Va. lawmaker proposes mandatory renewable energy standard for utilities

Source: By Darren Sweeney, SNL • Posted: Friday, January 29, 2016

A Virginia lawmaker introduced a bill in the General Assembly on Jan. 22 that would convert the state’s voluntary renewable portfolio standard to a mandatory program for investor-owned electric utilities.

Virginia’s voluntary RPS law gives electric utilities the option to meet a renewable energy target of 15% of electric energy sales by 2025. S.B. 761, introduced by Sen. Donald McEachin, a Democrat, would require utilities to make investments in solar energy generation, onshore wind, offshore wind and cumulative energy efficiency savings by 2030 to meet mandatory RPS standards.

Instead of RPS goals, the new proposed standards would “incrementally increase until, in calendar year 2025 and thereafter, such sources account for 25 percent of the amount of total electric energy that the utility sold” using the 2007 base year, according to a summary of the legislation. At least half of the renewable energy that is sold must be generated from sources located within the commonwealth, the bill states.

For compliance with the RPS standard for calendar years 2016 through 2025, utilities may only apply renewable energy generated from its own facilities; renewable energy purchased or acquired from a nonutility generator in the state; renewable energy certificates purchased or acquired from customer-generators within the state participating in net metering; or RECs purchased or acquired from generators in the proper interconnection region, “except that a utility may not apply such renewable energy certificates to meet more than 20 percent of the sales requirement for the RPS Standard in any year,” according to the legislation.

“If an investor-owned incumbent electric utility fails to comply with the RPS Standards established for the applicable year, the utility shall pay into the Voluntary Solar Resource Development Fund … or successor fund, a compliance fee of 10 cents for each kilowatt-hour of shortfall from required renewable sources,” the bill states.

In 2013, legislation was signed into law that removed an incentive for Dominion Virginia Power and American Electric Power Co. Inc. subsidiary Appalachian Power Co. to meet Virginia’s RPS goals. The law repealed a 50-basis-point renewable portfolio standard adder and kept a generation adder for offshore wind but reduced the bonus from 200 basis points to 100 basis points.

The companies, however, have committed to developing renewable energy in recent years as the industry prepares for compliance with the U.S. EPA’s Clean Power Plan and seeks noncarbon-emitting generation sources.

In November 2015, Appalachian Power said it plans to seek proposals for up to 10 MWac of ground-mounted solar energy resources in Virginia.

Dominion Virginia Power, known legally as Virginia Electric and Power Co., announced in February 2015 that it plans to add at least 400 MW of utility-scale solar by 2020 at a cost of $700 million. In December 2015, Virginia entered into a long-term purchase agreement with the Dominion Resources Inc. subsidiary for 110 MW of solar-generated energy as part of a plan to diversify energy resources and combat climate change.

Dominion Virginia Power also announced in September 2015 that it will again seek bids for a 12-MW offshore wind farm after receiving and rejecting only one costly bid in a prior solicitation.

Dominion declined to comment on McEachin’s proposal, which is among several legislative efforts to promote clean energy in the state.