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clean energy

SCC Approves First Renewable Energy Projects

offshore wind projectOn Friday, November 2, the Virginia State Corporation Commission (“SCC” or “Commission”) approved the first major renewable energy investments by Dominion Energy Virginia (“Dominion”) following the passage of Senate Bill 966 (“SB 966”), the sweeping utility overhaul legislation enacted in March. SB 966 provides that it is “in the public interest” for Dominion and Appalachian Power Company to purchase or construct up to 5,000 MW of new wind and solar energy resources. The legislation specifically states that a wind demonstration project located off Virginia’s coast would be “in the public interest.”

The SCC approved a 12 MW, $300 million offshore wind demonstration project proposed by Dominion, which will be constructed 27 miles off the coast of Virginia Beach. While finding the project to be prudent, the SCC’s Final Order strongly suggests that the application would have been rejected absent legislation deeming such projects to be “in the public interest” as a matter of law.

The Commission’s Final Order stated that the wind proposal “would not be deemed prudent [under this Commission’s] long history of utility regulation or under any common application of the term.” The SCC noted that the offshore wind project, which will be constructed by a Danish energy developer, was not subject to competitive bidding and that the energy costs will be “26 times greater than purchasing energy from the market” and “13.8 times greater than the cost of new solar facilities.” Finally, the Commission found that the project is not needed for Dominion to ensure reliability or meet any forecasted demand. Nonetheless, the Commission concluded that, “as a matter of law,” the Commission’s “factual analysis” of the reasonableness of the project is “subordinate [to] the legislative intent and public policy clearly set forth [by the 2018 amendments.”

The Commission also approved Dominion’s request to purchase 80 MW of solar energy via a power purchase agreement (“PPA”) with a non-utility company, Cypress Creek Renewables. The Commission noted that, unlike the offshore wind project, Dominion customers would be protected from financial and performance risks of the project since the utility is purchasing the energy from private developers.

The Final Order in the offshore wind matter (Case No. PUR-2018-00121) is available here and the Final Order in the solar PPA matter (Case No. PUR-2018-00135) is available here. Please contact one of our energy regulatory attorneys if you have questions about either of these cases.

Client Alert: Dominion In the Market for Solar, Wind

On October 24, 2018, Dominion Energy Virginia (Dominion) announced and issued an RFP seeking 500 MW of solar and on-shore wind generation. Projects must be at least 5 MW. Interested bidders can propose to either sell Dominion the project development assets or sell energy to Dominion under a Power Purchase Agreement. Projects must be located in the Commonwealth of Virginia to be eligible.

The RFP schedule is as follows:

Intent to Bid forms due: This Friday, November 2, 2018
Proposals to sell development assets due: December 13, 2018
Proposals to sell energy (PPA) due: March 14, 2019
RFP concludes: Second Quarter 2019

Dominion has pledged to have 3,000 megawatts of new solar and/or wind energy under development or in operation by early 2022. Dominion also announced that it will issue formal RFPs on an annual basis until the 3,000 MW target is met.

If your company has questions or would like any additional information regarding the Dominion RFP, please contact one of our renewable energy attorneys or utility attorneys.

We Shed Some Light on Solar PPAs in Fairfax

We were pleased to be involved in the Sierra Club’s presentation organized for local governments in the Northern Virginia area last month, as we detailed here. Afterward, the Sierra Club said:

“This briefing was sponsored by the Great Falls Group and held at the Fairfax County Government Center to educate the participants on the budget-neutral tools of solar Power Purchase Agreements (PPA) and Energy Savings Performance Contracts (ESPC). Presentation and handout information is available on the GFG website and the video recording is here.

Debra Jacobson had a lot of positive feedback from this event. There will be an article on this event for the next GFG Cascade.”

Here are a few pictures of the audience at the Government Center and Eric Hurlocker opening the panel.

If you want to know more about this meeting, Power Purchase Agreements, Energy Savings Performance contracts, or other issues in the renewable energy field, contact any of our energy lawyers.

Heading North for the Sierra Club

I am excited to have been invited by the Great Falls Group of the Sierra Club to join in the “Clean Energy Financing Workshop for Local Governments” that will be held this Friday (September 7) from noon to 1:30 p.m. at the Fairfax County Government Center. I’ll be talking about one of our favorite topics: solar power purchase agreements (SPPA), an accessible way for financing renewable energy projects that local governments can use.

