Memo to legislators: Virginia is not a low-cost energy state

Sure, there is something to be said for using a lot of energy–if you’re a Jack Russel Terrier. For the rest of us, not so much.
Photo credit Steve-65 – Own work, CC BY-SA 3.0, https-::commons.wikimedia.org:w:index.php?curid=17865919

Anyone who has attended the annual meeting of the House Energy Subcommittee has watched the Republican majority vote down all manner of legislation designed to improve Virginia’s poor ranking on energy efficiency. Since energy bills have to survive this subcommittee before the rest of the General Assembly gets to hear them, this little band of naysayers effectively holds back progress on initiatives that would save money and reduce energy use.

Why would they do that? As discussed in my last post, these delegates almost invariably vote the way Dominion Virginia Power wants them to. And Dominion doesn’t like these bills. The utility is in the business of selling electricity, and energy efficiency is bad for business.

Of course the utilities don’t put it that way. At this year’s subcommittee meeting, Dominion Virginia Power lobbyist Bill Murray explained his company’s opposition to one of Delegate Rip Sullivan’s energy efficiency bills by saying that real efficiency gains depend on the actions of individuals, and Virginians aren’t incentivized to take these actions because Dominion keeps our rates so admirably low.

This might put you in mind of former Vice President Dick Cheney’s dismissal of conservation as a sign of personal virtue but not a sound basis for energy policy. Let’s set that aside. Murray’s comments might also be thought unfair to his own client, which has tried and failed to get approval from the State Corporation Commission for various programs that would help consumers practice personal virtue. (If you wonder why, in that case, he was standing there opposing legislation designed to produce a better result, you are missing the point of the Subcommittee Hearing. It’s Kabuki theatre, people, and you really shouldn’t miss it.)

For now, however, let’s simply ask whether Mr. Murray’s claim is correct. Are we really paying less for energy than residents of other states?

We should first clarify whether we are talking about rates, or bills. Dominion prefers to focus on rates, but what people pay are bills. Few people can tell you what their electricity rate is, but most have a sense of the bottom line on their monthly bill.

According to the U.S. Energy Information Agency, Virginia’s 2016 residential rates stand at an average of 10.72 cents per kilowatt-hour, which is indeed about 12% below the national average of 12.21.* The average for our peer group, the South Atlantic region, is 11.11 cents per kWh, with Maryland at the high end (14.01 cents), and Georgia at the low end (9.92 cents).

When it comes to monthly bills, however, Virginia residential customers ($130.58) pay almost exactly the South Atlantic average ($131.20), but we are way above the national average ($114.03). (Note the bills are based on 2015 data; the EIA has not updated this chart for 2016.) If having to pay more for electricity is the primary motivation to adopt energy efficiency measures, Virginians are more motivated than most Americans.

Several factors can make a state have lower bills despite higher rates. Among these is energy efficiency. Energy efficiency is why a state like California, with high incomes and notoriously high residential electricity rates (16.99 cents/kWh), still has average monthly bills ($94.59) that are 30% below Virginia’s. California has succeeded in keeping per capita energy use flat for decades while the U.S. average climbed steadily, only flattening out in the past ten years. California is currently ranked 49th in the nation for per capita energy consumption, and 49th in total energy costs. “California” is a bad word among Virginia Republicans, who assume anything that state does must be bad, but California’s experience has to be considered by anyone who cares about energy costs.

Back at the Energy Subcommittee meeting, Bill Murray did not mention California, but he did offer his opinion on the cause of Virginia’s higher-than-average bills. He noted that many Virginians use electric heat pumps to heat their homes, which drives up winter electricity use, resulting in higher bills on average. (An EIA analysis using 2009 data showed that 55% of Virginia households heat with electricity, higher than the U.S. average but less than the South Atlantic average.)

To get a look at the whole energy picture across states, I created the table below that compares residents’ costs of electricity, natural gas and fuel oil across the U.S. Virginia ranked 18th out of 51. Because it isn’t weather-adjusted, it can’t tell the full story. However you slice it, though, Virginia is not a low-cost energy state.

It may still be true that middle-class homeowners don’t feel the bite of energy bills enough to go to the trouble of figuring out what they should do to save energy. If it’s hard, people don’t do it—which is one reason energy efficiency programs are designed to make it easier. But middle-class homeowners also aren’t the only ones who would benefit. Across Virginia, people with incomes below 50% of the poverty level spend at least 40%, and often more than half their income, on energy bills.

So if cost equals motivation, Virginians are motivated. What’s lacking are the energy efficiency programs to help people save energy, and the laws to enable those programs.

 

Overall Rank State Total Energy Cost Monthly Electricity Cost (Rank) Monthly Natural-Gas Cost (Rank) Monthly Home Heating-Oil Cost (Rank)
1 Connecticut $304 $155

(7)

$44

(20)

$104

(1)

2 Rhode Island $259 $107

(39)

$61

(5)

$91

(4)

3 Massachusetts $253 $115

(34)

$60

(6)

$78

(6)

4 Alaska $241 $129

(20)

$53

(13)

$59

(7)

5 New Hampshire $234 $127

(25)

$20

(44)

$87

(5)

6 Vermont $231 $120

(30)

$18

(48)

$93

(3)

7 New York $220 $115

(32)

$66

(3)

$39

(9)

8 Maine $217 $107

(40)

$6

(49)

$104

(2)

9 Pennsylvania $211 $121

(28)

$50

(15)

$40

(8)

10 Maryland $209 $145

(13)

$43

(22)

$21

(11)

11 Delaware $208 $152

(9)

$37

(26)

$19

(12)

12 Georgia $203 $157

(6)

$46

(19)

$0

(42)

13 New Jersey $200 $115

(33)

$63

(4)

$22

(10)

14 Alabama $197 $171

(3)

$26

(40)

$0

(39)

