Tag Archives: environment

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What’s wrong with Dominion’s Green Power Program

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Better than Green Power: installing a solar system yourself. Photo credit: NREL

Better than Green Power: installing a solar system yourself. Photo credit: NREL

Renewable energy advocates in Virginia were astonished to learn a few weeks ago that the U.S. Environmental Protection Agency has given Dominion Virginia Power an award for its Green Power Program.

Dominion’s program is not, to put it mildly, a good one. Half of the money its customers contribute is siphoned off for overhead and “education.” The rest goes to buy renewable energy certificates from out of state. Over the years Dominion has collected millions of dollars in these voluntary contributions without building a single wind or solar facility to supply the program. Surely the only green award this merits is one for greenwashing.

So I called the EPA to find out what criteria they use in determining who gets an award. It turns out the agency only measures the growth of a green power program, and Dominion has signed up more customers than other utility programs have.

I had to laugh. Customers of utilities in most other states have real options to buy wind and solar. If you can buy wind energy from an alternative supplier or participate in a community solar project, or if your utility is aggressively incorporating renewables into its power supply, you don’t need a green power program.

But Dominion has never built more than token amounts of renewable energy, and it continues to use its monopoly position to erect barriers to competition from others. The utility has signed up 19,000 Green Power participants only because it has effectively denied its Virginia customers any meaningful way of participating in the renewable energy market.

News of this award will surely lure more people in. Yet even if every one of Dominion’s customers signed up for the program, it wouldn’t shrink Virginia’s carbon footprint. Instead, Dominion’s latest integrated resource plan reveals plans for more fossil fuel generation and increasing greenhouse gas emissions over the next fifteen years.

And it’s worse than that. As of this year, Dominion is actually using the Green Power Program to bankroll an attack on renewable energy—one the State Corporation Commission shamefully endorsed when it approved the company’s 3-megawatt “solar purchase program.”

In this charade, Dominion buys solar power from homeowners and businesses to resell to the Green Power Program. The deal nets sellers a few cents over the retail price of electricity, but costs the Green Power Program almost three times as much. This overcharging of the Green Power Program would be bad enough. But the more insidious problem lies in Dominion’s justification for the high charge. It claims that rooftop solar energy is no more valuable than power from fossil fuels that it can buy at wholesale.

Dominion’s position flies in the face of recent studies demonstrating the benefits of solar energy to the grid, including generating power where demand is, providing power during peak hours when energy is most expensive, avoiding the need for transmission upgrades, eliminating line losses, and reducing the need for new generation.

It also runs counter to trends in states like Georgia, where Georgia Power has put a higher–than-retail value on the solar distributed generation it plans to buy, and says that paying the extra won’t put upward pressure on rates.

This makes it especially difficult to understand why Virginia’s State Corporation Commission approved Dominion’s Green Power rip-off. And predictably, Dominion has followed up its win with a deeply flawed study it plans to use as a basis for a new round of standby charges on customers who net meter. (The case is PUE-2012-00064, available on the SCC web site.)

So what is a dedicated renewable energy advocate to do?

There are options. If you are determined to buy RECs, you don’t have to go through Dominion. Buy from another source. But better yet, install solar yourself if you can. The price of solar panels has dropped so precipitously over the past few years (down 60% since the start of 2011) that you may find it worth taking out a home equity loan.

If you don’t have a sunny roof yourself or can’t afford the whole upfront cost, you can work with your school, community center or place of worship to install solar panels in your neighborhood. Interest in solar is very high among Virginia faith congregations, driving large turnouts for presentations on the topic given by Sierra Club and others in cooperation with the solar industry.

Or you can take the money you were spending on Dominion’s program and give it to a charity that will use it to install renewable energy here in Virginia; this may even get you a tax deduction. Low-income housing providers like Richmond’s Better Housing Coalition now put solar panels on many of their facilities, and will accept donations specifically for that purpose.

The Virginia Center for Wind Energy at James Madison University accepts donations to its Wind for Schools program, which helps public schools across the commonwealth install wind turbines for educational purposes.

A new non-profit, Three Birds Foundation, is working to put solar on public schools that serve low-income children in Virginia and elsewhere.

All these charities are committed to doing what Dominion, apparently, doesn’t want to do: install solar and wind energy in Virginia.

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McDonnell administration set to fail Virginians on building codes

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Everyone agrees that cutting energy waste is the most cost-effective way to meet our energy needs while reducing reliance on fossil fuels. And making new buildings efficient from the start is the surest way to achieve energy savings. Energy efficiency is the Mom-and-apple-pie part of our energy policy. Who could oppose it?

The Home Builders Association of Virginia, for one. They would rather build cheap housing than efficient housing, even when high utility bills turn cheap housing into expensive housing.

Bowing to aggressive lobbying from the home builders, the Board of Housing and Community Development (BHCD) has backed away from the national model building code provisions that would have improved the efficiency of Virginia residences by as much as 27.4%, according to a U.S. Department of Energy analysis. And, the McDonnell administration has signed off on the weak regulations. Virginia’s Department of Housing and Community Development has proposed a watered-down code that is currently open to public comment until September 29.