This brown bag lunch event is free, but registration is required as space is limited. If you can’t make it on Friday, I understand you can register as a virtual attendee and get access to the video after the session. Maybe I will see you there. If we miss each other, I can answer any questions about this topic or renewable energy development here, or just contact one of our renewable energy lawyers.

SCC Sets Procedural Schedule for Dominion Grid Application

On July 24, 2018, Dominion Energy Virginia (“Dominion”) filed a Grid Transformation Plan with the Virginia State Corporation Commission (“Commission” or “SCC”). The SCC has entered a procedural schedule for this case and set an evidentiary hearing for November 15, 2018.

Dominion’s grid plan proposes to invest approximately $816 million in projects designed “to enhance the reliability, resiliency and security of the electric distribution grid.” Dominion also states that the plan will “facilitate the integration of distributed energy resources, such as solar or battery storage, into the system.” Dominion proposes to make the $816 million in investments over a three-year period, between 2019 and 2021. In particular, the utility wants to install approximately 1.4 million smart meters throughout its service territory between 2019 and 2021. There is more about the request here.

The filing also outlines the utility’s longer-term grid transformation priorities. Over 10 years, Dominion proposes to invest over $3.1 billion in grid transformation investments. These investments would include additional smart meters and other “advanced metering infrastructure” as well as reliability improvements and “grid hardening” projects. Dominion’s plan includes proposals to replace certain aging distribution facilities and increase the company’s physical and cyber security capabilities.

The application is filed pursuant to recently enacted legislation, Senate Bill 966, passed by the General Assembly and signed by Governor Northam earlier this year. Dominion’s petition requests the SCC to find that the plan is “reasonable and prudent.” The legislation provides that “grid transformation projects” are “in the public interest.” However, the law does not require the Commission to approve any of the proposed investments.

Dominion does not request cost recovery in its filing or explain whether the spending plan would result in rate increases for customers. This case has been docketed as Case Number PUR-2018-00100. Interested parties have until September 11, 2018, to intervene in this case.

If you want to know more about how this filing may affect energy markets in Virginia or have a legal issue in the energy field, please contact any of our renewable energy lawyers.

Legal Debrief On Virginia’s Energy Future After SB 966

Obstacles and Opportunities for Clean Energy Development
June 20, 2018 – 10:00 a.m. – 11:30 a.m.
Virginia Bar Association VBA on Main professional space at 1111 East Main Street, Suite 905, Richmond, 23219

wind turbines and solar arraysEric Hurlocker and Will Reisinger of GreeneHurlocker are assembling a panel of experts to discuss and debate the implementation of the 2018 Virginia General Assembly’s SB 966, including the opportunities for renewable energy development and the legal obstacles to implementation.

On Wednesday, June 20, all are invited to our free look into the changes in regulatory environment and legal issues brought on by the recent session of the General Assembly. Joining us will be Will Cleveland, Staff Attorney, Southern Environmental Law Center; Matt Gooch, Assistant Attorney General, Office of the Virginia Attorney General; and Francis Hodsoll, co-founder, SolUnesco. Please RSVP for this free event here.

We’ll start at 10:00 a.m. with an introduction and background regarding Virginia’s laws regulating electric utilities and overview of 2018 Senate Bill 966. At 10:30 a.m. our panel will discuss whether SB 966 will advance or impede competition for renewable energy; whether it will be subject to challenge under the dormant commerce clause; and whether additional policy changes are necessary to advance renewable development in Virginia. The panel will be moderated by Will Reisinger.

Each participant will receive a copy of the recently revised Guide to Electric Utility Regulation in Virginia. 1.5 hours Virginia CLE pending.

If you have any questions about this debrief, please contact Eric, Will or any of the other Virginia regulatory lawyers at GreeneHurlocker.

Solar and Wind Take Center Stage at the 2018 Virginia Energy Conference

wind turbines and solar arraysRenewable energy development, driven by rising corporate demand, was a central theme of Wednesday’s 2018 Virginia Energy Conference, hosted by the Virginia Chamber of Commerce. Garret Bean, Vice President of Development for sPower and one of the keynote speakers at the conference, discussed his company’s proposed 500-megawatt facility in Spotsylvania County, which will serve corporate customers in Virginia. Microsoft announced that it will purchase 315 MW of energy from sPower’s 500 MW project as part of its sustainability goal of 60 percent renewable energy by early 2020. In addition to Microsoft, major global companies including Google, Apple, Facebook, and Walmart have joined together to commit to 100% renewable power as a part of the RE100 initiative.

