The session may be short, but the list of energy bills is long

Clean energy advocates expected this legislative session to feature fewer initiatives of interest, in part because of the shorter session and bill limits for legislators. Good news (I guess): the number of bills we are following is growing longer by the hour. 

Below are a number of bills of interest, organized by category, and then with House bills first, Senate bills second, in ascending order. I will update this post as I learn of other bills.

If you are interested in supporting or opposing any of these, you will want to act fast, since committees are hearing bills already. In Virginia, if a subcommittee or a committee votes against a bill, it is usually gone for good. 

Renewable energy and storage

HB1925 (Kilgore) Establishes, but does not fund, the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program. Kilgore put in a similar bill last year, which unfortunately did not pass. With no budget impact, this ought to pass easily. But I said that last year, too. 

HB1937 (Rasoul) is this year’s version of the Green New Deal Act. It contains policy initiatives to prioritize jobs and benefits for EJ populations and displaced fossil fuel workers and requires a transition to renewable energy by 2035, though these latter provisions are poorly integrated into the VCEA.

HB1994 (Murphy) and HB2215 (Runion) expands the definition of small agriculture generators to include certain small manufacturing businesses such as breweries, distilleries and wineries for the purposes of the law allowing these businesses to aggregate meters and sell renewable energy to a utility.

HB2006 (Heretick) exempts energy storage systems from state and local taxation but allows a revenue share assessment. This is a priority bill for renewable energy industry associations.

HB2034 (Hurst) and SB1420 (Edwards) clarifies that the program allowing third-party power purchase agreements (PPAs) applies to nonjurisdictional customers (i.e., local government and schools) as well as jurisdictional customers (most other customers). Currently, PPA projects with local governments in APCo territory have been held up due to a contract provision between the localities and APCo, and it is hoped this legislation will break the logjam.

HB2048 (Bourne) restores the right of customers to buy renewable energy from any supplier even once their own utility offers a renewable energy purchase option.  In addition, third party suppliers of renewable energy are required to offer a discounted renewable energy product to low-income customers, saving them at least 10% off the cost of regular utility service.  

HB2067 (Webert) lowers from 150 MW to 50 MW the maximum size of a solar facility that can use the Permit by Rule process. 

HB2148 (Willett) provides for energy storage facilities below 150 MW to be subject to the DEQ permit by rule process as “small renewable energy projects.” Although 150 MW is not “small,” the permit by rule process has worked pretty well, so this should be acceptable. This is a priority bill for renewable energy industry associations.

HB2201 (Jones) expands provisions related to siting agreements for solar projects located in an opportunity zone to include energy storage projects; however, according to existing language, the provision only takes effect if the GA also passes legislation authorizing localities to adopt an ordinance providing for the tax treatment of energy storage projects. (Why doesn’t the bill just go ahead and include that authorization? Don’t ask me.) This is another renewable energy industry bill.

HB2269 (Heretick) provides for increases in the revenue share localities can require for solar projects based on changes in the Consumer Price Index.  

SB1201 (Petersen) changes the definition of an “electric supplier” to include the operator of a storage facility of at least 25 MW, and subjects them to the same reporting obligations as other suppliers. 

SB1207  (Barker) is a companion to HB2201.

SB1258 (Marsden) requires the State Water Control Board to administer a Virginia Erosion and Sediment Control Program (VESCP) on behalf of any locality that notifies the Department of Environmental Quality that it has chosen not to administer a VESCP for any solar photovoltaic (electric energy) project with a rated electrical generation capacity exceeding five megawatts. The provisions become effective only if the program is funded; Marsden has submitted a budget amendment. This is also a priority bill for renewable energy industry associations.

SB1295 (DeSteph) requires utilities to use Virginia-made or US-made products in constructing renewable energy and storage facilities “if available,” but it does not require any added cost to be reasonable.

SB1420 (Edwards) is a companion bill to HB2034, clarifying PPA language for Appalachian Power territory.

Energy efficiency and buildings

HB1811 (Helmer) adds a preference for energy efficient products in public procurement.

HB1859 (Guy) amends last year’s legislation on Commercial Property Assessed Clean Energy (C-PACE) loans to allow these loans to be extended to projects completed in the previous 2 years; it also expressly excludes residential buildings of less than 5 units and residential condominiums.

HB2001 (Helmer) requires state and local government buildings to be constructed or renovated to include electric vehicle charging infrastructure and the capability of tracking energy efficiency and carbon emissions.

HB2227 (Kory) is the same as SB1224, below.

SB1224 (Boysko) requires the Board of Housing and Community Development to adopt amendments to the Uniform Statewide Building Code within one year of publication of a new version of the International Code Council’s International Energy Conservation Code (IECC) to address changes related to energy efficiency and conservation. The bill requires the Board to adopt Building Code standards that are at least as stringent as those contained in the new version of the IECC. This is one of the important bills I wrote about last week. 

Financing

HB1919 (Kory) authorizes a locality to establish a green bank to finance clean energy investments. Fairfax County has requested this authority. 

Fossil fuels 

HB1834 (Subramanyam) requires owner of carbon-emitting power plants to conduct a study at least every 18 months to determine whether the facility should be retired. It also requires notice of any decision to retire a facility to be submitted to state and local leaders within 14 days, a step that allows transition planning.

HB1899 (Hudson) sunsets coal tax credits, because it is absolutely crazy that Virginia continues to subsidize coal mining while we’ve committed to close coal plants.

HB1934 (Simon) requires local approval for construction of any gas pipeline over 12 inches in diameter in a residential subdivision. The genesis of this bill is a particular project in Simon’s district, but I was surprised this isn’t a requirement already. 

HB2292 (Cole) is similar to Rasoul’s Green New Deal bill but without the speeded-up RPS timeline. It contains a moratorium on permits for new fossil fuel infrastructure and requires programs for transitioning fossil fuel workers that guarantees them jobs at the same income they had before, and with early retirement benefits and pension guarantees. It also requires development of new job training programs; requires that 40% of energy efficiency and clean energy funding go to EJ communities; and mandates that 50 percent of the clean energy workforce come from EJ communities. 

SB1247 (Deeds) is a companion to HB1834.

SB1252 (McPike) sunsets the coal tax credits. 

SB1265 (Deeds) makes it easier for DEQ to inspect and issue stop-work orders during gas pipeline construction. 

SB1311 (McClellan) requires DEQ to revise erosion and sediment control plans or stormwater management plans when a stop work order has been issued for violations related to pipeline construction.

Climate bills 

HB2281 (Ware) would exempt certain companies that use a lot of energy from paying for their share of the costs of Virginia’s energy transition under the VCEA, driving up costs for all other ratepayers. And thus the slow chipping away at the VCEA begins. Everybody’s got a reason they’re special.

SB1282 (Morrissey) directs DEQ to conduct a statewide greenhouse gas inventory, to be updated and published every four years.

SB1284 (Favola) changes the name of the Commonwealth Energy Policy to the Commonwealth Clean Energy Policy, and streamlines the language without making major changes to the policies set out last year in Favola’s successful SB94. That bill overhauled the CEP, which until then had been a jumble of competing priorities, and established new targets for Virginia to achieve 100% carbon-free electricity by 2040 and net-zero carbon economy-wide by 2045. This year’s bill shows the Northam Administration is now fully on board, and the result is a policy statement that is more concise and coherent. 

SB1374 (Lewis) would set up a Carbon Sequestration Task Force to consider methods of increasing carbon sequestration in the natural environment, establish benchmarks, and identify carbon markets. 

And because this category would not be complete without a bill from a legislator who thinks climate action is a bunch of hooey, we have HB2265 (Freitas), which would repeal provisions of the VCEA phasing out carbon emissions from power plants, repeal the restrictions on SCC approval of new carbon-emitting facilities, and nix the provisions declaring wind, solar, offshore wind and energy storage to be in the public interest. Oh, but in case you thought Freitas was just a free market believer, or cared about cost, the bill provides that planning and development of new nuclear generation is in the public interest. 

Utility reform

Advocacy groups worked with legislators to develop a slate of bills, each a little different, that restore SCC oversight over utilities and/or benefit customers with refunds. More information about these bills is available on the Clean Virginia website.

HB1835 (Subramanyam) eliminates provisions that limit rate reductions to $50 million in the next SCC review of Dominion’s rates.

HB1914 (Helmer) changes “shall” to “may” in a number of places, giving the SCC discretion over when to count utility costs against revenues.

