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Virginia Senate Kills Bills to Expand Electric Choice for Renewable Energy

The Virginia Senate Commerce & Labor Committee rejected two bills on February 24, 2019 that would have allowed customers of Dominion Virginia Energy and Appalachian Power Company greater access to purchase renewable energy from an entity other than their electric utility. Customers and competitive service providers (CSPs) had lined up to support the bills, which passed the House two weeks ago.

The Senate C&L Committee a few weeks ago rejected similar bills that originated in the Senate, but the House versions passed. As a result, virtually identical bills found themselves back before the same Senate C&L Committee for consideration.

Currently, in Section 56-577 A 5 of the Code permits customers to purchase electricity provided 100% from renewable energy from CSPs but only if the customer’s incumbent utility does not have a 100% renewable energy tariff.  HB 889 would have modified that language to allow CSPs to sell, and customers to buy, renewable energy even if the utility has such a tariff. About two years ago, the State Corporation Commission approved APCo’s 100% renewable energy tariff, so APCo customers who desire a renewable product must purchase it from APCo.  Dominion’s 100% renewable energy tariff is currently pending before the Commission.

HB 889 would also have : (1) shortened from five years to three years the period that a large (+5MW) customer who switches from a utility to a CSP under Section 56-577 A 3  is barred from returning to utility service; and (2) made it easier for customers to aggregate their loads to reach the 5 MW threshold. The Senate Committee voted 8-6 (with one abstention) to pass the bill by indefinitely. It had passed the House 56-44.

Second, HB 868 was basically a scaled-down version of HB 889, addressing only the Section A 5 modifications.  Gov. Ralph Northam had backed HB 868, which passed the House on a 55-44 vote. The Committee voted 10-4 to continue the bill to 2021.

Larger customers such as Target and Costco lobbied for these bills, explaining that they could purchase renewable energy and lower their carbon footprint at a price cheaper than Dominion’s current price which is not a renewable product. Dominion and APCo argued in response that while shopping under Section A 5 might benefit those who shopped, the utilities’ remaining customers would be left to pay the costs that the shopping customers no longer had to pay. During the last two General Assembly sessions, similar bills failed to make it out of committee in each chamber, so the proposals made it farther this year than in prior years.

Maryland PSC Requests Comments on New RFP for Retail Suppliers

The Maryland Public Service Commission issued a Notice of Opportunity to Comment seeking comments on a new “Retail Supplier Load Shaping RFP.” The Commission want to consider “programs designed to demonstrate the ability to shape residential load profiles using innovative business models.” Comments on the RFP, a copy of which is attached to the Notice, are due April 9, 2019.

The RFP states that:

“The primary goal of this RFP is to identify pilots that demonstrate an ability to shape customer load profiles through load shifting, peak shaving, and energy efficiency. Applicants can propose any mechanism for load shaping such as sending appropriate price signals (real time rates), using technology to control usage (controllable thermostats), payment of rebates or behavioral modification treatments. A secondary goal is to test whether load shaping can lower customer bills or reduce the customers’ overall effective rate for electricity by avoiding energy usage during high cost periods. Customer satisfaction will be surveyed at the pilot’s conclusion.”

There’s some background here. In early 2017, the Commission established Public Conference 44 with various working groups. Three working groups involved areas where the retail supply market could be improved or could expand to provide additional services to Maryland customers. One of those working groups involved rate design issues and sought to develop TOU pilot programs. The Commission approved TOU programs for the utilities, which are now being marketed to customers. The Commission also approved an RFP to establish retail supplier programs. However, and the Commission in November 2018 issued a letter order holding that the bids received were not compliant and directed the utilities to reject them.

The Commission has now proposed changes to the prior RFP and has issued the current Notice to elicit more involvement from retail suppliers in a rate design program. The Commission seems determined to engage the retail supplier community in this effort, stating that, “[a]s Maryland moves forward with grid modernization, the retail supply community can play an important role in supporting policy goals, including more active efforts to shape load profiles.”

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

Continued Progress for Community Solar in Maryland

Maryland’s Community Solar Pilot Program is moving along with dozens of solar facilities in the project queues for Baltimore Gas and Electric CompanyPepco MDDelmarva Power MD, and Potomac Edison Company. The first year of the program has seen strong interest from the Subscriber Organizations that develop and manage the solar facilities. Under the program, customers subscribe to a portion of the output of the community solar facilities, which are called Community Solar Energy Generating Systems.

Many of the solar projects entered the utilities’ production queues last summer, so they will be reaching the operational deadline under the program rules in the next few weeks, unless they request an additional six months. Several Subscriber Organizations have recently filed requests with the Maryland Public Service Commission for extensions, citing permitting delays, program delays, and other implementation challenges.

