As Virginia catches up to neighboring states in embracing the emerging clean energy and energy efficiency sectors, one thing is becoming increasingly clear: The transition away from business as usual in the energy sector is inevitable.
In a rule that is expected to be finalized this summer, the Environmental Protection Agency is regulating the emission of carbon dioxide from existing power plants for the first time in history. Under the draft Clean Power Plan, Virginia must reduce carbon emissions from power plants by over 40 percent, from 1,438 pounds/MWh to 810/MWh by 2030, according to the Virginia Advanced Energy Industries Coalition.
Virginia enters this clean power era lagging behind neighboring states in terms of renewable energy generation. Virginia is a net energy importer, meeting almost 40 percent of its energy needs via out of state production. Of energy produced in-state, over 90 percent comes from a combination of coal, natural gas, and nuclear power.
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Virginia is in the minority of states with a voluntary renewable portfolio standard rather than a mandatory one. According to a 2012 report by the Chesapeake Climate Action Network , Virginia continues to reward utilities through the RPS, despite the fact that less than 20 percent of the renewable energy reported for the RPS was produced in state, only 0.4 percent of it was wind power and virtually none of it was solar. Over 80 percent of the energy was produced by hydroelectric plants, the vast majority of which were brought into service long before the RPS was implemented. Virginia has 11 MW of solar power currently installed, compared to 215 MW in Maryland and 953 MW in North Carolina.
There are certainly some causes for celebration among those bills for proponents of clean energy and energy efficiency. he Virginia Energy Efficiency Council (VAEEC) reported that “[The PACE program and the changes to the Natural Gas Energy Efficiency programs] are a significant step forward for energy efficiency in the Commonwealth, and that means lower energy bills, cleaner air and local jobs.”
It is in this climate that Governor Terry McAuliffe celebrated Earth Day by ceremoniously signing the following six clean energy and energy efficiency bills into law in April:
- Virginia Solar Development Authority – (HB 2267-Hugo/Bulova; SB 1099-Stuart) – Creates the Virginia Solar Energy Development Authority to foster solar development
- Net Energy Metering – (HB 1950-McClellan/Sullivan; SB1395-Dance/Edwards) – Doubles allowable generation capacity of a solar net energy metering facility
- Utility-scale Solar – (HB 2237-Yancey) – Authorizes utility cost recovery for construction or purchase of a solar facility with capacity over 1 MW and establishes that 500 MW of solar generation are in the public interest
- Natural Gas Energy Efficiency – (SB 1331-Petersen) – Clarifies how costs are evaluated by the State Corporation Commission to increase approval of energy efficiency programs
- Property Assessed Clean Energy (PACE) program – (HB 1446-D. Marshall; SB 801-Watkins) – Expands the PACE program, which creates loan programs for localities to finance energy efficiency projects on commercial buildings using private capital
- Green Jobs Tax Credit – (HB 1843-James; SB 1037/Hanger) – Extends a $500 per job Green Jobs Tax Credit for three years to July 1, 2018
Utility Wins. Competitive Energy Not So Much
There are certainly some causes for celebration among those bills for proponents of clean energy and energy efficiency. The Virginia Energy Efficiency Council (VAEEC) reported that “[The PACE program and the changes to the Natural Gas Energy Efficiency programs] are a significant step forward for energy efficiency in the Commonwealth, and that means lower energy bills, cleaner air and local jobs.” VAEEC also said that “this year’s General Assembly session was a home run for energy efficiency.”
The gains for solar were also significant, with the creation of the Virginia Solar Development Authority and the incentives for utility-scale solar potentially paving the way for dramatic increases in that field.
Competitive solar companies, however, had far less to celebrate than did utility solar. This was a tremendously successful year for the state’s largest energy utility and the largest corporate political donor. As reported by the AP, “Legislation it wanted passed, passed. Bills it didn’t like, did not.”
Along with the bills that Dominion supported, and that McAuliffe signed on Earth Day, the utility also won a controversial battle for SB 1349. The bill freezes the current base rates for at least seven years, although Dominion retains its ability to request special rate increases. In addition, the bill prohibits the State Corporation Commission from doing biennial reviews of Dominion’s books for six years, a process through which Dominion has had to refund excess profits to customers as recently as 2011. Although the bill also contains elements which will encourage the development of solar power, it is a huge boon for Dominion, potentially protecting hundreds of millions of dollars in profits.
In comparison, a number of bills associated with customer owned solar, which largely faced utility opposition this year, did not pass the assembly.
Net metering, the process by which smaller entities can sell back power to utilities (paying for only the net power that they consume) plays a critical role encouraging solar, and it provides a viable free-market alternative to larger utility-scale renewable energy. However, while the cap was raised this year from 500 KW to 1 MW for commercial entities, residential consumers remain capped at 20 KW, despite efforts to raise the cap to 40 KW.
Moreover, standby charges, fees paid by solar customers to cover grid costs, were untouched in this legislative session. Other efforts, including bills to allow community net metering (which is currently outlawed) and proposed changes to the ineffective RPS also gained little traction this year.
While the General Assembly this year took big steps forward in paving the way for energy efficiency improvements and expansion of renewable energy, it also took a big step towards producing solar energy at the utility-level, stalling out on several opportunities to make solar a competitive option for residential consumers and communities.
This article was written by Nick Marshall.
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