The McDonnell administration prides itself on fiscal prudence and its love for the business community. Here is a case where fiscal prudence demands tough love. A watered-down code means money wasted.

The model code provisions would have required higher “R” values in ceiling and wall insulation, resulting in homes that cost less to heat and cool. It would also have required builders to check for leaks mechanically, rather than just eyeballing it, to catch air leaks while they can still be fixed. The code that Virginia is set to pass jettisons these improvements, and others.

It’s cheaper for builders to skimp on insulation and not worry about air leakage, but the result is a home of lower quality and value. Owners and tenants end up having to pay more to keep warm in winter, and cool in the summer. These higher utility costs paid by occupants quickly eclipse the savings to builders.

What’s more, the cost of fixing defects later is much greater than building the house right to start with. Drafty houses are a classic example of the need for strong building codes, because sealing and insulation aren’t visible to buyers, and trying to add them later is difficult and expensive.

Customers who are buying brand-new homes have the right to expect a quality product. Virginians should tell the Department not to waste this opportunity to improve our housing stock for years to come.

A strong building code will also reduce Virginia’s reliance on fossil fuels and help low and moderate-income residents in one of the most cost-effective ways possible. Housing built for the low-end market is particularly vulnerable to poor construction. Buyers usually don’t know where corners have been cut, or don’t care because they plan to rent out the buildings and won’t themselves shoulder the high utility bills.

Some builders do cater to sophisticated buyers with homes that meet higher standards, but the vast majority stick only to what the code requires. Utility bills consume a disproportionate share of the income of residents with low and moderate incomes, and can also be a particular burden for seniors and others on fixed incomes. The failure to keep pace with the national model code means a missed opportunity to help homeowners across the state, as well as future owners and tenants.

The more rigorous model code standards would result in some additional upfront cost to buyers, but the Department of Energy calculates that savings on utility bills would more than cover the additional payment on a mortgage. Over 30 years, the average consumer would see more than $5,000 in savings.

Unfortunately, the pressure from the home builder lobby has resulted in a proposal with greatly weakened provisions that mean most new homes will remain unnecessarily expensive to heat and cool.

Virginians should not have to live with leaky, inefficient homes. The Department of Housing and Community Development should restore and adopt the full 2012 model building code standards, to improve our housing stock now and for the future.

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Dominion wins Virginia offshore wind lease: well, duh

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And the winner is . . . Dominion Power!

Okay, you knew that. Dominion had the deck so stacked in its favor for Wednesday’s Virginia offshore wind lease auction that the question everyone was asking at the end wasn’t “who won?” but “who bid against Dominion, and why did they bother?”

The answer to the first question proved to be Charlottesville-based Apex Energy, a far more experienced player in the wind industry—but one without Dominion’s lock on the Virginia power market.

There was much to criticize about the auction format and the process that led inevitably to Dominion’s win, but this historic step is still hugely exciting for offshore wind advocates. If Dominion follows through on the commitment it just made to develop offshore wind, Virginia will be a winner, too.

That “if” has a lot of people worried, given that Dominion is both a participant in the offshore wind industry and one of its loudest detractors. Company executives talk about their desire to develop the lease area, and also their opinion that offshore wind energy is way too expensive to succeed. Often they make both points in the same conversation.

Observers can’t help wondering why a company would pour money into a venture if it doesn’t believe it can sell its own product. Two possible reasons come to mind: one, because it is willing to gamble on political and market changes that will make its venture successful after all; or two, because by spending the money to win the lease, the company prevents any competitor from occupying the space. One is gutsy, the other is evil. It is possible for both to be true.

So what did Dominion win? The lease area, a 112,800-acre swath of ocean beginning more than 23 miles off Virginia Beach, is expected to support at least 2,000 megawatts of wind turbines—enough to power about 700,000 homes. It’s the second Wind Energy Area to be auctioned off in the U.S.; the first lies off Rhode Island and Massachusetts, and was auctioned off in August.

Under rules set by the Bureau of Ocean Energy Management (BOEM), the entire Virginia area was treated as one tract (a bad idea, in the view of advocates and industry members who aren’t Dominion, because it further reduced competition). Dominion won with a high bid of $1.6 million.

A formal announcement of the winning bid is expected in October, following federal antitrust review. As the winning bidder, Dominion will have five years to conduct the studies required for development of the area, with interim deadlines including submission of a Site Assessment Plan next summer.

After the five years is up, Dominion could decide not to proceed, releasing the area for BOEM to offer in a new auction. That result would be an unqualified disaster for Virginia’s ability to develop an offshore wind industry here. With states to the north proceeding, we would lose not just construction jobs, but the entire supply chain, and likely the marine services as well. Many thousands of jobs now ride on Dominion following through.

If Dominion decides to proceed, it will have to submit a Construction and Operations Plan at least six months before the expiration of the five-year site assessment period—that is, by the summer of 2018. BOEM will then evaluate the plan in accordance with the National Environmental Policy Act, producing an Environmental Impact Statement in 18-24 months, before construction can begin. That timeline puts construction underway no later than 2020, with electricity from the first turbines flowing by 2022.

