Tag Archives: PACE

New laws clear away barriers to small solar projects

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Edward Hicks’ “Peaceable Kingdom,” Metropolitan Museum of Art. Not shown: the 50 guys with muskets making darn sure the lions don’t try anything.

Virginia General Assembly members have an expression for when opposing interests agree on a bill: they call it “peace in the valley.”

The phrase comes from a gospel song by Thomas A. Dorsey, written for Mahalia Jackson and then later sung by a bunch of white guys including Red Foley and Elvis Presley. The lyrics, written on the eve of World War II, speak of a longing for the peace of the afterlife, where “the bear will be gentle, the wolf will be tame, and the lion will lay down by the lamb.”

I’m not sure the General Assembly has ever inspired anything quite so wonderful as the song describes. More typically, a legislator uses the expression to indicate that a bunch of special interests, having duked it out amongst themselves, have now each gotten everything they thought they could get out of negotiations and so are offering up a compromise that legislators can adopt without having to trouble themselves too much with the details.

So, not exactly the peace of God, but still a pretty good state of affairs from the point of view of committee members who have thirty or forty other bills to deal with that day.

Peace rarely used to characterize bills supporting distributed solar generation. The lion had no reason to lie down by the lamb. Indeed, more typically the lamb was lunch.

But the November election shifted the balance of power in the General Assembly. At first it wasn’t clear how much power the lion and bear were going to have to cede. In fact, no one is quite sure even now where the balance of power lies, even after weeks of intense skirmishing finally produced the flawed but-still-transformational Clean Economy Act. The bill passed, and the parties all claimed victory, but anyone who thinks there might be peace in the energy valley is advised to stick around for next year.

The skirmishing over distributed solar was decidedly less intense. Advocates and utilities achieved peace on a number of provisions removing barriers to rooftop solar, dramatically increasing program caps for third-party power purchase agreements (PPAs), raising the net metering cap, establishing shared solar programs, and making it easier for customers in homeowner’s associations to install solar.

Much work remains. Removing barriers is a necessary first step, but now the challenge is to make small-scale solar a priority for Virginia. The Clean Economy Act focused on cheap utility-scale projects, but an economy that runs primarily on renewables needs solar on places other than farmland. Getting to 100 percent carbon-free energy means putting solar on as many sunny homes and businesses as possible—not to mention government buildings, warehouses, data centers, parking lots, highway rest areas, closed landfills, brownfields, former mining sites and vacant land around airports.

Solar Freedom and the Clean Economy Act

The final version of the Solar Freedom bill, HB572 (Keam) and SB710(McClellan), made eight changes affecting customers of investor-owned utilities. Customers of electric cooperatives are excluded; a law passed last year addressed many of these issues.

• It raises the cap on the total amount of net metered solar allowed from 1 percent currently to 6 percent (broken out as 1 percent for low and moderate income customers and 5 percent for everyone else). This means customers installing rooftop solar will continue getting credit for surplus energy at the retail rate. When net-metered projects reach 3 percent, or in 2024 for APCo or 2025 for Dominion, the State Corporation Commission will conduct a solar study to determine the appropriate rate structure for new net metering customers. Existing net metering customers will not be affected.

• It raises the program cap on third-party power purchase agreements (PPAs). PPAs are the financing mechanism that schools, local governments, universities and other customers have been using to install solar on-site with no money down. The original program cap of 50 MW in Dominion territory was reached this fall, halting projects across the state. In Dominion territory, the limit will now go to 500 MW for jurisdictional customers (that’s most people) and 500 MW for non-jurisdictional customers (including local governments and public schools). The new cap in Appalachian Power territory is 40 MW for all customers, and there will be no limit in Old Dominion Power (Kentucky Utilities) territory. In addition, the legislation broadens who can take advantage of this program to any tax-exempt customer, and all other customers with projects over 50 kW.

• It increases the allowable size of net-metered commercial projects from 1 MW today to 3 MW.

• It increases the allowable size of residential net-metered projects to 25 kW, from 20 kW today.

• It removes standby charges for residential customers with solar facilities of less than 15 kW in Dominion territory, and removes them entirely for customers of Appalachian Power and Old Dominion Power.

• It allows residents of apartment buildings and condominiums in Dominion Energy and Old Dominion Power territories to share the output of on-site solar facilities.

• In Dominion territory, it allows customers to install enough solar to meet 150 percent of their previous year’s demand, recognizing the needs of growing families and EV owners. In APCo territory the limit remains at 100 percent of previous demand.

• Finally, it allows Fairfax County to move forward on a 5 MW solar project on a closed landfill, with the electricity serving government facilities. This will be the first such project in the state.