15 South Carolina $196 $177

(1)

$19

(47)

$0

(32)

16 Mississippi $184 $163

(4)

$21

(43)

$0

(49)

17 Ohio $183 $120

(29)

$59

(7)

$4

(19)

18 Virginia $182 $141

(14)

$31

(32)

$10

(13)

18 Hawaii $182 $177

(2)

$5

(50)

$0

(51)

20 Kansas $181 $125

(27)

$56

(11)

$0

(47)

21 Michigan $180 $106

(43)

$72

(2)

$2

(25)

22 North Dakota $179 $140

(15)

$32

(31)

$7

(15)

22 Texas $179 $155

(8)

$24

(41)

$0

(50)

24 Missouri $178 $134

(18)

$44

(21)

$0

(36)

25 Indiana $177 $129

(21)

$47

(17)

$1

(29)

26 Illinois $176 $96

(47)

$80

(1)

$0

(35)

27 Oklahoma $175 $135

(17)

$40

(24)

$0

(43)

28 Tennessee $174 $147

(10)

$27

(37)

$0

(37)

29 Wisconsin $171 $109

(37)

$57

(9)

$5

(17)

30 Minnesota $170 $108

(38)

$57

(10)

$5

(16)

31 Louisiana $169 $146

(11)

$23

(42)

$0

(46)

32 North Carolina $168 $145

(12)

$20

(45)

$3

(22)

33 Kentucky $167 $136

(16)

$30

(34)

$1

(30)

33 South Dakota $167 $129

(23)

$34

(28)

$4

(20)

35 Florida $164 $160

(5)

$4

(51)

$0

(44)

36 West Virginia $162 $126

(26)

$32

(30)

$4

(18)

36 Iowa $162 $109

(36)

$52

(14)

$1

(27)

38 Nevada $161 $128

(24)

$33

(29)

$0

(31)

38 Nebraska $161 $119

(31)

$42

(23)

$0

(33)

40 Arkansas $158 $129

(22)

$29

(36)

$0

(41)

41 Wyoming $154 $107

(41)

$46

(18)

$1

(28)

42 Arizona $153 $134

(19)

$19

(46)

$0

(48)

43 District of Columbia $148 $82

(51)

$58

(8)

$8

(14)

44 Idaho $146 $113

(35)

$30

(35)

$3

(23)

45 Montana $145 $103

(44)

$40

(25)

$2

(26)

46 Utah $144 $89

(49)

$55

(12)

$0

(34)

47 Colorado $141 $92

(48)

$49

(16)

$0

(38)

48 Oregon $135 $107

(42)

$26

(38)

$2

(24)

49 California $126 $96

(45)

$30

(33)

$0

(40)

50 Washington $125 $96

(46)

$26

(39)

$3

(21)

51 New Mexico $124 $88

(50)

$36

(27)

$0

(45)

 

Data derived from WalletHub, “2016’s Most & Least Energy-Expensive States,’ July 13, 2016, https://wallethub.com/edu/energy-costs-by-state/4833/#methodology. I was only interested in energy consumption in buildings, so I backed out the numbers for motor fuel cost.

______________________________

*The EIA data reflect statewide averages. Dominion’s own residential rates tend to be lower than Virginia’s statewide average. It costs more to bring electricity to rural areas, so APCo and the coops would be expected to have higher rates. And urban dwellers use less electricity on average than rural residents, which keeps bills lower for city folks in Dominion territory. But since most states have a mix of urban and rural residents, it seems correct to compare statewide averages.

Note, too, that the discussion here—and at the Energy Subcommittee meeting—concerned residential rates. Virginia’s commercial rates are significantly better than the U.S. average.

 

Virginia legislative session wraps up with action on solar, coal ash, and pumped storage

Next year I'm bringing him to lobby with me. Photo credit: Sierra Club

Next year I’m bringing him to lobby with me. Photo credit: Sierra Club

The Virginia General Assembly wraps up its 2017 session on Saturday, February 25. As usual, the results are a mixed bag for energy. On the plus side is the promise of a new solar purchase option for customers. On the downside, utility opposition to energy efficiency and distributed generation meant a lot of worthwhile initiatives never made it out of subcommittee.

Putting it into perspective, it could have been worse. For clean energy advocates in Virginia, that’s what we call a success!

Governor Terry McAuliffe has already acted on some of the bills that passed and will have until March 27 to act on the remaining bills. Under Virginia law, the governor can sign, veto, or amend the bills for legislators’ consideration.

“Rubin Group” bills move renewable energy forward—and back.

Negotiations between utilities, the solar industry trade association MDV-SEIA, and the group Powered by Facts produced three pieces of legislation that appear likely to become law (and all of which I’ve discussed previously). The most significant of these “Rubin Group” bills (named for facilitator Mark Rubin) is SB 1393 (Wagner), the so-called “community solar” bill, which is designed to launch a utility-controlled and administered solar option for customers. The utilities will contract for the output of solar facilities to be built in Virginia and will sell the electricity to subscribers under programs to be approved by the State Corporation Commission. Critical details such as the price of the offering will be determined during a proceeding before the State Corporation Commission.

This was the only one of the Rubin Group bills that had participation from members of the environmental community (Southern Environmental Law Center and Virginia League of Conservation Voters), and it received widespread (though not unanimous) support from advocates.

Broader legislation that would have enabled true community solar programs did not move forward. SB 1208 (Wexton) and HB 2112 (Keam and Villanueva), modeled on programs in other states, had the backing of the Distributed Solar Collaborative, a stakeholder group composed of everyone but utilities. In the Senate, Wexton’s bill was “rolled into” Wagner’s bill, but only her name, not the provisions of her bill, carried over.

