Dominion’s green energy package comes with a catch: coal. Businesses aren’t happy.
October 30, 2019

By Sarah Vogelsong 

Dominion Energy’s newest plan for a renewable energy package that environmentally conscious customers can buy is causing some big businesses, including Walmart, to push back against what they call “an unattractive offering.”

Why? Companies and an industry group that represents some of Virginia’s and the nation’s largest employers have two complaints. First, the portfolio of renewable energy resources assembled by Dominion includes numerous carbon-emitting facilities, some decades old, including one in Southwest Virginia that derives 93 percent of its energy from coal and is listed by Dominion on its website as a coal asset.

Second, if the utility succeeds in winning approval for its plan, that will deal a blow to the state’s fledgling renewable energy market, leaving nowhere else for most customers in the commonwealth to turn if they want to buy renewables.

“Now is the time to foster innovation and development of renewable energy options, not stifle it,” Lisa Perry, Walmart’s senior manager of energy services, wrote in testimony filed this October with the State Corporation Commission, the regulatory body that will weigh the merits of Dominion’s proposal later this fall.

This isn’t the first time Dominion, which, as Virginia’s largest utility, controls about two-thirds of the state’s electric customers, has proposed a renewable energy package for customers. (In Virginia, the offering is formally called a “renewable energy tariff,” and Dominion has labeled this particular plan Rider TRG, short for “Total Renewable Generation.”) The utility also floated plans for two green offerings in 2017. One was denied by the SCC, while the other was withdrawn by Dominion after the commission approved a package proposed by the state’s other major utility, Appalachian Power Company.

Unlike Dominion’s current proposal, however, the 2017 plans didn’t specify exactly where the renewable energy bought by customers would come from. Under the first, the company would have bought renewable energy through power purchase agreements with “existing or new facilities” while also developing its own fleet of renewables. Under the second, the company intended to craft a portfolio made up of “a combination of hydroelectric, wind and new solar (i.e., constructed after 2017) resources.”

The utility’s most recent proposal diverges from that approach, identifying a portfolio of 14 specific facilities that will supply program customers with renewable energy. Eight are solar, either owned by Dominion outright or with which the utility has a contract to purchase power. Two others — the Roanoke Rapids and Gaston power stations, which began operations in 1955 and 1963, respectively — are hydroelectric.

And four, the most controversial of the bunch, are associated with biomass. Besides the AltavistaHopewell and Southampton stations, which began burning coal in 1992 and were converted to burn biomass in 2013, the portfolio includes the Virginia City Hybrid Energy Center in Wise County, which started operations in 2012 and can produce a maximum of 20 percent of its energy from biomass (with the other 80 percent generated by coal).

Technically, under Virginia law, all of these sources are considered renewable. The state’s definition of renewable energy is expansive, including energy derived from biomass, “sustainable or otherwise,” even if it is produced at a facility that also burns fossil fuels like coal.

But while opponents of Dominion’s renewable energy plan acknowledge that its portfolio is in line with the letter of the law, they argue in SCC filings that the proposal’s mismatch with state goals of encouraging development in renewables means that it falls well short of what customers seeking to buy clean energy are looking for.

Virginia’s changing definition of renewable energy

2007: “Renewable energy” means energy derived from sunlight, wind, falling water, sustainable biomass, energy from waste, wave motion, tides, and geothermal power, and does not include energy derived from coal, oil, natural gas or nuclear power.

2008: “Renewable energy” means energy derived from sunlight, wind, falling water, sustainable biomass, energy from waste, municipal solid waste, wave motion, tides, and geothermal power, and does not include energy derived from coal, oil, natural gas or nuclear power.

2009 (current definition): “Renewable energy” means energy derived from sunlight, wind, falling water, sustainable biomasssustainable or otherwise, (the definitions of which shall be liberally construed), energy from waste, municipal solid waste, wave motion, tides, and geothermal power, and does not include energy derived from coal, oil, natural gas or nuclear power. Renewable energy shall also include the proportion of the thermal or electric energy from a facility that results from the co-firing of biomass. 

“Customers are participating in utility programs to drive additional renewable energy deployment, to lower emissions, and to demonstrate leadership,” wrote Caitlin Marquis, a director of energy industry trade association Advanced Energy Economy, in testimony opposing Dominion’s proposal to the SCC. “Providing financial support to existing projects that are more than 15 years old and to emitting resources — including a seven-year-old coal plant co-fired with biomass — is inconsistent with customers’ motivation and objectives.”

Of the case’s players, none have taken as firm a stance as Walmart, which Perry says will not participate in Dominion’s program if approved by the SCC, even though the retailer has set an ambitious target of supplying 50 percent of its energy needs from renewables by 2025.

“The program fails to meet our expectations as a customer because it offers a product that only results in additional costs to Walmart and does not allow Walmart to realize the benefits (or the costs) of opting to be served by renewable resources,” she wrote.

