District Energy and Renewable Energy in Virginia: Dominion Virginia Power Rates and Policies. Cliona Mary Robb

Transcription

1 District Energy and Renewable Energy in Virginia: Dominion Virginia Power Rates and Policies Cliona Mary Robb

2 Disclaimers 1 st disclaimer: I am in my professor role and not my counsel role for the purposes of this presentation. What I say here may bear little or no resemblance to the position of my clients. 2 nd disclaimer: District energy and renewable energy policy in general are currently a work in progress in Virginia. If you came to this presentation with the expectation of getting a firm blue print on how to implement district energy in Virginia, your expectations will not be met. 3 rd disclaimer: When assessing energy options, everyone has a bias. My bias is to view energy from a ratepayer s perspective.

3 2 nd disclaimer: work in progress Reports on State Corporation Commission website October 1, 2015 Annual Report by State Corporation Commission to General Assembly on Solar Distributed Generation Programs and Renewable Energy Pilot Program for Third Party Power Purchase Agreements September 1, 2015 Annual Report by State Corporation Commission to General Assembly on Implementation of the Virginia Electric Utility Regulation Act

4 2 nd disclaimer: work in progress Can the SCC Reports be considered data from a reliable source if there is a danger of regulatory capture? There is no danger of regulatory capture, as illustrated by Dissent in Dominion s 2015 biennial review case Dismissal of Dominion s first Rider U application Dismissal of Dominion s Remington Solar application

5 The trouble with most folks isn t so much their ignorance; it s know n so many things that ain t so. - -Josh Billings, a 19 th century humorist (often misattributed to Mark Twain) utilities customers developers 3 rd disclaimer: everyone has a bias regulators (SCC, DEQ, EPA, FERC) environmental groups General Assembly local governments

6 TREND Moved up 6 places COMMENTARY Solar in Virginia: not as bad as you might think! It s not quite a sterling endorsement, but it ll have to do, for now. The state s big utility company, Dominion Power, offers an anemic performance payments program, which will help homeowners now but isn t guaranteed to be there in a few years, and the Tennessee Valley Authority offers its rebate here, but serves only a tiny fraction of the state. All in all, the D grade is earned, but if you re environmentallyminded, you can get solar and see decent returns over 25 years.

7 Dominion s Perspective Renewable Energy Programs Dominion Virginia Power encourages the growth of renewable energy in the Commonwealth, and is committed to providing our customers with program options to support customer interest and needs. Our programs help gauge customer interest in renewable energy, directly influencing future program offerings while also providing us with a platform to study and assess the impact of renewable energy. Learn more about our green initiatives and ways you can get involved! Dominion Green Power Traditional Net Metering Agricultural Net Metering Solar Purchase Program

8 Dominion s Perspective The time for energy savings is now!! If you are interested in our Non-Residential programs, check out what we have to offer. Dominion is committed to helping Virginia meet its energy goal - that's why we're offering these energy conservation programs to help our customers conserve energy and maximize savings. These energy efficiency and peak-shaving programs are designed to meet the needs of our customers and move us towards meeting the state's 10 percent voluntary energy conservation goal enacted by the Virginia General Assembly and the governor in They provide environmental benefits in a cost-effective manner that translates into very real financial savings for our customers.

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13 Utility Development of Renewable Projects

14 Private Development of Renewable Projects Solar Purchase Program: feed-in tariff Description Objective Status a demonstration program for up to 3 MW of Dominion purchases from customer-owned DG solar facilities Customers install solar facilities and sell the entire output to Dominion at 15 /kwh. 120 projects totaling 1,704.6 kw. Pilot Program for Third Party Power Purchase Agreements: Dominion PPA pilot program Description Objective Status a pilot program limited to Dominion territory with a 50 MW cap for jurisdictional and non-jurisdictional customers A person that owns or operates a solar or wind powered generating facility between 50kW and 1 MW and located on a customer s premises may sell the electricity to the customer under a PPA. September 2015 SCC report did not indicate how much of 50 MW cap has been used. Retail Access to Competitive Services Description Status customers may purchase from a Dominion successfully challenged a customer s attempt to competitive supplier that offers purchase solar power from a competitive supplier, arguing 100% renewable energy that its competitive supplier tariff required the suppler to provide 100% of the needs of the customer s account, and solar power was incapable of meeting that requirement.