SB 1395 (Wagner), a second Rubin Group bill, increases from 100 MW to 150 MW the size of solar or wind projects eligible to use the state’s Permit by Rule process, which is overseen by the Department of Environmental Quality. The legislation also allows utilities to use the PBR process for their projects instead of seeking a permit from the SCC, if the projects are not being built to serve their regulated ratepayers.

The third Rubin Group bill establishes a buy-all, sell-all program for agricultural generators of renewable energy. Although supported by MDV-SEIA as part of the package deal, passage of SB 1394 (Wagner) and HB 2303 (Minchew) should be considered a loss for solar. The program replaces existing agricultural net metering rules for members of rural cooperatives and could lead these coops to reach their 1% net metering cap prematurely, blocking other customers from being able to use net metering. And while negotiators say the program should be economically beneficial to participants, it appears to offer generators no options they don’t already have under existing federal PURPA law.

The governor has until March 27 to act on these bills.

Appalachian Power PPAs for private colleges only

Under HB 2390 (Kilgore), the existing pilot program that allows some third-party power purchase agreements (PPAs) in Dominion Power territory will be extended to Appalachian Power territory, but only for the private colleges and universities who could afford to hire a lobbyist to negotiate the special favor, and only up to a 7 MW program cap. APCo is expected to use passage of the bill to assert that PPAs for all other customers are now illegal. The governor has not indicated whether he will sign the bill.

Intellectual property

SB 1226 (Edwards, D-Roanoke) allows solar developers to keep confidential certain proprietary information that would otherwise be subject to disclosure under the state’s Freedom of Information Act (FOIA). It resolves a problem that has held up a solar project on the Berglund Center, a public building in Roanoke.

Storage, pumped or otherwise

HB 1760 (Kilgore) and SB 1418 (Chafin) allow Dominion Power to seek rate recovery for a scheme to use abandoned coal mines for pumped storage facilities. If you think this sounds weird and possibly dangerous, you are not alone. Usually the idea is to keep water out of coal mines to avoid the leaching of toxic chemicals into groundwater. Apparently no one has ever used coal mines for pumped storage before, and neither the company that would construct the project, nor the sites under consideration, nor the technology to be used, have been revealed.

SB 1258 (Ebbin) adds storage to the mandate of the Virginia Solar Energy Development Authority.

Dominion’s nuclear costs, and the politics of the “rate freeze”

HB 2291 (Kilgore) allows Dominion to charge ratepayers for the costs of upgrading its nuclear facilities. Because the charges will appear as a rider on top of base rates, consumers would not be protected by the “rate freeze” Dominion pushed through in 2015’s SB 1349.

That 2015 legislation, of course, was supposedly designed to shield customers from the impact of the EPA’s Clean Power Plan, a ruse that has been since laid bare. Instead, it will allow Dominion to keep an estimated billion dollars of customers’ money it would otherwise have had to refund or forego. This year, with the CPP on death row under Trump, Senator Chap Petersen introduced SB 1095, which would repeal the rate freeze. His bill was promptly killed in committee, but continues to gain support everywhere outside the General Assembly. Governor McAuliffe belatedly announced his support for Petersen’s bill, but did not use his authority to resurrect it.

Petersen is encouraging the Governor to offer an amendment to Kilgore’s HB 2291 that would repeal the rate freeze, an option allowed by Virginia’s legislative procedure since both provisions affect the same provision of the Code.

Dominion, of course, says the CPP isn’t actually dead and buried just yet, and Republicans seem to fear its resurrection. HB 1974 (O’Quinn) requires the Department of Environmental Quality to submit any Clean Power Plan implementation plan to the General Assembly for approval, so they can stab it with their steely knives.  The governor is expected to veto the bill.

State’s failures on energy efficiency will now be tracked

SB 990 (Dance) requires the Department of Mines, Minerals and Energy to track and report on the state’s progress towards meeting its energy efficiency goals. Or in Virginia’s case, its lack of progress.

HB 1712 (Minchew) expands the provisions of state law that allow public entities to use energy performance-based contracting.

That’s it for energy efficiency legislation this year. Several good bills were offered but killed off in the House Energy Subcommittee, notably HB 1703 (Sullivan), which would have required electric utilities to meet efficiency goals, and HB 1636 (Sullivan again), which would have changed how the SCC evaluates energy efficiency programs. Delegate Sullivan, by the way, introduced a companion bill to SB 990, but his was killed in that same House subcommittee, all on the same day.

Coal ash legislation watered down but passes

SB1398 (Surovell) will require Dominion Power to monitor pollution and study options for the closure of its coal ash impoundments, including removal of the ash to secure, lined landfills. Unfortunately amendments in the House will allow Dominion to proceed with capping the waste in unlined pits while it completes the study. As one editorial put it, “Why not do it right the first time?” The editorial—along with a lot of people who have to live near the coal ash dumps—would like to see the governor offer amendments to the bill, but we’ve heard nothing from the governor’s office on that yet.

Republicans keep trying to throw taxpayer money down a rathole; Governor vetoes

Governor McAuliffe has already vetoed HB 2198 (Kilgore), which would reinstate the coal employment and production incentive tax credit and extend the allowance of the coalfield employment enhancement tax credit. SB 1470 (Chafin) is identical to HB 2198 and so likely faces a veto as well.

Dominion Power defends its billion-dollar handout from ratepayers; squashes dissent; asks for more.

DominionLogoA Senate committee quickly killed SB 1095, a bill introduced by Chap Petersen (D-Fairfax) that could have brought an early end to a five-year prohibition on regulators’ ability to review Dominion Virginia Power’s earnings and to order refunds where warranted. The prohibition, passed two years ago as part of 2015’s SB 1349 (Frank Wagner, R-Virginia Beach), will mean as much as a billion dollars in extra cash to the utility—money that would otherwise be returned to customers.

After losing the vote on SB 1095 in Senate Commerce and Labor, Petersen introduced SB 1593, a bill that would have prohibited campaign contributions from public service corporations like Dominion Power. He was forced to withdraw the bill when Senate leaders complained he had filed it late.