Just what do businesses want out of a renewable energy program? Bryn Baker, director of policy innovation for the Renewable Energy Buyers Alliance, an industry group that counts leaders from corporate titans like General Motors, Google and Amazon on its board of directors and is opposing Dominion’s proposal, pointed to the Corporate Renewable Energy Buyers’ Principles as a guide.

First formulated in 2014, these principles include such goals as “greater choice in procurement options” and “access to new projects that reduce emissions beyond business as usual.” And, according to Baker’s testimony, Dominion’s renewable energy proposal isn’t in line with them.

Key among her criticisms are that the plan relies on facilities that already exist — and in some cases have been operating for decades — rather than incentivizing the development of new renewable facilities, and that it relies on the largely coal-fired Virginia City plant.

That facility, SCC filings show, has never operated without burning coal.

A filing from the State Corporation Case considering Dominion Energy’s proposed 100 percent renewable energy tariff, including a question by Appalachian Voices and a response by Dominion.

“There is not a single second where [Virginia City] operates 100% on biomass feedstocks; whenever electric power flows out of [the facility], it is necessarily combusting coal,” argued William Cox, CEO of energy policy analysis firm Greenlink Analytics in testimony for Appalachian Voices, which is also opposing Dominion’s application.

On financial grounds, too, opponents argued that Dominion’s plan — which charges a premium of about 3.6 percent above the typical cost of service — also falls short.
“The costs of renewable technologies have dropped dramatically and zero-emission resources like wind and solar operate are now cost-competitive with existing fossil-based supply,” testified Travis Wright, vice president of energy and sustainability for data center developer QTS Realty Trust, on behalf of REBA. “In these economic conditions, rational commercial consumers are no longer willing to pay a premium cost for renewable energy without receiving a premium level of benefit.”

A Dominion spokesman did not respond to a request for comment for this story. Spokespeople have previously said that they have a policy of not speaking with the Virginia Mercury.

Closing the renewable energy market?

As the case rolls toward its Nov. 21 hearing, stakes are high. Renewable energy is increasingly big business in the U.S., and Virginia, with its burgeoning pool of data centers hungry for energy and close proximity to the nation’s capital, is a desirable market.

But the state’s uniquely complex regulatory structure has complicated development. As a semi-regulated state, Virginia allows few opportunities for businesses that are neither recognized monopolies nor electric cooperatives to sell energy within the commonwealth. One such exception is “100 percent renewable energy”: since 2007, licensed non-utilities have been permitted to sell such energy to customers as long as the monopoly utility isn’t also offering such a product.

There is, however, a catch: As soon as the utility receives approval to sell its own 100 percent renewable energy package, the market is closed, and no more non-utilities can begin offering such a product. Those that are already active can continue to serve their customers for the duration of their contract but can’t enroll anyone new.

It’s a scenario that played out recently in Appalachian Power Company’s service territory, where competition has been halted by the SCC’s approval of the monopoly’s own 100 percent renewable energy plan. And it’s one that the parties opposing Dominion’s tariff fear will come to pass in that utility’s territory, which has recently seen three non-utilities — known in this context as competitive service providers — begin offering renewable energy alternatives to customers.

Dominion has vigorously fought the advance of these companies and sought in the present case to speed up the commission’s proceedings, a move interpreted by competitive service provider Direct Energy, along with Costco and Advanced Energy Economy, as an effort to curtail CSPs’ enrollment of additional customers. Dominion argued that such arguments “lack merit” and that it would benefit the public interest to have the matter decided as quickly as possible; nevertheless, the State Corporation Commission denied the utility’s request to accelerate its deliberative process.

Although the window for competitive service providers to operate in Virginia remains open, further development would be stymied by commission approval of Dominion’s plan, Cox fretted in his testimony for Appalachian Voices: “Some opportunities to increase Virginia’s reliance on clean energy will be set back from day one by eliminating an option that competitively provide[s] 100% renewable energy to participating customers and replacing it with a utility construct that does nothing of the sort,” he contended.

Frank Lacey, a consultant for Direct Energy, also complained about the outcome that would result from commission approval of the utility’s tariff.

“Unfortunately,” he wrote, “the proposed tariff provides customers with only one option for a certain renewable energy service, taking away many other customer options.”

Other things to know about Dominion’s proposed renewable energy package

  • Dominion’s proposal, known as Rider TRG, is explicitly modeled on the 100 percent renewable energy tariff proposed earlier this year by Appalachian Power Company and approved by the State Corporation Commission.
  • The portfolio the utility has assembled is expected to meet “the capacity and energy requirements of approximately 50,000 residential customers or their commercial equivalent.”
  • Customers will pay a premium “based on the prevailing market value of retail renewable energy” equal to about $4.21 per megawatt-hour. They will also pay a “balancing charge” designed to hold non-participating customers “substantially harmless.”
  • The typical residential customer using 1,000 kilowatt-hours of energy who signs up to get 100 percent renewable energy from Dominion would see an average monthly bill increase of $4.21.
  • Customers who do not elect to participate in Dominion’s renewable energy program will see no increases in either rates or bills.
  • A hearing on the application will be held before a hearing examiner at the State Corporation Commission Nov. 21.
Dominion’s Bid for 100% Renewables Tariff Could Destroy Energy Choice in Virginia
August 21, 2019

A move by Dominion Energy to monopolize renewables in their service has the potential to debilitate energy choice in Virginia.