Solar Freedom overlaps with the Clean Economy Act, HB1526 (Sullivan) and SB851 (McClellan), on several of these provisions, including the net metering cap and PPAs. The Clean Economy Act also creates a Renewable Portfolio Standard (RPS) focused on utility-scale projects, but with a small carve-out for distributed “wind, solar and anaerobic digestion resources of one megawatt or less located in the Commonwealth.” The carve-out is limited to 1 percent of Dominion’s RPS targets. This level is so modest it probably won’t act as a market stimulus, especially for projects not owned by Dominion itself, and the addition of anaerobic digestion should give anyone pause. Also, there is no carve-out in APCo territory.

The failure of the Clean Economy Act to drive small-scale solar growth is a missed opportunity that will need to be addressed in the future if the General Assembly truly wants to achieve a clean energy economy. I recommend taking away the appalling subsidies for paper companies and letting those millions fund distributed solar.

Community solar

The provision in Solar Freedom that allows residents of multifamily buildings to share onsite solar arrays looks favorable to customers but requires an SCC proceeding this year to determine the bill credit rate for subscribers. The rate “shall be set such that the shared solar program results in robust project development and shared solar program access for all customer classes.” Further, “the Commission shall annually calculate the applicable bill credit rate as the effective retail rate of the customer’s rate class, which shall be inclusive of all supply charges, delivery charges, demand charges, fixed charge, and any applicable riders or other charges to the customer.”

While the Solar Freedom provision is restricted to multifamily residential buildings, the General Assembly also passed legislation more generally allowing for third-party owned community solar, rebranded as “shared solar.”

SB629 (Surovell) and HB1634 (Jones) instruct the SCC to set up a shared solar program for customers of Dominion and Old Dominion Power by Jan. 1, 2021. Shared solar projects must be no larger than 5 MW, can be owned by any for profit or nonprofit entity, and require at least three subscribers. The program is capped at a total of 150 MW, with an additional 50 MW possible if the utility demonstrates that 45 MW of shared solar has gone to low-income consumers.

The success of a shared solar program ultimately depends on whether project owners can make money and customers can save money. It remains to be seen whether that will happen. The provisions in these bills are less favorable to customers than the multifamily solar provisions of Solar Freedom. Customers will have to pay a minimum bill amount (waived for low-income customers), and there is no requirement that the bill credit rate be set at a rate than results in “robust project development.”

Finally, HB573 (Keam) requires that community solar projects owned by investor-owned utilities must include higher-cost facilities located in low-income areas.

Homeowner associations

Another successful piece of legislation is HB414 (Delaney) and SB504(Petersen), clarifying the respective rights of homeowners and HOAs when it comes to solar panels.

Since 2014, Virginia law has prohibited HOAs from banning solar panels unless the ban appears in the association’s recorded declaration. However, the law respects the right of HOAs to place “reasonable restrictions” on the size, place, and manner of placement of solar facilities on members’ property.

The fact that the law did not define “reasonable” turned out to be a problem. Some HOAs decided it was “reasonable” to insist solar panels be confined to the rear of a roof, whether there was sunshine back there or not. The result has been acrimony, added expense and blocked projects.

Aaron Sutch of Solar United Neighbors of Virginia estimates that since the 2014 legislation, HOAs have blocked over 300 Virginia installations with a value of over $6 million. Sutch negotiated with lobbyists for homeowners associations to achieve peace in this particular valley.

The new legislation provides that a restriction is not reasonable if it increases the cost of installation of the solar panels by 5 percent over the projected cost of the initially proposed installation, or reduces the energy production by 10 percent below the projected production. The owner must provide documentation prepared by an independent solar panel design specialist to show that the restriction is not reasonable by these criteria.

Other legislation

A few other bills should help customers finance solar panels.

B654 (Guy) authorizes DMME to sponsor a statewide financing program for commercial solar, energy efficiency and stormwater investments. The effect will be to boost the availability of low-interest financing through Commercial Property Assessed Clean Energy (C-PACE) in areas of the state where the locality has not developed a program of its own.

B754 (Marsden) authorizes (though it does not require) electric cooperatives to establish on-bill financing of energy efficiency and renewable energy. The program allows for the costs to be paid for out of the savings these improvements deliver. The coops asked for this authority, so presumably at least one plans to follow through.

Finally, B542 (Edwards) repeals the sunset date on crowdfunding provisions and provides fixes for obstacles to a financing approach that, to my knowledge, has been used only once for solar projects in Virginia.

This article appeared first in the Virginia Mercury on March 18,2020. 

And finally, energy efficiency and storage bills

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advocates holding clean energy signs

Hundreds of grassroots activists turned out on January 14 to lobby for clean anergy. Photo by Alex Kambis.

You’ve heard these statistics before: Virginia residents pay the 7th highest bills in the nation, due in large part to the fact that our utilities rank among the lowest in the nation for energy efficiency programs. 2018’s “grid mod” bill required massive utility investments in efficiency spending, but the legislation did not actually mandate results, and Dominion has been slow to propose programs.