HB1984 (Hudson) gives the SCC added discretion to determine a utility’s fair rate of return and to order rate increases or decreases accordingly.

HB2049 (Bourne) would prevent utilities from using overearnings for new projects instead of issuing refunds.

HB2057 (Ware) changes how the SCC determines a fair rate of return for utilities and gives the SCC discretion in the treatment of certain utility generation and distribution costs, as well as in determining when a rate increase is appropriate. It also provides that when a utility has earnings above the authorized level, 100% of the overearnings must be returned to customers, up from 70% today. The SCC is also given authority to determine when a utility’s capital investments should offset overearnings. 

HB2160 (Tran) gives the SCC greater authority to determine when a utility has overearned and gives the Commission greater discretion in determining whether to raise or lower rates and order refunds. It also requires 100% of overearnings to be credited to customers’ bills, instead of 70%, as is the case today.

HB2200 (Jones) makes a number of changes to SCC rate review proceedings, including setting a fair rate of return, requiring 100% of overearnings to be credited to customers’ bills, and eliminating the $50 million limit on refunds to Dominion customers in the next rate review proceeding.

SB1292 (McClellan) requires 100% of overearnings to be credited to customers’ bills, instead of 70%, as is the case today.

EVs and Transportation energy

The Virginia Mercury ran a good article this week that covered most of these bills.  

HB1850 (Reid) increases the roadway weight limit for electric and natural gas-fueled trucks to accommodate the extra weight of batteries or natural gas fuel systems.

HB1965 (Bagby) is the Clean Car Standard bill, which would require manufacturers to deliver more electric vehicles to Virginia dealers beginning in 2025.

HB1979 (Reid) creates a rebate program for new and used electric vehicles. 

HB2118 (Keam) establishes an Electric Vehicle Grant Fund and Program to assist school boards in replacing diesel buses with electric, installing charging infrastructure, and developing workforce education to support the electric buses. 

HB2282 (Sullivan) directs the SCC to develop and report on policy proposals to accelerate transportation electrification in the Commonwealth. The bill also limits how utilities get reimbursed for investments in transportation electrification: they must recover costs through normal rates for generation and distribution, and not through rate adjustment clauses or customer credit reinvestment offsets.

HJ542 (McQuinn) requests a statewide study of transit equity and modernization. 

SB1223 (Boysko) adds a requirement to the Virginia Energy Plan to include an analysis of electric vehicle charging infrastructure and other infrastructure needed to support the 2045 net-zero carbon target in the transportation sector. 

SB1380 (Lucas) authorizes electric utilities to partner with school districts on electric school buses. The utility can own the batteries and the charging infrastructure and use the batteries for grid services and peak shaving.  

Code update

SB1453 (Edwards) revises Titles 45.1 and 67 of the Virginia Code. “The bill organizes the laws in a more logical manner, removes obsolete and duplicative provisions, and improves the structure and clarity of statutes pertaining to” mining and energy. The bill is a recommendation of the Virginia Code Commission. 

This post has been updated to add bills and correct a misstatement about the development of the utility reform agenda.

An early look at climate and energy bills in the 2021 session

Last year Virginia’s General Assembly passed more than 30 separate clean energy bills, which together put Virginia on a path to zero-carbon electricity by 2050, enabled massive investments in renewable energy, storage and energy efficiency and eased restrictions on distributed solar. 

But many of the bills that passed were not perfect, and most of the new mandates affect only the electric sector. Only about a quarter of Virginia’s greenhouse gas emissions comes from power plants, so getting serious about a zero carbon economy means finding ways to reduce emissions from transportation, buildings, industry and agriculture. 

Unfortunately, building on last year’s progress will be hard this winter, not because there aren’t plenty of opportunities, but because the legislative session that starts Jan. 13 is likely to be exceptionally short and tightly-controlled. If, as expected, Republicans force a 30-day session limit(including weekends and holidays), that means each chamber must dispose of its own bills even faster than that to meet the crossover deadline (around Jan. 28, I’m told), when bills that have passed one chamber “cross over” to be considered in the other. Leadership has responded by strictly limiting the number of bills a legislator can carry, hoping not to overwhelm the committees that have to vet the bills. 

One result is that complex bills haven’t got a prayer. Climate advocates and their legislative champions will be focused on bills that are narrowly-crafted (or at least short) and easy to explain. 

Adding to the challenge, for those who want to weigh in with their legislators, is the fact that very few bills appear in the Legislative Information System yet, in another departure from prior years. 

And then of course, there’s COVID-19, disrupting normal procedures and making it harder than ever for citizens to make their voices heard. 

So yeah, ain’t we got fun?

What follows is a list of bills that are far along in the drafting process, have a patron, and are likely to be filed this year. I’m omitting other initiatives that don’t seem likely to make it into legislation this year or that I don’t have enough information to go on. I have not seen the language for any of these bills, so descriptions are based on previous years’ legislation, information from legislators and advocates, or both.

Building codes

One of the most cost-effective ways to lower carbon emissions from buildings is by constructing them with an eye to saving energy right from the start. If the builder puts more insulation in the walls and attic, reduces draftiness and installs better windows, buyers will save money and future residents will have lower heating and cooling costs for decades. Any small increases in a buyer’s mortgage costs are recouped many times over in utility bill savings.  

A national standard for energy efficiency in residential buildings even takes the guesswork out. The standard, known as the International Energy Efficiency Code (IECC), is updated every three years by a national organization referenced in the law setting out procedures for adopting Virginia’s residential building code. Unfortunately, the Board of Housing and Community Development (BHCD) has long ignored its statutory obligation to keep Virginia’s building code at least consistent with these nationally recognized standards. 

As a result of that, and BHCD’s slow review process, Virginia’s building code is still behind the 2012-2018 IECC’s consumer protections.  Unless BHCD is compelled to protect residents consistent with national standards, sub-standard housing will continue to be built for years into the future.    

Ideally, the attorney general or the governor would direct BHCD to correct its latest decision to extend substandard code protections. Regardless, this long history of our building code underperforming national standards calls for legislative action. Sen. Jennifer Boysko, D-Fairfax, is expected to introduce legislation that would require the BHCD to adopt the latest IECC within 12 months.  

[Update: Boysko’s bill is SB1224. Delegate Kory has also introduced HB2227.]

Right to buy

It’s a strange paradox. The Virginia Clean Economy Act is one of the most ambitious clean energy laws in the U.S., calling on our utilities to add thousands of megawatts of solar and wind energy in the coming years. And yet most Virginia customers still can’t buy solar energy unless they install it on their own property. 

This is an absurd position for Virginia to be in today, insisting on an energy transition but not allowing customers to actually go buy electricity from solar. Indeed, this restriction threatens Virginia’s ability to meet its carbon reduction goals, for one reason in particular: data centers. 

Data centers are energy hogs, and this sector has grown so fast in Virginia it now makes up 12 percent of Dominion Energy’s total electric demand in the state. Most data center operators say they want to run on renewable energy, and we need them to make good on that. Otherwise, cutting carbon will be harder and more expensive for the rest of us. 

But we have to make it possible for them to do so. Right now, only the really big companies, like Microsoft or Facebook, can get Dominion to come to the table on solar deals. The rest don’t have that kind of market power. Neither, of course, do residential customers and small businesses. 

The irony is that customers actually had the right to go outside their utility to buy 100% renewable energy until just recently. The Virginia Code gives customers that right so long as their own utility wasn’t offering a 100% renewable energy product. But first Appalachian Power, and then Dominion Energy Virginia, triggered a “kill switch” by offering their own products. The trouble is, these products cost more, use existing facilities instead of adding new renewable energy to the grid, and in Dominion’s case, include the poison pill of dirty biomass energy.

Last year saw the passage of a bill patroned by Del. Jeffrey Bourne, D-Richmond, that would return to customers their right to go outside their utility to buy renewable energy from sellers who qualify as competitive service providers. But there was a catch: an amendment tacked on at the last moment made the bill effective only if passed again in 2021.

Delegate Bourne is bringing the bill back this year, with added language that would require competitive service providers who sell renewable energy in Virginia to offer a discount to low and moderate income consumers. The providers would have to offer 100% renewable energy at a 10% discount off the cost of the utility’s standard residential rate. [Update: the bill is HB2048.]