Dominion is asking the Virginia State Corporation Commission (SCC) to approve a 100% renewables tariff that would give the utility a tremendous amount of control over its service territory, according to Cassady Craighill, communications director of renewables-focused Clean Virginia.

“If this tariff Dominion is asking for is approved by the SCC it pretty much eliminates competition for renewables in their service territories,” Craighill said. “People want choice. They want competition. They want wind and solar and this tariff would not exclusively provide that.”

SCC Approval Would Essentially Lock-In Dominion Customers

The tariff would make it difficult for customers who want renewables to exit their Dominion contracts because Dominion would argue it has the SCC’s stamp of approval as a renewable energy supplier.

“We’ve seen a lot of companies apply to leave based on wanting renewables and based on more competitive pricing,” Craighill said. “Several tech companies back in the spring actually sent a letter to the regulatory agency saying Dominion wasn’t offering enough renewables.

“You’re also seeing that from companies like Walmart and Costco, too,” she added. “They’re all clamoring to leave Dominion’s grip and go with another service provider.”

Dominion’s Track Record in Renewable Energy Is Questionable

Dominion’s renewable energy makes up 2% of its overall generation, Craighill said. The tariff could make it possible for Dominion to provide what would be dubbed renewable energy from coal, too, Craighill said.

The combination of these two facts has some doubting the company’s intention to provide the renewable energy its commercial, industrial and residential customers seek.

“It’s not a good faith effort to provide renewable energy,” Caighill said. “As we stand now, Dominion has a really poor track record for renewables, period.

“To bully other service providers of offering (a 100% renewables) option when they don’t really offer it themselves is pretty poor practice,” she added.

When asked why the SCC would approve Dominion’s request for a tariff in light the negative side effects, she said she didn’t have a good answer.

“It’s a bad move for the environment, it’s a bad move for customers who want energy choice, it’s a bad move for climate change and it’s a bad move for attracting new companies and employers,” she said. “I don’t think there’s any good reason approve.”

Dominion’s 100% renewables tariff could kill Virginia’s retail choice ambitions
August 5, 2019

By Catherine Morehouse 

In an increasingly changing energy world, state energy markets vary widely in how they allow companies to compete for and retain customers. And that’s beginning to matter more in states with large retail customers in a (mostly) regulated vertical energy market, such as in Virginia.

Dominion Energy, the state’s dominant utility, in May filed an application with the State Corporation Commission (SCC) for approval of its 100% renewable energy tariff. If approved, that tariff offering would prevent other retail electricity providers from competing in the market to give large and residential customers a 100% renewable option.

Virginia customers are only able to procure energy outside Dominion through two routes: If a customer has a load larger than 5 MW, it can apply to exit through the SCC. Or, customers of any size can shop for a 100% energy product from competitive services providers (CSPs).

Two CSPs — Direct Energy and Calpine Energy — have been soliciting business customers in the state to offer a 100% renewable energy package. On July 15, Dominion terminated processing all current and future interconnection applications with those CSPs, citing concerns over their ability to provide that offering to customers.

Policy watchers say this fight between Dominion and the CSPs highlights a larger tension in the state — whether Virginia should move toward a competitive retail choice market, something customer advocates, environmentalists, corporate customers and others are advocating for.

Battling for customers

The state’s other utility, Appalachian Power Company (APCo), had its tariff approved in January, meaning CSPs cannot offer their 100% renewables package through that power provider’s load zone. And though Dominion filed with regulators in 2017 for approval of its 100% tariff, it says it has modeled its new application off APCo’s.

“Our goal is to ensure that all customers in Virginia are protected. And so we want the competitive service providers to be held to the same standard that APCo and Dominion Energy are being held to,” Dominion spokesperson Audrey Cannon told Utility Dive. “We want them to have to be able to show the SCC that they have that generation in the same way that we’re showing it.”

Direct Energy serves almost a quarter million business customers across North America and says they “clearly have the expertise needed to provide renewable power to customers,” Direct Energy Director of Government and Regulatory Affairs Ron Cerniglia told Utility Dive. “We look forward to establishing in the course of this proceeding that we are supplying customers with 100% renewable energy. And we’ve certainly adequately documented [Direct Energy’s] ability to do so.”

That process is “very prescriptive,” according to Cerniglia. Direct Energy contracts with a renewable energy provider and delivers that power through Dominion’s load zone, pending its approval.

The only exception, is if the utility offers a 100% renewable option in the form of a tariff, regulators ruled in 2017 after pressure from Direct Energy to clarify the rules.