Score two for Dominion. But in case you thought the utility giant might choose to lie low for a while, consider another of this year’s bills: HB 2291 (Terry Kilgore, R-Gate City). The legislation allows Dominion to seek approval to charge customers for billions of dollars in nuclear power plant upgrades. Kilgore has collected $162,000 in campaign contributions from Dominion’s parent company over the years, even though he represents an area of the state that is not served by Dominion Virginia Power (meaning it won’t be his constituents paying for his bill). Astoundingly, the bill passed the House of Delegates with only two dissenting votes (cast by Mark Keam, D-Vienna, and Sam Rasoul, D-Roanoke).

Obviously, there is a pattern here. It actually began at least as far back as 2014, when another Kilgore-sponsored bill passed allowing Dominion to shift onto its customers several hundred million dollars of nuclear development costs that otherwise would not have been recovered for many years, if ever. The legislation inspired much criticism, but little action.

Taken together, these legislative giveaways add up to enormous sums of money. The 2015 legislation involved as much as a billion dollars in customer payments that exceed the profit margin allowed by the State Corporation Commission, according to an estimate offered by one commissioner. In the absence of SB 1349, Dominion would likely have had to issue refunds, lower rates, or both.

At the time, Dominion claimed that the EPA’s proposed Clean Power Plan would impose huge costs on ratepayers unless the General Assembly acted to stop base rates from rising. Legislators weren’t told the real effect of SB 1349 would be to keep base rates from falling. And meanwhile, customers’ utility bills could continue to rise because base rates make up only a portion of monthly bills.

Petersen’s bill this year took notice of the fact that the Clean Power Plan is now highly unlikely to take effect. SB 1095 would have reinstated the SCC’s authority to review rates if and when the Clean Power Plan was deemed truly dead. This misses the mark only in being way too generous to Dominion. As the SCC has pointed out, the review freeze period will be over before the Clean Power Plan is slated to take effect, so SB 1349 could not possibly protect ratepayers from compliance costs anyway.

SB 1349 is currently being challenged in court as an unconstitutional abrogation of the SCC’s power. Two former Attorneys General, Republican Ken Cuccinelli and Democrat Andy Miller, have weighed in on the side of consumers. The current Attorney General, Democrat Mark Herring, was harshly critical of the bill when it was before the General Assembly, but now says he is obligated to defend the law.

SB 1349 passed the General Assembly two years ago amid great confusion about what was in the bill and what it all meant. Legislators padded it out with modest solar-energy and energy-efficiency provisions to make it palatable to skeptical Democrats and ensure it would be signed by Governor McAuliffe.

But this year, legislators have no such excuse. They cannot have missed the torrent of criticism the law inspired, or the point that Dominion won’t spend a dime of its ill-gotten gain on compliance with the Clean Power Plan. It is hard to see the 9-2 vote in Commerce and Labor to kill Petersen’s SB 1095 as anything but a blatant, bipartisan gift to Dominion. (The dissenting votes came from Republicans Dick Black and Stephan Newman.)

Dominion’s corrosive effect on Virginia politics is one of the main threads of a book published last year called Virginia Politics & Government in a New Century: The Price of Power. Author Jeff Thomas outlines a whole host of ways in which Virginia politics have become mired in corruption. SB 1349 is Exhibit A.

Now the unearned largesse for Dominion—and the ignominious end to Senator Petersen’s effort to rein in Dominion’s influence—have become an issue in this year’s governor’s race. Republicans Denver Riggleman and Corey Stewart and Democrat Tom Perriello are all taking aim at the connection between Dominion’s campaign spending and the billion-dollar boondoggle it received from SB 1349. If Kilgore’s HB 2291 passes the Senate this month, they will have another example on which to build their case that Dominion’s campaign donations have corrupted Virginia’s legislative process.

Legislators themselves publicly reject the idea of a causal relationship between the steady stream of campaign cash and their votes in favor of the bills, while privately acknowledging the sway Dominion holds over the General Assembly. Indeed, the comfortable fiction that campaign donations don’t affect a politician’s votes is such an insult to voters’ intelligence that the wonder is why it took so many years to become a campaign issue.

Given Wagner and Kilgore’s leadership roles in the Republican-controlled House and Senate, the issue might not seem like obvious fodder for the Republican primary campaign. Of course, Wagner is also running for governor on the Republican ticket, so the assaults of challengers Riggleman and Stewart might simply be tactics designed to undermine the competition. If voters respond, though, we can expect to hear a lot more discussion of government corruption.

In today’s chaotic political environment, Democrats who don’t speak out could find themselves under fire, too. Lieutenant Governor Ralph Northam, the other Democrat running for Governor, has accepted over $97,000 from Dominion since 2008, according to VPAP.org, and so far seems not to have joined the chorus of voices criticizing Dominion’s influence.

The anti-corporate sentiments that fueled Bernie Sanders’ campaign have only intensified with Donald Trump’s embrace of bankers and oil barons. Democratic voters today are less likely than ever to forgive leaders of their own party for cozying up to big corporations. If either Democratic candidate for governor cedes the issue of clean government to the other—or to Republicans—this might be the election in which it matters.

Virginia General Assembly session opens. What can we expect?

Photo credit: Corrina Beall

Photo credit: Corrina Beall

The General Assembly failed to act on clean energy bills in 2016, but as the 2017 legislative session gets underway, advocates hope the delay will have only increased pressure for progress this year.

New energy legislation includes the four bills negotiated over the summer by the utilities and the solar industry promoting utility, community-scale, and agricultural renewable energy projects. The “Rubin Group” (named for facilitator Mark Rubin) brought together utilities, the solar industry trade group MDV-SEIA, and a group called Powered by Facts, but largely excluded environmental and consumer interests. Not surprisingly, the resulting bills are heavily weighted towards utility-scale solar, and utility control of solar in general.