Workers install solar panels at Huguenot High School in Richmond. (Sun Tribe Solar)

Solar for public schools and other government buildings

Last year the VCEA and Solar Freedom legislation expanded the ability of customers to finance onsite solar projects by raising the cap on third-party power purchase agreements (PPAs) and making the program available to a wider range of customers in Appalachian Power territory, where it had previously been restricted. The new limits in Dominion territory are 500 MW for “non-jurisdictional” customers like local governments and schools and 500 MW for “jurisdictional” customers like residents and businesses; in Appalachian Power territory the new limit is 40 MW for all customers. This year a bill from Sen. John Edwards, D-Roanoke, clarifies that the program in Appalachian Power territory applies to non-jurisdictional customers as well as jurisdictional customers. 

The bill also expands a pilot program for municipal net metering established in 2019 that allowed a local government to use surplus electricity generated by solar panels on one building for another building also owned by the locality. As originally enacted, however, the pilot program did not allow the locality to use PPA financing for its solar panels, a restriction that prevents budget-conscious local governments from using the program. Senator Edwards’ bill will let local governments of both Dominion and APCo use PPAs for solar projects installed under the pilot program. In addition, the previous caps on the municipal net metering pilot program are removed in favor of the general PPA program caps. 

[Update: Delegate Hurst introduced HB2049, which just addresses PPAs in APCo territory.]

Transportation

What RGGI does for the electric sector, the Transportation Climate Initiative (TCI) is supposed to do for transportation. As Sarah Vogelsong reported last week, Virginia is participating in the development of the multistate compact designed to lower carbon emissions from the transportation sector 30 percent by 2032, but it hasn’t yet pledged to join the compact. There may be some details to work out before that happens, including resolving concerns from environmental justice leaders who believe more of the revenues should go to historically underserved communities. So whether we will see a TCI bill this year is anyone’s guess, but I’ve included it here because of the impact it would have if it does show up.

Three other transportation bills are more certain. One, called the Clean Car Standard, simply requires manufacturers of electric vehicles to send some of their vehicles to Virginia dealers, so consumers can actually buy them. (Weirdly, many dealers are opposed.) Del. Lamont Bagby, D-Henrico, is expected to carry the bill; its passage is a priority for a long list of environmental and grassroots groups. [The bill is HB1965.]

A bill from Del. David Reid, D-Loudoun, would have Virginia offer incentives for the purchase of electric vehicles, following recommendations from a 2019 study. I’m told we should also expect at least one bill from Del. Mark Keam, D-Fairfax, and one from Sen. Louise Lucas, D-Portsmouth, to get more electric school buses on the road. [Reid’s bill is HB1979. Keam’s is HB2118.]

Another bill would require a Transit Modernization Study, which would gather information about how the public is currently being served by the existing transit system, including details as specific as which bus stops in which communities have benches and covered facilities. The study will determine which transit systems have infrastructure needs related to safety, reliability and environmental impact, such that when funding is available, the results of the study can ensure that funding is allocated equitably and to be used to make non-car options more appealing. A patron will be announced soon. [The patron is McQuinn, and the bill is HJ542.]

Environmental Justice

Del. Shelly Simonds, D-Newport News, and Keam are expected to introduce a bill that will expand last year’s Environmental Justice Act to change how the state forms and carries out environmental justice policies within agencies, and to ensure greater public involvement in the permitting process at DEQ. Among other issues, residents often learn too late that Virginia’s Department of Environmental Quality has finalized a permit for a facility that will add to the pollution in their community. The legislation would also require DEQ to consider the cumulative impact of polluting facilities — that is, to take into account whether the community is already overburdened.

Low-income ratepayer protections

The State Corporation Commission has been busy writing implementing regulations for many of the programs established by 2020 legislation. Some of the rules that have come out of the SCC are disappointing enough that I wouldn’t be surprised to see corrective legislation, but probably not until next year. One exception, where legislation is needed right away, concerns the Percentage of Income Payment Program. 

The PIPP is an important feature of the Virginia Clean Economy Act  that caps utility bills for qualifying low-income customers. The SCC convened a stakeholder group to hammer out the details, but concluded the statute did not provide enough information to go on. An SCC order issued Dec. 23 left open critical elements of the program, and urged the General Assembly to provide additional legislative guidance. It is very late in the year to craft a response and secure a patron, but the administration and advocates are trying. 

Pipelines

A bill from Sen. Jennifer McClellan, D-Richmond, adds specificity to the currently vague process that governs small to medium changes in pipeline routes and may impact permit conditions like erosion control measures. Currently it is unclear under what conditions DEQ must re-examine plans it has previously approved. The legislation will bring clarity and explicit direction to all parties involved. [The bill is SB1311.]

At least one and possibly two other bills that would affect pipeline construction are also said to be in the works, but I have no details. [See SB1265, from Senator Deeds.]

Fossil fuel moratorium

Last year’s Virginia Clean Economy Act contains a two-year moratorium on new fossil fuel electric generating plants. Del. Joshua Cole, D-Fredericksburg, is expected to introduce legislation expanding this into a permanent moratorium on all new fossil fuel infrastructure, to take effect in 2022. The bill would exempt retail projects like local gas hook-ups but would otherwise affect not just electric generation, but pipelines, fracking infrastructure, refineries and processing facilities. 

Utility reform

Last year saw a number of bills that would affect how our utilities do business. These issues have not gone away, so we should expect to see legislation to strengthen SCC oversight and pare back the ability of utilities to pocket overearnings. [Clean Virginia produced a whole slew of bills. These include HB1835, HB1914, HB1984, HB2049, HB2160, and HB2200.]

Will there be bad bills?

Yes, we should expect to see a few bills from Republicans attempting to roll back parts (or all) of the Virginia Clean Economy Act, or trying to block Virginia’s participation in the Regional Greenhouse Gas Initiative. These aren’t expected to get far in the Democratically-controlled General Assembly. [So far the worst of the bunch is HB2265.]

This post originally appeared in the Virginia Mercury on January 4, 2021. It has been updated to reflect additional bill information.

COVID-19 throws a lemon at Virginia’s plan for an energy transition. It’s time for lemonade.

solar panels on a school roof

The solar panels on Wilson Middle School are saving money for Augusta County taxpayers. Photo courtesy of Secure Futures.

In mid-March, the Virginia General Assembly passed legislation to transition our economy from fossil fuels to clean energy over the coming years. Two weeks later, Virginia shut down in response to the COVID-19 pandemic. Among the businesses whose very existence is now in peril are the energy efficiency companies and solar installers we will be counting on to get us off fossil fuels.

Home weatherization and energy efficiency programs have come to an almost complete halt in Virginia, including programs run by Dominion Energy Virginia. Nationwide, the energy efficiency sector has lost almost 70,000 jobs. Meanwhile, companies that install solar, especially rooftop systems, report plummeting sales. The Solar Energy Industries Association reports that nationally, 55 percent of solar workers are already laid off or suffering cutbacks.

The timing seems terrible — although to be fair, there’s no good time for an economy-crushing, worldwide pandemic. Eventually, however, the virus will run its course or be defeated through vaccine or cure. At that point, we will face a choice: we can stagger blinking out into the sunlight aimlessly wondering now what?, or we can execute the well-developed plan we have spent these weeks and months formulating.

Let’s go with the second option.

First, it’s worth remembering that nothing happening now will change the trajectory of clean energy. Solar and wind had banner years in 2019, continuing their steady march to dominance. Wind has become the largest single source of electricity in two states, Iowa and Kansas. The island of Kauai in Hawaii is now 56 percent powered by renewable energy, mostly solar. Across the U.S. wind, solar and hydro produce more electricity than coal. Wind is the cheapest form of new electric generation nationally; solar takes pride of place in Virginia.

Meanwhile, fossil fuel is even more firmly on its way out. Six of the top seven U.S. coal companies have gone into bankruptcy since 2015. That was before the lockdown sent energy demand down, further hurting high-priced coal.

Fracked gas helped kill coal but is itself vulnerable to price competition from renewables. Odd as it sounds, the collapse in oil prices will make natural gas more expensive. That’s because oil producers in Texas and North Dakota are closing wells that produced natural gas along with oil. The tightening supply of gas may finally make fracking companies in Appalachia profitable, but it means higher prices for utilities. Wind and solar will just keep looking better.

The Trump administration is still trying futilely to hold back the tide, but the U.S. will get a lot farther riding the wave than struggling against it. Congressional leaders should declare the country “all in” on clean energy. Instead of bailing out the highly polluting fossil fuel industries, they should put that money to work creating more jobs and economic development — and actually doing something about climate change — with energy efficiency and renewables.