In May of that year, Dominion proposed one of those tariffs, but regulators shot down the proposal a year later, ruling the process would have allowed “extraordinary discretion delegated to the utility.”

But Dominion says this time around it expects to receive approval — because APCo pulled it off in January.

“We modeled that 100% renewable tariff really closely after the one that was recently approved by the Commission for APCo,” said Cannon. “We intentionally followed their guidance. So that’s why we feel good about, hopefully, the commission approving it.”

The utility, under its proposed tariff, would use wind, solar and its four biomass units, including its 600 MW Virginia City Hybrid Energy Center, which generates the majority of its power from coal, and up to 117 MW from biomass. By 2023, 10% of the plant’s power will come from biomass, which qualifies the plant as a renewable facility, said Cannon.

But the fight between the two providers and Dominion highlights a larger standoff in the state.

Battling for a competitive market

“There are sort of two fights,” Harrison Godfrey, executive director of Advanced Energy Economy’s Virginia chapter told Utility Dive. “One is this very technical fight” around qualifying the CSPs to deliver renewable energy into Dominion’s load zone, he said.

“That’s a concern in of itself — obstruction by bureaucracy and slow walking these processes. That coincides with a concern about whether or not you essentially get the introduction of a tariff … that closes down the 100% market for consumers large and small, but provides them with an option that is substandard or does not meet their specific requirements.”

“Virginia is a little unique,” said Godfrey. The state currently operates under a “hybrid” market, somewhere between regulated and deregulated, he told Utility Dive.

Virginia began the process of deregulation, along with a lot of the Northeast, in the late 1990s, before the “Re-regulation Act” was passed in 2007, creating the current structure, which incorporates most customers into the vertical utility model, with a few exceptions.

If a business customer’s load is greater than 5 MW of electricity, it can apply to the SCC to leave Dominion’s service. Regulators earlier this year denied the exit applications of two of the utility’s larger customers, Walmart and Costco, citing concerns over impacts to other ratepayers.

That brings forward another concern outside customer access to clean energy: cost.

“As an entrepreneur I just prefer a competitive marketplace,” said Bob Pizzini, CEO of iFly, an indoor skydiving company in Virginia Beach, which has a demand capacity of approximately 1 MW. Pizzini is one potential customer of Direct Energy and says he has a problem with both the pricing structure and the accessibility of clean energy under Dominion.

Expense was a large driver for Walmart and Costco as well — Costco in its application complained Dominion’s “excessive costs” compounded through “piling on” rate adjustment clauses were unfair. The utility in April filed for a return on equity of 10.75% and last week a coalition of customer groups, including the U.S. Navy, Walmart and low-income advocacy groups protested that proposed increase.

And in May, several technology customers, including Microsoft, Apple and Salesforce, wrote a letter to the utility, criticizing its integrated resource planfor not incorporating enough renewable energy and relying too heavily on natural gas. Earlier that month, a group of environmentalists and free market advocates formed a coalition, calling for the state to deregulate its energy market.

“Big retail customers like Walmart, Costco, all the tech companies that are creating a data center right now in northern Virginia, they’re pretty much shackled to Dominion Energy,” Cassady Craighill, communications director at Clean Virginia, one of the groups in the coalition, told Utility Dive.

“But what’s important to remember that you shouldn’t have to be a major corporate customer to use and even have the option to buy renewable energy. … So in the case of Direct Energy, we’re not necessarily saying that that’s the choice for everybody, but the point is that there’s no choice right now.”

Written comments on the application are due by Nov. 14 and a public hearing to receive testimony on Dominion’s Tariff is scheduled for Nov. 21.

The Battle for Virginia’s Corporate Renewables Market Heats Up
July 26, 2019

By Emma Foehringer Merchant

Tensions are escalating in Virginia between Dominion Energy, rival electricity suppliers and the state’s growing list of big corporations demanding renewable power.

Direct Energy and Calpine, two competitive service providers (CSPs) working in utility Dominion’s Virginia territory, alleged in separate motions filed Monday that Dominion has stopped processing their 100 percent renewable electricity enrollment requests for large customers in recent months. The two companies asked state regulators to swiftly intervene to restart enrollment.

Virginia allows competitive service providers to offer 100 percent renewables to large customers as long as the regulated utility does not provide that option itself, which Dominion currently does not.

The appeals from Calpine and Direct Energy come in response to Dominion’s petitions filed earlier this month, which ask the regulators to confirm that competitive service providers have adequate renewable supply to sign on new customers. The utility suggested that neither Calpine nor Direct Energy has that capacity.

Direct Energy told Greentech Media that Dominion’s comments have “no basis in fact or law.”

The battle for Data Center Alley

The tensions over which provider will serve large customers, many of them seeking ever-increasing percentages of renewable power, represent a particular problem in Virginia, where cheap electricity has remade part of the state as “Data Center Alley.”

The number of large companies looking for affordable and often renewable power in the state has put a squeeze on Dominion, which currently produces just 5.6 percent of its electricity in the state using renewables. The utility has also weathered criticism from large corporate customers claiming that its rising rates make power unaffordable.