The process doesn’t have to take as long as this; Deepwater Wind, which won the two leases in the Rhode Island/Massachusetts area last month, says construction there “could begin as early as 2017, with commercial operations by 2018.”

But Dominion had previously indicated its preference for the slowest possible approach. The company’s original idea was to build some wind turbines, think about it for a while, and five years later start all over again. Then five years later, round three. Another five years, round four. So 20 years on, if Dominion liked what it saw each time, Virginia would finally have its 2,000 megawatts.

In accordance with this plan, Dominion’s surrogate, the Virginia government, asked BOEM to make the lease term for Virginia’s Wind Energy Area 45 years instead of 25.

Other developers and the environmental community cried foul, pointing out that such an approach would mean a generation would be born, grow up and go off to college before we had all our wind turbines—hardly the way to build an industry or stave off climate change.

BOEM conceded half a loaf and agreed to a 33-year term that allows time for a phased approach, but a faster one. The agency expects the construction plan will consist of four, two-year phases, ensuring completion of the build-out in 8 years—or by 2028, to be followed by 25 years of operation.

We can only hope that BOEM’s confidence is not misplaced. Dominion employees have said candidly that right now, under current market conditions, the company has no intention of actually building offshore wind turbines.

What will it take to change its mind? The company talks about costs and the difficulty of getting approval from Virginia regulators. It seems likely that the company will follow through with construction only if some combination of events happens in the next few years:

  • Continuing advancements in technology bring the cost of offshore wind energy down. Already the latest cost estimates put offshore wind power well below the sky-high figures Dominion cites.
  • Congress or the EPA tackles climate change through incentives for renewable energy (or disincentives for fossil fuels);
  • The Virginia government passes legislation to create a market in Virginia for offshore wind power;
  • Virginia’s State Corporation Commission (SCC), which regulates utilities, alters the way it views renewable energy.

Of these contingencies, the last might be the hardest. The SCC seems to believe the public interest is served only by providing the cheapest possible electricity available today. It shows no interest in climate change, or the pollution costs of fossil fuels, or long-term price stability, or job creation, or asthma rates. Ignoring the actual language of the Virginia Code, it declared this summer that Virginia law doesn’t require it to consider the environment in evaluating a new electric generation facility.

But the offshore wind industry is now off and running in the U.S., and the only question is whether Virginia wants to be part of it. On that answer depend thousands of jobs for our residents, an abundant source of stably-priced energy, and Virginia’s ability to move beyond fossil fuels in the face of climate change.

Virginians overwhelmingly want to move forward on offshore wind; now our challenge will be to make it happen.

Unknown's avatar

Dominion’s giant concrete paperweight

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Fracking_Site_in_Warren_Center,_PA_04

A natural gas fracking site in Warren Center, PA. Photo credit: Ostroff Law

The State Corporation Commission has approved Dominion Virginia Power’s proposal for a new gas-fired power plant in Brunswick County, rejecting arguments from the Sierra Club and others that ratepayers would be better served by a combination of low-cost energy efficiency and price-stable renewable energy.

The decision in the case (PUE-2012-00128) reflects the same discouraging themes we have seen from our regulators before: a tendency to believe everything Dominion tells them, coupled with an absolute refusal to acknowledge the climate crisis bearing down upon us and the changes in the energy market that make fossil fuels increasingly risky.

As the SCC put it in its order, “The relevant statutes… do not require the Commission to find any particular level of environmental benefit, or an absence of environmental harm, as a precondition to approval.” (Note to legislators: How about fixing that?)

The SCC’s state of denial is not just about the future. Since at least the 1980s, Dominion has consistently overestimated future demand growth.

A little skepticism might be in order when Dominion projects the same level of demand growth that keeps not materializing.

But the SCC is not skeptical. Its order declares Dominion’s load forecasts “reasonable.”

Evidently one can be both reasonable and wrong. Demonstrating this in real time, only a few days after the SCC issued its order in early August, Dominion CEO Tom Farrell had to explain to shareholders why electricity demand has not grown this year in line with company predictions.

Amnesia was also in evidence at the public hearing on the case, where proponents of the gas plant – everyone from Dominion employees to the SCC staff – kept insisting on the environmental advantages of natural gas.

But congratulating each other that at least it wasn’t a coal plant seemed odd to those of us who recall the fanfare surrounding the opening of Dominion’s newest Virginia coal plant, all of one year ago.

My, how quickly things change. No one is proposing to build coal plants any more. Now that natural gas costs half what coal does, people have suddenly noticed that burning dirty black rocks to make electricity is a terrible idea. “Look at all that pollution!” they say in wonderment. “How last century!”

Hydraulic_Fracturing_Marcellus_Shale USGS

A natural gas fracking operation in the Marcellus Shale. Photo credit: U.S. Geologic Survey

But in this century, natural gas is already wearing out its welcome – and not just among unhappy landowners who say fracking has spoiled their drinking water. Scientists measuring methane escaping from extraction wells warn that high levels of “fugitive emissions” may make natural gas a major contributor to climate change.

The SCC takes no notice of climate change, but it ought to consider that others do, presenting a financial risk for any fossil fuel plant. A national plan to reduce carbon emissions could make gas very expensive.

