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clean energy

Clean Economy Act Leads on Renewable Energy

wind turbines and solar arraysAmong the accomplishments of our General Assembly, the Clean Economy Act and Clean Energy and Community Flood Preparedness Act have set a framework to increase momentum in renewable energy development. A lot of the details are in this article from our friends at the Virginia Mercury.

A number of beneficial effects will follow on from these acts and other legislation:

In the solar arena, the two major investor-owned utilities are tasked with constructing significant amounts of new solar generation capacity. As well, the retail PPA pilot cap of 50 MW in Dominion’s territory has been adjusted. Utilities will be under new and significant mandates with respect to energy storage and Virginia is adopting energy efficiency resource standards for these utilities. Off-shore wind projects get a big boost. Plus, there are schedules established for the closure of certain coal and biomass facilities in Virginia.

Importantly, it looks like Virginia is poised to join the Regional Greenhouse Gas Initiative (RGGI), which will facilitate carbon cap and trade. We are closely examining the other effects of energy and business legislation passed in the session and signed into law by the governor. If you have any questions about new or existing laws on energy regulation, development or any business and energy industry issue, please reach out to one of our energy and business lawyers.

C-PACE Expansion On Governor Northam’s Desk

Lost in the excitement and debate about the Virginia Clean Energy Act (we talked about it here), a number of other clean energy and energy efficiency bills have been winding their way through the General Assembly. One bill in particular that has flown under the radar is House Bill 654, which amends the Virginia C-PACE enabling legislation to empower the Department of Mines, Minerals and Energy to develop and administer a statewide program for C-PACE. HB 654 has now passed both the House and Senate and awaits signature by the Governor.

C-PACE, which stands for Commercial Property Assessed Clean Energy, is an innovative lending program now active in over 20 states including parts of Virginia, which provides long-term financing for renewable energy, energy efficiency, and resiliency upgrades for commercial buildings. C-PACE loans are repaid via a special assessment on the property tax bills and can often finance 100% of eligible improvements. For a summary of C-PACE, where its available, and how it works, check out https://pacenation.org/ and https://virginiapace.com/.

C-PACE has been enabled in Virginia since 2009, but because the financing mechanism involves special assessments on property, to date, each local jurisdiction is required to pass enabling ordinances to enable the assessment changes, and then implement the necessary changes to their property tax systems. Currently, eight Virginia jurisdictions have passed enabling legislation and are in various stages of implementation, including some of the largest in the Commonwealth, including Fairfax, Loudon, Richmond, Petersburg and Fredericksburg. (See chart below, courtesy of our friends at the Virginia Pace Authority.)

The change provided by HB 654 will create a state wide program that any jurisdiction can opt into. This will streamline the process, provide a more centralized mechanism for promoting the program, and allow smaller jurisdictions, who may not feel that they have the resources to implement and manage such a program, to avail themselves of the same benefits that larger jurisdictions have gleaned from C-PACE.

Once passed, the Department of Mines, Minerals and Energy will engage a private entity through a competitive selection process to run the program. This is an exciting development for energy efficiency efforts in the Commonwealth, and we are hopeful this legislation will become law. Check back here for more developments on C-PACE and if you are interested in learning more about how you can take advantage of C-PACE where currently available, contact Andy Brownstein or any of our Virginia energy lawyers.

 

Locality Status (as of Dec. 17, 2019) Program Details
Arlington County Active Launched in Jan. 2018, Arlington C-PACE is the first active program in the state. Sustainable Real Estate Solutions is the program administrator.
City of Fredericksburg Active Fredericksburg enabling ordinance passed Dec. 2018. City intends to self-administer program initially, and staff considers the program to be active.
Loudoun County Active Loudoun County and program administrator Virginia PACE Authority (“VPA”) launched program in November, 2019 late 2019.
Fairfax County Active January 2020 Fairfax County selected VPA as its program administrator in November, 2019. Program launch anticipated in early 2020.
City of Petersburg Active January 2020 Ordinance passed on July 3, 2019. City rode Loudoun County’s contract with VPA in August.
City of Richmond Ordinance enacted City Council passed ordinance on November 12, 2019. Program to be launched by mid-2020 per ordinance requirement.
City of Alexandria Ordinance in development Funding to support ordinance/program development approved April, 2019. launch of program anticipated in mid-2020. Anticipated public comment on ordinance in January 2020.
Town of Dumfries Ordinance enacted City Council passed ordinance on December 3, 2019. No further info is available regarding if they are issuing an RFP or riding a contract with another locality.
City of Lynchburg Ordinance enacted City Council passed ordinance on December 10, 2019. No further info is available regarding if they are issuing an RFP or riding a contract with another locality.