That leaves Virginia with a lot of low-hanging fruit that looks mighty tempting as we seek to decarbonize our energy supply at the least possible cost.

Not surprisingly, then, spending on energy efficiency programs is central to the big energy transition bills like HB77, the Green New Deal, and HB1526/SB851, the Clean Economy Act. RGGI bills generally also specify that a portion of the funds raised by auctioning carbon allowances will fund efficiency programs.

There are also a few standalone efficiency bills. HB1450 (Sullivan) and SB354 (Bell) appear to be the same as the efficiency provisions of the CEA, though the standalone applies only to Dominion and APCo.

HB1576 (Kilgore) doesn’t set new efficiency targets, but it makes it harder for large customers to avoid paying for utility efficiency programs. In the past, customers with over 500 kW of demand were exempt; this bill allows only customers with more than 1 MW of demand to opt out, and only if the customer demonstrates that it has implemented its own energy efficiency measures.

HB413 (Delaney) authorizes a locality to include in its subdivision ordinance rules establishing minimum standards of energy efficiency and “maintaining access” to renewable energy.

HB575 (Keam) beefs up the stakeholder process that Dominion and APCo engage in for the development of energy efficiency programs.

SB963 (Surovell) establishes the Commonwealth Efficient and Resilient Buildings Board to advise the Governor and state agencies about ways to reduce greenhouse gas emissions and increase resiliency. Every agency is required to designate and energy manager responsible for  improving energy efficiency and reducing greenhouse gas emissions.

SB628 (Surovell) requires the residential property disclosure statement provided by the Real Estate Board to include advice that purchasers should obtain a residential building energy analysis as well as a home inspection prior to settlement.

Funding efficiency

These bills are also covered under the renewable energy roundup.

HB633 (Willett) establishes a tax deduction up to $10,000 for the purchase of solar panels or Energy Star products.

HB654 (Guy) authorizes DMME to sponsor a statewide financing program for commercial solar, energy efficiency and stormwater investments. The effect would be to boost the availability of Commercial Property Assessed Clean Energy (C-PACE) in areas of the state where the locality has not developed a program of its own.

HB947 (Webert) expands the authority of localities to grant tax incentives to businesses located in green development zones that invest in “green technologies,” even if they are not themselves “green development businesses.” Green technologies are defined as “any materials, components, equipment, or practices that are used by a business to reduce negative impacts on the environment, including enhancing the energy efficiency of a building, using harvested rainwater or recycled water, or installing solar energy systems.”

SB754 (Marsden) authorizes utilities to establish on-bill financing of energy efficiency, electrification, renewable energy, EV charging, energy storage and backup generators.

HB1656 (O’Quinn) authorizes Dominion and APCo to design incentives for low-income people, the elderly, and disable persons to install energy efficiency and renewable energy, to be paid for by a rate adjustment clause.

HB1701 (Aird) authorizes the Clean Energy Advisory Board to administer public grant funding, and makes small changes to the Board.

SB634 (Surovell) establishes the Energy Efficiency Subsidy Program to fund grants to subsidize residential “efficiency” measures, interestingly defined as solar PV, solar thermal or geothermal heat pumps. It also creates a subsidy program for electric vehicles.

SB1061 (Petersen) allows Property Assessed Clean Energy (PACE) loan programs to include residential as well as commercial customers.

Energy storage

HB1183 (Lopez) requires the SCC to establish a task force on bulk energy storage resources.

SB 632 (Surovell) creates a storage target of 1,000 MW and states that this is in the public interest.  Senator Surovell says this bill originated with the Governor’s office.

HB1306 (Kory) directs the Department of Mines, Minerals and Energy to adopt regulations allowing appropriate brownfields and lands reclaimed after mining to be developed as sites for renewable energy storage projects.

 

Renewable energy bills to watch

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People gathered with signs supporting climate action

Grassroots activists gather at the steps of the Virginia Capital on January 14. Photo courtesy Sierra Club.

Yesterday’s post launched my annual roundup of energy and climate bills with a comparison of the two major energy transition bills filed to date, HB1526/SB851, the Clean Economy Act, and HB77, the Green New Deal Act. Today I’m covering other renewable energy bills. You will be glad to see I am addressing each only briefly, given the large number of them. Bills can still be filed as late as tomorrow evening, and there is often some lag in the Legislative Information System, which posts the bills, their summaries, their committee assignments, and what happens to them. I will add to this list once I’ve seen the rest, so check back for updates.

Most of these bills will be heard in Senate Commerce and Labor, or now in the House, Labor and Commerce, committees. Both House and Senate have established energy subcommittees. In the Senate, the subcommittee is advisory and does not have the power to kill a bill outright. The House subcommittee used to be a killing field for good bills. Hopefully this year will be different.

Bills with monetary implications typically must go to Finance or Appropriations.

As always, the action will be fast and furious, and it is already underway. Blink and you will miss it.