Yet building the Brunswick plant commits Dominion ratepayers to paying whatever the market price is for natural gas for the next three decades. Worse, it’s effectively a baseload plant, designed to burn gas 24/7; it can’t ramp up and down quickly to supply power when needed on a short-term basis, such as to fill in around the power supplied by wind and solar.

Analysts predict wind and solar will increasingly become the first choice for new generation, as these renewables get steadily cheaper and offer long-term price stability as well as environmental benefits.

Indeed, wind turbines beat out natural gas plants as the largest source of new generating capacity nationwide last year. Companies are designing natural gas turbines now that integrate with renewable energy, allowing utilities to hedge their bets on gas.

Well before the end of its 36-year life, a 24/7 baseload plant like Brunswick may be reduced to a giant concrete paperweight.

It would seem wise to hold off on building this gas plant, and we could. Investments in energy efficiency would more than meet the demand the Brunswick plant is supposed to serve, at a lower cost.

The SCC brushed aside this argument, pointing out that it consistently swats down good energy efficiency proposals – and intends to continue doing it.

So Virginia ratepayers, prepare yourselves: You’ve already been stuck with one of the last coal plants to be built in America. Now get ready for 30 years of paying for a natural gas plant. As for your dreams of wind and solar, keep dreaming.

Originally published in the Hampton Roads Virginian-Pilot on August 29, 2013. 

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Workshops on renewable energy for Virginia non-profits draw large crowds

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Photo credit: Corrina Beall

Photo credit: Corrina Beall

Over 90 people packed the fellowship hall of the Mount Vernon Unitarian Church in Alexandria on the evening of June 23d for a presentation on solar power opportunities for houses of worship and other non-profits. Later in the week, more than 50 people attended a similar workshop at Virginia Union University in Richmond, designed primarily for colleges and universities.

In both places, the audience was there to learn about an opportunity provided by a new law that took effect in Virginia July 1. The law allows non-profits to use what are known as “third-party power purchase agreements,” or PPAs, to finance solar and wind installations. The PPAs let customers use clean, renewable energy for the same price—or even less-–as grid-delivered power produced from dirty fossil fuels. PPAs have been the driving force behind most small solar installations nationwide in recent years, and advocates hope they will now do the same in Virginia.

For-profit entities will also be able to use the new law, but only if they install a project of at least 50 kilowatts in size. Residential systems, which are typically in the 4-8 kilowatt range, are excluded. The law applies only within the territory of Dominion Virginia Power, and projects must be installed within the next two years, unless the program is extended.

The groups that organized the workshops—the Sierra Club, Interfaith Power & Light, National Wildlife Federation and the Virginia Conservation Network—view the new law as an opportunity for Virginia to begin ramping up its tiny solar and wind industries.

The Sierra Club has worked closely with the solar industry nationwide as a way to increase the use of renewable energy in the U.S., largely as a way to combat climate disruption. The club’s Beyond Coal Campaign seeks to ensure that as the dirtiest coal plants are retired, America’s energy needs can be met with clean energy rather than fossil fuels.

For the church workshop, Sierra Club partnered with Interfaith Power & Light (MD.DC.NoVa) because of its experience with congregations in Maryland and DC, helping them to go solar. Interfaith Power & Light has been a vigorous advocate for clean energy within area faith communities. Similarly, Sierra Club chose to partner with National Wildlife Federation for the college workshop because of its ongoing “green campuses” initiative nationwide.

Photo credit: Corrina Beall

Photo credit: Corrina Beall

Getting solar projects done in Virginia poses a challenge. Many states have encouraged the growth of solar and wind power through aggressive targets for renewable energy backed up by incentives and utility mandates, but Virginia offers neither. The state’s wind industry is essentially nonexistent, and with less than 10 megawatts (10,000 kilowatts) of solar installed statewide to date, Virginia produces less than one percent of the solar energy that New Jersey does. It also remains far behind neighboring states like Maryland and North Carolina, which both have solar policies and incentives that Virginia lacks.

Yet the price of solar has declined so steeply in recent years that it can now make economic sense in Virginia, especially for nonprofits. Nonprofits often can access low-interest loans or bring in investors from the community to help them prepay some of the PPA, allowing them to achieve greater overall savings. And churches, colleges, schools and other nonprofits typically own their buildings for many decades, so they are able to view energy savings over a longer time horizon than do many residential and commercial building owners.

For communities of faith, payback may not even be the top consideration. More and more congregations see addressing climate change and being better stewards of the earth as part of their core mission.

Educational institutions similarly see benefits beyond energy savings. Putting solar panels in a prominent location can be a symbol of an institution’s commitment to sustainability. When Eastern Mennonite University installed its solar array, enrollment increased ten percent, according to Tony Smith of Secure Futures LLC, the company that financed the system.

Smith, who also represents the solar industry trade group MDV-SEIA in Virginia, spoke at both the Alexandria and Richmond workshops. In Richmond he was joined by Jeff Ryan of Abakus Solar and Dave Stets of Richmond BySolar for a panel discussion about how PPAs can benefit nonprofits. A number of other solar and wind providers, as well as leaders from government and academia, also attended and contributed to the discussion.