The program is a great opportunity for electricity customers – including low- and moderate income residents – to access solar energy, particularly those that rent or do not have the ability to install their own solar panels. Under the pilot program, if a community solar facility is located within your utility’s service territory, even if it is across town, you can enroll with a Subscriber Organization and purchase a portion of the energy produced by your community solar system. While subscribed to a solar facility, customers receive a bill credit each month for energy generated by the solar system. Offers from Subscriber Organizations include discounts off the utility’s standard electric rates from around 5%-10%.

Customers won’t actually get their household energy directly from solar panels, but their payments will help finance solar facilities that place electricity onto the grid. So far, the Commission has approved six projects across Maryland and we anticipate that more will be approved within the next few years. Statewide, the General Assembly authorized bout 200 MWs to be built under the pilot program which could power about 40,000 households.

As with any new program, some implementation challenges are to be expected as the program gets off the ground. However, we are optimistic that Maryland’s Community Solar Pilot Program will be a success, enabling more and more customers are able to access solar energy.

If you would like more information about the program’s background, we have been tracking the Maryland’s Community Solar Pilot Program since its inception and the development of the program regulations back in April of 2016 (check out our previous post here). We also did a video about Community Solar in the mid-Atlantic region last Spring.

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.

Energy Secretary Perry Concerned With Grid Resiliency

Eric Wallace covers the Notice of Proposed Rulemaking (NOPR) sent by Secretary of Energy Rick Perry to the Federal Energy Regulatory Commission (FERC) in regard to grid resiliency.

Community Solar Growing in Mid-Atlantic

Eric Wallace explains what’s driving the increase in interest and use for community solar energy generating facilities in mid-Atlantic jurisdictions such as Maryland and the District of Columbia. For more information about community solar projects and regulation, contact Eric or any of our mid-Atlantic energy lawyers.

Appalachian Power Receives Approval To Add 120 MW of New Wind Power

Detail of windmills on wind-farm wind farm with mountains and clouds

Appalachian Power Company (“APCo”), which provides electric service in western Virginia and southern West Virginia, has received regulatory approval in Virginia and West Virginia to add approximately 120 MW of wind energy to its generation portfolio. APCo sought approval from its regulators in both states to purchase the wind energy from NextEra Energy Resources, which will build the wind facility in Indiana.

The Bluff Point wind farm is expected to be online by 2018 and will help APCo meet its voluntary renewable portfolio standard goal in Virginia. APCo and Dominion Virginia Power both have a goal of using 15% renewable energy (based on each utility’s 2007 sales) by 2025.

The Virginia State Corporation Commission (“SCC”) approved the Bluff Point wind contract following a settlement between APCo and the SCC’s Staff. The settlement was approved despite opposition from a group of large industrial customers of APCo. The industrial group objected to a proposal by APCo that will provide rate credits to commercial and residential customers during periods when wind power costs are less than prevailing market prices for energy. Under Virginia law, industrial customers are not allocated expenses that utilities incur to attain their renewable portfolio standard goals.  The Bluff Point PPA was also approved by the West Virginia Public Service Commission following a settlement among the parties.

APCo’s president, Chris Beam, recently stated publicly that the utility expects to add new wind resources in southern West Virginia in the near future. Currently, APCo’s generation portfolio consists of about 60% coal resources. APCo will file its 2017 Integrated Resource Plan, describing the company’s planned investments in new renewable generation over the next 15 years, with the SCC on May 1.

If you have questions about this regulatory ruling or renewable energy development in Virginia or the mid-Atlantic, please contact one of our renewable energy lawyers.

Future of Maryland’s Energy and Distribution System

transmission towers for electricityThe Maryland Public Service Commission’s Public Conference 44 proceeding is now well underway. The purpose of this proceeding is for the Commission to seek input on the best ways to transform Maryland’s electric distribution system, advancing customer-centered, affordable, reliable, and environmentally-sustainable electric service. Stakeholder workgroups are meeting to develop proposals for the Commissions six different topic areas:

  1. Rate Design;
  2. Electric Vehicles;
  3. Competitive Markets and Customer Choice;
  4. Interconnection Process;
  5. Energy Storage; and
  6. Distribution System Planning.

We are working with retail energy clients and industry stakeholders to help develop time-of-use pilot programs, competitive retail energy options for electric vehicle owners, and utilize the more sophisticated meter data available through recently deployed smart meters. In the next few months, stakeholders will also begin meeting to develop proposals for enhancements to Maryland’s competitive retail energy markets.

We are excited to see where this proceeding will go and what new opportunities for Maryland businesses and energy consumers will result. If you are interested in learning more about Maryland’s PC44 proceeding or other developments in Maryland’s energy industry, please contact one of GreeneHurlocker’s energy and regulatory attorneys for more information.