RPS

Both HB1526/SB851, the Clean Economy Act, and HB77, the Green New Deal Act, contain a renewable portfolio standard (RPS) requiring utilities to include in their electricity mix a percentage of renewable energy that ratchets up over time. In addition, HB1451 (Sullivan) is a stand-alone RPS bill that also includes an energy storage mandate. It applies only to IOUs but otherwise appears to be identical to the RPS and storage provisions of the CEA (of which Sullivan is also the patron).

Instead of an RPS, SB876 (Marsden) establishes a “clean energy standard” applicable to both IOUs and coops. A “clean energy resource” is defined as “any technology used to generate electricity without emitting carbon dioxide into the atmosphere,” including “(i) electric generation facilities that are powered by nuclear, solar, wind, falling water, wave motion, tides, or geothermal power; (ii) a natural gas-fired generation facility with 80 percent carbon capture; or (iii) a coal-fired generation facility with 90 percent carbon capture.” Aside from the contradiction in terms inherent in this definition, the clean energy standard also suffers from a delay in its starting point to 2030, when it begins at 30%–or about where Dominion is today with its nuclear plants. Considering only offshore wind and solar development already underway, the CES would not be a meaningful spur to new renewable energy for at least another 15 years. A couple of strong points, however: the bill also requires the closure of all coal-fired generation facilities by 2030, and requires workforce transition and community assistance plans. [Update: we’re told Senator Marsden agrees with the criticisms of this bill and does not intend to present it, at least without significant amendment.]

SB842 (Petersen) provides for all retail customers of electricity to be able to choose their supplier, and instructs the SCC to promulgate regulations for a transition to a competitive market for electricity. Existing utilities will continue to provide the distribution service. The bill also requires suppliers of electricity to obtain at least 25% of sales from renewable energy by 2025, 50% by 2030, and 100% by 2050. Renewable energy is defined to include “sustainable biomass” but not waste incineration or landfill gas.

Customer-sited solar

“Solar Freedom” is back this year for another attempt to lift barriers to customer-sited renewable energy, including rooftop solar. The primary vehicles are SB710 (McClellan) and HB572 (Keam), with nearly identical versions from Lopez (HB1184) and Simon (HB912). It contains 8 provisions:

  1. Raising from 1% to 10% the cap on the total amount of solar that can be net metered in a utility territory, ensuring small-scale solar continues to grow.
  2. Making third-party financing using power purchase agreements (PPAs) legal for all customers of IOUs, removing current cap. The SCC reports the program in Dominion’s territory is now filled, putting in jeopardy Fairfax County’s ambitious solar plans. In Southwest Virginia in APCo territory, the program is even smaller and narrower, and several projects have been unable to move forward.
  3. Allowing local government entities to install solar facilities of up to 5 MW on government-owned property and use the electricity for schools or other government-owned buildings located on nearby property, even if not contiguous. This would allow Fairfax County to move forward with a planned solar facility on a closed landfill; localities with closed landfills across the state could similarly benefit.
  4. Allowing all customers to attribute output from a single solar array to multiple meters on the same or adjacent property of the same customer.
  5. Allowing the owner of a multi-family residential building to install a solar facility on the building or surrounding property and sell the electricity to tenants. This is considered especially valuable for lower-income residents, who tend to be renters.
  6. Removing the restriction on customers installing a net-metered solar facility larger than required to meet their previous 12 months’ demand. Many customers have expressed interest in installing larger facilities to serve planned home additions or purchases of electric vehicles.
  7. Raising the size cap for net metered non-residential solar facilities from 1 MW to 3 MW, a priority for commercial customers.
  8. Removing standby charges on residential facilities sized between 10-20 kW. Current charges are so onerous that few customers build solar arrays this size, hurting this market segment.

Other PPA and net metering bills

HB1647 (Jones) is similar to Solar Freedom but includes community solar and leaves out meter aggregation.

Five of the eight provisions of Solar Freedom also appear in the Clean Economy Act, omitting only numbers 3,4 and 5. SB532 (Edwards) is a stand-alone bill to make PPAs legal, using an approach similar to that of Solar Freedom and the CEA. HB1067 (Kory) deals with a specific situation where a customer has solar on one side of property divided by a public right-of-way, with the electric meter to be served by the solar array on the other side. The legislation declares the solar array to be located on the customer’s premises. (Item 4 of Solar Freedom would also solve the problem.)

Resilience hubs

HB959 (Bourne) directs DMME to establish a pilot program for resilience hubs. These are defined as a simple combination of solar panels and battery storage capable of powering a publicly-accessible building in emergency situations or severe weather events, primarily to serve vulnerable communities.