Attendance at both workshops far exceeded organizers’ expectations. The audiences included a broad cross-section of faiths as well as representatives from eight universities and community colleges. Some attendees have already begun discussions with solar providers as a result of the workshops, leading many to hope that Virginia’s solar industry is at last poised to take off.

Additional workshops will likely be held in September; contact Corrina Beall at Corrina.Beall@sierraclub.org for more information.

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Virginia doesn’t need another gas plant

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On April 24, Virginia’s State Corporation Commission (SCC) will consider a proposal from Dominion Virginia Power to build a new natural gas-fueled generating plant, the second of three it wants to add to its holdings. Its first plant, now under construction in Warren County, generated little opposition because it will replace old coal boilers that Dominion needs to retire.

But the latest proposal for a plant in Brunswick has come in for fierce criticism, and for good reason: we don’t need another gas plant. Dominion has exaggerated the growth in demand that it says justifies the plant, and the company could more cheaply meet its actual needs with energy efficiency and renewable energy.

Moreover, the world is changing, and the energy model of big utilities running big baseload power plants is becoming outdated. If Dominion builds another of these, Virginia could end up stuck with a giant concrete paperweight.  The SCC owes it to customers not to let this happen.

Every year Dominion tells regulators it expects demand to increase by 1.5% to 2% per year indefinitely, but its actual energy sales have been essentially flat since 2006. Sure, the recent recession threw everyone a curveball, but Dominion’s tendency to overstate future demand goes back decades. The company seems not to have anticipated widespread changes like more efficient appliances and better building codes that let consumers use less electricity even while we’re buying more gadgets.

With a little effort, we could save even more energy. Virginia ranks in the bottom half of states for energy efficiency, and Dominion is not on track to meet even the modest efficiency goals of the Virginia Energy Plan. Some of the fault for this lies with the SCC itself, which has often rejected energy efficiency programs. But nor has Dominion tried very hard. Even their rate structure is designed to encourage energy use. Greater efficiency would mean lower electricity sales, and who wants that? Not a company that makes its money building plants and selling electricity.

And this is a shame, because the cheapest energy is the energy that isn’t used. Virginians use 20% more electricity per person as our neighbors in Maryland, so we have a lot of low-hanging fruit we should pick before we build another power plant.

Even if we needed more power, though, building another baseload natural gas plant is a bad plan. A “baseload” plant is one designed to run continuously, unlike a “peaker” plant that fills in when needed. The price of natural gas fluctuates wildly, so building a baseload plant means committing customers to paying whatever the going rate happens to be, all day, every day, for the 30-year life of a gas plant. With about a third of Dominion’s power mix already coming from natural gas, surely adding more baseload gas is a reckless gamble when alternatives are available. Even Dominion CEO Tom Farrell has warned against an over-reliance on natural gas for this very reason.

It used to be that alternatives to fossil fuels weren’t much available, so a 30-year gamble was normal, and regulators didn’t trouble themselves by asking what the world would be like in 20 years. Wind and solar have changed that. When you build a wind farm or a solar facility, you know exactly what you will be paying for energy 20 years down the road, because your “fuel” is free. Building wind or solar is like locking in a fixed-rate mortgage instead of gambling on an adjustable rate mortgage with a low teaser rate. With that as an option, why should Virginians commit themselves to 30 years of buying gas at whatever the market decides is the price?

With prices dropping rapidly, wind and solar are today’s fastest growing energy technologies, and wind is second only to gas as a source of new electric generation. Of course, Virginia can’t boast a single wind farm today, and the smattering of solar across the state totals less than 1% of what New Jersey has. But even here, time and economics are on the side of renewable energy. Citigroup recently issued a report projecting that renewable energy will reach grid parity across the U.S. within the next few years and will gradually relegate all other fuels to back-up status.

This makes it an even worse idea for Dominion to invest in a plant that cannot easily adjust its output when the wind picks up or the sun comes out. Other options exist. Gas turbines are now being designed to integrate with renewable energy, combining high efficiency with the ability to ramp up and down quickly. Companies like General Electric are making big bets that this is the future of gas turbines.

Dominion, meanwhile, seems to be looking at the future as if we were back in the 20th century, and without even taking advantage of hindsight. Its plan is a bad deal for its customers, and the State Corporation Commission should reject it.

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The Keystone XL Pipeline: Game over?

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NASA scientist James Hansen famously warned that if the Keystone XL pipeline gets built, it’s “game over” for the climate. That dire warning lit a fire under the feet of activists, who rightly argue that Canada shouldn’t be producing the dirty, carbon-intensive tar sands oil, and the U.S. shouldn’t enable the climate destruction by building a pipeline to get the oil out of North America. But stopping Keystone won’t stop global warming, and building it won’t make environmentalists throw in the towel. If this is a game, we are pawns as well as players, so we can never walk away.

Frankly, it’s hard to understand right-wing enthusiasm in the U.S. for a pipeline benefiting a Canadian company extracting Canadian oil intended for the world market. In spite of all the talk about jobs, it will employ only a few thousand workers temporarily, and not in the areas of the country where unemployed construction workers live. Moreover, building it requires the government to seize private property from unwilling landowners to benefit a private interest—usually the sort of thing that makes Republicans go ballistic.