In 2018, companies including eBay and Salesforce argued in a letter to the State Corporation Commission that Dominion’s proposed integrated resource plan wouldn’t provide the renewables that companies flocking to the area are demanding. Other companies including Apple and Adobe followed up with another letter this May. The SCC ended up rejecting the IRP and approving an updated version last month.

But the SCC has also rebuffed some attempts from corporations to leave Dominion behind. This year regulators rejected bids from both Walmart and Costco to drop Dominion and procure electricity separately, though they suggested the companies should escalate their fight to the legislature. Other companies including Target, Cox Communications and Kroger have also filed applications requesting an exit.

The most recent dust-up over CSPs comes soon after Dominion filed an application with regulators in late May for its own 100 percent renewables offering, which the utility is seeking to get approved within six months. Regulators rejected Dominion’s last attempt at such an option in May 2018.

Ron Cerniglia, Direct Energy’s director of corporate and regulatory affairs, called Dominion’s move to halt enrollments “an overreach and an arrogant attempt to block competition” while Dominion’s own request is processed.

“They’re essentially running the clock by delaying customers’ statutory ability to secure a 100 percent renewable product,” said Cerniglia. “We think Dominion is just putting forward these legal theories with the real purpose of delaying the inevitable, hoping competitive retailers will leave and trying to dissuade customers from switching to a competitive service provider.”

Dominion questions CSPs’ offerings

Dominion, however, told Greentech Media its petition aims “to ensure that all electric customers in Virginia are protected.”

“We think it’s important to ensure that customers who take part in these programs are in fact receiving 100 percent renewable energy,” said spokesperson Samantha Moore in an email.

Calpine did not respond to requests for comment, but in its motion filed with regulators, the company argued that “Dominion should not be allowed to unilaterally impose its own self-serving interpretation of the rules, and, in doing so, prevent customers from exercising their statutory right to choose a CSP for a 100 percent renewable product.”

Without help from the SCC, Calpine said its business in Virginia would “suffer irreparable harm.” Direct Energy said Dominion’s decision has halted over a thousand customer accounts either in the queue or likely to join it soon.

The SCC has given Dominion until July 31 to respond to the motions from Direct Energy and Calpine. Those companies will then have until August 6 to respond.

The commission declined to offer a timeline on when it might rule on the issue.

Clean Virginia Announces First Wave of Candidate Endorsements and $1 Million Effort in Virginia’s General Assembly Elections
July 16, 2019

Clean Virginia Announces First Wave of Candidate Endorsements and $1 Million Effort in Virginia’s General Assembly Elections 

Endorsed Candidates Refuse Utility Monopoly Contributions and Demonstrate Commitment to Clean Government and Clean Energy

July 16, 2019 

Today, Clean Virginia announced its plans to invest over $1 million in Virginia’s 2019 state legislative elections to support candidates with a principled stance against taking campaign contributions from Virginia’s regulated utility monopolies. Clean Virginia also announced its first round of general election endorsements for Virginia’s General Assembly, all of whom are champions of clean government and clean energy. 

“Virginians are ready to elect candidates who truly represent their communities and the future of Virginia,” Clean Virginia Executive Director Brennan Gilmore said. “Clean Virginia is thrilled to endorse 61 candidates who have demonstrated a commitment to a functional and fair democracy, 21st century energy policy, and a check on the powerful utility giants in Virginia who have stymied progress on both.”

Clean Virginia’s Endorsements:

https://www.cleanvirginia.org/our-endorsements/

Clean Virginia endorses candidates based on a variety of criteria, including: public statements, responses to our 2019 Candidate Questionnaire on clean governance and clean energy policy, legislative record (for incumbents), and their stances on accepting contributions from regulated utility monopolies — like Dominion Energy and Appalachian Power Company — and their employed lobbyists. Clean Virginia’s investment will support a wide range of candidates and incumbents of both political parties who have this principled stance. The efforts will include targeted digital campaigns, grassroots organizing, and direct campaign contributions from Clean Virginia Fund and Clean Virginia Board Chair Michael Bills. 

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Clean Virginia is a 501(c)4 independent advocacy organization with an associated Political Action Committee, Clean Virginia Fund. Clean Virginia works to fight corruption in Virginia politics in order to promote clean energy, a robust, competitive economy, and community control over our energy policy. We are motivated by the core belief that our democracy should serve average Virginians over special interests. 

How the General Assembly failed Virginia again on clean energy
March 12, 2019

By Ivy Main 

When the General Assembly session opened Jan. 9, legislators were presented with dozens of bills designed to save money for consumers, lower energy consumption, provide more solar options and set us on a pathway to an all-renewables future.

Almost none of these measures passed, while bills that benefited utilities kept up their track record of success.