HOAs

HB414 (Delaney) and SB504 (Petersen) clarifies the respective rights of homeowners associations (HOAs) and residents who want to install solar. The law allows HOAs to impose “reasonable restrictions,” a term some HOAs have used to restrict solar to rear-facing roofs regardless of whether these get sunshine. The bill clarifies that HOA restrictions may not add more than $1,000 to the cost of solar facility, or decrease the expected output by more than 10%.

Community solar.

Three years ago legislation passed to allow utilities to set up so-called community solar programs. A couple of coops followed through, notably one from Central Virginia Electric Cooperative. Dominion received SCC approval to launch a small program back in 2018, but still hasn’t done so. That leaves a large base of potential customers—people without sunny roofs, apartment dwellers, or anyone who can’t afford to install solar—with no options.

The Clean Economy Act has detailed provisions for community solar, supported by the trade organization Community Solar Access. An alternative as a stand-alone bill is SB629 (Surovell). It creates an opportunity for subscribers in the territory of investor-owned utilities to buy from small (under 2 MW) “solar gardens” developed by third-party owners. Utilities would credit purchasers at the retail rate minus the utility’s costs. Preference would be given to solar gardens with low-income subscribers.

HB573 (Keam) does not establish a new program. It affects the utility-controlled and operated “community solar” programs required by 2017 legislation (and still not rolled out yet, though I assume the facilities have been selected). The bill requires that “an investor-owned utility shall not select an eligible generating facility that is located outside a low-income community for dedication to its pilot program unless the investor-owned utility contemporaneously selects for dedication to its pilot program one or more eligible generating facilities that are located within a low-income community and of which the pilot program costs equal or exceed the pilot program costs of the eligible generating facility that is located outside a low-income community.” I read this to mean utilities must select more expensive sites and develop more expensive programs in low-income areas than elsewhere, which seems . . . odd.

HB1634 (Jones) requires utilities to establish shared-solar programs that allows customers to purchase subscriptions in a solar facility no greater than 5 MW. (For what it’s worth, the GA passed a similar law in 2017, and we are still waiting for Dominion’s program.)

Resolving local disputes over utility-scale projects

Developers of utility-scale solar and wind sometimes face pushback at the local level. Opposition can come from residents who worry about viewsheds or who have been subjected to anti-renewables propaganda, and from local officials who want to collect tax revenue above the local real estate tax rate. Industry organizations and counties have worked to come up with a number of bills to resolve the concerns, though in some cases the counties have split on whether to support them.

HB1327 (Austin) allows localities to impose property taxes on generating equipment of electric suppliers utilizing wind turbines at a rate that exceeds the locality’s real estate tax rate by up to $0.20 per $100 of assessed value. Under current law, the tax may exceed the real estate rate but cannot exceed the general personal property tax rate in the locality. Wind developer Apex Clean Energy helped develop the bill and supports it.

Bills supported by the solar industry organization MDV-SEIA include:

  • HB656 (Heretick) and SB875 (Marsden) allow local governments to incorporate into their zoning ordinances national best practices standards for solar PV and batteries.
  • HB1131 (Jones) and SB762 (Barker) authorize localities to assess a revenue share of up to $0.55 per megawatt-hour on solar PV projects, in exchange for which an existing tax exemption is expanded.
  • HB657 (Heretick) and SB893 (Marsden) exempt solar facilities of 150 MW or less from the requirement that they be reviewed for substantial accord with local comprehensive plans.
  • HB1434 (Jones) reduces the existing 80% machinery and tools tax exemption for large solar projects.
  • SB870 (Marsden) authorizes local planning commissions to include certain regulations and provisions for conditional zoning for solar projects over 5 MW.

Other RE siting bills

HB1133 (Jones) makes it in the public interest for utilities to build or purchase, or buy the output of, wind or solar facilities located on previously developed sites.

HB1675 (Hodges) requires anyone wanting to locate a renewable energy or storage facility in an opportunity zone to execute a siting agreement with the locality.

A few bills appear designed to make wind and solar projects harder to site, or are intended to rile up sentiment against solar: HB205 (Campbell) adds unnecessary burdens to the siting of wind farms and eliminates the ability of wind and solar developers to use the DEQ permit-by-rule process for projects above 100 megawatts. HB1171 (Poindexter) is a make-work bill requiring an annual report of the acreage of utility scale solar development, as well as the acreage of public or private conservation easements. HB1636 (Campbell) prohibits the construction of any building or “structure” taller than 50 feet on a “vulnerable mountain ridge.” You can tell the bill is aimed at wind turbines because it exempts radio, TV, and telephone towers and equipment for transmission of communications and electricity.

Grants, tax deductions, tax credits and other financing

HB754 (Kilgore) establishes the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund, which will support wind, solar or geothermal projects sited on formerly mined lands or brownfields. (See also Jones’ HB1133, which makes it in the public interest for utilities to build or purchase, or buy the output of, wind or solar facilities located on previously developed sites. And see Kory’s HB1306, which directs DMME to adopt regulations allowing brownfields and lands reclaimed after mining to be developed as sites for renewable energy storage projects.)

