigned to House Committee on Agriculture, Chesapeake and Natural Resources and is on the docket for 8:30 a.m. Wednesday, January 21. Odd: it ought to be in Finance.) The grant would equal 35% of the costs of a renewable energy facility, including not just wind and solar, but also things like biomass, waste, landfill gas, and municipal waste incinerators. Facilities paid for by utility ratepayers are not eligible, and the grant total is capped at $10 million per year. Prospects for the program aren’t great given the state’s tight budget situation, but the bill is a high priority for the solar industry.

Another tax-related bill is HB 1297 (Rasoul), which authorizes localities to charge a lower tax on renewable projects than on other kinds of “machinery and tools.” Last year, you may recall, the solar industry was successful in getting passage of a bill that exempted solar equipment entirely from local machinery and tools taxes. Proponents are trying to ensure that Delegate Rasoul’s well-intentioned bill doesn’t reverse last year’s victory on solar.

Bills specific to energy efficiency

HB 1730 (Sullivan) establishes energy efficiency goals for electric and natural gas utilities. The good news: the goals are mandatory. The bad news: the goals are modest to a fault: a total of 2% energy savings by 2030 for electricity and 1% for natural gas.

HB 1345 (Carr) extends the sales tax holiday for Energy Star and WaterSense products to include all Energy Star light bulbs; currently only compact fluorescent light bulbs are eligible.

PACE bills

PACE (Property Assessed Clean Energy) is a way to finance energy efficiency, renewable energy and water conservation upgrades to commercial and non-profit-owned buildings. Local governments sponsor the financing for improvements and collect payments via property tax bills. Since the energy savings more than pay for the increased assessments, PACE programs have been hugely successful in other states.

Last year a bill that would have let localities extend “service districts” to cover clean energy (PACE by another name) failed in the face of opposition from the banking industry. This year’s bills are also not labeled PACE bills, but they achieve the same end. Apparently the parties have worked out the problems, a hopeful sign that a multi-year effort will finally meet with success.

SB 801 (Watkins) and HB 1446 (Danny Marshall) are companion bills that would authorize local governments to work with third parties to offer loans for clean energy and water efficiency improvements, creating “voluntary special assessment liens” against the property getting the improvements. The Department of Mines, Minerals and Energy would develop underwriting guidelines for local loans to finance the work. HB 1665 (Minchew) is similar, and we are told it will be conformed to HB 1446.

Virginia Solar Energy Development Authority

HB 1725 (Bulova) and SB 1099 (Stuart) establish the Virginia Solar Energy Development Authority to “facilitate, coordinate, and support the development of the solar energy industry and solar-powered electric energy facilities in the Commonwealth.” This implements a proposal in the 2014 Virginia Energy Plan and is not expected to be controversial.

Virginia SREC registry

HB 2075 (Toscano) requires the SCC to establish a registry for solar renewable energy certificates (SRECs). It would not suddenly make Virginia SRECs valuable, but it would put the administrative framework in place to support a voluntary SREC market, or even a real one if Virginia were to adopt legislation requiring utilities to buy solar power.

Cross-cutting approaches to clean energy

A few bills would have a more sweeping effect on energy efficiency and renewable energy. HB 2155 (Sickles) is billed as an “Energy Diversity Plan.” It was supposed to be a “grand bargain” between utilities and the clean energy industries, with the McAuliffe administration participating as well, but we understand there are outstanding issues that make the bill’s future uncertain.

The big idea is to put all non-emitting energy sources into one category: primarily wind, solar, hydro and nuclear, but also adding in combined heat and power, demand response and energy efficiency. The bill creates a timeline that requires utilities to ramp up use of new, non-emitting sources gradually, beginning with 0.25% of retail sales in 2016 and ramping up to 35% in 2030.

The bill has the support of clean energy industries, but the idea of treating nuclear as a benign source of power on an even footing with efficiency and renewables concerns the environmental community.

I’ll write more about this bill if it looks like it has legs.

