By Derek Seidman
Virginia Governor Ralph Northam announced last week that Grant Neely will become his new Communications Chief. Neely has been the Director of Strategic Communications for Dominion Energy since August 2016.
Dominion is an energy utility that is one of the most powerful corporate forces in Virginia. The appointment reinforces concerns over the revolving door between Dominion and state governments and potential conflicts of interests of government officials regarding Dominion, which is pushing the controversial Atlantic Coast Pipeline, a proposed 600-mile fracked gas pipeline that would run through West Virginia, Virginia, and North Carolina.
Neely is not new to the revolving door between industry and government. Before going to work for Dominion in 2016, Neely was chief of staff to Richmond Mayor Dwight C. Jones. He resigned from the Jones administration to go work for Dominion as the company’s media point person.
Neely will now serve in an administration that has regulatory oversight over his immediate former employer. This comes at a time when Dominion’s power and influence has come under increasing scrutiny.
Grant Neely is not the only person to have walked through the revolving door between Dominion and state government. In early 2018, North Carolina Governor Roy Cooper hired Lee Lilley as his Director of Legislative Affairs. Lilley had been a lobbyist for Dominion for years – right up until the time he joined the Cooper administration.
Before becoming a lobbyist, Lilley was a legislative director for North Carolina U.S. House Representative George Butterfield, developing skills and connections that he could later bring to his lobbying work on behalf of private corporate interests. After serving in government from January 2007 to May 2012, Lilley became a lobbyist for McGuireWoods, a powerhouse consulting firm (Richard Cullen, the brother-in-law of Dominion CEO Tom Farrell, is a partner at McGuireWoods).
From 2012 to 2017, Dominion paid $690,000 to McGuireWoods for lobbying services carried out by teams of lobbyists that included Lilley. Some of these lobbying efforts for Dominion that Lilley was part of involved meetings with the U.S. Senate and House on the issue of “Proposed Interstate Natural Gas Pipeline approval” – likely a reference to the Atlantic Coast Pipeline.
The revolving door between states governments and Dominion – with persons entering the top ranks of gubernatorial administrations directly from positions where they were paid to lobby for Dominion or held positions directly within the utility – raises questions about Dominion’s influence over and access to these administrations.
Notably, Virginia and North Carolina have both seen intense debate over the Atlantic Coast Pipeline, much of which would run through those two states to transport fracked gas from the Marcellus Shale formation. Dominion is the pipeline’s top (48%) owner, while Duke Energy is the second top (47%) owner.
Dominion has been a top donor in Virginia politics for years. According to the Virginia Public Access Project, Dominion has spent at least $16,694,987 in Virginia politics since 1996. Since October 2015, it has given $216,751 to Ralph Northam throughout his career. Dominion CEO Tom Farrell has also showered Virginia politicians with hundreds of thousands of dollars.
Dominion’s vast influence in Virginia – including tied its interests regarding the Atlantic Coast Pipeline – is illustrated in other ways.
For example, as we reported earlier this year, a host of Virginia state legislators who have proactively supported the Atlantic Coast Pipeline are personally invested in Dominion – meaning they are potentially set to profit from the pipeline they are supporting from the platform of their elected position. One State Senator, Bill DeSteph, owns more than $250,000 in Dominion stock (you can view a table with all these investments here).
Others have pointed out further evidence of Dominion’s troubling influence on government officials and regulators.
For example, Kelly Roache at Energy Policy Institute recently wrote about how U.S. Attorney General William Barr and states Attorneys General have supported Dominion as the U.S. Supreme Court is “poised to decide this month whether it will review a ruling key to the Atlantic Coast Pipeline’s future.” Barr received $2.3 million in cash and stock awards as a Dominion board member from 2009 to 2018 and Dominion has given tens of thousands of dollars to the Republican Attorneys General Association.
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.”
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 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.”
By Mel Leonor
In what the State Corporation Commission termed an “extraordinary” finding, the panel on Monday rejected a small part of a request by Dominion Energy to recover money spent in environmental upgrades at its Chesterfield County power plant.
The commission approved most of the $247 million investment, which paid for improvements to the way the plant processes coal to comply with environmental regulations.
The commission rejected an $18 million portion of the investment, which it found was not “reasonable and prudent,” given that the company expected the units to quickly become obsolete.
The investment paid for upgrades to two power units in Chesterfield that allowed the company to process coal ash without using water that would later require decontamination.
The commission found that Dominion pulled the trigger on that project in June 2015, and that at the time, the company’s own analysis showed that those power units were expected to go offline or stop burning coal by 2020. The two Chesterfield units were indeed permanently retired in March 2019.
Dominion spokesman Jeremy Slayton said the ruling was “a good outcome for Dominion Energy customers and supports our plan to safely store and dispose of coal combustion residuals in compliance with federal and state environmental regulations.” Slayton added that the company is making “rapid progress” away from coal.
The commission did not go as far as the Virginia Attorney General’s Office had recommended. The agency had pushed to block Dominion Energy from charging ratepayers for the full $247 million, calling the spending “imprudent,” given that the company had thrown into question the viability of coal going back to 2011.
The company will be allowed to recover money spent on the construction of a modern landfill to store coal ash, a 1,400-foot bridge that connects the landfill to the power plant, and nearby roadwork. It will also be able to recover money spent to transition two other units away from transporting and storing coal ash with water.
Had the SCC allowed the company to recover the full cost of the projects, along with a profit of 9.2%, households using roughly 1,000 kilowatt-hours per month would have seen their bills rise by $2.15 starting in November. Given the rejection of just $18 million, that figure is expected to change little.
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 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, 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.
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:
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 1840, HB 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.
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.
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.
And that, I’m sorry to say, is pretty much it for energy legislation this year.
• 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.
• 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.
• 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.
• 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.
• 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