Congress should return the Investment Tax Credit for solar (and offshore wind) to the 30 percent level in effect last year and keep it there, instead of continuing the phase-out now in effect. Congress should also give solar owners the option of taking the credit as a cash grant, as it did during the last recession, and for the same reason: tax-based incentives are less useful in a recession, when companies can’t use the credits.

Virginia’s Sens. Tim Kaine and Mark Warner have a critical role to play in convincing their colleagues to support solar. So far neither is rising to the task.

On the state level, Northam did the right thing in signing this year’s energy legislation, allowing utilities and industry members to start planning for the future. But the Clean Economy Act gets wind and solar off to a very slow start; Dominion doesn’t have to build Virginia solar for five years yet. And though the new laws remove many policy constraints on customer-sited solar, they offer next to nothing in the way of financial incentives.

Governor Northam should make it clear he intends to make rooftop solar a priority for next year, along with projects on closed landfills, former coal mine areas, and other brownfields, with a special focus on areas hardest-hit economically. He can also encourage corporations that do business in Virginia to meet their sustainability goals with Virginia wind and solar, starting right now.

The governor should also prioritize building efficiency. Virginia will be adopting a new residential building code this year, and if past years are any indication, its energy efficiency provisions will fall short of the most recent model code standard. It’s up to the governor to make sure Virginia adopts the full code.

Local governments are already taking advantage of suddenly-empty buildings to accelerate maintenance and repairs. But it’s a good time to think bigger, with new financing tools available that make energy efficiency retrofits and solar facilities cash-positive right from the start.

Energy performance contracting allows the energy savings to pay for retrofits. The Department of Mines, Minerals and Energy keeps a list of pre-qualified energy service companies and offers expertise to help local government employees navigate the process.

This year’s legislation also greatly expanded local governments’ ability to finance on-site solar through third-party power purchase agreements, effective July 1. The PPAs are structured so that a school district, municipality or any commercial or non-profit customer can have a solar array installed at no cost, paying just for the energy produced.

In December, Fairfax County awarded contracts for PPAs to install solar on more than a hundred sites, including schools and other government buildings. The county’s contract is “rideable,” which allows other counties and cities to piggyback, getting the same terms without the need for new contract negotiations.

Unfortunately, local governments in southwest Virginia are prevented from pursuing PPAs — not by state legislation, which allows it starting July 1, but by a contract with Appalachian Power that governs their electricity purchases from the utility. The contract is up for renewal this year; disgracefully, APCo is refusing to agree to new terms allowing the localities to use solar PPAs. APCo should back off, and let local governments in economically depressed southwest Virginia start saving money and supporting solar jobs this year.

Arlington County has gone beyond on-site solar, contracting for a share of a large solar farm in southern Virginia that will provide more than 80 percent of the electricity for county government operations. It’s a model any locality can adopt.

Virginia residents and businesses also have good reasons to focus on clean energy. The enforced down-time many people are experiencing means more time to research options, and companies are motivated to offer low prices on energy efficiency upgrades and rooftop solar.

The federal government offers more generous tax credits this year than next. Credits for residential energy efficiency equipment and a deduction for energy efficient commercial buildings expire at the end of this year.

The investment tax credit for solar (as well as for geothermal heat pumps, fuel cells and small wind turbines) stands at 26% for projects placed in operation this year, but it will drop to 22% in 2021. It falls to 10% for commercial customers and disappears altogether for residential customers in 2022. If Congress acts to raise the credit to 30%, buyers will get an even bigger boost. If it doesn’t, there will be a rush this year to get projects done by the end of the year, so customers should secure their place in line now.

Virginia nonprofits have helped hundreds of residents and businesses save money on solar and EV chargers through bulk purchasing programs. Virginia Solar United Neighbors just announced a series of virtual information sessions to promote the Arlington Solar EV Co-op. And LEAP, which closed operations temporarily due to the virus, reports it has restarted two programs, Solarize NOVA and Solarize Piedmont.

In an ideal world, the U.S. would already be well along in executing a comprehensive plan for a clean energy transition, one that includes job retraining for workers, and that resists counterproductive efforts to save the fossil fuel industry. But we can do the next best thing, and use the tools of government, the market and consumer choice to speed us in the right direction.

COVID-19 has handed all of us a big, fat lemon. Let’s make some lemonade.

 

A version of this article appeared originally in the Virginia Mercury on April 30, 2020.

 

Yeah, I’m not perfect either. Pass the Clean Economy Act.

People gathered with signs supporting climate action

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

When it was first introduced, and before the utilities and special interests got their grubby little paws on it, the Clean Economy Act was an ambitious and far-reaching overhaul of Virginia energy policy that turned a little timid when it came to particulars.

Sausage-making ensued.

The bill that emerged from the grinder inevitably allows Dominion Energy to profit more than it should. (Welcome to Virginia, newcomers.) The energy efficiency provisions, which I thought weak, became even weaker, then became stronger, then ended up somewhere in the middle depending on whether you were looking at the House or Senate version. The renewable portfolio standard, complicated to begin with, is now convoluted to the point of farce — and to the extent I understand it, I’m not laughing.

Yet the bill still does what climate advocates set out to do: It creates a sturdy framework for a transition to 100% carbon-free electricity by 2045 (the House bill) or 2050 (the Senate bill).

It’s worth taking a moment to marvel at the very idea of a strong energy transition bill passing in a state that still subsidizes coal mining. Even a year ago, this would not have been possible. That we have come this far is a tribute not just to the Democrats who are making good on their pledge to tackle climate, but to the thousands of grassroots activists who worked to elect them and then stayed on the job to hold them to their promises.

The Clean Economy Act works by tackling the problem from multiple directions in a belt-and-suspenders approach:

• The legislation puts an immediate two-year moratorium on any new carbon-emitting plants. The concept came straight from the grassroots-led Green New Deal, and it creates space for the other provisions to kick in.

• It requires DEQ to implement regulations cutting carbon emissions through participation in the Regional Greenhouse Gas Initiative. RGGI uses market incentives to cut carbon emissions from power plants 30 percent by 2030. The Department of Environmental Quality will auction carbon allowances to power plant owners and use the auction money primarily for coastal resilience projects and energy efficiency projects for low-income residents. The Department of Housing and Community Development will be in charge of this efficiency spending, not Dominion.

• The Clean Economy Act takes RGGI out further, ensuring that Virginia reaches zero emissions by 2045 (House bill) or 2050 (Senate bill).

• It requires the closure of most coal plants in Virginia by the end of 2024. The newest of these, the Virginia City Hybrid coal plant, must close by the end of 2030 unless it achieves 83 percent emission reductions through carbon capture and storage, the technology it was allegedly designed for. Biomass plants have to close by the end of 2028.

• In place of fossil fuels, utilities have to build or buy thousands of megawatts of solar, on-shore wind, offshore wind and energy storage. Yearly solicitations for wind and solar will ensure sustained job creation employing thousands of workers. Thirty-five percent of all this must be competitively procured from third-party developers, a requirement that lowers costs and makes it harder for utilities to overcharge for the projects they build themselves.

• The storage requirement in particular is notable because batteries compete directly with gas combustion turbines to serve peak demand. The more storage a utility builds, the weaker its case for building new gas peakers becomes.

• For the first time, Virginia utilities will have to achieve energy efficiency savings, not just throw money at the problem. Under the stronger House bill, Dominion must achieve 5 percent cumulative energy savings by 2025. Appalachian Power must achieve 2 percent. Starting in 2026, the SCC will set efficiency goals every three years. Achieving savings ought to be easy; a new ranking of progress on efficiency puts Dominion at 50th out of 52 utilities. Low-hanging fruit, anyone? The Clean Economy Act also calls for 15 percent of efficiency spending to be allocated for programs benefiting low-income, elderly, disabled individuals and veterans.

• Also for the first time, the legislation requires the State Corporation Commission to consider the “social cost of carbon.” That puts one more thumb on the scales weighing against fossil fuels.

• If by January of 2028 we are still not on track, the House bill empowers the secretaries of natural resources and commerce and trade to put a second moratorium on new fossil fuel facilities.

One other element of the bill is worth mentioning, given the questions about how much all these new projects and programs will cost. The legislation creates a “percentage of income payment program” for low-income ratepayers to cap electricity costs at 6 percent of household income, or 10 percent if they use electric heat. The program includes provisions for home energy audits and retrofits.