15 Private Development of Renewable Projects Description Residential customers with facilities up to 20 kw and non-residential customers with facilities up to 1 MW are paid at their retail rate for excess electricity that such facility feeds to the electric distribution grid in excess of such customer s use. Standby charges apply to residential facilities in excess of 10 kw. Net Energy Metering Objective and Status provides an alternative to the feed-in tariff. a cap of 1% of the electric distribution company s adjusted Virginia peak-load forecast for the previous year. The 2015 SCC Report did not indicate how much of the net metering cap had been met for each utility. agricultural net metering allows a renewable facility to offset use at multiple meters located at separate but contiguous sites, allowing for aggregation in a single account the electricity consumption and generation measured by the meters Interconnection Description Objective Status Parameters for interconnection with the utility are established pursuant to the net metering statute To make interconnection by the customer subject to uniform guidelines and strict time deadlines. Permit by Rule Description Objective Status Streamlines or eliminates generation siting applications for smaller renewable facilities. To simply or eliminate regulatory requirements for small, nonutility renewable generators.

16 PLEASE JOIN THE HONORABLE TERENCE R. MCAULIFFE GOVERNOR OF THE COMMONWEALTH OF VIRGINIA FOR AN IMPORTANT ENERGY ANNOUNCEMENT WEDNESDAY, MARCH 16 TH :00 A.M. PATRICK HENRY BUILDING WEST READING ROOM 1111 EAST BROAD STREET RICHMOND, VIRGINIA PLEASE BRING A PHOTO ID AND PLAN TO

17 (excerpt from press release from perspective of glass is full ) Governor Announces Public-Private Partnership among Commonwealth of Virginia, Microsoft and Dominion for Affordable Solar Energy ~ The initiative will result in additional solar energy capable of powering 5,000 homes ~ RICHMOND Governor Terry McAuliffe announced today that the Commonwealth of Virginia, Microsoft (Nasdaq: MSFT) and Dominion (NYSE: D) will partner to bring 20 megawatts (MW) of solar energy onto the grid in Virginia enough energy to power 5,000 homes. Speaking at the announcement today in Richmond, Governor McAuliffe said, This agreement is a solid step forward in our ongoing effort to make Virginia a leader in the renewable energy economy. This partnership will help reduce Virginia s carbon emissions and diversify our energy portfolio, while growing the solar and data center industries in Virginia. This is a prime example of the type of creative thinking and publicprivate cooperation we need to build a new Virginia economy.

18 Virginia partners with Dominion, Microsoft on solar power project 3/17/2016 Richmond Times Dispatch article by John Ramsey (excerpts from article from perspective of glass is half full ) project is expected to generate enough solar energy to power... all six departments that fall under the state s Secretary of Natural Resources. puts the state closer to Gov. Terry McAuliffe s goal of deriving at least 8 percent of the energy for its buildings from solar during the next three years. double Virginia s entire installed capacity.... By the end of the year, Virginia will see solar generation grow by a 10-fold increase since the start of McAuliffe my administration put more clean energy on the grid and reduce Virginia s carbon emissions.

19 Virginia partners with Dominion, Microsoft on solar power project 3/17/2016 Richmond Times Dispatch article by John Ramsey (excerpts from article from perspective of glass is half empty ) Last year, the SCC rejected Dominion s proposal for a solar farm on the same site, in large part because the utility couldn t prove that building the project was less costly than allowing a third-party solar company to build it. Observations from Glen Besa, director of the Virginia chapter of the Sierra Club. On the same day that the governor announced (a 20-megawatt) solar project with Dominion and Microsoft to be built in Fauquier County, there is a hearing on a 1,600-megawatt natural gas power plant in Greensville County Additionally, Dominion s often repeated pledge to install 400 megawatts of solar by 2020 should be contrasted with the simple fact that North Carolina installed 400 megawatts last year alone.