But if the chairmen of House and Senate Commerce and Labor thought the Rubin Group’s work would mean no one else would float new renewable energy bills, they were certainly wrong.

Community-scale solar. I’ve previously addressed the Rubin Group’s legislation that enables a utility-administered, community-scale program to sell solar to participants on a voluntary basis. I see Senator Wagner will be carrying the bill in the Senate, now designated SB 1393. I haven’t had time to compare the current bill to the draft previously shared with stakeholders, but I’m cautiously optimistic that it will produce a viable solar option for consumers. Even better would be HB 2112 from Delgate Keam and SB 1208 from Senator Wexton, which authorize a broader set of community solar models. Delegate Krizek’s solar gardens bill, HB 618, also authorizes shared solar.

Utility-scale solar. Another bill from the Rubin Group, SB 1395 (Wagner), would raise from 100 MW to 150 MW the size of wind and solar projects that qualify as “small renewable energy projects” subject to Permit By Rule (PBR) permitting by DEQ, and allowing utilities to use that process for facilities that won’t be rate-based. In contrast, Senator Deeds’ SB 1197 would undo much of the streamlining gained by the PBR process, sending projects to the SCC if they either disturb an area of 100 acres or more or are within five miles of a boundary between political subdivisions.

The third Rubin Group bill, Wagner’s SB 1388, would allow utilities to earn a margin when they obtain solar energy via power purchase agreements with (lower cost) third-party developers rather than building projects themselves.

Senator Marsden’s SB 813 exempts investor-owned utilities from the requirement that they consider alternative options, including third-party market alternatives, when building solar facilities that have been declared in the public interest. This is surely an attempt to smooth the way for utility-owned solar at the SCC. However, if you’re trying to get utilities to keep costs down by using third-party installers, this is the wrong incentive.

Agricultural net metering. The last bill from the Rubin Group, Senator Wagner’s SB 1394, would revoke the recently enacted code provisions that allow agricultural customers to attribute electricity from a renewable energy facility to more than one meter on their property for the purposes of net metering. The proposed legislation would terminate this provision in 2018 (grandfathering existing net metering customers for 20 years) and instead offer farmers a buy-all, sell-all option for their renewable production.

Under the proposed bill, negotiated between the utilities and Powered by Facts, farmers would have to buy all their (dirty) power from their utility at retail, and sell their renewable power to the utility at the utility’s avoided cost—essentially wholesale. This doesn’t sound like a good deal for the farmers, but we’re told it more or less pencils out. On the plus side, the bill would allow farmers to build up to 1.5 megawatts of renewable capacity on up to 25% of their land, or up to 150% of the amount of electricity they use, whichever is less, which is more than they can under today’s rules. (But since federal law allows anyone to sell power they produce from a qualifying facility into the grid at avoided cost, even this part of the bill is of dubious added benefit.)

Regardless, removing the net metering option seems both unnecessary and unwise; many farmers specifically want to run their farms on solar, for marketing reasons or otherwise, and taking away their ability to aggregate meters and use net metering will be viewed as a serious setback.

The first draft of this bill that I had seen contained a provision that projects under the new program would apply against the state’s 1% cap on total net metering output, even though the projects would not be net metered. Fortunately, I don’t see that in the current version. [Update: this provision does appear in the version of the bill reported out of the Senate subcommittee on January 27, presenting a reason sufficient in itself to oppose the legislation.]

An agricultural bill that is more readily supportable is Senator Edwards’ SB 917, which eases the rules for agricultural customer-generators and increases the size of projects that can qualify for meter aggregation under the net metering statute. It also extends the law to include small hydro projects.

PPAs. Two bills attempt to resolve the ongoing dispute over customers’ rights to use third-party power purchase agreements for their on-site renewable facilities. Delegate Toscano’s HB 1800 essentially reiterates what solar advocates believe to be existing law allowing on-site PPAs, but—as a peace offering to utilities—narrows it to exclude residential customers. Senator Edwards’ SB 918 takes a different approach, replacing the Dominion PPA pilot program with a permanent statewide program to be designed by the State Corporation Commission.

Tax credits. Delegate Hugo’s HB 1891 provides a tax credit for residents who install geothermal heat pumps—a nice idea, but it will face tough sledding in a tight budget year. That budget reality could also doom Delegate Sullivan’s HB 1632, offering a broader renewable energy property tax credit (it would include geothermal heat pumps).

In spite of the current budget deficit, Republicans are making a new attempt to reinstate taxpayer subsidies for coal mining companies (Delegate Kilgore’s HB 2198). Delegate Morefield’s HB 1917 takes a better approach, offering a new tax credit for “capital investment in an energy production facility in the coalfield region.” This is worth watching, as it is not limited to coal facilities but applies to any facility that has “the primary purpose of producing energy for sale.”

Climate. Republicans seem inclined to make a renewed attack on the EPA’s Clean Power Plan (Delegate O’Quinn’s HB 1974), even though Trump’s election seems likely to send it to an early grave. This probable fate inspired Senator Petersen’s SB 1095, which says that if and when the Clean Power Plan is really declared dead, then the notorious “rate-freeze” imposed two years ago will end. As readers know, that law (Wagner’s SB 1349 from the 2015 session), will allow Dominion to keep an estimated $1 billion in excess revenues; at the time, Dominion said the law was needed to protect its customers from rate hikes required by compliance with the Clean Power Plan. Unfortunately the condition in Petersen’s bill doesn’t seem likely to kick in for at least a year or two, and possibly more; we’d prefer to see the legislation revoke the freeze immediately, and put the ill-gotten gains to use as a massive stimulus package supporting clean energy jobs.