I might add that the environmental damage being done to thousands of square miles of Canadian arboreal forests and lakes is staggering—but Republicans have long since made it clear that they do not consider despoiling nature a drawback when there is energy to be had and profit to be made. (If you are a Republican and you bristle at this, see if you can name a recent oil, gas, or coal mining project your party has opposed for environmental reasons. I can only name one, and that doesn’t get beyond “sort of.” See the Tennessee Conservative Union’s ad opposing mountaintop removal coal mining, now that a Chinese company wants to do it.)

Some would argue that the climate case against Keystone is overstated. Tar sands oil is “only” 14-24% more carbon intensive than conventional oil, if you ignore a nasty byproduct called petroleum coke that adds to the total carbon footprint. Yet surely if the reverse were true, and the carbon footprint of tar sands oil were less than that of conventional oil, it would be hailed as some kind of a planet-saving fuel. Incremental changes are what got us into this mess in the first place.

If Keystone represents evil, though, it has plenty of company, and there is blame enough to go around. Canadians are developing tar sands oil because the worldwide demand for petroleum is high and growing, there is money to be made meeting the demand, and there is no one who will make them stop. The harm done exceeds the profit to be made, but most of the harm is borne by people in other countries.

That makes the case against the pipeline mostly a moral one, and moral arguments don’t get much respect these days. Yet when the State Department or the Washington Post urges that if we don’t build the pipeline, the Canadians will just find other ways to get the oil to market, the proper response should be outrage. Their position is the moral equivalent of justifying buying stolen goods on the theory that if you don’t do it, the thieves will just find a fence somewhere else.

Admittedly, lots of people would buy stolen goods if there weren’t a law against it; for such people, morality is most successful when immorality gets you arrested. And there isn’t a law against tar sands oil; Canada is the only country with jurisdiction, and it prefers to look away.

Americans also have a little problem that we do, indeed, buy a lot of stolen goods. As the world’s biggest oil consumers, we have a credibility problem. On the other hand, if we don’t set the standards, who will? And if we don’t start here, then where?

Keystone or no Keystone, the fight against climate change will go on, because our lives and our children’s lives depend on it. It’s not a game we can stop playing—but we sure shouldn’t make it even harder for ourselves to win.

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Tom Farrell’s nuclear fantasy

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Tom Farrell doesn’t get it. Dominion Power, the utility of which he is CEO, has been all about building natural gas plants for the past couple of years, as it rushes to take advantage of cheap fracked gas. Out with the aging coal plants that had been its first love, in with the next cheap thing, and never mind the pollution! Then suddenly two weeks ago, faced with a question about climate change, Farrell told reporters the answer is more nuclear plants.

Mother Earth to Tom Farrell: The correct answer is “renewable energy.”

Most of the rest of the country gets this. Wind supplied more new electric generation than natural gas did in 2012. More people work in solar energy than in coal mining. Renewable energy has overtaken nuclear worldwide. Almost no one is building nuclear plants, partly because—here’s an inconvenient truth for you, Tom—they cost too much. Almost three years ago a Duke University study found that power from new nuclear plants is more expensive than solar energy, and the cost of solar has only gone down since then.

But Farrell is convinced wind and solar can’t provide reliable electricity to power the whole grid. You’d think he’d been reading propaganda from the Koch Brothers and had come to believe that if there are solar panels somewhere and a cloud crosses the sun, the whole grid crashes.

Can I just point out here that Dominion’s own North Anna nuclear reactors shut down suddenly in 2011 following an earthquake in Virginia, and the grid did not crash? Even though nuclear is one-third of Dominion’s Virginia portfolio, and North Anna represents more than half of that? And even though, while weather forecasters are pretty good at predicting regional cloud cover, no one can yet predict an earthquake?

The reason the grid didn’t crash is that grid operators make sure there is enough surplus generation available to keep supplying power even at times of catastrophic failure. And note that the nuclear plants didn’t come back online when the clouds cleared off, either. They were down for four months.

If nuclear power is more expensive than renewables, and it has to be backed up 100% with other forms of energy, for much longer time periods, where is the place for new nuclear?

As the CEO of a utility, Tom Farrell should know better. He should also know about the new study demonstrating that renewable energy alone—onshore wind, offshore wind, and solar energy—can power the entire grid 99.9% of the time. The study authors show that doing this would actually cost less than conventional sources of electricity, assuming you include in the price the “external” cost society pays for the use of fossil fuels. That is, if you factor in the cost of climate change, it’s cheaper to build renewable energy than new fossil fuel plants.

Climate aside, there’s other evidence for the superior value of renewable energy in providing price stability for customers and a whole range of benefits for the grid. And of course, for meeting demand at the cheapest possible cost, you can’t beat energy efficiency.

It’s time to face reality, Tom Farrell. If all you care about is making money for Dominion today, your natural gas strategy probably makes sense. But if you care about tomorrow—or even about the big picture today—it doesn’t. Either way, there’s no room in the picture for expensive new nuclear plants.

And if you’re sincerely concerned about climate change, now would be a good time for Dominion to invest in energy efficiency, wind and solar.