 

Takeaways from the Energy Bar Conference

Creighton Boggs and I were part of a skills session on drafting and negotiating Power Purchase Agreements at the Energy Bar Association 2019 Mid-year Energy Forum last Wednesday, October 16, at the Renaissance Downtown Hotel in Washington, DC. This two-day conference of lawyers and law professionals was a discussion of a wide range of issues from climate change to utility operations and legal topics.

On the second day, along with the other panelists, we joined in an interactive approach to training lawyers how to negotiate a distributed energy power purchase agreement (PPA). During the first part of the session we role-played as attorneys and clients to set the stage for a PPA negotiation, including a discussion of transactional terms and an overview of fundamental motivations behind the PPA instrument, such as the customer’s ability to avoid capital commitments and the developers ability to qualify for preferred tax treatment. The panel then walked through a term sheet with the audience using a Q&A approach to go through the key provisions of the PPA from the perspective of a developer and a customer, and, finally, focused on a few key PPA terms, comparing customer-friendly provisions to developer-friendly ones to provide participants with the background necessary to negotiate a distributed energy PPA.

This turned out to be a great session, with plenty of audience engagement and participation. We noted the increasing presence of junior attorneys in the panels over the two days, indicating that this part of the law is a good gateway for young practitioners looking to have a career path to a growing industry practice. If you are interested in more on the sessions, you can try looking for #EBA19EnergyForum in your favorite social channels.

As always, should you have any questions about energy regulation, energy resource development or other legal matters, you can call any of our energy lawyers to chat.

 

Covering PPAs for the Energy Bar

My partner Eric Hurlocker is helping lead a skills session on drafting and negotiating Power Purchase Agreements at the Energy Bar Association 2019 Mid-year Energy Forum this Wednesday, October 16, at the Renaissance Downtown Hotel in Washington, DC. Accompanying him on the panel is our law clerk (and pending associate) Creighton-Elizabeth Boggs. This panel is at 11:00 a.m. The full conference began today, the 15th, and goes through Wednesday evening.

Along with the other panelists, they will participate in an interactive approach to training lawyers how to negotiate a distributed energy power purchase agreement (PPA). During the first part of the session experienced practitioners will role-play as attorneys and clients to set the stage for a PPA negotiation, including a discussion of transactional terms and an overview of fundamental motivations behind the PPA instrument, such as the customer’s ability to avoid capital commitments and the developers ability to qualify for preferred tax treatment. The panel will then walk through a term sheet with the audience using a Q&A approach to go through the key provisions of the PPA from the perspective of a developer and a customer. Finally, the panel will focus on a few key PPA terms, comparing customer-friendly provisions to developer-friendly ones to provide participants with the background necessary to negotiate a distributed energy PPA.

If you’re at the meeting, please find us and say hello. If you can’t make it, follow along by looking for #EBA19EnergyForum in your favorite social channels.

As always, should you have any questions about energy regulation, energy resource development or other legal matters, you can call any of our energy lawyers to chat.

Calpine and Direct Energy Win Again, Continue to Provide Renewable Energy in Virginia

The Virginia State Corporation Commission (the “Commission”) denied Dominion Energy Virginia’s (“Dominion”) July 16, 2019 petitions for declaratory judgment in Case Numbers PUR-2019-00117 and PUR-2019-00118 by Final Order on September 18, 2019. Dominion’s petitions sought to have the Commission standardize “around the clock,” “control of renewable capacity” requirements for competitive service providers (“CSPs”) to serve customers under Virginia Code § 56-577 A 5 (“Section A 5”). That section provides a statutory right to customers of all classes to purchase “electric energy provided 100 percent from renewable energy” from a CSP unless the utility has its own 100% renewable energy tariff. Dominion’s application for a 100% renewable energy tariff is pending before the Commission, and Dominion had refused to process enrollments submitted by Calpine Energy Solutions, LLC (“Calpine”) and Direct Energy Business, LLC (“Direct Energy”) under Section A 5 in the interim and initiated these cases at the Commission.