On the flip side, Delegate Villanueva is gamely making another run at getting Virginia to join the Regional Greenhouse Gas Initiative (HB 2018) as a way to change utility incentives and raise money for climate adaptation and clean energy.

Nuclear. Delegate Kilgore has introduced HB 2291, a bill to make it easier for Dominion Virginia Power to stick ratepayers with the costs of any upgrades it makes to its nuclear power plants. The bill further attacks and undermines the SCC’s authority to determine whether expenses are reasonable, the sort of favor to Dominion that has become a theme in recent years. Kilgore doesn’t even represent any Dominion customers; he’s in APCo territory. I guess that’s why he’s okay with raising rates for Dominion customers.

Energy efficiency. Efficiency bills suffered the same fate as renewable energy bills last year; many were offered, but few were chosen. (Actually, it might have been none. We don’t do much energy efficiency in Virginia.)

Delegate Sullivan is trying again to set energy efficiency goals with HB 1703, or at the very least to have government track our progress towards meeting (or rather, not meeting) the state’s existing goal, with HB 1465. He is also trying again to change how the SCC evaluates energy efficiency programs to make them easier to implement (HB 1636). Senator Dance’s SB 990 also sets an energy consumption reduction goal.

Delegate Krizek’s HJ 575 would authorize a study of infrastructure investments that yield energy savings. Delegate Minchew’s HB 1712 authorizes energy performance-based contracting for public bodies.

Miscellaneous. Delegate Kilgore’s HB 1760 supports a new pumped storage facility in the Coalfields region (news to me). Senator Ebbin’s SB 1258 would add energy storage to the work of the Virginia Solar Development Authority, which seems eminently sensible.

More bills are likely to be filed in the coming days, and I would promise to update you on them if I weren’t marking Trump’s inauguration by leaving the country for a week. Serious advocates should peruse the LIS website and perhaps sign up for the bill tracking service “Lobbyist in a Box.” Also watch for a clean energy lobby day that MDV-SEIA will organize, likely on the yet-to-be-announced day the House Commerce and Labor Subcommittee on Energy meets, usually in early February.

This year’s legislative session lasts a mere 45 days, weekends included. Cynics say the tight schedule limits the damage politicians can do, but in reality it just means lawmakers have to lean heavily on lobbyists and constituents—and as the lobbyists are on hand, and the constituents are at home, the schedule favors the lobbyists. So if you want to make your voice heard, now’s the time.

Virginia utilities back legislation to offer consumers a solar option

Photo credit iid.com

Photo credit iid.com

A group comprised primarily of Virginia utilities and solar industry members has proposed four pieces of legislation for the 2017 Virginia legislative session. The bills address four areas the group agreed to work on: creating a pilot program to offer solar energy to customers on a voluntary basis, under the name of “community solar”; raising from 100 MW to 150 MW the size limit for wind and solar projects that can take advantage of the streamlined Permit by Rule process, and allowing utilities to use that process in some circumstances; creating a program to allow farmers to sell some surplus solar to the grid; and allowing utilities to earn a profit on solar facilities they don’t build themselves (an incentive for them to do more deals with developers, whose costs are less and who receive more favorable tax treatment).

The group, referred to as the Rubin Group after its moderator, Richmond lawyer Mark Rubin, formed earlier this year when the Commerce and Labor Committees of the General Assembly refused to act on a suite of renewable energy and energy efficiency bills offered during the 2016 session. The committee chairmen, Senator Frank Wagner and Delegate Terry Kilgore, said members needed more time to consider the proposals, though they were similar to ones submitted (and killed) in previous years. Wagner and Kilgore assigned a special subcommittee to study the legislation and make recommendations for next year.

The subcommittee met once in the spring to hear summaries of the bills. It took no further action until December 8, when four members showed up to hear presentations from the Rubin Group and ask a few questions. The hearing took half an hour. No one mentioned energy efficiency.

Setting aside more contentious issues, the Rubin Group had agreed to focus on drafting legislation where they felt compromise between the solar industry and the utilities was possible. That left out a lot, including the many bills dealing with net metering issues and third-party ownership. They also chose not to bring in environmental or consumer groups until they had nearly completed drafting their bills, though they did include an advocacy group called Powered by Facts that focused on agricultural customers. Representatives from Southern Environmental Law Center and League of Conservation Voters were finally brought in to review and comment solely on the community solar bill. Other stakeholders were briefed on the bills in late November but not allowed to see the legislation until today. (As of this writing, the bills had not yet been posted anywhere I can link to.)

The community solar bill has generated the most interest, especially from residential customers who can’t put solar on their own roofs and are eager for options. And a review of the language suggests that in concept, at least, this bill holds a great deal of promise for bringing solar to average Virginians.

However, the name “community solar” is something of a misnomer for the Rubin Group’s bill, which might better be described as enabling a program for utility-administered, community-scale solar. The legislation provides for the utility to solicit bids for new solar facilities to be built by private developers around the state. The utility will contract for the output of the facilities and sell the electricity to customers who want to buy solar. Customers will never own the projects.

The bill is labeled a three-year pilot program. It consists of generating facilities up to 2 megawatts in size, for an initial total of 4 MW for APCo and 25 MW for Dominion. When a program is 90% subscribed, the utilities will add facilities up to a total of 10 MW for APCo and 40 MW for Dominion. Each utility will issue requests for proposals (RFPs) from developers, and will purchase the output and the associated renewable energy certificates (RECs). The utility will retire the RECs on the customer’s behalf, which assures customers they are actually getting solar. Electric cooperatives are also authorized to conduct similar pilot programs.

The utilities will be allowed to recover all of their costs through a rate schedule, including for squishy categories like administrative and marketing charges, plus a margin determined by the “weighted average cost of capital.”