*    *    *

Note to readers: Willett Kempton, one of the authors of the study cited above on powering the grid with renewable energy, will be speaking at a townhall meeting sponsored by Sierra Club and Environment America this Wednesday, March 13, at the MetroStage Theatre, 1201 North Royal St., Alexandria, VA. The meeting is open to the public (Tom Farrell is especially invited). To RSVP, contact Phillip Ellis at phillip.ellis@sierraclub.org or 571-970-0275.

 

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Dominion takes the wrong way on solar

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On February 12, Virginia’s State Corporation Commission held a public hearing to decide whether to approve Dominion Virginia Power’s plan to buy 3 megawatts of solar power from Virginia residents and businesses to sell to the company’s voluntary Green Power Program. Sound like a good idea? It’s not.

Yes, Virginians want solar power. Investing in solar means stably priced electricity, cleaner air and lower greenhouse gas emissions. Solar power is now cost-effective in Virginia even in the absence of state incentives, thanks to federal tax credits and a steep decline in the price of solar panels. But a high upfront cost still limits who can afford to install it.

Utilities and the SCC have a role to play in bringing new solar power onto the grid. Dominion’s program to install 30 megawatts of solar on leased rooftops, which the SCC approved this fall, provides an example of how utilities can strengthen the grid, diversify their power sources, supply valuable peak-demand electricity, and contribute to their own learning curve on integrating renewable energy, all while meeting a portion of their customers’ demand for clean power.

The 3-megawatt program, on the other hand, gets nothing right. Under the program, customers who have solar panels would sell all their solar power to Dominion for 15 cents per kilowatt-hour (kWh), and buy regular fossil-fuel electricity (known as “brown power”) from Dominion at the normal retail rate of about 11 cents. Cost to Dominion: 4 cents/kWh.

Dominion would then resell the solar power to the participants in its Green Power Program, not for the 4 cents it costs the company, but for 11 cents. Dominion would keep 7 cents/kWh.

Dominion tells us that the 7 cents would go to its rate base, not its own bottom line. But it’s clear who loses. The do-gooders who pay extra on their utility bills for the Green Power Program would pay 11 cents for something Dominion bought for 4 cents. They are being played for chumps.

Last year the Green Power Program bought Virginia solar power directly for 4 cents/kWh through the purchase of renewable energy certificates. So why should the program pay 11 cents for something it can get for 4?

Since Dominion administers the program, it will be up to the SCC to prevent this misuse of its funds.

This is only part of the problem. The reason Dominion wants to shift the cost of the solar purchase onto the Green Power Program is its insistence that the value of solar energy isn’t the retail rate of electricity, but is the utility’s “avoided cost”—roughly, the price at which it can buy brown power on the wholesale market, which is around 4 cents/kWh.

Of course, if the current wholesale price were the only thing that mattered, you’d have to question why Dominion ever builds its own electric generation, including its new coal-fired plant that delivers power at 9.3 cents/kWh.

The SCC allows Dominion to build its own generation in Virginia for a host of other reasons, all of which apply equally to Virginia solar. Rooftop solar also provides significant additional benefits to the utility and the electric grid that utility-supplied brown power does not. A number of recent studies have quantified these benefits to prove that net-metered solar (where customers sell solar power to the grid at the retail rate) lowers costs for everyone.

Yet Dominion wants to shift costs onto a voluntary program, while keeping the benefits. This is bad for the Green Power Program, and it sets a terrible precedent for valuing solar that could retard its growth in Virginia. And that would be bad for all of us.

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Renewable energy makes small gains in Virginia’s 2013 legislative session

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The Virginia General Assembly will soon wrap up its work on the 2013 legislative session. Renewable energy advocates began the session with high hopes for a series of bills that promised to reform our renewable energy law, expand net-metering, and open up new opportunities for financing solar systems and small wind turbines.

So how did we do? Well, this is Virginia. Progress is slow, the utilities are powerful, and half the legislature doesn’t believe in climate change. On the other hand, they do believe in business. Under the circumstances, we did okay.

Renewable Portfolio Standards: bye-bye, bonuses

Readers of this blog already know the long, miserable tale of Virginia’s weak and ineffective, voluntary renewable portfolio standard (RPS), which has enriched utilities with tens of millions of dollars in incentives without bringing any new renewable energy projects to Virginia. This year the legislature went halfway to fixing the problem. Legislation negotiated between the office of the Attorney General and the utilities will deprive utilities of future ill-gotten gains for meeting the RPS law, but won’t change the pathetic nature of the law itself.

Stripping out the RPS incentives was only part of a bigger, more complex bill that sweetens the deal for utilities in other ways, so it’s hard to judge whether the legislation as a whole marks a victory for consumers. Skeptics will note that Dominion’s stock price has actually gone up several percentage points since the deal was announced, which you wouldn’t expect if the AG were correct that the bill will save consumers close to a billion dollars over time.

What is clear is that the RPS remains as voluntary and as crummy as it ever was, but the utilities can no longer use it to rip off ratepayers while pretending to be good citizens. Some environmental groups consider stripping out the incentives a bad thing, on the theory that only by giving utilities a bonus can we expect them to meet the goals. Other groups (including the Sierra Club) believe Dominion, at least, will want to maintain its greenwashed public image by continuing to meet the RPS goals, and that ending the consumer rip-off is worth celebrating.