The Commission previously granted Calpine’s and Direct Energy’s requests for injunctive relief, requiring Dominion to process enrollments while these cases are pending. We blogged about that here.

Dominion’s petitions took aim at Calpine and Direct Energy, seeking a determination that CSPs seeking to serve under Section A 5 must establish that they can supply customers with electric energy provided 100 percent from renewable energy on an “around the clock” basis and that the CSPs must have “control” over “renewable capacity.” The Commission flatly rejected Dominion’s positions and declared that both Calpine and Direct Energy provided information to reasonably establish that they have contracted for sufficient renewable energy to match renewable supply with a participating customer’s load on a monthly basis, which is consistent with Section A 5 and Commission precedent.

Regarding Commission precedent, the Commission refused to adopt Dominion’s interpretation of a prior order approving Appalachian Power Company’s Rider WWS (“Rider WWS Order”), which Dominion believes requires a CSP to have “control of sufficient renewable generation resources, including renewable capacity and associated renewable energy, to enable it to serve the full load requirements of the customers it intends to serve.” The Commission’s refused to provide the requested declaration, explaining that the Rider WWS Order did not require “’renewable capacity,’ nor did it define ‘full load requirements’ to mean (as argued by Dominion) ‘full load at all times’ or ‘full load requirements around the clock.’” Significantly, the Commission’s Final Order makes clear: “Nothing in [the Rider WWS Order], however, found that [Appalachian Power Company’s] proposal was the only way to comply with Section A 5.”

The crux of the Commission’s decision relied upon its close reading of Section A 5. “The plain language of Section A 5 also says ‘energy,’ not ‘capacity.’” In acknowledging this critical distinction, the Commission put a finer point on Dominion’s efforts to muddy the waters between “energy” and “capacity” requirements, despite the fact that Section A 5 requires customers to purchase renewable electric “energy” – not “capacity.” In the same way, the Commission examined closely Dominion’s request for more stringent matching standards, noting several times that in other proceedings, Dominion has taken positions inconsistent with those it takes in its petitions for declaratory judgment: “There is nothing in the plain language of Section A 5, however, that mandates Dominion’s “100% of the time” (i.e., “around the clock”) requirement.”

The Commission also scrutinized Dominion’s proposal from a consumer protection perspective, finding that Dominion’s “100% of the time” standard would adversely affect a customer’s right to purchase renewable energy – essentially, upending the entire aim of Section A 5. Dominion’s argument would read certain renewable generating sources (e.g., wind or solar) out of the statute because of their intermittency regardless of the amount of nameplate capacity or peak load served. Finally, the Commission evaluated Dominion’s proposed standard with special focus on the fact that Virginia’s existing monthly matching standard is already one of the most stringent in the country for states with renewable energy markets, as other states generally require customer load and renewable supply to be matched on a yearly basis.

The Commission declined to accept Dominion’s proposed language that would adopt a new standard for Section A 5, presented for the first time at the hearing on August 20, 2019. The Commission reasoned that to do so would contravene the Commission’s past rejection of “capacity,” “peak demand,” or “100% of the time” requirements – including the Commission’s rejection of Dominion’s past requests (notably in the Rider WWS proceeding) for “around the clock” supply of renewable energy pursuant to Section A 5. Similarly, the Commission held that Dominion’s proposal at the hearing regarding what Dominion believes the current law should reflect “improperly goes beyond the specific relief requested in the Petitions for Declaratory Judgment… [and] does not reflect current Commission precedent and is otherwise procedurally improper.”

The Conclusion in the Commission’s Final Order makes clear that:

  • Commission precedent permits a CSP to match customer load with renewable supply on a monthly basis and does not requires CSPs to provide “renewable capacity”;
  • Direct Energy and Calpine have satisfactorily demonstrated that they can supply their customers with electric energy provided 100 percent from renewable energy on a monthly matching basis;
  • Direct Energy and Calpine are required to continue providing information as directed in the Final Order – regarding each CSP’s customer load and wholesale generation contracts, in accordance with Section A 5, the Commission’s Rules Governing Retail Access to Competitive Energy Services, as well as Dominion’s Competitive Service Provider Coordination Tariff; and
  • Even if Dominion’s new proposal were procedurally appropriate, which it is not, the Commission further finds that: (1) the plain language of Section A 5 does not mandate – as a matter of law – adoption of Dominion’s proffered standard; and (2) matching customer load with renewable supply on a monthly basis represents a reasonable standard under Section A 5, and Dominion’s proposed standard is not necessary in order to implement Section A 5 in a reasonable manner,