As I said at the outset, the bill is not without its flaws. The cost of offshore wind energy is “capped” in the bill at 1.6 times the cost of energy from a gas peaker plant, though I’m told negotiations continue and the adder may be reduced. Regardless of the number, this makes as much sense as capping the cost of apples at some number above the cost of Cheetos. Why are we comparing a carbon-free source of energy that is getting cheaper every year with one of the dirtiest and most expensive fossil fuel sources? On behalf of the offshore wind industry: Please, I’m insulted.

Virginia will be a leader on offshore wind, but we are not the first, and we know the price of electricity from the other U.S. projects already under contract. Prices are already well below gas peaker plant levels. The CEA ought to cap the cost of the Virginia project at 10 or 20 percent above the lowest-priced comparable offshore wind project, which would allow plenty of room for differences in wind speeds, distance from shore and other variables.

On second thought, as a point of pride, Dominion should reject any adder at all, and insist on capping its costs below those of all the northeastern projects. Have some confidence in yourselves, people!

My other complaint is that the Clean Economy Act’s nearly incomprehensible renewable portfolio standard fails to deliver. Yes, other provisions of the bill require the utilities to build a lot of wind and solar. But nothing requires them to use the renewable energy certificates (RECs) associated with those facilities for the RPS.

If I totally lost you with those acronyms, it’s okay. Just know that RECs are the bragging rights associated with renewable energy, and they can be bought and sold separately from the electricity itself. If Dominion builds a solar farm in Virginia and sells the RECs to Microsoft or the good people of New Jersey, those folks have bought the right to claim the renewable energy regardless of whether they actually get their electrons straight from the solar farm. Virginia would be left with a solar farm, but legally, no solar energy.

RECs also fetch different prices according to the kind of renewable energy they represent and how many are on the market. Everyone wants solar, so solar RECs cost more. RECs from hundred-year-old hydroelectric projects are not in demand, so they are cheap.

As written now, the Clean Economy Act sets up an RPS that doesn’t require any wind or solar RECs at all (excepting a miniscule carve-out for small wind and solar that can also be met with “anaerobic digestion resources,” possibly a reference to pig manure).

The RPS can be met with RECs from several sources less desirable than solar, and therefore cheaper. These include old hydro dams, Virginia-based waste-to-energy and landfill methane facilities and biomass burned by paper companies WestRock and International Paper. As a result, utilities will buy RECs from those sources to meet the requirements.

Only once utilities run out of cheaper RECs from eligible sources will they be forced to apply RECs from any of the wind and solar they are building. Until that time, Dominion and APCo will sell the RECs from the new solar farms to the highest bidder, while Virginia customers shell out potentially hundreds of millions of dollars for RECs no one really wants.

That’s not fair to the Virginians who are paying for the wind and solar projects to be built and who have a right to expect wind and solar will be a part of their energy supply as a result. Legislators can correct this with a very simple requirement that RECs from the new facilities mandated by the law be applied to the RPS.

And, while I am telling legislators what to do, they ought to remove the eligibility of paper company biomass. This provision seems to have been added to the bill (in obscure, coded language) simply because WestRock has talented lobbyists and the political power to demand a cut of the action. But do we ratepayers want to buy their RECs? No, we do not.

WestRock is doubtless unhappy about losing the nice stream of unearned income it’s been getting from selling thermal RECs to Dominion under Virginia’s voluntary RPS. But there is no good reason for electricity customers to subsidize a Fortune 500 corporation whose CEO earned $18 million last year and whose Covington mill, according to EPA data, spews out more toxic air emissions than any other facility in Virginia including Dominion’s Chesterfield coal plant. That’s not clean energy.

Fortunately (I guess), the RPS is not the heart and soul of the Clean Economy Act. For the next several years, its slow ramp-up makes it barely even relevant, and it is the next several years that matter most in our response to the climate crisis.

Joining RGGI, cutting emissions, implementing energy efficiency, building renewable energy and storage, closing coal and biomass plants: those are the mechanisms of the Clean Economy Act that will drive Virginia’s transition to 100% clean energy.

And so, having offered my helpful suggestions to improve the nutritional content of this sausage, I will add just one more thing:

Pass the bill.

This column originally ran in the Virginia Mercury on February 24, 2020. That afternoon, the Senate Commerce and Labor committee conformed the House version of the bill to the weaker Senate version and passed it out of committee. House Labor and Commerce meets today and is expected to conform the Senate bill to the stronger House language. Assuming both chambers pass the bills without further amendments, the bills will then go to a conference committee (three senators, three delegates) to resolve the differences, and the resulting language will go to the Governor. 

It’s halftime at the GA, and do we ever have a show!

battle scene

Tense negotiations over the Clean Economy Act. (Aniello Falcone, Metropolitan Museum of Art)

Welcome to “Crossover,” the day on which the Virginia House and Senate have to finish the work on their bills and send them over to the other chamber. This is sudden death time; if a bill didn’t get across the finish line in time, it is dead for the year.

In past years, henceforth to be known as “the bad old days,” almost nothing good even got out of committee, much less reached Crossover. Clean energy advocates could pretty much plan vacations for the second half of February.

This year the Democrats are on a tear, especially in the House. Yes, a lot of good bills have been heavily watered down. This is still the Old Dominion, with the emphasis on Dominion. And it is definitely too early to break out the champagne, because the action isn’t over for the bills still in play. But overall, 2020 is shaping up to be a watershed year for clean energy.

BILLS STILL ALIVE

Energy Transition

HB1526/SB851, the Clean Economy Act, has been the subject of intense and continuous negotiation. First there were a bunch of amendments that weakened it; then there were a bunch that strengthened it. It’s been a wild ride, and we may still see more changes during the second half of Session. But it’s alive! (HB1526 passed the House 52-47; Democrats Rasoul and Carter voted no. SB851 passed the Senate on a party-line vote of 21-19.)

SB94 (Favola) rewrites the Commonwealth Energy Policy to bring it in line with Virginia’s commitment to dealing with climate change. The bill sets a target for net-zero greenhouse gas emissions economy wide by 2045, and in the electric sector by 2040. This section of the Code is for the most part merely advisory; nonetheless, it is interesting that Dominion Energy supported the bill. (Passed the Senate 21-18, on party lines.)

Delegate Reid’s HB714 is similar to SB94 but contains added details, some of which have now been incorporated into SB94. (Passed the House 55-45 with a substitute.)

HB672 (Willett) establishes a policy “to prevent and minimize actions that contribute to the detrimental effects of anthropogenic climate change in the Commonwealth.” State agencies are directed to consider climate change in any actions involving state regulation or spending. Local and regional planning commissions are required to consider impacts from and causes of climate change in adapting comprehensive plans. (Passed the House 55-44 with a substitute.)

HB547 (Delaney) establishes the Virginia Energy and Economy Transition Council to develop plans to assist the Commonwealth in transitioning from the use of fossil fuel energy to renewable energy by 2050. The Council is to include members from labor and environmental groups. (Passed the House 54-45.)

RGGI bills, good and bad

The Democratic takeover of the General Assembly means Virginia will finally join the Regional Greenhouse Gas Initiative (RGGI), either according to the regulations written by DEQ or with a system in place that raises money from auctioning carbon allowances.

HB981 (Herring) and SB1027 (Lewis) is called the Clean Energy and Community Flood Preparedness Act. It implements the DEQ carbon regulations and directs DEQ to enter the RGGI auction market. Auction allowances are directed to funds for flood preparedness, energy efficiency and climate change planning and mitigation. We are told this is the Administration’s bill. A similar bill, HB20 (Lindsey), was incorporated into HB981. (HB981 passed the House 53-46. SB1027 passed the Senate 22-18.)

SB992 (Spruill) requires the Air Board to give free allowances for three years to any new power plant that was permitted before June 26, 2019, the effective date of the carbon trading regulations. Essentially it gives special treatment to two planned gas generation plants that aren’t needed and therefore have sketchy economics unless they get this giveaway. Clean energy advocates will be looking to kill this one in the House. (Passed the Senate 27-13. A number of Democrats who should know better voted for the bill.)

RPS

The Clean Economy Act contains 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 appears to be identical to the RPS and storage provisions of the CEA (of which Sullivan is also the patron). (Passed the House 52-47.)