20 REGULATORY CAPTURE AND THE GENERAL ASSEMBLY S ENVIRONMENTAL NEGLIGENCE (excerpts from commentary from perspective of glass is bone dry ) Last October, Virginia s State Corporation Commission turned down an application from Dominion Virginia Power to build a 20-megawatt solar facility on land it owns near Remington, Virginia. The SCC told Dominion it had failed to meet its statutory obligation to consider third-party market alternatives that could save ratepayers money. So Dominion found another way to build the project, with what is being billed as a public-private partnership, Dominion will sell the power from the project to the state of Virginia, who will then will sell the associated renewable energy certificates (RECs) to Microsoft to help it meet its renewable energy goals for its data centers. Governor McAuliffe said at an event in Richmond, that this would reduce Virginia s carbon emissions and diversify our energy portfolio. And in the process, allowing Dominion to avoid having to consider less expensive means of acquiring solar energy, such as power purchase agreements or bids from third party developers.

21 District Energy: A Legal and Regulatory Perspective Excerpts from 2011 Report Given by Staff to Fairfax County Private Sector Energy Task Force Issue Observations Limited County Authority Municipal Provision of Service Exclusive utility service territories under Chapter 10.1 of Title 56 Virginia is a Dillon Rule state: local governments only have powers that are o specifically conferred o necessarily implied o essential No local authority to adopt or amend building codes State regulates provision of energy services Title 21 authorizes creation of a sanitary district to provide services for use and benefit of those in the district o permissible services are water, heat, light, and power and gas systems o powers include taxation, condemnation, and mandatory participation Use for district energy is untested Regulatory compact: utility agrees to serve all customers in its service territory; in exchange, state restricts competition Chapter of Title 56: CPCN required to provide utility service, and SCC may not grant unless incumbent utility is providing inadequate service Virginia recognizes exclusivity as a valuable property right: SCC case involving electric coop, PUE : We intend to ensure that our decisions enforce the Code s requirement of strong protection for the exclusive service territories of utilities in Virginia.

22 Excerpts from 2011 Report Given by Staff to Fairfax County Private Sector Energy Task Force Issue Observations Chapter 10.1 Generating and distributing electric energy 1 st exemption exclusively for own consumption Chapter nd exemption District Energy: A Legal and Regulatory Perspective Furnishing geothermal resources or water to less than 50 customers Chapter rd exemption Under certain circumstances, using a central plant to provide electric service, together with heating and cooling services, to tenants and lessees. Applies if building or buildings located on single tract of land undivided by publicly-maintained road when central plant was installed and owner does not charge separately or by meter for electric energy used by tenant, except as part of rental charge service to under 100 customers

23 District Energy: A Legal and Regulatory Perspective Excerpts from 2011 Report Given by Staff to Fairfax County Private Sector Energy Task Force Issue Campus environments Multi- Owner Property Sites Observations property owner providing utility service for its own consumption not a utility service not provided for the public property owner providing utility service for consumption of tenants or lessees not a utility service when (1) purchased from a regulated utility or licensed competitive provider or (2) self-provisioned and central plant exclusion applies Electric or natural gas service: potential entrant unlikely to establish incumbent utilities are providing inadequate service Combined heat and power and co-generation: regulatory barriers to sale Niches may exist for other energy services o domestic hot water o heating and/or cooling presumably no exclusive-territory issue (only one incumbent A/C utility in Fairfax County with very limited service area) service provider subject to public utility regulation, except: chilled water A/C cooperative serving residences in less than one square mile provision of geothermal resources to under 50 customers VDOT regulations allow access to public rights-of-way

24 District Energy: A Legal and Regulatory Perspective

25 Cliona Mary Robb, LEED AP East Main Street, Suite 1200 Richmond, Virginia