Dominion Crushing Solar Producers in East VA

My great blogging colleague over in East Virginia, Ivy Main, has posted a great assessment of the Edison Electric Institute’s attack on solar power generation over at her blog Power for the People VA.

I have been covering the Edison Electric Institute’s creeping attack on solar producers in Arizona and other states.  While the attack is expanding across the country, Ms. Main points out that the East VA SCC and Dominion Power, the state’s biggest electric company, have already teamed up to stifle new solar power investments with a $30 to $60 per month “standby fee” imposed on large East VA solar producers.

The latest effort to squelch solar is through standby charges: fees imposed on net metering customers that compensate the utility for “standing by,” ready to sell grid-produced energy at night and on cloudy days. In 2012 in Virginia, Dominion Virginia Power won the right to charge customers with large residential systems (10-20 kilowatts) up to $60 per month—a charge that destroyed this market segment. This summer Dominion pressed its advantage, indicating in a submission to regulators that it will likely seek more standby charges on a broader class of solar customers.

Note that Virginia has less than 15 megawatts (MW) of solar installed across the state. Dominion Power alone has around 19,000 MW of coal, gas and nuclear. So the notion that net metering by solar customers has any perceptible effect on the grid or other customers is silly. The point of Dominion’s stand-by charges is to stifle the solar market, not cover costs.

Ms. Main goes on to blow apart the argument made by EEI and their dark money friends at ALEC that solar producers don’t pay their “fair share” of electricity costs:

Meanwhile the conservative American Legislative Exchange Council (ALEC) has gotten into the act, drafting a model resolution insisting that net metering customers should have to pay their “fair share” of utility costs through measures like standby charges. Not incidentally, Dominion Power is a member of ALEC and sits on the energy and environment task force next to the fossil fuel shills from Heartland Institute.

But the “fair share” argument is bogus. Utilities weren’t set up to ensure Americans all paid their “fair share” of the costs of the electric grid. If they were, there would still be mountain communities without power today. Residents of cities and towns subsidized the cost of running power lines to far-flung rural homes inhabited by people who could never have afforded their “fair share” of this infrastructure.

Even today, city dwellers pay more than their “fair share” of transmission costs to subsidize people like me who live in leafy, sprawling suburbs and less-populated parts of the state. Anybody voting for an ALEC-style resolution about “fair shares” had better be willing to stick it to suburban and rural consumers.

There are other ways electricity rates aren’t “fair.” Dominion’s residential rates are structured so people who use less electricity pay more per kilowatt hour than those who use more—again, making it roughly a transfer of wealth from urban apartment dwellers to those with larger or less efficient homes elsewhere. The utility’s goal is to encourage the use of electricity, and compete more effectively with the gas company for heating. People paying their “fair share” just doesn’t enter into it.

And while we’re at it, if we were serious about subsidies we’d slap a tax on electricity made from fossil fuels to reflect the costs they impose on society. Asthma, heart disease, mercury poisoning, groundwater contamination, and of course, the dumping of carbon into the atmosphere—these are all costs of fossil fuel that ought to be included in power bills to make sure everyone is paying their “fair share.” People who install solar panels deserve a thank-you for their service to society, not standby charges based on bogus “fair share” claims.

The argument for standby charges is, pure and simple, an attempt by entrenched monopolies to block competition. The “fair share” argument is a red herring from utilities that don’t want a fair fight. And with good reason: they’re going to lose.

This is exactly right.  There is nothing about the “fair share” argument that can’t be applied to hundreds of other costs involved with providing electricity across the US.  And, of course, readers of The Power Line are well aware of the uncounted costs imposed on all of us by coal and nuclear power in particular.

Thank you Ms. Main for your clear and thorough debunking of the real reasons behind the “standby charge” and “fair share” propaganda.  And, as you say “they’re going to lose.”

2 thoughts on “Dominion Crushing Solar Producers in East VA

  1. I’m not sure I agree with the argument that city dwellers are “subsidizing” rural users by paying “their fair share” of transmission costs to ship them power. Most of our “dirty” power is generated in those rural areas because city dwellers don’t want that dirty stuff in their back yard. I also question the whole “you’re paying more for using less” argument if Virginia’s is set up like West Virginia’s where there’s a per customer flat fee to pay for each customer’s use of a meter, a service line, a bill and a meter reader. Someone who uses less electricity still utilizes these services the same as someone who uses more… that’s why it’s a flat fee unrelated to usage.

    If we’re going to start arguing about whom is subsidizing whom, let’s talk about the theory that someone has to make a sacrifice for the energy needs of someone else.

    • This isn’t an argument about who is subsiding whom. Ms. Main’s point was that there are all kinds of “unfairnesses” in any system of rate making. And the power company claim that solar producers are unfair to everyone else is miniscule compared to most of the unfairness in the current system.

      You actually make two of her points.

      (1) At the beginning of the US electrical system, there was no electricity in rural areas, because it was too expensive to build and maintain for the relatively small income companies could make from so few customers. Only with tax payer subsidized rural electrification could people in the country get access to electricity.

      (2)Ms. Main also made the point that coal fired power generation’s costs do not include the costs imposed on everyone, particularly those where the power is generated.

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