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Dominion Energy’s latest attempt at a time-of-use program has earned some praise from solar advocates.
Solar United Neighbors and Dominion Energy don’t often harmonize in Virginia.
So it’s worth noting when the nonprofit sings some praises for the utility behemoth’s rollout this month of a peak-shaving pilot program designed to ramp up renewable-generated electricity by clamping down on fossil fuels.
The big picture behind the four-year time-of-use pilot is to motivate participants to consume the bulk of their electricity during off-peak windows when rates are lower and more electrons are flowing from clean sources.
Aaron Sutch is the Richmond-based Mid-Atlantic regional director for Solar United Neighbors, a national advocacy group. While he isn’t giving every aspect of the pilot a full-throated endorsement, he is pleased about the potential climate benefits.
Just eliminating the need for additional utility infrastructure such as dirty peaker plants reduces carbon pollution, he said.
“I’m not going to sell this like it’s better than sliced bread,” Sutch said in an interview. “But we like the idea of a voluntary rate because the grid isn’t static.
“If participants can reduce peak demand for the grid, that helps out all utility customers. If solar customers can recoup a value for the services they provide, that’s even better.”
Initially, enrollment is capped at 10,000 residential customers. As an incentive, the first 500 enrollees who switch to solar energy receive a $500 rebate check. Rates per kilowatt-hour vary depending on the season, the time of day, and whether it’s a weekday, weekend or holiday.
Sutch and Dominion manager Derek Wenger, who develops renewable energy programs and integrates new technologies throughout Virginia, fielded questions during a joint webinar last week organized by Solar United Neighbors that attracted an audience of 160.
In a follow-up interview, Wenger pointed to three reasons the utility expects this pilot to succeed, unlike Dominion’s time-of-use programs of a decade or so ago.
One, rates — including tiers and pricing — have to be set to entice customers to convert. Two, smart meter technology is required so usage can be accurately tracked, and three, customers have to be brought up to speed so messages from the utility are useful and pertinent.
State legislation, passed as Senate Bill 1769 in 2019, included a provision calling for Dominion to create a time-of-use program to collaborate with stakeholders to develop the rate and a rebate. The main thrust of SB 1769 was lifting a net metering cap for electric cooperatives.
“We had a who’s who of energy policy in Virginia,” Wenger said about input from Sutch’s group and others, including Vote Solar, the Sierra Club, the Southern Environmental Law Center, the Natural Resources Defense Council, the Virginia Poverty Law Center, and representatives from energy efficiency advocates.
Smart meter required
While it seems counterintuitive for an investor-owned utility to want to reduce the kilowatt-hours it sells, this program is more about when, not how much, it’s deployed.
“It’s beneficial for us to work to try to align load shape as best we can with the load shape of the renewable energy coming onto our system,” Wenger said. “Time of use allows customers to use energy when renewable energy will be performing at its highest levels.”
Shifting customers away from carbon-intensive energy, generated from coal or natural gas during peak hours, and toward lower-priced, off-peak, cleaner electricity saves everybody money because it also cuts grid congestion.
SB 1769 complements last year’s overarching Virginia Clean Economy Act, which requires Dominion to switch to carbon-free power by 2045 and Appalachian Power to follow suit by 2050.
“Time of use is a critical path forward to net-zero,” Wenger said. “If you think about what’s coming down the pike, a lot of renewable energy will be interconnected on the system.”
Roughly 1,000 customers had expressed interest in the program as of last week. Wenger said he expected that number to grow before Friday when enrollment goes live.
Dominion limited pilot enrollment to 10,000 because the utility’s antiquated billing system couldn’t handle more than that. Dominion is in the midst of addressing that shortcoming.
In a related matter, only customers with smart meters are eligible for the pilot because the program requires two-way communications built into this more sophisticated technology. It allows the utility and customers immediate access to a host of real-time data about electricity usage.
That gives an edge to customers in Northern Virginia, Richmond, Petersburg and Charlottesville, where Dominion has installed the bulk of its 700,000 smart meters thus far. The utility is optimistic that regulators will green-light a proposal now under review that would more than triple that reach.
Dominion is planning for full deployment to all of its 2.3 million residential electric customers by 2024. In the recent past, the State Corporation Commission has asked Dominion to provide context for its decision to upgrade its meter technology.
“Advanced metering infrastructure is a game-changer,” Wenger said about smart meters. “It opens a lot of doors for demand-side management.”
A boon for net metering?
Early on, Sutch predicted, the time-of-use pilot will be an ideal fit for “gadget geeks” and those very literate about the details of their energy consumption.
Customers with rooftop- or ground-mount solar arrays often fall into those categories, but that doesn’t guarantee it will be a compatible match that lowers bills.
“It requires technical and behavioral changes,” Sutch said. “Everybody in the household has to be on board.”
An analysis by Sutch and two colleagues at Solar United Neighbors noted that homeowners with solar could save money from time-of-use if they are willing to adjust their schedules to operate certain energy-hogging appliances at offbeat times. Battery storage, electric vehicle charging, and smart thermostats and appliances are among the advanced technologies that can offer solar customers an advantage.
For instance, the study suggested that west-facing solar panels could earn more value. That’s because they generate more electricity in the afternoon and early evening when time-of-use rates are higher. Thus, electricity sent back to the grid is more valuable.
Also, it said electric vehicle owners could pay less to fuel their vehicles by charging them during off-peak hours. Solar owners could also save money by charging their battery system when electricity is less expensive and discharging it during peak hours.
Electricity is cheapest during what Dominion calls super off-peak, from midnight to 5 a.m. daily and year-round. Most of the energy generated during that five-hour window is from nuclear sources.
Wenger said the program is fluid because regulators have granted the utility permission to tweak the pilot along its four-year journey.
“It’s experimental,” Wenger said. “The idea was to build a rate that hits the most sweet spots for customers.”
Enrollees will continue to pay a basic monthly charge of $6.58. That matches Dominion’s charge for other standard residential customers.
Sutch emphasized that the program’s rates are far from perfect. But more favorable rates won’t ever be part of the mix for solar users unless they enroll and provide feedback.
“At the end of the day, not everyone is singing ‘Kumbaya,’” he said. “But we’re saying this is worth a try, so let’s get people involved and help them participate.”