GreeneHurlocker represents Calpine in these proceedings.
If you have questions about this case or electric service in general, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

Delmarva Power Files Proposed DE Purchase of Receivables

transmission towers for electricityAfter years of proceedings at the Delaware Public Service Commission, the end – or the beginning – is in sight. In late March, Delmarva Power filed its proposed Purchase of Receivables (POR) program, including the going-in discount rates, with the Delaware Commission. With a POR program, the utility purchases the receivables of the retail electric supplier operating on the system, which helps to level the playing field between suppliers and the utility which has the right to disconnect service for non-payment.

Delmarva recommends that the program take effect for service rendered on June 1, 2019, as the Commission has previously directed. The discount rates are important because those are the “discounts” that retail suppliers must accept in allowing the utility to purchase the receivable. Delmarva proposes the following discount rates for the first year of the program:

Class Discount Rate
Residential 0.6167%
Small C&I 0.3409%
Large C&I 0.1182%
Hourly Priced Service 0.0%

 

It is expected that the Commission will consider the POR proposal at one of its May administrative meetings, in time for the program to being June 1, 2019. For more information, please contact one of our energy lawyers.

We’re Back at TomTom to Support Renewable Energy

On Wednesday, April 10, the TomTom Festival and Summit will hold its Renewable Energy Day in Charlottesville, Virginia, during the six day-long series of panels, speakers, podcasts, performances, parties and other notable goings about art, community, food, music, creative and entrepreneurial ecosystems, and innovation. We’re proud to be a sponsor again, and we are focused on the 9 AM panel “The Economic Development Opportunity of Renewable Energy.”

Many of our lawyers will be attending, and our partners Eric Hurlocker, Brian Greene and Jared Burden will be in Charlottesville to welcome you personally and to talk to you about the work we’re doing in renewable energy development and regulation. In addition, we would be glad to have the opportunity to introduce you to our OPENgc services for companies that currently operate without inside general counsel. If you don’t see us at the panel or breaks, come on to the exhibit area where we will try to answer your questions and send you home with a few small gifts.

If you are interested in knowing more about our TomTom sponsorship, the renewable energy industry or have a legal issue that you need to discuss, please feel free to contact Eric Hurlocker, Brian Greene, Jared Burden or any of our Virginia energy lawyers and business lawyers.

Maryland Solar Groups Seek Community Solar Utility Consolidated Billing

On March 20th, the Climate Access Fund and Solar United Neighbors of Maryland filed a petition asking the Maryland Public Service Commission to require Maryland utilities to provide consolidated billing for subscriber organizations participating in Maryland’s Community Solar Pilot Program. The petitioners want utilities to include community solar subscription charges on customer bills. Today, subscriber organizations have to separately bill community solar subscribers. The stated objective of the petition is to make consolidated billing available for low and moderate income customers, helping to improve the economics of participating in the program. Two alternatives are proposed in the petition: (1) consolidated billing for all subscriber organizations or (2) consolidated billing for low and moderate income-focused community solar projects only.

We will be on the lookout for a response from the Commission and opportunities to comment on the community solar consolidated billing proposal. If you would like to review the filing, a copy of the petition is available on the Maryland Public Service Commission’s website: Mail Log # 224384.

For more information about Maryland’s Community Solar Pilot Program, check out our previous blog posts:

Maryland Proposes Community Solar Pilot Program Regulations
Community Solar Growing in Mid-Atlantic
Continued Progress for Community Solar in Maryland

If you have questions or would like more information about community solar projects or other regulatory issues, contact Eric Wallace or any of our mid-Atlantic energy lawyers.

Solar Powers Augusta Schools

We were really excited last week when our good client, Secure Futures, was out in Augusta County Public Schools (ACPS) to talk about the installation of a total of 1.8 megawatts of solar power across seven campuses. ACPS, with more than 5,000 solar panels deployed, is the largest solar energy system of any public school division in Virginia. Some excellent coverage of this initiative is here. Augusta County students created some great posters about how much they love solar and those are featured on the Secure Futures homepage.

Secure Futures’ partnership with ACPS meant the school division had no capital investment for this solar project. Additionally, and most importantly, they receive monthly savings on their utility bill by using the electricity generated by the solar panels. ACPS has a special webpage where you can look at their solar energy production in real time. Pretty cool!