HB 1913 (Lopez) is the only bill of the bunch that directly targets Virginia’s Renewable Portfolio Standard (RPS). Maybe that shouldn’t be a surprise. Our RPS is a poor, sickly thing that most people have left for dead. To his credit, Lopez keeps trying. His bill keeps the RPS voluntary but beefs up the provisions to make the program meaningful, if a utility chooses to participate. Instead of mostly buying renewable energy certificates from things like old, out of state hydro dams, the bill would ensure that actual, real-world renewable projects get built. You know, what an RPS is supposed to do.

In addition, the bill folds into the RPS the state’s existing goal of 10% energy efficiency gains by 2022. Utilities have done very little toward meeting this goal. Putting it into the voluntary RPS might be the prod needed to get more efficiency programs underway.

Or it might cause a utility to drop out. Either way, the result would be better than what we have now, where Virginia pretends to have an RPS, and utilities pretend to care.

Update: Another net metering bill has been filed. SB 1395 (Dance) raises the commercial net metering cap from 500 kW to 2 MW.

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Virginia’s SCC staff attacks EPA over the Clean Power Plan

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Virginians rally in front of U.S. EPA Headquarters in Washington, DC in support of the Clean Power Plan

Virginians rally in front of U.S. EPA Headquarters in Washington, DC in support of the Clean Power Plan

In recent years paleontologists have come to believe that the dinosaurs did not go extinct; they evolved into today’s chickens and other birds. It turns out, however, that some of them did not evolve. Instead, they took jobs at Virginia’s State Corporation Commission.

Now they’ve put their DNA on full display with comments they filed on the EPA’s Clean Power Plan. The proposed EPA rules, under section 111(d) of the Clean Air Act, would require states to reduce the power plant CO2 emissions driving climate change. The staffers assert primly that they “take no position on the broad policy issues,” but that they feel “compelled” to point out all the ways the plan is “arbitrary, capricious, unsupported, and unlawful.” These mostly boil down to their claims that the plan will force coal plant closures, raise rates significantly and threaten service reliability—claims experts say are badly off-base.

Note that the commissioners themselves didn’t sign onto these comments. They come from the career staff at the Energy Regulatory Division, led by Bill Stevens, the Director, and Bill Chambliss, the General Counsel. This is pretty peculiar. I can’t think of a single other agency of government where the staff would file comments on a federal rulemaking without the oversight of their bosses.

Bill and Bill acknowledge in a footnote that the staff comments represent only their own views and not those of the commissioners. But that distinction has already been lost on at least one lawmaker. Today Speaker of the House William J. Howell released a statement declaring, “The independent, nonpartisan analysis of the State Corporation Commission confirms that President Obama’s environmental policies could devastate Virginia’s economy.”

And really, “devastate”? But that’s the kind of hysteria you hear from opponents of the Clean Power Plan. While the rest of us see healthier air, huge opportunities for job growth in the clean energy sector, and the chance to avoid the worst effects of climate disruption, the Friends of Coal see only devastation. And no wonder: Howell accepted $14,000 from the coal industry just this year alone.

But back to what the Bills over at the SCC think about the Clean Power Plan. How did they arrive at their conclusion that it would raise rates? According to Cale Jaffe, a lawyer with the Southern Environmental Law Center who practices extensively before the SCC, “Staff never did an analysis of an actual plan to comply with the Clean Power Plan, which has a lot of flexibility built into it. Instead, the Staff simply took Dominion Virginia Power’s last Integrated Resource Plan from 2013 and used it as a proxy for a compliance plan. That’s a significant flaw that skews the Staff’s analysis.  The Dominion plan, after all, was released nearly a year before the EPA even announced its rule.”

Compounding the error, says Jaffe, the staff “artificially inflated the cost by assuming that the only compliance strategy would be for Dominion to build a new nuclear reactor: the most expensive resource, which is not a required compliance option.”

We can all agree with the staff that nuclear plants are appallingly expensive. That may be why the EPA doesn’t assume most states will build them as part of their compliance strategy. To the contrary, the expectation is that states will respond with energy efficiency, wind and solar—all resources that are plentiful in Virginia but largely untapped so far.

As Jaffe notes, “an independent analysis of the actual Clean Power Plan itself shows that Virginia can achieve its goals at a fraction of the cost while lowering Virginians’ bills by 8%.”