The legislation does not set the price of the electricity, something left to the State Corporation Commission to decide under tight parameters. Leaving the price out of the legislation is reasonable, given that the RFPs haven’t even been issued yet, but it does mean we have no idea at this point whether customers will see a savings from the program either immediately (highly unlikely) or in the future. But the legislation does allow customers to lock in a fixed price for as long as they are in the program, giving them the price stability that is one of the major benefits of solar.

In addition, the members of the Rubin Group say they have agreed to abide by a Memorandum of Understanding they drafted to guide implementation of the bill at the SCC. This MOU has not been made public, and in any case the SCC would not be bound by it, but it may help ensure that regulations implementing the pilot program meet the parties’ expectations.

So how much of a difference could this program make? As a rule of thumb, supplying an average Virginia household with 100% solar energy requires the output of 10 kilowatts (kW) worth of solar panels. Thus the program total of 50 MW (50,000 kW) would be enough to supply 5,000 average Virginia households if they were to meet their entire electric load this way, or more if they are energy efficient or plan to meet only a portion of their load with solar. By comparison, Dominion alone claims to have over 30,000 customers in its Green Power Program. That program offers mostly wind RECs from other states, and does not reduce customers’ use of ordinary grid power from fossil fuels and nuclear. Thus there seem to be more than enough customers primed to sign up for a program that is infinitely better than what they are paying extra for today.

The astute reader will wonder why Dominion didn’t just change its Green Power Program to a Virginia solar program, something it could do through the State Corporation Commission without new legislation. If any astute reader figures that out, please let me know, because I’ve been wondering about it for years.

Regardless, the Rubin bill holds promise as an option for customers who can’t put solar on their own rooftops. It would mean more solar projects get built in Virginia, creating jobs and bringing new economic development to localities across the state. It would decrease demand for dirty power and possibly persuade our utilities that the future really does lie with solar, not with fracked gas.

Calling it community solar seems unwise, however. Virginians are wary of a bait-and-switch from a utility with a long history of promising the moon and delivering green cheese.

For real community solar, we will have to look to legislation developed by the Virginia Distributed Solar Collaborative. This broad-based group of solar stakeholders includes consumers, local government employees and environmentalists as well as solar industry representatives (but not utilities). The Collaborative developed its own model bill this summer based on legislation from other states. The model bill gives much greater freedom to customers to cooperate in the development and ownership of renewable energy facilities for their own benefit. Customers don’t have to wait for their utility to choose a developer, and they can choose to own a share of a facility, not just buy some of the electricity generated. Utilities can own facilities, but so can non-profit or for-profit entities. Utilities are required to purchase the output of the community facilities, and to issue bill credits to its customers who are subscribers.

As a practical matter, members of the Virginia Distributed Solar Collaborative don’t expect the General Assembly to adopt their model instead of something that comes with the Dominion Power seal of approval. But it’s important for legislators to understand what the alternative looks like, and why their constituents may feel that a utility-operated program shouldn’t be the only option.

Will Virginia run roughshod over local zoning power to help gas drilling companies?

Although Virginia’s 2017 General Assembly session is still more than three months off, fossil fuel interests will already be planning how to win more special favors from the legislature. In past years they’ve gotten subsidies or a relaxation of environmental safeguards. This year, it could be help dealing with pesky local governments that want to protect communities from fracking. Guest blogger Linda Burchfiel brings us the story.

Photo credit Virginia Sierra Club

Photo credit Virginia Sierra Club

Even in a Dillon Rule state like Virginia, where local governments have only the authority conferred on them by the state, localities have some authority over matters that affect the daily life of residents. Traditionally they have authority to enact zoning ordinances to maintain their sense of community. Recently, counties have started to use their authority to limit the ability of natural gas drilling companies to conduct fracking operations within their borders. Now the industry is pushing back—hard.

Indeed, any action that limits fracking sends the oil and gas industry into high gear. The industry is already working to undermine new state regulations governing disclosure of chemicals used in fracking operations. Based on the experience of other states, we expect to see the industry seek legislation in Virginia’s upcoming General Assembly Session to block local authority over fracking.

New forms of “unconventional drilling,” including hydraulic fracturing or “fracking,” make drilling for natural gas potentially profitable in parts of Virginia that have no history of oil and gas development. Fracking companies have been travelling to new areas, leasing acres of land and approaching local governments for permits. Before considering permits, some local governments have insisted on researching fracking and its consequences.

This happened in 2010 in Rockingham County, which sits in the Shenandoah Valley atop a sliver of the Marcellus Shale. When a Texas-based drilling company requested permits to conduct fracking operations there, county supervisors decided they had better educate themselves on the subject. A Republican board member took the lead, investigating the safety records of fracking companies in other states and sounding the alarm about his findings. Facing growing opposition and unwilling to wait, and with falling gas prices making fracking in the county less profitable, the drilling company eventually withdrew its request.

Fracking also threatens the Tidewater area, where the U.S. Geological Survey estimates the Taylorsville Basin may contain over a trillion cubic feet of shale gas in an area underlying parts of more than a dozen Virginia counties. (A map of the Taylorsville Basin can be found here.) But while the potential for industry profits may be good, the potential risks are much greater. This low-lying region is in the Chesapeake Bay watershed and contains the Potomac Aquifer, which supplies water for drinking, agriculture and industry for almost half of Virginia’s population. In recognition of these unique environmental challenges, the Virginia Oil and Gas Act includes special provisions to protect the Tidewater Region. Two such provisions are the requirement of an environmental impact assessment for a permit, and a prohibition of drilling for oil or natural gas within 500 feet of the Chesapeake Bay or any tributary.

To add further safeguards, the King George Board of Supervisors proposed an ordinance in August 2015 with specific restrictions intended to protect the community from the noise, traffic and environmental degradation of fracking. After the gas industry threatened to sue, the Board held a new public hearing this year, then passed the ordinance with only slight modifications. Restrictions include a prohibition on well drilling within 750 feet of a waterway or road or occupied building, limiting drill sites to four acres, prohibiting holes from being bored within 100 feet of a property line, and requiring each company interested in drilling to apply for a special exception permit and to submit extensive information.