HB461 (Sullivan) establishes a tax credit of 35%, up to $15,000, for purchases of renewable energy property. It is available only to the end-user (e.g., a resident or business who installs solar or a geothermal heat pump).

HB633 (Willett) establishes a tax deduction up to $10,000 for the purchase of solar panels or Energy Star products.

HB654 (Guy) authorizes DMME to sponsor a statewide financing program for commercial solar, energy efficiency and stormwater investments. The effect would be to boost the availability of Commercial Property Assessed Clean Energy (C-PACE) in areas of the state where the locality has not developed a program of its own.

HB947 (Webert) expands the authority of localities to grant tax incentives to businesses located in green development zones that invest in “green technologies,” even if they are not themselves “green development businesses.” Green technologies are defined as “any materials, components, equipment, or practices that are used by a business to reduce negative impacts on the environment, including enhancing the energy efficiency of a building, using harvested rainwater or recycled water, or installing solar energy systems.”

SB542 (Edwards) repeals the sunset date on crowdfunding provisions and provides fixes for certain existing obstacles to this financing approach. The bill is the result of lessons learned in developing a 2019 “solar bonds” program for five commercial and non-profit customers.

SB754 (Marsden) authorizes utilities to establish on-bill financing of energy efficiency, electrification, renewable energy, EV charging, energy storage and backup generators.

HB1656 (O’Quinn) authorizes Dominion and APCo to design incentives for low-income people, the elderly, and disable persons to install energy efficiency and renewable energy, to be paid for by a rate adjustment clause.

HB1701 (Aird) authorizes the Clean Energy Advisory Board to administer public grant funding, and makes small changes to the Board.

SB634 (Surovell) establishes the Energy Efficiency Subsidy Program to fund grants to subsidize residential “efficiency” measures, interestingly defined as solar PV, solar thermal or geothermal heat pumps. It also creates a subsidy program for electric vehicles.

SB1039 (Vogel) allows a real property tax exemption for solar energy equipment to be applied retroactively if the taxpayer gets DEQ certification within a year.

SB1061 (Petersen) allows residential customers to qualify for local government Property Assessed Clean Energy (PACE) financing programs for renewable energy and energy efficiency improvements; currently the availability of this financing tool is restricted to commercial customers. Note the potential interplay with HB654, above.

Customer rights to shop for renewable energy

HB868 (Bourne) and SB376 (Suetterlein and Bell) allows customers to buy 100% renewable energy from any licensed supplier, regardless of whether their own utility has its own approved tariff.

HB 889 (Mullin) and SB 379 (McPike), the Clean Energy Choice Act, is broader than HB868. The legislation allows all customers to buy 100% renewable energy from any licensed supplier regardless of whether their utility has its own approved tariff. In addition, large customers (over 5 MW of demand) of IOUs also gain the ability to aggregate their demand from various sites in order to switch to a competitive supplier that offers a greater percentage of renewable energy than the utility is required to supply under any RPS, even if it is not 100% renewable. Large customers in IOU territory who buy from competing suppliers must give three years’ notice before returning to their utility, down from the current five years. The SCC is directed to update its consumer protection regulations.

Offshore wind

The CEA contains detailed provisions for the buildout and acquisition of offshore wind. HB234 (Mugler) directs the Secretary of Commerce and Trade to develop an offshore wind master plan.

SB860 (Mason) and HB1664 (Hayes) puts the construction or purchase of at least 5,200 MW of offshore wind in the public interest.

HB1607 (Lindsey) and SB998 (Lucas) allows Dominion to recover the costs of building offshore wind farms as long as it has a plan for the facilities to be in place before January 1, 2028 and that it has used reasonable efforts to competitively source the majority of services and equipment. All utility customers in Virginia, regardless of which utility serves them, will participate in paying for this through a non-bypassable charge. Surely this bill came straight from Dominion.

 

Virginia’s legislative session ends. How did we do?

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Photo credit: Corrina Beall

The General Assembly made a mad dash to the end of the 2015 legislative session last week. House Republicans were in a hurry to finish up a day early, even if bills suffered as a result, in the peculiar belief that prioritizing speed over quality would demonstrate their competence.

Apparently they thought that would play to the anti-government crowd. And I guess it does; if you weren’t anti-government before they pulled a stunt like that, you probably are now.

Being in a rush had to be their excuse for that ethics bill they pushed through in the final hours. I can finally understand why Senator Dick Saslaw says, “You can’t legislate ethics.” What he means is that the Virginia General Assembly can’t legislate ethics. Most of the rest of us would have no problem doing it. Our legislators, however, are just too fond of living well on the tab of corporate lobbyists.

So the new bill drops the gift limit from $250 to $100—but then removes the aggregate cap, allowing for an unlimited number of $99 gifts. Gifts that go over the limit but that are donated to charity now don’t count, providing a nice way for a legislator to buy popularity at no expense to himself.