We have seen time and again that the SCC staff has never been friendly to either renewable energy or energy efficiency, so it’s no surprise that their comments dismiss them as unworkable. Indeed, it is clear from the comments they filed that their real interest is promoting an anti-EPA, pro-coal agenda. Otherwise it would be hard to understand why they would stray so far from their own area of practice to attack the very legality of the Clean Power Plan.

Jaffe lists a number of other ways the SCC staff screwed up, but you get the picture: careful, reasoned analysis wasn’t the point. Still, you’d think that if agency staffers decide to go rogue like this, they would be careful to get the facts right.

———————————

Update: I have heard from some sources that the SCC staff had the blessing of at least one commissioner in putting forth their comments, and that all three commissioners may have known. If so, that’s even worse.

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McAuliffe’s Energy Plan has a little something for (almost) everyone

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On October 1, the Virginia Department of Mines, Minerals and Energy released the McAuliffe administration’s rewrite of the Virginia Energy Plan. Tomorrow, on October 14, Governor McAuliffe is scheduled to speak about the plan at an “executive briefing” to be held at the Science Museum of Virginia in Richmond. Will he talk most about fossil fuels, or clean energy? Chances are, we’ll hear a lot about both.

Like the versions written by previous governors, McAuliffe’s plan boasts of an “all of the above” approach. But don’t let that put you off. In spite of major lapses of the drill-baby-drill variety, this plan has more about solar energy, offshore wind, and energy efficiency, and less about coal, than we are used to seeing from a Virginia governor.

Keep in mind that although the Virginia Code requires an energy plan rewrite every four years, the plan does not have the force of law. It is intended to lay out principles, to be the governor’s platform and a basis for action, not the action itself. This is why they tend to look like such a hodge-podge: it’s just so easy to promise every constituency what it wants. The fights come in the General Assembly, when the various interests look for follow-through.

Here’s my take on some of the major recommendations: IMG_3954

Renewable energy. Advocates and energy libertarians will like the barrier-busting approach called for in the Energy Plan, including raising the cap on customer-owned solar and other renewables from the current 1% of a utility’s peak load to 3%; allowing neighborhoods and office parks to develop and share renewable energy projects; allowing third-party power purchase agreements (PPAs) statewide and doubling both the size of projects allowed and the overall program limit; and increasing the size limits on both residential (to 40 kW) and commercial (to 1 MW) net metered projects, with standby charges allowed only for projects over 20 kW (up from the current 10 kW for residential, but seemingly now to be applied to all systems).

It also proposes a program that would allow utilities to build off-site solar facilities on behalf of subscribers and provide on-bill financing to pay for it. This sounds rather like a true green power program, but here the customers would pay to build and own the project instead of simply buying electricity from renewable energy projects.

Elsewhere in the recommendations, the plan calls for “flexible financing mechanisms” that would support both energy projects and energy efficiency.

In case unleashing the power of customers doesn’t do enough for solar, the plan also calls for the establishment of a Virginia Solar Energy Development Authority tasked with the development of 15 megawatts (MW) of solar energy at state and local government facilities by June 30, 2017, and another 15 MW of private sector solar by the same date. Though extremely modest by the standards of Maryland and North Carolina, these goals, if met, would about triple Virginia’s current total. I do like the fact that these are near-term goals designed to boost the industry quickly. But let’s face it: these drops don’t even wet the bucket. We need gigawatts of solar over the next few decades, so let’s set some serious long-term goals for this Authority, and give it the tools to achieve them.

Finally, the plan reiterates the governor’s enthusiasm for building offshore wind, using lots of exciting words (“full,” “swift,” “with vigor”), but neglecting how to make it happen. Offshore wind is this governor’s Big Idea. I’d have expected more of a plan.

And while we’re in “I’d have expected more” territory, you have to wonder whatever happened to the mandatory Renewable Portfolio Standard that McAuliffe championed when running for office. Maybe our RPS is too hopeless even for a hopeless optimist.

Energy Efficiency. Reducing energy consumption and saving money for consumers and government are no-brainer concepts that have led to ratepayers in many other states paying lower electricity bills than we do, even in the face of higher rates. Everyone can get behind energy efficiency, with the exception of utilities that make money selling more electricity. (Oh, wait—those would be our utilities.) The Energy Plan calls for establishing a Virginia Board on Energy Efficiency, tasked with getting us to the state’s goal of 10% savings two years ahead of schedule. But glaringly absent is any mention of the role of building codes. Recall that Governor McDonnell bowed to the home builders and allowed a weakened version of the residential building code to take effect. So far Governor McAuliffe hasn’t reversed that decision. If he is serious about energy efficiency, this is an obvious, easy step. Where is it?