Customer-sited solar/net metering

Solar Freedom SB710 (McClellan) and HB572 (Keam) lifts barriers to customer-sited renewable energy such as rooftop solar. The changes include lifting the caps on PPAs and net metering, and eliminating standby charges. Nearly identical versions were filed by Delegates Lopez (HB1184) (rolled into HB572) and Simon (HB912) (ditto). SB532 (Edwards), a stand-alone bill to make PPAs legal, was rolled into SB710. (SB710 passed the Senate 22-18 with a substitute that is much more limited than the original bill. HB572 passed the House with just a minor substitute 67-31. HB1647 (Jones) is a Solar Freedom bill that also includes community solar. (Passed the House 55-45.) Several provisions of Solar Freedom also appear in the Clean Economy Act.

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 increase the cost of the solar facility by more than 5%, or decrease the expected output by more than 10%. (HB414 passed the House 95-4. SB504 passed the Senate 40-0.)

Community solar

HB1647 (Jones) (see above) includes community solar in a bill that otherwise looks like Solar Freedom.

SB629 (Surovell) creates a program for “solar gardens.” (Substitute passed the Senate 39-0.)

HB1634 (Jones) requires utilities to establish shared-solar programs that allows customers to purchase subscriptions in a solar facility no greater than 5 MW. (Amended with a substitute; it now looks a lot like SB629. Passed the House 99-0.)

HB573 (Keam) affects the utility-controlled and operated “community solar” programs required by 2017 legislation. 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.” (Passed the House 90-8.)

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. (Passed House unanimously with substitute.)

SB860 (Mason) and HB1664 (Hayes) puts the construction or purchase of at least 5,200 MW of offshore wind in the public interest. (SB860 passed the Senate 22-18. HB1664 amended to incorporate HB1607, but with less gold-plating than the other bill. HB1664 passed the House 65-34.)

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. (HB1607 amended to incorporate HB1664; only 1664 moves forward. SB998 passed the Senate 40-0.)

Nuclear and biomass

SB828 and SB817 declare that any time the Code or the Energy Policy refers to “clean” or “carbon-free” energy, it must be read to include nuclear energy. In subcommittee, Senator Lewis suddenly announced he was amending the bills to add “sustainable biomass” as well. After an uproar and a crash course on biomass, both bills eventually went back to being only about nuclear. (Both bills passed the Senate unanimously.) Unfortunately, some biomass from paper companies did creep into the Clean Economy Act in spite of the best efforts of clean energy advocates.

Energy Efficiency

HB1526/SB851, the Clean Economy Act, contains a mandatory energy efficiency resource standard (EERS) and contains other provisions for spending on low-income EE programs. HB981 (the RGGI bill) specifies 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. (HB1450 passed House 75-24,picking up a respectable number of Republicans. SB354 stricken at request of patron in C&L.)

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. (Passed the House, 99-0.)

HB575 (Keam) beefs up the stakeholder process that Dominion and APCo engage in for the development of energy efficiency programs. (Passed the House 99-0 and referred to Senate C&L.)

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. (Passed the Senate 40-0.)

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. (Passed the Senate 26-14.)

Energy storage

HB1183 (Lopez) requires the SCC to establish a task force on bulk energy storage resources. (Passed the House 91-9 with a substitute.)

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. (Passed the Senate 20-19 with a substitute.)

Siting, permitting, and other issues with utility-scale renewable energy

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. (Passed the House 81-12, now goes to Senate Finance.)

HB656 (Heretick) and SB875 (Marsden) allow local governments to incorporate into their zoning ordinances national best practices standards for solar PV and batteries. (Both bills passed their chambers unanimously with substitute language.)

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. (HB1131 Passed the House 54-42 with a substitute. SB762 passed Senate 40-0.)

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. (HB657 passed the House with a substitute, 59-41. SB893 was passed by indefinitely—killed—in Local Government.)

HB1434 (Jones) and SB763 (Barker) reduces the existing 80% machinery and tools tax exemption for large solar projects. (HB1434 passed the House 57-41. SB763 passed the Senate 40-0.) 

SB870 (Marsden) authorizes local planning commissions to include certain regulations and provisions for conditional zoning for solar projects over 5 MW. (Passed Senate 40-0 with a substitute.)

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. (Passed House 89-7.)

Grants, tax deductions, tax credits and other financing

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. (Passed House 75-23. Assigned to Senate Committee on Local Government.)

SB754 (Marsden) authorizes utilities to establish on-bill financing of energy efficiency, electrification, renewable energy, EV charging, energy storage and backup generators. (Passed Senate 40-0 with a substitute.)

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. (Passed the House 95-4.)

HB1707 (Aird) makes changes to the Clean Energy Advisory Board, which is (already) authorized to administer public grant funding. (Passed the House 65-33 with a substitute. Referred to Senate Ag.)

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. (Passed the Senate 32-7. Senator Surovell has requested a budget amendment of $1 million for the fund. )

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. (Passed the Senate 40-0.)

SB542 (Edwards) repeals the sunset date on crowdfunding provisions and provides fixes for certain existing obstacles to this financing approach. (Passed the Senate 40-0.)

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. (HB868 passd the House 55-44. But note that its Senate companion SB376 was passed by indefinitely in C&L.)

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. (HB889 passed the House 56-44. But its Senate companion SB379 passed by indefinitely in C&L.)

Other utility regulation

HB528 (Subramanyam) requires the SCC to decide when utilities should retire fossil fuel generation. (Passed the House 55-44.)

HB1132 (Jones, Ware) put the SCC back in control of regulating utility rates. (Passed the House 77-23.)

SB731 (McClellan) also affects rates, in this case by addressing a utility’s rate of return. The SCC determines this rate by looking first at the average returns of peer group utilities, and then often going higher. The bill lowers the maximum level that the SCC can set above the peer group average. (Passed the Senate 38-1.)

HB167 (Ware) requires an electric utility that wants to charge customers for the cost of using a new gas pipeline to prove it can’t meet its needs otherwise, and that the new pipeline provides the lowest-cost option available to it. (Note that this cost recovery review typically happens after the fact, i.e., once a pipeline has been built and placed into service.) Last year Ware carried a similar bill that passed the House in the face of frantic opposition from Dominion Energy, before being killed in Senate Commerce and Labor. (Passed the House unanimously with a substitute. It will now go to Senate C&L, where it may still have trouble from a Dominion-friendly committee.)

DEAD FOR THE YEAR

Green New Deal HB77 (Rasoul) sets out an ambitious energy transition plan and includes a fossil fuel moratorium. (Sent from Labor and Commerce to Appropriations, where it was not brought up. This is a polite way of killing a bill without anyone having to vote on it).

Undercutting RGGI HB110 (Ware) says that if Virginia joins RGGI, DEQ must give free carbon allowances to any facility with a long-term contract predating May 17, 2017 that doesn’t allow recovery of compliance costs. Rumor has it the bill was written to benefit one particular company. (Left in Labor and Commerce.)

Clean energy standard Instead of an RPS, SB876 (Marsden) proposed a “clean energy standard” that made room for some coal and gas with carbon capture. (Recognizing a number of problems with this approach, Senator Marsden rolled his bill into SB851; that’s GA-speak for killing a bill while still giving the patron points for trying).

Greenhouse gas inventory HB525 (Subrmanyam and Reid) require a statewide greenhouse gas inventory covering all sectors of the economy. (Laid on the table in a subcommittee, which also means it was killed.)

Brownfields 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. (Stricken from docket in House Ag.) 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. (Continued to 2021, yet another polite way of killing a bill, though it leaves them not technically dead. So should we call them the undead? Let’s hope the concept is resurrected next year, anyway.)

Local action HB413 (Delaney) authorizes a locality to include in its subdivision ordinance rules establishing minimum standards of energy efficiency and “maintaining access” to renewable energy. (Left in Cities, Counties and Towns.)

Retail choice 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. (Continued to 2021.)

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. (Continued to 2021.)

Net metering 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.) (Continued to 2021.)

Utility restructuring

HB1677 (Keam) replaces Virginia’s current vertically-integrated monopoly structure with one based on competition and consumer choice. Existing monopoly utilities would be required to choose between becoming sellers of energy in competition with other retail sellers, or divesting themselves of their generation portfolios and retaining ownership and operation of just the distribution system. Other features: a nonprofit independent entity to coordinate operation of the distribution system; performance-based regulation to reward distribution companies for reliable service; consumer choices of suppliers, including renewable energy suppliers; an energy efficiency standard; a low-income bill assistance program; and consumer protections and education on energy choices. (This was politely continued to 2021 in Labor and Commerce with no debate. The patrons were complimented for “starting a conversation.”)