If you want to know more about solar energy issues in Virginia or have legal matters that involve solar or other renewable energy resources, contact any of our Virginia energy lawyers.

MD PSC Approves Modified Electric Vehicle Portfolio

electric car iconThe Maryland Public Service Commission issued an order on January 14, 2019, approving Electric Vehicle (“EV”) Portfolio Programs for Maryland’s electric distribution utilities. The EV Portfolio Programs aim to increase EV usage in Maryland by expanding EV tariff options, furthering utility investment in EV charging infrastructure, and offering customer programs for EV owners.

The Proposed EV Portfolio Programs:

Case No. 9478 kicked off with a petition filed on January 22, 2018, by the Public Conference 44 Electric Vehicle Work Group Leader, with the support of the utilities and several other stakeholders, to implement a statewide electric vehicle proposal. The proposals for each participating utility are summarized below:

Baltimore Gas and Electric: BGE’s proposed program included installation of 18,455 EV chargers, costing $48.1 million. For residential customers, BGE proposed $9.7 million in rebate programs that could be pared with BGE’s existing “Whole-House Time-of-Use Rate” for customers with EV chargers. BGE also proposed $14.1 million in rebates and incentives, as well as a “Demand Charge Credit” program, for non-residential customers who install EV chargers for fleet use. In addition to these customer programs, BGE proposed a public network of 1,000 EV chargers, costing $17 million, and a grant program for 490 EV chargers, costing another $7.2 million.

Pepco and Delmarva: Pepco and Delmarva proposed similar programs, including a combined 3,038 EV chargers costing $41.9 million. The Pepco and Delmarva proposals also included residential rebate programs, off-peak charging credits, and expansion of Pepco’s “Whole-House Time-of-Use Rate” to Delmarva. The price tag for the Pepco and Delmarva residential programs was $5 million. For non-residential customers, Pepco and Delmarva proposed rebate and incentive programs for EV chargers, a demand charge credit program, for a combined cost of $10 million. Pepco and Delmarva also proposed installing 608 public EV chargers, costing $16.9 million. Pepco and Delmarva proposed $6.9 million in additional rebate and grant programs for installation of EV chargers. The proposed “DC Fast Charging with Energy Storage” demonstration project is aimed at minimizing adverse grid impacts from installation of fast charging stations, for another $2.8 million.

Potomac Edison: Potomac Edison also proposed rebates, incentives, public chargers, and EV tariffs, with a total of 2,259 EV chargers costing over $12.3 million.

The utilities proposed ratepayer financing for the $104.7 million investment in new infrastructure charging portfolios, meaning customers will pay for these programs through electric distribution rates or customer surcharges over a five year period. However, there are other state and local incentive programs available that may offset some of the costs for the new chargers. Some of the costs would also be recovered from charging customers that use public or non-residential chargers. As discussed below, the Commission did not approve these programs as proposed, reducing the program size and the cost to Maryland ratepayers.

The Commission’s Decision (Order No. 88997):

In its order, the Commission reduced the BGE and Potomac Edison residential rebate programs to a total of 1,000 each. The Commission also limited the rebate to $300 (compared to the proposed $500 rebate). The Commission approved the proposed Pepco and Delmarva residential rebate offerings. The Commission also approved continuation and expansion of utility “Whole-House Time-of-Use Rate” offerings for residential customers. Regarding the non-residential customer proposals, the Commission limited its approval to rebates and incentives for EV chargers installed at multi-unit or multi-tenant dwellings. The Commission also approved a limited number of rate-payer funded public charging stations: 500 for BGE, 100 for Delmarva, 250 for Pepco, and the full 59 proposed by Potomac Edison. The Commission rejected the proposed $14 million in innovation rebate and grant programs, as well as the proposed Pepco and Delmarva demonstration projects. The Commission also directed all the utilities to recover costs through traditional ratemaking in a future rate case (as proposed by BGE, Delmarva, and Pepco), rather than Potomac Edison’s upfront customer surcharge.

The next step is for the utilities to develop and submit tariff proposals to implement the EV programs approved by the Commission.

If you have any questions about the Maryland Public Service Commission’s decision on the Statewide Electric Vehicle Program or other regulatory issues, contact Eric Wallace or any of our mid-Atlantic energy lawyers.