Sure, if the goals had brought wind and solar to Virginia, the Sierra Club would have considered the incentives a tolerable price to pay. As it happened, Dominion and the other utilities continuously rebuffed efforts over the years to improve the RPS. Had Dominion approached the RPS as an opportunity to bring real renewable energy to Virginia rather than as a cash cow to be milked for its own advantage, the company would have saved itself a public relations fiasco and likely kept its bonuses, too. Surely, someone at HQ should be out of a job right now.

Taking the long view, it is also worth noting that getting rid of the free money is a necessary first step towards a mandatory RPS in Virginia, which would unleash market forces for renewable energy that don’t emerge with a voluntary law. Utilities would oppose such a move more vigorously if they still had incentives to protect that were available only under the voluntary program.

. . . but reform efforts fail again

These views all assume the legislature will someday pass a bill to improve the goals and bring wind and solar projects to Virginia, without which the RPS is meaningless anyway. Surely legislators must recognize how pointless it is to have an RPS that can be met with out-of-state, pre-World War II hydro, plus some trash and wood-burning and a few assorted projects that put no power on the grid. (Even without the performance incentives, utilities remain entitled to pass along to customers the cost of meeting the RPS goals.)

Bills to improve the goals should have passed the legislature this year as part of the reform package. HB 1946 (Lopez) and SB 1269  (McEachin) even received the support of Dominion Power for provisions that would limit most future purchases for the RPS to high-quality projects like wind and solar. What killed the bills seems to have been a combination of opposition from vested interests and sheer cussedness on the part of some Republicans, who were engaged in partisan maneuvers that had nothing at all to do with renewable energy.

As usual, we are left hoping for better luck next year.  Meanwhile, however, a couple of other RPS bills made incremental progress. Most notably, HB 1917 (Surovell) adds solar thermal energy to the definition of renewable energy; as of this writing it has passed the House and is on the Senate floor.

A loss for more honest competition among fuels

There are more ways to support renewable energy than through an RPS, of course. One of my favorite bills would have required utilities and the State Corporation Commission to consider the long-term price stability of fuels used in electric power generation. HB 1943 (Lopez) would have helped price-stable wind and solar compete against notoriously price-volatile natural gas. It’s an idea that should appeal to fair-minded conservatives, so it’s a shame it hasn’t gained traction since first being introduced in 2012. However, it died in committee in the face of opposition from Dominion Power, which doesn’t want any interference with its plans for new natural gas plants.

Power Purchase Agreements get a “pilot”

Two bills passed the legislature to allow some third-party power purchase agreements (PPAs) for wind and solar within Dominion’s territory. Under a PPA, an installer retains ownership of the solar equipment, with the customer buying the electricity that is generated. This arrangement has two primary advantages: the customer can “go solar” with no money down and no responsibility for the equipment; and in the case of a tax-exempt entity like a church or a university, it provides a way to access federal tax credits worth 30% of the system cost.

The bills were designed to prevent a recurrence of a dispute that erupted in 2011 when a Staunton-based solar company, Secure Futures, installed a large solar system at Washington & Lee University under a PPA. Dominion issued “cease and desist” letters insisting that only it could sell electricity in its assigned territory. Although Virginia law is unclear on this point, the university and the solar company capitulated in the face of massive litigation costs. Since then Dominion’s army of lawyers has proven as effective as any statute in stopping further efforts to use PPAs in Virginia.

This year’s bills, SB 1023 (Edwards) and HB 2334 (Yancey), were originally written to allow third-party PPAs wherever customers can currently install renewable energy systems that they own themselves. They were significantly scaled back to win acceptance from Dominion Power. (AEP and the coops wouldn’t play at all, so legal ambiguity remains the rule in their territories.)

The bills allow up to 50 megawatts’ worth of solar and wind installations using PPAs, in Dominion territory only, as a pilot program.  Whether net-metered or not, they will be counted against the current net-metering cap of 1% of the utility’s generation. Tax-exempt entities can have a facility of any size up to 1 megawatt (500 kW if they net meter); taxable entities must have a minimum size of at least 50 kW (so no homeowner need apply). PPAs that do not meet the requirements are expressly prohibited in Dominion territory.

Agricultural net metering, yes; community net metering, no

A bill to allow agricultural net metering also passed this year. HB 1695 (Minchew) allows the electricity from a single solar, wind, or digester gas facility to be attributed to two or more electricity meters as long as they are all on the same property and have the same owner. Thus, for example, a farmhouse, barn and other out-buildings can all share in the benefits of solar panels on one of the buildings, even if each building is separately metered.

Originally the bill would also have enabled community net metering, sometimes known as solar gardens, but the utilities opposed it. Bowing to political reality, Delegate Minchew scaled it back. The bill is notable, however, for making progress without including any provisions that seem capable of doing mischief.

A note about all the bills: In Virginia, the governor can sign a bill, veto it, or send it back to the legislature with amendments of his own, so none of these bills are final as of this writing.