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A letter to Gov. Ralph Northam’s administration asks for more flexibility for companies seeking to buy from alternative suppliers.
Virginia needs to make it easier for companies of all sizes to access greener energy sources, according to a letter signed by a dozen major energy users.
In a wide-ranging letter to the state Department of Mines, Minerals and Energy last month, the group of businesses, universities and healthcare institutions said Virginia’s competitiveness depends on broader access to renewable power.
“To stay competitive, Virginia should offer a range of choices for large customers to access and procure renewables from both utility and non-utility providers,” the Aug. 24 letter says. Large users “should also be able to aggregate their load across the Commonwealth and procure less than 100 percent renewable energy if they so wish.”
The letter was submitted as part of a now-closed public comment period for the Virginia Energy Plan, a ten-year strategic vision for energy policy being devised at the behest of Democratic Gov. Ralph Northam.
The companies submitted the comments in hopes of accelerating the fledgling energy transition underway in the state, which passed expansive energy legislation last winter that is already spurring interest and conversations around clean energy.
Growing awareness of limit
Under a state law on the books since 2007, customers are allowed to buy from alternative power suppliers if their annual demand is at least 5 megawatts. That same law also lets a group of customers aggregate their individual demands to reach the required 5 MW threshold.
Importantly, such a bundling by different customers wouldn’t be permitted unless state utility regulators ruled that the requested aggregation was “consistent with the public interest,” according to research by Richmond energy attorney Will Reisinger of the GreeneHurlocker Law Firm.
Earlier this year, state utility regulators for the first time approved a request from the manufacturer of Reynolds Wrap to meet the threshold by bundling six of its locations together, allowing the company to shop around for alternate power suppliers instead of relying on the state’s two investor-owned utilities.
Dominion Energy and Appalachian Power opposed Reynolds’ request. Dominion argued that the Legislature intended to allow retail choice “only in limited circumstances” when it passed the law. As well, Dominion argued that aggregation would “have the potential effect of eroding a significant portion of the utility’s jurisdictional customer base.”
Initially, both utilities signaled to the State Corporation Commission that they would appeal that February decision. However, neither company pursued an appeal.
The Reynolds Holding Group case, filed in July 2017, was the initial test of the statutory provision. Then in December, Walmart and Sam’s Club followed Reynolds’ lead with a similar filing before the SCC. Both retailers also sought to bundle stores in territories covered by the state’s two largest utilities.
The commissioners have scheduled a hearing on the Walmart and Sam’s Club request for Oct. 30.
Virginia companies have taken note that businesses in Maryland and other deregulated states have access to energy with lower prices and carbon footprints via competitive suppliers. Those suppliers can be more nimble and offer more sophisticated energy products.
“The fact that more customers want to shop for generation … is an indication that the market is very competitive now,” Reisinger says.
Companies speak up
Ceres, a Boston-based nonprofit that works with investors and companies on sustainability issues, coordinated an effort with the 12 large energy users in Virginia to spell out their specific needs in the letter submitted to the state.
“In Virginia, aggregation is key,” said Alli Gold Roberts, senior manager of state policy at Ceres, because it allows retailers, farmers and smaller manufacturers to benefit from economies of scale by investing in large renewable energy projects.
Virginia’s green energy landscape has evolved more rapidly over the last couple of years than many expected.
For one, initiatives by Northam and his Democratic predecessor Terry McAuliffe are complemented by legislative measures such as the sweeping Grid Modernization and Security Act, which went into effect on July 1. It calls for regulated utilities to invest $1 billion in energy efficiency and designates the build-out of 5,000 megawatts of solar and wind to be in the public interest.
A separate Northam measure in the works would cut carbon pollution from large power plants by 30 percent over the next decade.
In tandem with the Global Climate Action Summit in San Francisco this week, the governor has directed Virginia’s Department of Environmental Quality to reduce the state’s transportation carbon footprint and limit methane leakage from natural gas infrastructure.
“Businesses are increasingly interested in choice in the marketplace,” Roberts said.“They seek the most cost-effective option to invest in clean energy, whether that’s through their utility or a third-party provider.”
The dozen letter signers include seven businesses: Adobe, JLL, Mars, Nestle, Salesforce.com, Unilever and Worthen Industries; one healthcare institution, Bon Secours Richmond Hospital; and four colleges, Emory & Henry College, Sweet Briar College, Virginia Wesleyan University and Washington and Lee University.
In the three-page letter, the businesses presented five broad low-carbon recommendations they want rolled into the state plan. They include reducing overall carbon emissions, increasing renewable energy development, funding energy efficiency programs, investing in electric vehicle charging infrastructure and deploying directives, voluntary targets and tax incentives to drive innovation with clean technology.
“We knew there were policy barriers when we got involved a few years ago,” Roberts says. “We’re excited to see Virginia moving forward because clear policies will create certainty for businesses.”