SCC greenlights Dominion plan to build 20 MW solar facility in Fauquier County

sunset-solar-squareOn Wednesday, February 1, the Virginia State Corporation Commission approved an application filed by Dominion Virginia Power to construct and operate a 20 MW solar generating facility near the town of Remington, in Fauquier County. Virginia. Dominion will sell the output of the facility to the Commonwealth of Virginia under a 25-year power purchase agreement. Dominion estimates that the total cost of the project will be $46 million. The terms of the agreement, however, including the price that the state agreed to pay for the energy, are confidential and were not disclosed to the Commission.

The SCC rejected Dominion’s first application to build and operate the Remington facility in 2015. In the 2015 case, Dominion sought to increase customer rates in order to pay for the Remington project, which would have provided power to all of the company’s retail customers. But the Commission rejected Dominion’s application after finding that the company had not complied with a Virginia statute requiring it to consider third-party alternatives. Specifically, Virginia law requires utilities, when proposing to build new generation facilities, to demonstrate that they considered whether the same energy could have been obtained for a lower price from non-utility companies.

The Commission’s final order on Wednesday, however, found that this law should not apply to Dominion’s new application because the Commonwealth of Virginia is the sole purchaser of the energy. The Commission noted that the Commonwealth is a “non-jurisdictional retail electric customer” and thus “the rates and charges it pays generally fall outside of the Commission’s regulatory authority.” The Commission also explained that Dominion will “recover its costs exclusively through contracts negotiated with the Commonwealth” and not “through any Virginia jurisdictional retail electric rates established by the Commission.”

The Commission admitted that it had “not reviewed or evaluated the terms of the Commonwealth’s contract with Dominion, including the financial terms of [the] arrangement.” Therefore, it is unclear at what price the Commonwealth agreed to purchase the Remington energy, or whether solar energy could have been obtained from another seller at a lower cost to taxpayers.

Dominion has announced plans to build at least 400 MW of solar energy in Virginia by 2020. And, as we have discussed previously, several bills currently under consideration by the General Assembly could further accelerate the development of solar energy in Virginia. The Virginia Department of Environmental Quality reports that there are seven other solar facilities at least 20 MW in size that have been permitted by the state and in various stages of construction.

Please contact one of our energy lawyers or regulatory attorneys should you have questions about this solar project or other renewable energy initiatives in Virginia.

CLIENT ALERT: APCo Seeks Solar Power Bids

Appalachian Power (“APCo”), a subsidiary of American Electric Power, issued a Request for Proposals (“RFP”) on January 19, 2017, seeking up to 25 megawatts alternating current (“MW AC”) of ground-mounted utility scale solar.  Pursuant to the terms of the RFP, the project must (i) be located in APCO’s service territory in Virginia or West Virginia, (ii) be interconnected to the PJM Regional Transmission Operator or to APCo’s distribution system and (iii) have a nameplate rating of at least 5 MW AC. In addition, the solar project must have started construction after January 1, 2016 and be operational by December 31, 2019.

You can access the RFP here:  https://www.appalachianpower.com/info/news/viewRelease.aspx?releaseID=2143.

If you have questions about renewable power development or retail electric utility regulations, contact one of our Virginia energy lawyers.

Virginia’s Lawmakers Could Accelerate Renewable Energy Source Development

As the 2017 Regular Session of the Virginia General Assembly heats up, we are keeping a close eye on legislation that could support the development of additional solar energy in the wind turbines and solar arraysCommonwealth. As  noted in the Richmond Times-Dispatch, there is significant regulatory uncertainty in Virginia regarding the rights of utility customers to purchase solar energy. The Times-Dispatch reported that this legal and regulatory uncertainty “may be stifling the development of a lot of solar projects in Virginia.”

In particular, our attorneys will be reviewing the proposed legislation that emerges from the so-called “Rubin Group,” a group of energy stakeholders, including utilities and pro-solar advocates, that is moderated by Richmond lawyer and mediator Mark Rubin. The stakeholder group has been working for months to propose legislation that would encourage solar development, including investments by non-utility companies, while at the same time balancing the concerns of the utilities who must bear the costs to maintain the electric distribution system. Solar advocates generally want customers to have the freedom to purchase 100% solar energy – even if it is not offered by their incumbent electric utility. The utilities, meanwhile, are concerned that if more customers purchase solar generation from third-party solar suppliers, it could mean less revenue for maintenance of the electric grid.

Please contact one of our energy lawyers or regulatory attorneys should you have questions about the status of any energy legislation being considered by the General Assembly this year. Call it our sunny optimism, but we think solar energy has a bright future in Virginia!