Before I review the individual bills, it’s worth considering for a moment how very different Virginia’s energy future would look if the best of 2019’s bills had passed. In that alternate universe, Virginians could have looked forward to:

  • A freer and more open market for renewable energy at all levels, including unrestricted use of third-party financing for renewable energy, an end to punitive standby charges and arbitrary limits on customer solar and new opportunities for local governments to install solar cost-effectively.
  • A mandate for utilities to achieve real energy efficiency results, not just to throw their customers’ money at programs.
  • An energy efficiency revolving fund to offer no-interest loans to local governments, public schools and public institutions of higher learning.
  • The right to choose an electricity supplier for renewable energy, instead of being restricted to more expensive and less desirable utility offerings (if available at all).
  • Tax credits for solar on landfills, brownfields and economic opportunity zones.
  • Rebates for low and moderate-income Virginians who install solar.
  • A new revenue source for spending on climate adaptation efforts, energy efficiency programs and coalfields transition, made possible by the auctioning of carbon allowances to power plants as part of joining the Regional Greenhouse Gas Initiative; half the lowered carbon emissions would have been achieved through installing wind and solar.
  • Movement towards an eventual phase-out of fossil fuels.
  • Stronger assurance that customers won’t be overcharged for the use of the Atlantic Coast Pipeline or other fracked-gas pipelines owned by utility affiliates.

But in a legislature still ruled by Dominion Energy and Republicans (in that order), what we mostly got instead were bills letting utilities charge their electricity customers for speculative development projects (HB 1840HB 2738 and SB 1695) and rural broadband infrastructure (HB 2691), and another that would actually prevent the state from pursuing carbon-reduction regulations (HB 2611). The governor is likely to veto this last one, however.

A year ago, legislators agreed that Dominion and Appalachian Power should propose hundreds of millions of dollars in energy efficiency programs, as a way to sop up some of those companies’ excess earnings instead of the unthinkable alternative of taking the money away from them.

This year, subcommittees killed bills (HB 2294HB 2294) that would have insisted those programs be effective. (HB 2294 would have also made last year’s renewable energy goals mandatory.)

The energy efficiency bills that did pass were far more modest: making it harder for the SCC to reject utility-proposed programs (HB 2292 and SB 1662) and establishing a stakeholder group to provide input on programs (HB 2293).

“Energy Freedom,” and other similar legislation aimed at opening up the rooftop solar market, died on party-line votes in committee.

A solar array. (Getty Images)

In fact, the party-line vote became a theme whenever bills came up that Dominion opposed. Anyone sitting through the House Commerce and Labor subcommittee hearing, watching one customer solar bill after another be unceremoniously killed, might have wondered if the vote buttons had gotten stuck.

The only significant renewable energy legislation to make it through the committee gauntlet was a long-negotiated compromise bill that gives customers of Virginia’s rural electric cooperatives more opportunities to install solar, at the cost of accepting future new demand charges (HB 2547and SB 1769).

Customers of Dominion and APCo didn’t get even that much, though one bill — from a Republican — calls for those utilities to provide a total of $50 million in assistance to low-income, elderly and disabled customers for solar and energy efficiency. HB 2789 by Del. Israel O’Quinn, R-Washington, marks one of the rare bright spots of the 2019 session.

Two other minor renewable energy bills could make incremental progress for a handful of municipalities (HB 2792 and SB 1779) and school systems (HB 2192 and SB 1331).

And that, I’m sorry to say, is pretty much it for energy legislation this year.

Bills that passed: renewable energy

 HB 2192 (Del. Nick Rush, R-Montgomery) and SB 1331 (Sen. Bill Stanley, R-Franklin) is a school modernization initiative that includes language encouraging energy efficient building standards and net zero design. It also encourages schools to consider lease agreements with private developers.  It does not provide for the more common use of third-party power purchase agreements. It has nice (but not mandatory) language on net zero schools. It allows leases with private developers who will construct and operate buildings and facilities. It permits public schools to contract with utilities for solar energy as part of the school modernization project. An amendment added language requiring that renewable energy facilities must be on school property and cannot be used to serve any other property. PPAs are not mentioned. Ambiguous language in these provisions may cause problems for schools. Both bills passed the House and Senate almost unanimously with Sen. Dick Black, R-Loudoun, the only naysayer.

• HB 2547 (Del. Tim Hugo, R-Fairfax) and SB 1769 (Sen. Glen Sturtevant, R-Richmond) make changes to the net metering program for customers of electric cooperatives. The overall net metering cap is raised from the current one percent to a total of five percent, divided into separate buckets by customer type and with an option for coops to choose to go up to seven percent. Customers will be permitted to install enough renewable energy to meet up to 125 percent of previous year’s demand, up from 100 percent today. Third-party PPAs are generally legal for tax-exempt entities, with a self-certification requirement. However, the co-ops will begin imposing demand charges on customers with solar, to be phased in over several years, replacing any standby charges. This bill was negotiated between the co-ops and the solar industry via the “Rubin Group.” An amendment to the bill establishes a stakeholder group for further discussions with Dominion and Appalachian on net metering, a prospect that will appeal only to eternal optimists and amnesiacs who don’t remember the past five years of time-wasting, fruitless negotiations. SB 1769 passed both the Senate and House unanimously.  HB 2547 passed the House unanimously and the Senate 36-4, with Black and Sens. Amanda Chase, R-Chesterfield, Richard Stuart, R-Stafford, and David Suetterlein, R-Roanoke County, voting no this time.