Although the oil and gas industry had tried to influence the Board’s decision with the threat of long and expensive litigation, its legal theory is weak. A 2015 opinion by Attorney General Mark Herring affirms that municipalities have the authority to use zoning ordinances to restrict fracking, including authority to prohibit it entirely within a jurisdiction. His opinion overturned that of the previous Attorney General, Ken Cuccinelli, who had stated that localities could not “ban altogether” oil and gas exploration and drilling through zoning ordinances. Even Cuccinelli, however, had conceded that a county “may adopt a zoning ordinance that places restrictions on the location and siting of oil and gas wells that are reasonable in scope and consistent” with applicable state laws.

If the industry can’t win in court, though, it may attempt to use the legislature to pass legislation taking away local governments’ ability to limit fracking. Given the historic influence the fossil fuel industry has on Virginia’s General Assembly, this poses a serious threat to localities that want to control their own fate.

The industry has an ally in this effort: the American Legislative Exchange Council (ALEC), a lobbying organization heavily funded by the fossil fuel industry. ALEC counts many conservative Virginia legislators among its members, as well as utility giant Dominion Resources. ALEC members draft and share model state-level legislation that favors corporate interests. ALEC claims to support sending power back to the local level, but in fact it consistently favors unlimited fossil-fuel extraction and burning, regardless of ALEC’s ostensible principles. So if local governments want to restrict fracking, while state legislatures are less inclined to do so, ALEC will likely favor blocking local government restrictions.

A recent news account revealed that ALEC and its local government affiliate, the American City-County Exchange (ACCE) are working to block local government action in states where the state legislature is more corporate-friendly than local governments. Thus we should be prepared to see ALEC insert itself in Virginia’s legislative process to try to block local restrictions on fracking.

Indeed, ALEC has already been working in other states to stop local governments from restricting fracking. This includes Texas, which passed a preemptive ban on local government efforts to stop fracking in 2015. In Florida, a similar ALEC-supported ban was defeated after opponents pointed out that the measure threatened localities’ traditional control over other local issues, such as education.

Linda Burchfiel is the Fracking Issues Chair for the Virginia Chapter of the Sierra Club.

Sierra Club scorecard plumbs divisions among Virginia legislators

SC ScorecardBy and large, Virginia Republicans are still locked in a fossil fuel echo chamber, where “all of the above” and “war on coal” guide their votes. Virginia Democrats mostly acknowledge the damage climate change is doing to the commonwealth and around the planet and support a course correction. And regardless of ideology, large majorities from both parties vote for whatever Dominion Power wants.

These are the major takeaways from this year’s legislative session and the 2016 Climate and Energy Scorecard, just released by the Virginia Chapter of the Sierra Club. Constituents and clean energy advocates will want to look at not just the raw grades of individual legislators, but also the discussion provided in the report, to understand the dynamics of our General Assembly.

Twenty-eight Democrats earned perfect scores. All but a handful of Republicans earned failing grades. Sierra Club gave extra credit to legislators who introduced bills that advanced clean energy. This included several Republicans highlighted in the scorecard, but their bad votes on other bills dragged down their overall scores.

This is really a shame, since some Republicans have worked hard to advance clean energy legislation. Leesburg Delegate Randy Minchew comes to mind here for his dogged efforts on behalf of distributed solar energy, something you might not guess from his overall grade of D.

Often, it seems, reform-minded Republicans go along with their party’s more retrograde positions where they are pressured to do so by their party leaders, or where the votes are so lopsided that there is nothing to gain from breaking with the majority.

If party leaders have an outsize influence on voting, so too does Dominion Power. In fact, if you want to know who the true champions of the people are, don’t look at party affiliation. Look for the few legislators who will stand up to the most powerful political force in Richmond.

That assumes you can find votes to examine. In the introduction to the Sierra Club scorecard, Legislative Chair Susan Stillman noted with frustration this year’s paucity of recorded votes available to score:

The challenges of producing a fair and even scorecard are growing, as are the opportunities for Virginia citizens to have a clear and accurate picture of their elected representative’s voting record. Transparency in the General Assembly sunk to a new low this year: 95% of the bills defeated in the House of Delegates were done so on an unrecorded vote or no vote at all. This is not business-as-usual: just over a decade ago, nearly every bill that passed through the House received a recorded vote.

An ongoing problem, both for scorecard referees and for clean energy advocates, is that most bills that would advance the cause of renewable energy and energy efficiency never make it out of committee; in the House, the bills are heard in a tiny subcommittee. Not only do votes go unrecorded, but this approach deprives most of our elected representatives of the opportunity to vote on some of the most important energy policy issues facing Virginia.

And then there was this year, in which even the subcommittee members never got a chance to vote. A dozen or so of the most promising clean energy bills were never heard at all, but were sent to a newly-formed interim study subcommittee, ostensibly for the purpose of giving these bills the benefit of greater deliberation. The effect was to kill them quietly for the year.

As Stillman notes, all these unrecorded votes make it hard to know where the vast majority of legislators stand:

Without a recorded vote, the public is deprived of the full measure of his or her elected official’s voting history. And the problem of unrecorded votes is growing worse. This year’s unprecedented rate of unrecorded votes in the House is up from 76% in 2015—a 25% jump in one year. Virginia legislators are killing more bills than ever without accountability for their actions. This practice is wrong, and it’s dangerous for our democracy.

Stillman gives a shout-out to the founding members of the new, bipartisan Transparency Caucus for its efforts to make all votes public and ensure every bill gets a hearing.

These would be modest reforms, but welcome. If sunlight is the best disinfectant, there’s a big, dirty House (and Senate) in Richmond that need cleaning.