A report from the group ProgressVA analyzes the bill’s effect and concludes that some 70% of lobbyists’ 2014 giving would still be legal under the new law, while opening up some brand-new loopholes. Among the most egregious is that lobbyists and their clients will now be able to pay for legislators to fly around the state for official meetings without the travel having to be disclosed, much less reimbursed. This means legislators from southwest Virginia can expect even more face time with coal lobbyists, but now on corporate jets—and their constituents will never know about it.

Addressing (or not) the issue of extravagant vacations paid for by companies with business before the legislature, the bill imposes a requirement that there be “a reasonable relationship between the purpose of the travel and the official duties of the requester.” That means junkets to France paid for by Virginia Uranium are still okay. So is letting corporate America pay for you to attend meetings of the American Legislative Exchange Council (ALEC), where lobbyists can teach you how to hobble environmental regulators and suppress voting.

If you can’t figure out a way to meet the reasonable relationship test (and I’m embarrassed for you if you have so little imagination), you can still accept a fun travel adventure as long as Virginia’s toothless ethics council approves it—or simply doesn’t act within five days of your request.

And of course, this so-called ethics reform makes no attempt to address the biggest obstacles to honest government in Virginia: the flood of corporate money into campaign chests and the ability of legislators to use campaign money for personal expenses. Even if Governor McAuliffe fixes the serious flaws in the ethics bill, nothing in it will stop companies like Dominion Resources from continuing to use cash to corrupt the democratic process.

Which brings us to energy legislation. The Associated Press summed up the situation very nicely: “Virginia’s 2015 legislative session was a good one for energy giant Dominion Resources Inc., the state’s most politically influential company. Legislation it wanted passed, passed. Bills it didn’t like did not.”

Chief among the legislation Dominion wanted was Senator Wagner’s SB 1349, which spares Dominion from having to refund excess profits for the next five years. Pretty much every newspaper in the state editorialized against it, so I’ll spare you a rehash of its failings.

Sadly, Governor McAuliffe signed the bill without amendments. He told reporters, “It was clear to Dominion that at the end of the day a veto would have been devastating for them.” If so, that’s a lot of leverage the Administration squandered.

And really, Governor, “devastating”? But since you fell for that, can I interest you in a bridge in Brooklyn?

SB 1349 does contain some welcome language calling solar energy projects of at least 1 MW in size, and up to an aggregate of 500 MW, “in the public interest,” a phrase that will help utilities when they seek approval for these projects at the State Corporation Commission. But nothing actually requires the utilities to build these projects, and the 1 MW size minimum has been carefully crafted to be above the limit for net-metered solar projects. Dominion wrote the bill for itself, not for ordinary people who want to go solar on their own.

The solar language was not originally part of SB 1349; it was imported from another Dominion bill, Delegate Yancey’s HB 2237, as a way to get buy-in from the solar industry and Democrats.

As for customer-owned solar, this was another bad year. The only concession won from Dominion was an increase in the size cap for net-metered projects from 500 kW to 1 MW, a compromise from the initial proposal of 2 MW.

Wherever else solar advocates faced utility opposition, they lost. That includes bills on community net metering, solar gardens, RPS improvements, expanded 3d party PPA availability, and a higher hurdle for standby charges. Also going down to early defeat was the renewable energy grant program that had been celebrated last year as a near-triumph (it only lacked passage again this year, plus—oh yeah—funding).

The GA did pass one of the Governor’s solar priorities, establishing the Virginia Solar Energy Development Authority (HB 2267 and others). The Authority is explicitly tasked with helping utilities find financing for solar projects; there is no similar language about supporting customer-owned solar. The Authority is supposed to identify barriers to solar, but isn’t given any tools to remove them. So we shall see.

Bills that did not require Dominion’s approval did better. Chief among these was legislation enabling Property Assessed Clean Energy (PACE) loans for commercial customers. This should help bring low-cost financing to energy efficiency and renewable energy projects at the commercial level.

And while Dominion’s sole concession to energy efficiency this year was agreeing to a “pilot program” of unspecified size as part of the SB1349 deal, natural gas utilities sought and won legislation (SB 1331) that makes it easier to win regulatory approval for energy efficiency programs that could benefit lots of customers. The difference is that natural gas companies have “decoupled” profits from sales, so it’s in their interest to help customers use energy more wisely. Dominion and Appalachian Power, by contrast, have a profit model that requires ever-increasing sales, making efficiency bad for business.

While legislators repeatedly shot down any solar bills that might be characterized as subsidies, they dropped their free market principles when it came to subsidies for coal mining. Unless the governor vetoes HB 1879, Virginia taxpayers will continue to pay tens of millions of dollars annually to prop up an uncompetitive industry with a long legacy of poisoning our air, land and water. Anyone who is ever tempted to believe a Virginia Republican’s claim to legislate based on his conservative principles and not merely on politics should check how they voted on this bill. (Here are the House votes, and here are the Senate votes.)