Fracking_Site_in_Warren_Center,_PA_04

Natural Gas. Did I say offshore wind was the governor’s Big Idea? Well, now he’s got a bigger one: that 500-mile long natural gas pipeline Dominion wants to build from West Virginia through the middle of Virginia and down to North Carolina. Governor McAuliffe gets starry-eyed talking about fracked gas powering a new industrial age in Virginia. So it’s not surprising that the Energy Plan includes support for gas pipelines among other infrastructure projects. As for fracking itself, though, the recommendations have nothing to say. A curious omission, surely? And while we are on the subject of natural gas, this plan is a real testament to the lobbying prowess of the folks pushing for natural gas vehicles. Given how little appetite the public has shown for this niche market, it’s remarkable to see more than a page of recommendations for subsidies and mandates. Some of these would apply to electric vehicles as well. But if we really want to reduce energy use in transportation, shouldn’t we give people more alternatives to vehicles? It’s too bad sidewalks, bicycles and mass transit (however fueled) get no mention in the plan.

Photo credit Ed Brown, Wikimedia Commons.

Coal. Coal has fallen on hard times, indeed, when even Virginia’s energy plan makes no recommendations involving it. Oh, there’s a whole section about creating export markets for coal technology, as in, helping people who currently sell equipment to American coal companies find a living in other ways. These might be Chinese coal mining companies; but then again, they might be companies that mine metals in Eastern Europe, or build tunnels, or do something totally different. The Energy Plan seems to be saying that coal may be on its way out, but there’s no reason it should drag the whole supply chain down with it. Good thinking.

Nuclear. If you think the coal industry has taken a beating these past few years, consider nuclear. Nationwide, the few new projects that haven’t been canceled are behind schedule and over budget, going forward at all only thanks to the liberality of Uncle Sam and the gullibility of state lawmakers. But there it is in the Energy Plan: we’re going to be “a national and global leader in nuclear energy.” Watch your wallets, people. Dominion already raided them for $300 million worth of development costs for a third plant at North Anna. That was just a down payment.

Photo: U.S. Coast Guard

Photo: U.S. Coast Guard

Offshore drilling. As with nuclear, favoring offshore oil drilling seems to be some kind of perverse obsession for many Virginia politicians. Sure enough, the energy plan says we should “fully support” it. As for the downside potential for a massive spill of crude oil fouling beaches, ruining fishing grounds, destroying the coastal tourism economy, and killing vast numbers of marine animals, the plan says we must be prepared “to provide a timely and comprehensive response.” I bet Louisiana was at least equally prepared.

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Report confirms Dominion’s worst-place standing on clean energy

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photo courtesy of the Sierra Club

photo courtesy of the Sierra Club

A new report from the non-profit group Ceres shows Dominion Resources, the parent of Dominion Virginia Power, winning last place among investor-owned utilities on a nationwide ranking of renewable energy sales and energy efficiency savings.

That’s left Virginians wondering how a company that talks so big succeeds in doing so little. And more importantly, what would it take for Dominion to rank even among the average?

Dominion came in 30th out of 32 in renewable energy sales, at 0.52%. On energy efficiency, it achieved 31st out of 32 on savings measured cumulatively (0.41%), and 32nd out of 32 measured on an incremental annual level (at 0.03%). Together these put our team in last place overall—a notable achievement for a utility that trumpets its solar investments and carbon-cutting progress.

To show just how awful Dominion’s performance is, the top five finishers achieved between 16.67% and 21.08% on renewable energy sales, 10.62-17.18% on cumulative annual energy efficiency, and 1.46-1.77% on incremental annual energy efficiency. National averages were 5.29% for renewable energy sales, 4.96% for cumulative efficiency savings, and 0.73% for incremental annual efficiency savings. Rankings were based on 2012 numbers, the latest year for which data were available.