In his keynote, Bean explained that rapid data center development in Virginia, sustaining 70 percent of the world’s internet traffic, coupled with customer demand for cloud services powered by clean energy sources, presents a significant opportunity for growth in Virginia’s renewable energy sector. However, with the growth of renewable energy, developers are facing siting, permitting, and interconnection challenges that will have to be overcome.

Delegate Terry Kilgore, Senator Frank Wagner, and Secretary of Natural Resources Matt Strickler also discussed the opportunities and challenges of Virginia’s renewable energy industry. Senator Wagner voiced concerns about Virginia’s proposed regulations to link to the Regional Greenhouse Gas Initiative (RGGI) and participate in its regional greenhouse gas emissions cap-and-trade program. However, with the passage of SB 966 this session, paving the way for 5,000 megawatts of solar and wind energy in Virginia, and Governor Northam’s announcement that the Virginia Department of Mines, Minerals and Energy has posted a Request for Proposals for contracts to help strengthen Virginia’s offshore wind supply chain and service industry, the future for Virginia’s renewable energy industry is looking bright.

If you have questions about Virginia’s renewable energy industry, legislation, or regulatory structure, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

Dominion Proposes Significant New Solar and Gas-Fired Generation

On May 1, Dominion Energy Virginia (“Dominion”) filed its 2018 Integrated Resource Plan (“IRP”) at the State Corporation Commission (“SCC”). In Virginia, an IRP is a utility’s proposal for meeting customer demand over the next 15 years. An IRP is a planning document and does not represent a commitment to pursue any particular course of action. Instead, it is the utility’s best assessment, at a particular point in time, regarding which resources it will deploy over the planning horizon.

The SCC must review Dominion’s IRP and decide whether the plan is “reasonable and in the public interest.” Generally, interested parties are able to present arguments and testimony regarding the reasonableness of the plan.

Dominion’s 2018 filing includes five alternative scenarios. The key variable in the alternative plans is carbon regulation. For example, the IRP includes different modeling based on whether a carbon tax is imposed at the federal or state level, or whether the Commonwealth joins the Regional Greenhouse Gas Initiative.

In each alternative plan, Dominion proposes to add at least 4,700 MW of new solar capacity in the next 15 years. Dominion also proposes to add between 3,700 and 5,200 MW of new gas-fired generation. Dominion suggests that these new gas facilities will be used as “peaking resources,” which run when necessary during periods of increased demand, such as on hot summer days when there is greater need for air conditioning. The also IRP assumes that Dominion’s peak demand will increase 1.4% each year.

The IRP indicates that the proposed Atlantic Coast Pipeline (“ACP”) will be a supply source for the new gas facilities. Dominion states that it has already signed an agreement to “secure firm transportation services on the Atlantic Coast Pipeline.” Dominion’s parent company, Dominion Energy, is one of the developers of the ACP.

Finally, the IRP assumes that Dominion’s four nuclear reactors will receive federal approval to remain operational throughout the planning period. However, Dominion says that it will “pause material development activities for North Anna 3,” a third nuclear reactor that the company was planning to construct at its nuclear facility in central Virginia.

The IRP notes that Senate Bill 966, which was enacted by General Assembly earlier this year, will become effective on July 1 of this year. This legislation is intended to encourage investments in renewable energy and “grid transformation” projects. The legislation requires Dominion to propose at least $870 million in energy efficiency programs over the next 10 years.

Dominion states that it “has begun the initial planning associated with a transformational grid modernization effort.” These “grid transformation” efforts will include investments in smart meter technology, distribution substation automation, “replacing aging infrastructure,” and an “enhanced customer information platform” to allow customers to manage their energy consumption. Although the IRP notes that Senate Bill 966 requires the company to propose $870 million in efficiency programs over the next 10 years, the IRP does not identify what type investments might be made.

We expect the SCC will enter an order for notice and hearing in the coming weeks. The SCC’s order will include deadlines for intervention, expert witness testimony submissions, and a date for the evidentiary hearing.

If you have any questions about Dominion’s IRP, or other electric energy matters, please contact one of GreenHurlockler’s renewable energy or regulatory lawyers.