The limited progress made this year towards greening our energy supply does not bode well for compliance with the EPA’s Clean Power Plan. The only legislation that would have moved Virginia decisively towards compliance, by having us join the Regional Greenhouse Gas Initiative, died in committee. On the other hand, a number of bills that would have hindered compliance also died. True, SB 1349 makes the process harder by adding a hurdle to the closure of coal plants. Republicans also pushed through a bill that requires the Department of Environmental Quality to waste time and money studying whether the federal carbon reduction rules have health benefits beyond those gained by regulating conventional pollutants.

But overall, the session ended in a draw on climate issues. On the one hand, that’s bad, given that 2014 was the hottest year on record globally.* On the other hand, this is Virginia. Merely not regressing counts as progress here.

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*I know, 2014 was not hot in eastern North America, and 2015 has started out with one of those winters that make people say they could use a little global warming. Nature has a keen sense of irony. But while you were shivering, the rising sea ate a little more of our shoreline.

 

 

 

Tomorrow’s Clean Energy Lobby Day will highlight top legislative initiatives, but many are likely to fail in Dominion-friendly subcommittee

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solar installation public domainOver a hundred representatives of renewable energy and energy efficiency businesses will descend on the General Assembly tomorrow, February 3d, for Clean Energy Lobby Day. The annual event gives legislators the chance to hear from small businesses across the state that are set to grow if Virginia gets the policies right.

The tradition of a lobby day for clean energy businesses began four years ago as a way to create a counterweight to the outsized influence of utility and fossil fuel interests in the legislature. The Sierra Club organized the popular, bipartisan event its first three years. For 2015, the businesses themselves have taken over, led by a coalition group called Virginia Advanced Energy Industries, and MDV-SEIA, the solar industry trade association.

Participants will primarily discuss with legislators the bills with the greatest potential to affect their own business interests. I’ve described most of these bills in previous posts, so I’ll just list a few here, with their current status.

  • Legislation to promote Property Assessed Clean Energy (PACE) financing for energy efficiency and renewable energy on commercial properties. SB 801 (Watkins) has already passed the Senate unanimously. Its companion bill, HB 1446 (Danny Marshall), and the somewhat similar HB 1665 (Minchew) have been assigned to a subcommittee of the Counties, Cities and Towns and are on the docket for Wednesday, February 3.
  • Delegate Randy Minchew’s HB 1636, creating a program for community net metering. This is a top priority of the solar industry. Sadly, it has been assigned to the Commerce and Labor Committee’s subcommittee on Energy, typically considered a wholly-owned subsidiary of Dominion Power. Prospects aren’t good unless Delegate Minchew negotiates a deal with Dominion.
  • House bills to increase the size limit for commercial renewable energy projects eligible for net metering will also be heard in the energy subcommittee. These include HB 1950 (McClellan), HB 1912 (Lopez), and HB 1622 (Sullivan). On the Senate side, SB 764 (Edwards) and SB 1395 (Dance) were scheduled to be heard in Commerce and Labor today. I’ll update this when I hear the outcome. [Update: the Senate bills were rolled together and heard as SB 1395, which passed the committee unanimously; however, as amended it increases the project cap to 1 MW, rather than the 2MW that was originaly proposed. In addition, it contains new language limiting the project capacity to the amount of energy used, and requiring the owner to pay for the costs of interconnection equipment and other costs.]
  • The renewable energy grant program, HB 1650 (Villanueva), which passed the GA unanimously last year, has already died in a House subcommittee.
  • HB 1725 (Bulova) and SB 1099 (Stuart) would establish the Virginia Solar Energy Development Authority. Bulova’s bill is before the House Subcommittee on Energy. Stuart’s bill has already passed the Senate, with an (unfortunate) amendment to give the legislature more power over appointments.

Many of the clean energy bills on the House side will be heard in the Commerce and Labor Committee’s subcommittee on energy Tuesday afternoon. The timing is not exact; the meeting will follow the conclusion of the meeting of the full committee, in House Room D of the General Assembly building. The subcommittee’s docket has been posted here.

In addition to legislation mentioned above, the subcommittee docket includes other bills of interest, like Yost’s HB 2219 and Yancey’s HB 2237, which promote utility-owned solar, Lopez’s RPS bill, HB 1913, and Villanueva’s Coastal Protection Act, HB 2205.

Some lobby day participants will also be urging opposition to legislation that would prevent Virginia from moving forward quickly to comply with the EPA’s Clean Power Plan, which favors renewable energy and energy efficiency. One such bill, HB 2291 (O’Quinn), is on the House energy subcommittee docket. The equivalent Senate bills are in Agriculture and Natural Resources, where they have not been heard yet.