In case you’re wondering, American Electric Power, the parent company of Appalachian Power Co., earned 24th place for renewable energy, with 2.65% of sales from renewables—a number only half the national average and one we might have called pathetic if it weren’t five times higher than Dominion’s. AEP’s efficiency rankings also placed it firmly in the bottom half of utilities, running 23d and 20th for cumulative and incremental efficiency savings, respectively. However, AEP earned its own laurels recently as the nation’s largest emitter of carbon pollution from power plants due to its coal-centric portfolio.

A study of the rankings reveals that Dominion’s major competition for the title of absolute worst came from other utilities based in the South. The critic’s favorite, Southern Company, nabbed 31st place on the renewable energy sales measure, but failed to make the bottom five on one of the efficiency rankings. Another southeastern utility, SCANA, achieved rock bottom on renewable energy; but like Southern, its marginally better performance on efficiency disqualified it from an overall last-place ranking.

Why do utilities in the South do so poorly? Probably because they can. Most of the poor performers have monopoly control over their territories and are powerful players in their state legislatures. Lacking in competition, they do what’s best for themselves. Possessing political power, they are able to keep it that way.

Of course, they still have to contend with public opinion and the occasional legislator who gets out of line. For that it helps to have a well-worn narrative handy, like the one about how expensive clean energy is. Dominion has found that Virginia’s leaders fall for that one readily, even though it’s false.

And so, when asked about the Ceres report, Dominion responded that Virginia wouldn’t want to be like the states that have high-performing utilities. Dominion spokesman Dan Genest told the Daily Press, “The three states — California, Connecticut and Massachusetts — the report mentions as being leaders in those categories also have among the highest electric rates in the nation. Typical residential customer monthly bills are $228.85, $206.07 and $191.04, respectively. Dominion Virginia Power customers pay $112.45.”

This would be an excellent point, if it were true. Alas, Genest’s numbers appear to be a product of a fevered imagination. According to recent data reported in the Washington Post, California’s average monthly electric bill is only $87.91, Connecticut’s comes in at $126.75, and Massachusetts’ at $93.53, while Virginia’s is $123.72. (Virginia’s numbers presumably reflect an average of bills paid by customers statewide, probably accounting for the higher figure than Genest cites for Dominion’s “typical” customer.)

That’s right: in spite of higher rates, Californians pay way less for electricity than Virginians do, in part because they have achieved high levels of energy efficiency. If you do that, you can afford to invest in more renewable energy without people’s bills going up.

This is such a great idea that it seems like it would be worth trying it here. Remarkably, this is precisely the strategy that environmental groups have been urging for years in their conversations with legislators and their filings at the State Corporation Commission. With the pressure on from global warming and the EPA’s Clean Power Plan, this would seem to be a great opportunity to save money, cut carbon, and move us into the 21st century.

So go for it, Dominion. Aspire to lead! Or failing that, at least shoot for average.

 

 

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Energy Plan must prepare Virginia for hotter summers

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A version of this blogpost was previously published in theHampton Roads Virginian-Pilot on July 20, 2014

Virginians rally in front of U.S. EPA Headquarters in Washington, DC

Virginians rally in front of U.S. EPA Headquarters in Washington, DC

“Over the past 30 years, the average resident of [the Southeast] has experienced about 8 days per year at 95° or above. Looking forward, if we continue our current emissions path, the average Southeast resident will likely experience an additional 17 to 52 extremely hot days per year by mid-century and an additional 48 to 130 days per year by then end of the century.”

            —Risky Business: The Business Risks of Climate Change in the United States

This quote comes from a report issued in June by an all-star group of business and government leaders, laying out the costs involved in higher temperatures and sea level rise. The section on the Southeast is especially likely to make you want to move north and west.

Virginia has started to focus attention on rising sea levels because they are already taking a toll on Tidewater areas, regularly flooding neighborhoods in Norfolk and eating away at the Eastern Shore. In 2013, at the behest of the General Assembly, the Virginia Institute of Marine Science produced an in-depth report on sea level rise and our options for dealing with it. The report says southeast Virginia should expect another one to two feet of sea level rise by 2040, and up to 7.5 feet by the end of the century. We have our work cut out for us, but at least we’re facing up to it.