HB206 (Ware) was, I’m told, the beta version of Delegate Keam’s HB1677. (Incorporated into HB1677, which was continued to 2021.)

SB842 (Petersen) seeks to achieve the same end as HB1677 and HB206, but it puts the SCC in charge of writing the plan. The bill 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. (Continued to 2021.)

Anti-renewable energy bills

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. (Laid on the table in subcommittee.)  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. (Continued to 2021.) 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. (Laid on the table in subcommittee. FWIW, we’re told it was aimed at hotels, not wind. Yeah, sure . . .) HB1628 (Poindexter) prohibits the state from joining RGGI or adopting any carbon dioxide cap-and-trade program without approval from the General Assembly. (Passed by indefinitely in subcommittee. Yep, another way to kill a bill.)

Financing

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). Unfortunately, loose drafting would have also made the credit available for wood-burning stoves and other non-clean energy applications. (Died in a Finance subcommittee on a 5-5 vote.)

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

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.” (Continued to 2021.)

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. (Continued to 2021.)

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. (Left in Appropriations.)

[Updated February 12 to include late votes and fix a random meaningless line, and later to correct various other screw-ups that people have kindly brought to my attention.]

The strange case of thermal RECs

Renewable energy advocates are hoping that 2020 will be the year Virginia finally begins to make wind and solar the centerpiece of its energy planning, rather than a grudging add-on. The General Assembly will consider at least two bills that adopt a mandatory renewable portfolio standard as well as legislation to lower carbon emissions and open the private market to greater investments in renewables.

But good intentions don’t always produce effective legislation. Sloppy drafting causes unanticipated consequences. Minor amendments offered by an opponent produce major consequences only the opponent anticipated.

For a case in point, let’s consider Virginia’s existing, voluntary RPS. Worse than useless, it has enabled all kinds of mischief by defining “renewable energy” to include things that do not contribute carbon-free renewable power to the grid

As currently written, our renewable portfolio standard never has been, and never will be, responsible for a single electron of wind or solar energy. That means that any bill that takes as its starting point the definition that currently exists in the Virginia Code, or even uses the term “renewable energy” without narrowly defining it, risks failing right out of the gate.

Part of the problem is biomass. But a much greater problem is one that has been largely overlooked, mainly because no one understands it. It’s called “thermal” energy, and it is a major piece of mischief all by itself.

Added to the statute in 2015, thermal renewable energy certificates quickly became the primary means for Dominion Energy Virginia to meet its RPS targets, after counting the energy from the utility’s own hydro and biomass facilities and those from which it buys power under contract.

The thing is, no one seems to know where thermal RECs come from. The code offers three possibilities. One is “the proportion of the thermal . . . energy from a facility that results from the co-firing of biomass.” Another is “the thermal energy output from (i) a renewable-fueled combined heat and power generation facility that is (a) constructed, or renovated and improved, after January 1, 2012, (b) located in the Commonwealth, and (c) utilized in industrial processes other than the combined heat and power generation facility.” Finally, there is a tiny (and mainly unused) category for solar hot water systems and swimming pool heating.

The second definition, added to the code in 2015, is so specific that it was clearly written with a particular industrial facility or facilities in mind. From that definition, we can determine that thermal RECs don’t represent renewable electricity added to the grid.

What no one but Dominion seems to have known was that thermal RECs would instantly become the leading category for RECs, and one that would eliminate any chance for wind or solar to ever compete for RPS dollars in Virginia.

The Virginia statute is an oddity. “Thermal” is not a recognized category in the regional registry for purchase and sale of RECs among utilities and voluntary buyers (known as PJM GATS). I also haven’t found another state RPS program that includes thermal in its definition of renewable energy, aside from solar thermal.

A year ago I asked Dominion what kind of industry supplies thermal RECs; I was promised an answer, but none came. So a week ago I asked the staff of the State Corporation Commission. They don’t know either.

Every year in November, Dominion submits a report to the SCC about its renewable energy activities, including information the law requires about a utility’s RPS program. The reports are available on the SCC website.

None of the reports include any discussion of thermal RECs, including the report submitted covering 2015, the first year these RECs were allowed. The reports don’t indicate where thermal RECs come from, what kind of industrial process produces them, or whether there might be a lot more available that could supply Dominion in the future as RPS goals increase.

However, by law Dominion has to provide other information that, read together, allows us to deduce a few bits of information about thermal RECs, and about their role in the RPS:

  • They are generated by one or more Virginia facilities.
  • The facility or facilities were placed in service this decade, confirming that we are talking about that second meaning of thermal.
  • The facilities are not owned by Dominion.

All or almost all the RECs Dominion purchases are thermal RECs. Thermal RECs make up all or nearly all the energy and RECs Dominion has banked to use in future years. (Virginia law allows a utility to hang on to a REC for up to five years after it was generated.) If these were wind and solar RECs instead of thermal RECs, the value of the banked RECs would exceed $40 million, even at the low REC prices currently prevailing in the PJM marketplace.

I compiled the information from these reports into the table below. The 2019 filing, containing information for 2018, also gives us a view into the current year. It states: “The company began 2019 with banked renewable energy and RECs of 4,252,354 MWh and expects to have a bank of approximately 4,113,477 MWh of renewable energy and RECs toward future RPS targets at year-end 2019.”

Source: Virginia State Corporation Commission. (Ivy Main)

As you can see, Dominion has enough RECs banked that, when added to generation from Dominion’s own or contracted renewable energy facilities, Dominion has no need to purchase any RECs from any source until 2022 (when it still won’t need much).

Dominion doesn’t report what it paid for thermal RECs, but they are undoubtedly cheaper than any other qualifying source. One reason: with no competitive market for thermal RECs, Dominion is almost certainly the only buyer. In antitrust parlance, the term for this is “monopsony,” a word I hope you will now want to work into your dinner table conversation.

Monopsony power includes the power to set the price of a product, because the seller has no one else to sell to. In the case of thermal RECs, we don’t know who the seller is, but clearly its primary business is not the production of thermal RECs for sale. In fact, the money it gets for these RECs likely represents a windfall, and it is happy to get anything that covers its administrative cost in documenting its use of thermal energy.

On the other hand, Dominion doesn’t have to be overly stingy, since Virginia law allows the utility to pass on to ratepayers the cost of purchasing RECs for the RPS. One can imagine Dominion CEO Thomas Farrell having a nice dinner with the CEO of the corporation owning the industrial facility that uses the thermal energy, and together deciding what Virginia consumers will pay for these RECs. As long as it is less than the cost of other RECs available to Dominion, who will complain?

Whatever the price is, a monopsony price of thermal RECs will be less than the price of wind and solar RECs in Virginia, because wind and solar have a competitive market and buyers who are willing to pay more.

For years, critics have complained that the voluntary RPS is a failure for every purpose except greenwashing. But with no appetite for reform in the General Assembly, it’s been easy to ignore how the definition of renewable energy was expanding like a slime mold escaping its petri dish.

This year, though, the reformers are on the move. One or more bills requiring utility investments in renewable energy seem likely to gain traction. Advocates will be keeping their fingers crossed—and reading the definitions.

 

This article was originally published in the Virginia Mercury on January 7, 2020.

[Update: Several astute readers pointed me to information indicating that the source of the thermal RECs is WestRock, a Georgia-based multinational paper company that burns wood and black liquor (a toxic byproduct of the pulping process) as a power source. WestRock is the single biggest emitter of air toxics in Virginia, with its facility in Covington topping the ranks as the Commonwealth’s number one air polluter, ahead of even Dominion’s biggest and dirtiest coal plant. So when you are sorting through junk mail or have a cardboard box delivered, take time to savor the moment. Maybe you didn’t actually help make that paper, but you probably contributed your small mite to WestRock CEO Steven Voorhees’ $18 million compensation package.]

Green Power for Suckers program wins regulatory approval

Trees clearcut.

Don’t think of biomass as destroying forests, think of it as a way to feel good about subsidizing pollution. Photo by Calibas, Creative Commons.

Virginia’s State Corporation Commission (SCC) has approved Dominion Energy Virginia’s request to offer a new product to electric utility customers who want to buy renewable energy at a discount but lack the knowledge to understand when they are being taken for chumps.

