Va. energy plan punts on RPS but opens door to third-party solar

Source: Rod Kuckro, E&E reporter • Posted: Friday, October 3, 2014

Renewable energy and energy efficiency appear to be first among equals in Virginia Gov. Terry McAuliffe’s all-of-the-above energy plan released yesterday.

While the 2014 plan, as expected, offers policy prescriptions to revive the state’s coal economy through exports, expand natural gas pipeline infrastructure, support nuclear reactors, and drill for oil and gas off the Virginia coast, what stands out is McAuliffe’s desire to exploit the “tremendous untapped potential” of wind and solar generation and lead a statewide efficiency drive to lessen the need for new power plants.

McAuliffe, a Democrat elected in 2013 who governs a purple state with a General Assembly dominated by Republicans, is “trying to balance a lot of different economic interest here,” said one veteran energy lobbyist. “The governor and his staff moved the needle in the right direction on this.”

The quadrennial energy plan for the first time — at the direction of the General Assembly earlier this year — includes an analysis of the costs and benefits to Virginia of U.S. EPA’s proposed regulation of greenhouse gas emissions from existing fossil-fuel-fired power plants, also known as the Clean Power Plan, under Section 111(d) of the Clean Air Act (EnergyWire, Sept. 29). Two analyses are appendixes to the plan, one by the Virginia Center for Coal and Energy Research at Virginia Tech and the other by ICF International on behalf of the Southern Environmental Law Center.

Some solar energy advocates will be disappointed that McAuliffe did not propose to convert the state’s voluntary renewable portfolio standard to a mandatory regime as a draft recommendation had called for in July. “We have more work to do” on “finding a path to a stronger portfolio standard,” McAuliffe wrote in a letter transmitting the plan.

But their disappointment may end there, as McAuliffe advocates allowing “third-party Power Purchase Agreements (PPAs) throughout all utility service territories in Virginia.” He also proposes doubling the current 50-megawatt cap on the amount of solar distributed generation that can be installed through PPAs. Virginia, with just 8 MW of installed solar, ranks 30th among states, according to the Solar Energy Industries Association.

Allowing utility customers to sign long-term electricity supply deals with a third party would likely need approval by the General Assembly. It would open the door to national companies such as SolarCity Corp. and Sunrun Inc. as well as Virginia entities to respond to “long-pent-up demand” for rooftop solar, said Will Craven, a spokesman for the Alliance for Solar Choice.

Other solar incentives include increasing the amount of distributed generation that can be owned by “customer-generators,” increasing the amount of distributed generation that can be operated before a “standby charge” applies to compensate utilities, and developing rules to permit neighborhood and office park solar projects.

New governing bodies proposed for solar, efficiency

McAuliffe would have the state contribute to solar deployment by creating a Virginia Solar Energy Development authority that would spur partnerships to install 15 MW at state and local government facilities by June 30, 2017, and the same amount at commercial, industrial and residential facilities by the same date.

The solar authority would be modeled on the state’s Offshore Wind Development Authority, which has struggled to advance deployment of the costly technology. Nevertheless, McAuliffe reiterates a commitment to “the full and swift development” of the 113,000-acre area set aside for offshore turbines.

The plan’s recommendations don’t mention the development of onshore commercial wind power, of which there is none in the state and which is generally a fraction of the cost of building offshore wind plants.

McAuliffe proposes to establish the Virginia Board on Energy Efficiency to develop a plan to reach the state’s voluntary goal of reducing energy consumption 10 percent by 2020, two years ahead of the current schedule.

Also, a new position of chief energy efficiency officer would direct state efforts to cut electricity consumption in state facilities by 15 percent by 2017 and enlist local governments in complementary efforts.

Francis Hodsoll, founder of the Virginia Advanced Energy Industries Coalition, said McAuliffe’s “plan is an opportunity to focus in on the deployment of clean energy technologies at scale, reducing pollution and gaining the economic benefits associated. We need a diverse, prudent energy supply that isn’t overreliant on any one fuel. It’s a very good start.”

Dominion Resources Inc., the state’s largest electric utility, could not react to details in the just-released plan, but spokesman David Botkins praised McAuliffe for “his recognition of the need for new energy infrastructure investments.” While a consensus is unlikely “on every recommendation, and we ourselves have concerns about the rate impacts of certain recommendations on customers, we will work with all stakeholders going forward,” Botkins said.

“It’s a great move forward that they’re talking about creating the solar authority and also creating some type of energy efficiency commission to start getting the ball rolling on some of these policies,” said Chelsea Harnish, policy manager for Virginia Conservation Network and, like Hodsoll, a member of the Virginia Energy Council that helped develop the plan.

“It’s good to see those in writing, but we want to make sure that we’re actually taking action to make sure that it happens,” Harnish said.