By contrast, we have not yet begun planning for higher summer temperatures. As the Risky Business report warns, these higher temperatures will make much of the humid Southeast literally uninhabitable without air conditioning. And that has profound implications for our energy planning, starting now.

More intense summer heatwaves will place additional stress on the electric grid and cause costly spikes in power demand. Power outages, today mostly an inconvenience, will become public health emergencies unless there are back-up sources of power readily available, such as solar PV systems with battery storage distributed throughout every community.

Better building construction will be critical to keeping homes and businesses cool reliably and affordably. Since buildings last for many decades, we shouldn’t wait for summers to become deadly before we start mandating better insulation. It is vastly cheaper and more effective to build energy efficiency into a building than to retrofit it later.

This makes it especially unfortunate that the McDonnell administration caved to the home builders’ association last year and did not adopt the updated residential building codes, which would have required these kinds of improvements in new additions to our housing stock. Governor McAuliffe’s failure to reverse the decision this year remains incomprehensible.

However, the McAuliffe administration is now engaged in three planning exercises that ultimately converge around Virginia’s future in a warming world. The Department of Mines, Minerals and Energy is currently writing an update to the Virginia Energy Plan as required by statue every four years, and which must be submitted to the General Assembly this October. On a slower track, a revived Climate Commission will begin conducting its work over the course of the next year. And most recently, the Department of Environmental Quality has announced listening sessions this summer focused on the U.S. EPA’s proposed climate rules.

This timeline puts the (energy) cart before the (climate) horse. The writers of the Energy Plan will not have the benefit of the climate commission’s deliberations, and won’t know what the final EPA rules will require. With pressure from utilities, fossil fuel interests and home builders, business-as-usual thinking might prevail. That would be a mistake.

We don’t know whether the worst extremes cited in the Risky Business report will become reality, or whether the U.S. and the rest of the world will manage to reduce greenhouse gas emissions enough to slow the rise of the oceans and check the worst of the heatwaves. But while we hope for the best, it makes sense to plan for the worst.

And in this case, planning for the worst will also reduce the likelihood of it happening. If we improve building efficiency starting now, we will cut down on the emissions driving a Risky Business future. If our disaster preparedness includes solar panels on businesses and government buildings, we cut emissions and make the grid more resilient.

Global warming has to be part of Virginia’s energy planning from now on. It’s just too risky to ignore it.

 

 

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Governor McAuliffe gets his chance on energy and climate

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Virginia Sierra Club activists Tom Ellis and Ann Moore. Photo by Ivy Main

Virginia Sierra Club activists Tom Ellis and Ann Moore. Photo by Ivy Main

2014 is shaping up to be an exceedingly interesting year for energy policy in Virginia. The rewrite of the Virginia Energy Plan, the re-establishment of the Governor’s Climate Commission, and EPA’s just-proposed carbon rule create three separate pathways that will either intersect to form a coherent and coordinated state policy, or will take us into a chaotic tangle of competing agendas.

Add in the myopia of the State Corporation Commission and the control of the General Assembly by utility and coal interests, and we’ve got an unpredictable plotline here. All you energy watchers are going to want to stock up on popcorn for this show. Or better yet, become a player—read on to find out how.

First there’s the energy plan. Virginia law requires a new iteration every four years, with this year’s due October 1. To help with the work, Governor McAuliffe appointed the Virginia Energy Council two weeks ago. The Council consists primarily of energy industry members, with only one environmental representative and no consumer advocates. (Although come to think of it, that might be because Virginia doesn’t have any consumer advocates. But still.)

The Council will be working with the staff of the Department of Mines, Minerals and Energy, which has already begun holding “listening sessions” and accepting comments to get input from the public. The next one will be held tonight, June 17, in Annandale, Virginia. Get there early and sign up for a speaking slot. Other locations include South Boston on June 19, Abingdon on June 24, Norfolk on June 26, and Harrisonburg on July 1.

The existing energy plan, created under Governor McDonnell, is the sort of “all of the above” hodgepodge that you’d expect from a process where you bring in a bunch of energy company executives and say, “Have at it!” I’d be concerned that the same fate awaits the new one, but for a couple of new factors: the reboot of the Governor’s Commission on Climate Change and the looming threat of EPA’s carbon rule. (Making this the first time ever that I’ve welcomed anything I called a looming threat.)

