East Virginia has a terrible record when it comes to renewable power. The state legislature allows electric companies to impose punitive “stand by” charges on renewable power producers. AEP’s Appalachian Power Company, which also controls about half of WV’s electrical system, has imposed monthly fees on solar power producers. When it comes to renewable power, East VA is as much of a failed state as WV.
In the controversy over East VA’s extra feed in charges on renewable power, the state legislature did create a commission to determine whether solar and wind generators cost other customers money or whether renewable generators created benefits to the system for which they are not being compensated. The East VA Senate’s Distributed Generation and Net Metering Solar Stakeholder Group has almost completed the draft of the final report of its findings.
Here is a link to a good account of what happened next. Dominion Energy, the holding company that owns Virginia Electric Power, the state’s largest electric company, just walked away from the Stakeholders Group, hoping to sabotage the process.
David Botkins, a spokesperson for Dominion Virginia Power, said after providing “feedback” to a draft report by the Group, it determined “the group has migrated into issues that are more appropriate for the SCC (State Corporation Commission) and General Assembly to consider.”
When asked why Dominion did not assume, from the beginning, that a report from the Group was destined for the Senate, Botkins added, with “the report nearly complete (it has been through several drafts) it seemed an appropriate time to discontinue our participation.”
Susan Rubin, Vice President-Legislative Affairs of the Virginia, Maryland and Delaware Association of Electric Cooperatives informed DMME and DEQ of their withdrawal saying ”We began the process hoping, in the end, the work product would be the result of collaboration. Following the last meeting (in August), it became clear that we must remove ourselves from the list of participating stakeholders as we cannot be associated with the final report this group will issue.”
Pitt of VCU, the Group’s meeting leader, said, “Basically the utilities all said that the report was heading in a direction that they wouldn’t be able to support.” He added, they “wouldn’t say anything specific about what parts of the report they disagreed with.”
The withdrawal is leading several solar advocates to conclude that the utilities opined the valuation methodology headed would set too high a value for solar, setting the stage for a debate, and perhaps legislation, they might have a difficult time controlling. Several long-time observers have long doubted this study would have much, if any, impact because Republicans control the House of Delegates, as well as, the Senate. Neither body has demonstrated interest in enabling markets for cleaner energy in Virginia, even as the economy needs to replace tens of thousands of jobs lost to cut backs in defense contracting.
The East VA power companies are scared of what an objective study of the net value of solar power to the grid really is, because it undermines their claims that solar producers are “free riders” on non-productive “consumers.” As John Pierobon points out in his blog post:
The value of a rooftop solar system is drawing increasing interest from advocates and a lot scrutiny from utilities since Minnesota became the first U.S. state in March to officially set a value on solar-generated electricity. That value, in the form of a tariff, is a kilowatt hour payment that Minnesota utilities may opt to pay as an alternative to the state’s policy for crediting excess generation of electricity on a monthly or annual basis – known as net metering – at the retail rate paid by homeowners and most businesses.
Minnesota’s valuation was the result of a lengthy process based in part on the Federal government’s calculation of the social cost of fossil-fuel sources of power and their carbon emissions. Tariff’s are unique to each utility. Analysts estimate tariffs in Minnesota are likely to range between 12 and 14 cents per kilowatt hour. The higher the value, the higher revenue drain that such a determination poses for utilities which make money simply by selling more electricity. There is long-running debate in regulatory circles about how to “decouple” utility profits from pure sales.
Pierobon provides an account of why the power companies pulled out at the last minute:
Some of that control sought by utilities might have been provided by the Department of Environmental Quality’s coordinator of the working group, Carol Wampler. Wampler is a former lobbyist for the Virginia Manufacturers Association whom the utilities trusted to help steer the Group deliberations in a direction they could live with.
But Wampler retired at the end of August. On September 5, the utilities notified various offices of the state government of their withdrawal. Some seasoned political observers familiar with the significant influence Dominion exerts on the General Assembly, agreed that the combination of a harmful report and Wampler’s retirement was too much for them to stomach. Wampler would not comment for this column.
“It looks like the utilities didn’t like what the study is finding, and they are hoping that walking out of the room will make it go away,” said Ivy Main, a prominent blogger about clean energy in Virginia and a participant in the Group. Main has been a vocal critic of in-state utilities’ intransigence about any policy enabling a significant market for solar energy in their service territories.
Utilities have complained that net metering amounts to an unfair subsidy for customers that own solar panels at the expense of those who don’t. Solar advocates counter that the retail rate underestimates the value of solar panels to the grid and society, taking into account the health and environmental impacts of harmful greenhouse gas emissions.
Monique Hanis, of Falls Church, VA, a member of the Group’s Steering Committee representing solar system owners who formerly was senior manager of the national Solar Energy Industries Association, said she was “excited about the possibilities of working together with utilities, companies, municipal leaders and conservation groups, not just on this report, but on expanding options for customers to ‘go solar,’ creating more jobs and driving innovation across the state.”
It’s all about power company control of the political process. When that control is threatened, the power companies just walk away.