 HB 2621 (Del. Riley Ingram, R-Hopewell) and SB 1398 (Stanley) authorize a locality to require the owner or developer of a solar farm, as part of the approval process, to agree to a decommissioning plan. This was a negotiated Rubin Group bill. SB 1398 was incorporated into SB 1091 (Sen. Bryce Reeves, R-Spotsylvania), which was amended to conform to the compromise language of HB 2621.

• HB 2741 (Del. Lashrecse Aird, D-Petersburg) establishes a rebate program for low and moderate-income households that install solar. Amended so it retains the structure of the program but removes funding. As amended it passed both House and Senate.

• HB 2792 (Del. Kathy Tran, D-Prince William) and SB 1779 (Sen. Adam Ebbin, D-Alexandria) establish a six-year pilot program for municipal net metering for localities that are retail customers of investor-owned utilities. The initial bill negotiated with the utilities was much more limited than most localities wanted; further amendments whittled it down to a point where it won’t help localities with significant projects like landfill solar. However, we are told it will be useful for a few small on-site projects that don’t need PPAs. Even with the utilities on board, 21 House Republicans and one senator (Sutterlein) voted against the House bill, though only 12 House Republicans were hardcore enough to vote against the identical Senate bill when it crossed over.  

• HB 2789 (O’Quinn) requires Dominion and Appalachian to develop pilot programs to offer solar and energy efficiency incentives to low-income, elderly and disabled customers. The energy efficiency money, totaling $25 million, is to come out of the amount the utilities are required to propose in efficiency spending under last year’s SB 966. The renewable energy incentives, also $25 million, cannot come out of that spending; the legislation is silent on how it will be paid for. Passed the House 90-9, with only Republicans as holdouts. Passed the Senate 37-3, with only Black, Stuart and Suetterlein in opposition.

Bills that passed: energy efficiency

• HB 2292 (Del. Rip Sullivan, D-Fairfax) and SB 1662 (Sen. Frank Wagner, R-Virginia Beach), dubbed the “show your work bill,” requires the State Corporation Commission to provide justification if it rejects a utility energy efficiency program. As amended, the bills passed almost unanimously.

  HB 2293 (Sullivan) establishes a stakeholder process to provide input on the development of utility energy efficiency programs. Passed both houses unanimously.

  HB 2332 (Del. Mark Keam, D-Fairfax) protects customer data collected by utilities while allowing the use of aggregated anonymous data for energy efficiency and demand-side management efforts. A substitute changed the bill to one requiring the SCC to convene a Data Access Stakeholder Group to review customer privacy and data access issues. As amended, the bill passed both Houses unanimously.

•  SB 1400 (Sen. Chap Petersen, D-Fairfax City) would have removed the exclusion of residential buildings from the Property Assessed Clean Energy (PACE) program, which allows localities to provide low-interest loans for energy efficiency and renewable energy improvements on buildings. After passing the Senate unanimously, the bill was amended in the House to remove the residential PACE authorization (it does expand PACE to include stormwater improvements). As amended, it passed both houses unanimously. It’s probably cheating putting this one in the “passed” category, but I needed the win.

Bills that passed: energy transition and climate

•  HB 2611 (Del. Charles Poindexter, R-Franklin) would prohibit Virginia from joining or participating in RGGI without support from two-thirds of the members of the House and Senate, making it sort of an anti-Virginia Coastal Protection Act. Passed the House on a 51-48 party-line vote. Passed the Senate on a 20-19 vote. Only one Republican, Jill Vogel, voted against it. The governor is expected to veto it.

•  HB 2747 (Del. Terry Kilgore, R-Scott) and SB 1707 (Sen. Ben Chafin, R-Russell) create a Southwest Virginia Energy Research and Development Authority “for the purposes of promoting opportunities for energy development in Southwest Virginia, to create jobs and economic activity in Southwest Virginia consistent with the Virginia Energy Plan prepared pursuant to Chapter 2 (§ 67-200 et seq.), and to position Southwest Virginia and the commonwealth as a leader in energy workforce and energy technology research and development.” Among the powers listed are promoting renewable energy on brownfield sites, including abandoned mine sites, and supporting energy storage, including pumped storage hydro. Fossil fuel projects are not listed, but are also not excluded. Both bills passed unanimously.

Bills that passed: other utility regulation

  HB 1840 (Del. Danny Marshall, R-Danville) allows utilities to develop transmission infrastructure at megasites in anticipation of development, charging today’s customers for the expense of attracting new customers. The legislation was amended to change the language to the nicer-sounding “business park,” but it continues to allow utilities to recover costs for constructing transmission lines and substations to serve these speculative projects. It passed unanimously in the Senate and 82-18 in the House, with mainly the newer Democrats voting no.