The Climate Commission was supposed to have launched by now, and if it had, I might have been able to say something definite about how it will interact with the Energy Council. Unfortunately, Governor McAuliffe got a little sidetracked by something you may have heard about: the political chaos that ensued when a certain Democratic senator resigned his seat and threw the Senate into Republican hands under suspect circumstances in the middle of a battle over the Governor’s signature initiative.

(In fairness. the senator’s backers insist he acted only out of the purest self-interest and not because he’d been bribed, there being a legal difference. Still, from now on anyone who screws over a large number of friends at once will be said to have “Pucketted” them.)

As you may remember, Governor Kaine established the first Governor’s Commission on Climate Change back in 2007 to study the effects of global warming on Virginia and to make recommendations on what to do about it. The commission issued a well-thought-out report replete with excellent suggestions. The report was put on a shelf and admired for a while, until Governor McDonnell found out about it. He acted swiftly, taking down the Commission’s web page lest anyone think he believed in rising sea levels and flooding and predictions about the dire consequences of global warming—you know, the sort of thing you can actually see going on now in Hampton Roads, the second-largest metropolitan area in Virginia.

Governor McAuliffe, on the other hand, not only “believes in” climate change and the risks it poses to Virginia, but also believes there are huge job and growth opportunities to be had by taking action in response. He has made it clear he does not want his commission to start from scratch, but rather to pick up where the Kaine commission left off.

McAuliffe’s Energy Plan must also take account of carbon emissions in a way the McDonnell plan never tried to. On June 2, EPA issued a proposed rule to address carbon pollution from existing electric generating plants, intended to reduce overall emissions nationwide by 30% by 2030. Although the rule won’t be final for a year, and states will then have as long as two years to implement it, and there will be lawsuits trying to block it from ever being implemented—still it means no one can ignore carbon now.

If you want to weigh in on the carbon rule, EPA will be holding hearings around the country, including in Washington, DC on July 30, or you can email your comments.

The proposed rule is not simple. Each state has been given a carbon budget for all its electric generating plants combined, expressed in pounds per megawatt-hour, and arrived at by some still-rather-opaque notion of what a given state is capable of. The cleanest states are thought to have policies in place to get even cleaner, so their targets are more ambitious than those of the dirtiest states. The dirty, coal-intensive states, having done so little to clean up in the past, are thought incapable of making a whole lot of progress now, and so are rewarded by being graded on a curve. Interestingly, it is not the clean states crying foul, but the dirty ones.

Virginia’s carbon target falls in the middle, but achieving it will require improvements of 37.5% over 2012 levels. This sounds harder than it is, given that we have several natural gas plants under construction that will presumably count towards lowered emissions as they dilute the coal in the state’s power mix. EPA also assumes that existing plants can operate at higher efficiencies that will reduce emissions per unit of energy produced.

The carbon rule also contains what seems to be a freebie of 6% of existing nuclear power, a provision intended to encourage the continued operation of nuclear plants that still have time remaining on their licenses but are no longer economic. In Virginia’s regulated market, our nuclear plants don’t have to compete on the open market and so aren’t in danger of being shut down for economic reasons, but apparently we get the freebie anyway.

Beyond that, however, the carbon rule will clearly put a thumb on the scale in favor of energy efficiency and carbon-free power sources. The EPA is right to think we have plenty of those to call on. A few years ago, ACEEE released a study showing Virginia could readily achieve energy efficiency savings of almost 20% cost-effectively, and much more if we really rolled up our sleeves. Since then, the few utility programs that have addressed energy efficiency have barely moved the needle. This means the low-hanging fruit still clings there, only now it’s really, really ripe.

Add in offshore wind (which can provide about 10% of state energy needs just from the initial lease area that Dominion Power bought rights to), some land-based wind (a few more percentage points) and solar energy (estimated to be able to produce 18-25% of our demand), and we know we can blow right through the EPA target.

As we also know, though, Dominion CEO Tom Farrell has his heart set on a new nuclear plant, which would suck up all the money that might otherwise go to renewables and dampen the utility’s interest in efficiency. Given nuclear’s high cost, the need for taxpayer and ratepayer subsidies, and the public safety risks involved, the free market isn’t on his side. But with captive ratepayers and the legislature on the company payroll, Farrell’s dream remains a possibility in Virginia.