“Rider REC” is an ultra-cheap version of the company’s Green Power Program (itself of questionable value). For less than a buck a month on their electric bills, customers will be able to buy renewable energy certificates that cost Dominion next to nothing because no one else wants them. And for good reason: these are the dregs of the renewable energy category.

You won’t find any wind or solar in Rider REC, but you might find paper mill waste, trees burned after clear-cutting, or century-old hydro dams—all officially “renewable” under the generous provisions of Virginia law. Dominion will scrounge up these old and dirty leftovers, package them up, and put a green bow on them.

“Caveat emptor,” says the SCC with a shrug. The SCC seems to think anyone dumb enough to pay extra voluntarily deserves whatever they get.

This is not the first time the SCC has shown disregard for eco-conscious consumers. Four years ago it gave Dominion the nod for a program the company was calling “community solar,” which wasn’t actually selling any solar and had nothing to do with communities. Dominion never did roll out that program, perhaps because there was no way to market it without courting accusations of consumer fraud. But it had the SCC’s blessing for it!

(In case you are confused: this was before the company’s most recent iteration of community solar, also approved, also not actually community solar, and which we are still waiting for. Dominion executives could probably do with a thesaurus.)

In response to concerns that customers wouldn’t know what they are getting, the SCC order did impose one labeling requirement. Dominion’s marketing materials must “clearly identify the source of the RECs available for purchase under Rider REC (i.e., the less expensive of PJM Tier II RECs or national Green-e eligible RECs).”

Perhaps Dominion will even tell buyers what those things mean, though the SCC doesn’t seem to be saying it has to. In the interests of clarity, Dominion could explain that “PJM Tier II RECs” translates to “some stuff we found behind the refrigerator and think might still be edible.” But it probably won’t.

That’s because, just as with the old community solar thing, the problem is that if buyers understand what’s in it, they won’t be buyers.

 

This article was originally published in the Virginia Mercury on November 8, 2019. 

First solar crowdfunding campaign launches in Virginia

workers complete a rooftop solar array on a warehouse

A Secure Futures project on an InterChange warehouse. Photo courtesy of Secure Futures.

Unless you have a sunny roof or back yard, you probably haven’t found a way to put your money into building local solar facilities. This month, that changed.

Secure Futures, LLC has created a crowdfunding platform to sell solar bonds in support of five projects across Virginia, all for tax-exempt institutions. The financial details, including interest rates and terms, can be found on the crowdfunding website.

The five projects, totaling 1.3 megawatts of solar capacity, involve these customers:

  • The Caritas Center in Richmond, a non-profit that works to break the cycles of homelessness and addiction in the Metro Richmond area, will have a 426.6 kW system to serve a building under construction
  • Eastern Mennonite School, a private K-12 school in Harrisonburg; the 131 kW solar facility will meet 33% of the school’s total electric demand
  • Insurance Institute for Highway Safety, a nonprofit scientific and educational organization with a research center in Ruckersville, where the 200 kW facility will go
  • Shenandoah University, a private university in Winchester; the 467 kW project will provide 10% of the university’s electricity
  • Temple Rodef Shalom, the largest Jewish congregation in the Commonwealth, located in Falls Church; the 115 kW facility will provide 29% of the temple’s electricity

All of the projects will be installed using power purchase agreements or solar services agreements, and all are scheduled for completion in 2019 and 2020.

Although selling bonds to finance solar projects doesn’t sound revolutionary, I’ve found few precedents for the general public to buy into specific projects. Solar City sold corporate bonds directly to the public until the company was bought by Tesla; the bonds financed Solar City’s nationwide portfolio of projects. (Disclosure—I own stock in several renewable energy companies including Tesla, not always to my profit.)

Several years ago another company, Solar Mosaic, raised money from individual investors who could choose to link their investments to specific projects, but the company has since closed the investment side of its business. Other companies have offered investment opportunities only to accredited investors—i.e, people with high incomes or net worth.

Opportunities for regular folks to invest have been slow to emerge since Congress changed the law to allow people to invest through internet crowdfunding back in 2012. But it took the Securities and Exchange Commission until 2016 to implement rules, so it’s early yet. If Secure Futures finds success raising funds for these Virginia projects, perhaps solar bonds will turn out to be the next new thing in project financing.

Dominion Energy’s new choices are really about limiting choices

Trees clearcut.

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

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

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

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

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

The wrong thing, of course.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

 

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

Dominion’s plans to tackle global warming are mostly hot air

Graph compares CO2 reductions by Dominion Energy and Xcel

Dominion (blue line) starts out with lower total CO2 emissions than the larger Xcel (red line), but after switching out old coal for new fracked gas, Dominion’s carbon-cutting slows to a crawl, while Xcel’s keeps going.

My readers will be shocked, shocked to learn that contrary to Dominion Energy’s propaganda, the company plans to cut carbon emissions by only about 1% per year between now and 2030, a slower pace than it has achieved in the past.

According to an analysis of Dominion’s own data by the Energy and Policy Institute, “the company reduced its carbon emissions at an average rate of 4% per year from 2005 to 2017, mostly by retiring coal plants in the later years of that period. That reduction rate plummets to 1% per year between now and 2030 under Dominion’s new goal.”

“The company’s reduction pace would increase again between 2030 and 2050 in order to meet its later goal [of 80% carbon reduction from 2005 to 2050], though only to about 2.8%, still lower than its pace from 2005 to 2017.”

Fracked gas investments are both the reason Dominion has brought carbon emissions down as much as it has, and the reason it can’t keep up the pace. Closing expensive, old coal plants is an easy way to cut carbon and save money at the same time. Replace the output of a coal plant with the same output from a gas plant, and you’ve slashed carbon emissions almost in half overnight.

But it’s not such a great trick if it requires you to build a new gas plant with a useful life of 30 years. That makes it much harder to decarbonize further by replacing gas with carbon-free renewables.

This is exactly Dominion Energy Virginia’s problem. A comparison of the utility’s 2013 and 2018 integrated resource plans shows coal fell from 22% of the total energy mix to 18%, while natural gas jumped from 17% to 32%, displacing purchased energy as well as coal.

The company achieved this feat with three new, huge combined-cycle gas plants it brought online just in the past five years: Warren (1,370 MW) in 2014, Brunswick (1,358 MW) in 2016, and Greensville (1,588 MW) in 2018. Together these plants increased Dominion’s natural gas generating capacity by more than 50%.

Not only did Dominion stick utility ratepayers with these big new gas plants, its parent company promised investors the utility will burn enough gas to justify spending $7 billion-plus on the Atlantic Coast Pipeline. Decarbonizing violates the business plan.

Dominion is in good company — by which I mean bad company — in making bold claims about carbon cuts that prove inadequate on closer inspection. According to the Energy and Policy Institute, the other southeastern monopoly utilities, Duke, Southern, and NextEra, are all using the same playbook.

Other utilities have avoided the gas trap. National leaders like Minneapolis-based Xcel, Consumers Energy in Michigan, and NIPSCO in Indiana are replacing coal with renewables and leapfrogging over new gas. That puts them in a position to deliver on their promises of rapid emissions cuts.

The Energy and Policy Institute analysis pointedly contrasts Xcel with Dominion:

Xcel Energy is one of the country’s largest electric utilities, with operations in eight states, primarily Colorado and Minnesota. Xcel pledged in December 2018 to reduce its carbon emissions 80 percent by 2030 from 2005 levels, and to fully decarbonize by 2050. Xcel’s new goal is an upgrade of a previous one to cut carbon emissions 60 percent by 2030. It says it plans to lean heavily on renewable energy and batteries will save its customers money. In a detailed report released in March, Xcel says its goals fall within the range compatible with Intergovernmental Panel on Climate Change scenarios that achieve either a 2°C or 1.5°C target.

Graphing Xcel’s trajectory vs. Dominion’s is telling: the companies’ decarbonization pathways tracked one another closely from 2005 until 2017. At that point, Xcel’s trajectory starts turning sharply downward, while Dominion’s flattens out.

Another contrast you’ll notice between Xcel and Dominion: Dominion has no plans to get to zero emissions, ever. It’s hard not to conclude that the company’s leaders are simply putting the best climate face on a gas strategy that hasn’t changed.

Eventually, though, the falling costs of wind and solar and the public’s demand for climate action will force Dominion to follow Xcel and others into deep decarbonization.

It may not be the business plan, but it is the future.

This post was originally published in the Virginia Mercury on July 15, 2019.