  HB 2477 (Kilgore) originally would have eliminated one of the few areas of retail choice allowed in Virginia by preventing large customers from using competitive retail suppliers of electricity, including for the purpose of procuring renewable energy, in any utility territory with less than two percent annual load growth. A substitute bill removed most of the bad provisions and confined its operation to Appalachian, but also left it incomprehensible, so I can’t possibly tell you what it does. As far as I was able to determine, no customers opposed the final bill, which passed the House and Senate unanimously.

  HB 2691 (O’Quinn) originally would have established a pilot program for electric utilities to provide broadband services in underserved areas, and raise rates for the rest of us to pay for it. The bill was amended so utilities can only provide the capacity on their lines to private broadband suppliers. The investment is eligible for recovery as an electric grid transformation project under last year’s SB 966, presumably so it is paid for out of utility overearnings instead of a new rate increase. The amended bill passed both houses almost unanimously.   

 HB 2738 (Del. Lamont Bagby, D-Henrico) and SB 1695 (Wagner) authorizes utilities to acquire rights of way for sites that the Virginia Economic Development Partnership Authority decides could be developed to attract new customers and allows utilities to recover costs from existing customers. A substitute tightened the requirements somewhat, but it remains another giveaway to utilities in the name of speculative development, at the expense of landowners and consumers. The House bill passed 85-13 with mostly newer Democrats in opposition, then passed the Senate 37-3, with McPike, Spruill and Suetterlein voting no. The Senate bill passed 34-6; although the bills appear to have been identical, Sens. Amanda Chase, R-Chesterfield, Stephen Newman, R-Lynchburg and Mark Peake, R-Lynchburg, also voted no. The House vote on SB 1695 was 84-13.

 

A sign at the edge of property along South James River Road in Buckingham County that Dominion Energy has purchased for a proposed compressor station. (Robert Zullo/ Virginia Mercury).

A sampling of what failed: 

 HB 1718 (Del. Lee Ware, R-Powhatan) would have required an electric utility to demonstrate that any pipeline capacity contracts it enters are the lowest-cost option available, before being given approval to charge customers in a fuel factor case. Ware testified in committee that the bill was not intended to stop the Atlantic Coast Pipeline, but would simply guide the SCC’s review of cost recovery after the pipeline is operational. Dominion’s lobbyist argued the legislation was unnecessary because the SCC already has all the authority it needs, and it shouldn’t be allowed to look back to second-guess the contents of the ACP contract. The bill passed the House 57-40. Do look at the votes; this is the most interesting energy vote of the year, as it neatly separates the Dominion faction from the pro-consumer faction. Unfortunately, the bill was then killed in Senate Commerce & Labor, where the Dominion faction runs the show, so most senators didn’t have the opportunity to demonstrate whose side they’re on. In an interesting side note, however, Sen. Dick Saslaw, D-Fairfax, the minority leader and long one of Dominion’s most reliable allies in the General Assembly, voted against killing the bill. Maybe it has something to do with the line of attack his primary challenger has taken

• HB 2329 (Keam) and SB 1456 (Sens. Jennifer McClellan, D-Richmond and John Edwards, D-Roanoke) is the Solar Freedom bill that would have removed eight barriers to renewable energy installations by utility customers, including lifting the one percent net metering cap, removing PPA caps, and allowing municipal net metering. HB 2329 was defeated inCommerce and Labor 8-7 on a party-line vote. The Senate companion was killed in Commerce and Labor on a 10-3 party-line vote.

 HB 1928 (Del. David Bulova, D-Fairfax) and SB 1460 (McClellan) would have expanded utility programs allowing third-party power purchase agreements for renewable energy while continuing to restrict the classes of customers who are allowed to have access to this important financing tool. In committee hearings, utility lobbyists claimed there was no need for the legislation because there is “plenty of room left” under the existing caps. Industry members testified that there is a lot more in the queue than is public, and caps will likely be reached this year. HB 1928 killed in Commerce and Labor subcommittee 3 by a 6-4 vote; Republican Tim Hugo voted with Democrats in support of the bill. SB 1460 killed in Senate Commerce and Labor 10-3, with only Democrats supporting.

 HB 2645 (Del. Sam Rasoul, D-Roanoke, with 13 co-patrons), nicknamed the REFUND Act, would have prohibited electric utilities from making nonessential expenditures and requires refunds if the SCC finds they have. It also would have barred fuel cost recovery for more pipeline capacity than appropriate to ensure a reliable supply of gas. Other reforms in the bill would undo some of the provisions of last year’s SB 966, lower the percentage of excess earnings utilities can retain, and require the SCC to determine rates of return based on cost of service rather than peer group analysis. Democrat Steve Heretick voted with Republicans to kill the bill in Commerce and Labor subcommittee 3.

For a complete list of the several dozen pieces of legislation that might have been, go to powerforthepeopleva.com