As I say, it’s going to be an interesting year.

 

 

 

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Green buildings help the poor (and could help the rest of us, too)

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This post originally appeared as an OpEd in the Richmond Times-Dispatch on April 25, 2014.

Better Housing Coalition’s Somanath Senior Apartments in Richmond, VA. Photo credit: BHC

Better Housing Coalition’s Somanath Senior Apartments in Richmond, VA. Photo credit: BHC

If you think of “green” homes and solar panels as luxury amenities for high-end housing, you might be surprised to learn that these are becoming standard features in low-income housing—even here in Virginia.

Buildings with added insulation, better windows, energy-saving light fixtures and Energy Star appliances translate into big savings on utility bills. This should matter to all of us, but it’s especially important for low-income households. For them, lower energy bills can mean not having to choose between keeping the lights on and putting food on the table.

Reducing energy costs is equally important for low-income housing owned by the government or nonprofits. Using energy efficiency and renewable energy to lower utility bills saves the public money and makes it possible to keep rents stable.

Recognizing these benefits, ten years ago the Virginia Housing Development Authority (VHDA) began to incentivize green building techniques. As a result, when government agencies and nonprofits build low-income housing in Virginia today, they make green building a priority.

Today there are over 11,000 units of affordable housing in Virginia that are certified to EarthCraft standards, one of the strictest measures of home energy efficiency. According to Philip Agee, Green Building Technical Manager for EarthCraft Virginia, these new affordable housing units are 28% more efficient than homes that are built to the 2004 model housing code. Units renovated to EarthCraft standards average a 43% improvement in efficiency.

Richmond-based Better Housing Coalition now builds all its low-income housing to exceed EarthCraft standards. As its website explains, “Installing energy-efficient heating and cooling systems, energy efficient windows and lighting, and blown cellulose insulation are standard practice for BHC homes. So, too, is the use of durable cement-board siding and tankless water heaters. Reduced energy usage means reduced utility bills for our owners and residents.”

Even more striking is the inclusion of solar energy in recent projects. Many of the Better Housing Coalition’s buildings include solar PV panels for electricity and solar thermal systems for hot water. Last year the Better Housing Coalition built the first net-zero-energy apartments for low-income residents, combining super-efficient construction with solar to produce as much energy as residents consume.

Another leader in the solar movement is Community Housing Partners, a non-profit that designs and builds low-income housing throughout the Southeast. It has worked with Virginia Supportive Housing to include solar panels on at least four of its recent projects, each system sized to provide 20% of the building’s electricity.

The Heron’s Landing apartments, in Chesapeake, include both 61 kilowatts of solar PV and a 13-kilowatt solar thermal array to supply hot water to the 60-unit complex designed for formerly homeless residents. Across the state in Charlottesville, The Crossings includes 33 kilowatts of solar PV and a 76-kilowattt solar thermal system for 62 units serving homeless and low-income residents. Both projects used Charlottesville-based AltEnergy as the solar contractor, supporting solar jobs in state. Paul Risberg, AltEnergy’s CEO, says his firm is currently working on two more Virginia projects.

Solar systems are also part of the Community Housing Partners’ developments in Richmond (Studios at South Richmond) and Portsmouth (the attractive South Bay Apartments). Now, like the Better Housing Coalition, the organization plans to take the next step, making its latest housing development for low-income seniors in Christiansburg, Virginia net-zero

Municipalities, too, are working solar into their plans for low-income housing.  Last year the Harrisonburg Redevelopment and Housing Authority worked with Staunton-based Secure Futures LLC to install solar on its Polly Lineweaver apartment building, which serves elderly and disabled residents. According to a local television report, the contract will save the Authority money over time and help keep rents stable.

Building “green” is proving such a money-saver for low-income housing that it’s a shame Virginia isn’t applying this lesson more widely. The state’s failure last year to adopt the 2012 model building code standards means that even buyers of brand-new homes won’t be guaranteed the level of quality built into these low-income apartments. Let’s hope the McAuliffe administration takes note and changes course.