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Advocates for access to long-awaited shared solar in Virginia continue to plug along despite being jolted by a pair of policy setbacks this winter.
For one, they fear a $55 monthly utility customer fee proposed in mid-February will quash a nascent residential program set to roll out in Dominion Energy territory next year.
Then, on the heels of that announcement, the General Assembly opted to deep-six three measures designed to spur shared solar in rural Virginia, replacing that legislation with yet more studies on the topic.
The takeaway? The State Corporation Commission will likely be determining the fate of Dominion’s program while that same regulatory body guides the outline of future shared solar options in the countryside.
Charlie Coggeshall, who directs policy and regulatory affairs for the national nonprofit Coalition for Community Solar Access, said the second proposal is easier to swallow than the first.
“Up to this point, there’s been a ton of momentum in Virginia with getting shared solar established,” Coggeshall said. “High minimum fees and administrative fees threaten to undermine that momentum.”
“But we’re not going anywhere,” he said about his trade group’s persistence. “We’re here to see this through.”
“Solar freedom” legislation passed in 2020 was designed to allow Virginians in Dominion territory to buy solar energy via subscriptions to shared, local arrays instead of having to install panels on their own rooftops. Such off-site power facilities are typically built and owned by third-party entities, not utilities.
Ideally, subscribers earn credits in the form of savings on their monthly electric bills while also helping to pay down the cost of the shared array.
Such an arrangement is attractive to low-income customers who can’t afford the upfront cost of rooftop panels, residents with shaded southern exposure or subject to homeowner association restrictions, and apartment renters and condominium owners without control of their rooftops.
Sen. Scott Surovell, a Democrat who represents a district near Washington, D.C., shepherded Senate Bill 629 through the legislature. It was signed into law by former Gov. Ralph Northam, a Democrat.
The measure included the ability for utility regulators to set what’s called a minimum monthly fee — a fixed-cost charge to subscribers — to account for the costs of implementing the program and for use of the utility’s grid infrastructure.
Surovell has long maintained that a reasonable minimal fee is essential if shared solar programs are going to attract customers seeking fairly priced renewable energy.
A high double-digit fee will make access out of reach, Coggeshall said, making the shared solar market unattractive for developers and subscribers. He added that shared solar not only creates jobs and spurs economic development, but also provides a stable revenue source for landowners leasing property for arrays.
He noted that the concept of a minimal fee or bill associated with shared solar programs is “unique to Virginia. Generally speaking, it’s rare and not seen in other states.”
“We’re now waiting for a commission decision on the minimum bill,” he said, adding that setting it as high as $55 “would effectively kill any project. It’s definitely not the answer we were looking for.”
“The SCC could decide in a month or six months, we just don’t know.”
Fee decision ‘splitting the baby’
D. Mathias Roussy Jr., an SCC hearing examiner, rocked Coggeshall and others on Feb. 16 when he issued a 65-page decision recommending that Dominion would be within its bounds to charge shared solar customers a $55 monthly minimum fee.
Roussy considered four options, ranging from a low of $7.58 proposed by Coggeshall’s coalition to a high of $74.28 from Dominion. SCC floated two separate figures — $10.95 and $55.10. All four proposals assume 1,000-kilowatt-hour usage and 1,000 kWh subscription by a residential customer.
The fee would vary, except on the $7.58 proposal, if usage goes up or down. Roussy’s decision to opt for a volumetric minimum fee, instead of a set one, creates a financial obstacle for participants, Coggeshall said.
“We’re not saying the hearing examiner works for the devil or anything,” Coggeshall said. “He is splitting the baby to say, let’s do the one in the middle.
“Clearly, he got over-analytical and took his eye off the program being workable. Workability has to be the most important factor or you aren’t achieving the intent. It makes everything else moot if it isn’t workable.”
Dominion’s program is to be capped initially at 150 MW. However, it can be boosted to 200 MW if it meets an incentive requiring at least 30% of enrollees to meet pre-established low-income standards.
Low-income participants would not be saddled with a minimum fee, no matter its cost. Nor would they be responsible for paying a yet-to-be-determined administrative fee that Dominion also would be allowed to collect.
Dominion had not yet announced an administrative fee when the hearing examiner reached his decision, although the utility has estimated that it could be in the $10 to $20 range. Each of the four figures the hearing examiner reviewed included a built-in $1 administrative fee as a placeholder.
It isn’t clear when Dominion would be setting its administrative fee and the utility didn’t answer a follow-up query on that number.
Shared solar roadmap due Nov. 30
Before the General Assembly session began in January, Chelsea Barnes was champing at the bit to expand shared solar into the state’s two other and smaller investor-owned utilities.
Appalachian Power, a subsidiary of American Electric Power and Old Dominion Power, part of Kentucky Utilities, serves more mountainous and remote regions of Virginia, where Barnes is legislative director for the advocacy organization Appalachian Voices.
Both of those utilities had been stripped from Surovell’s community solar bill before it became law a few years ago.
This legislative session, Barnes and her colleagues were again frustrated that a trio of bills aiming to set on-the-ground goals for shared solar at the two smaller utilities and electric cooperatives was scuttled in favor of one that will evaluate the program’s possibilities.
“We’re disappointed that we have to wait another year for shared solar,” Barnes said. “This is not a guarantee but it’s better than nothing.”
What emerged as bipartisan Senate Bill 660 directs utility regulators to collaborate with interested parties to figure out how Appalachian Power and Old Dominion Power might proceed with shared solar. As well, Coggershall’s coalition is co-leading a parallel effort to do the same with electric cooperatives.
“It’s an opportunity to establish a roadmap to do this in a scalable way in co-op territory,” Coggeshall said.
Reports from the two workgroups are due to Senate and House of Delegates committees by the end of November.
“A workgroup provides a transparent process, so hopefully that will result in something more tangible,” Barnes said. “But the utilities also can decide they don’t want a shared solar program and won’t fully participate.”
Sens. Emmett Hanger Jr., R-Mt. Solon, and John Edwards, D-Roanoke, co-sponsored the legislation.
A possible advantage of such legislative accountability is that utilities won’t be tempted to stall progress, thus drawing the ire of lawmakers, Barnes said.
She noted that the size of a shared solar program is not a one-size-fits-all proposition. For instance, larger solar developers tend to be able to offer more robust and cost-competitive deals for customers. However, they likely won’t be drawn to a state with a puny program that is a more appropriate fit for smaller local solar companies.
“Maybe there is a balance that can be achieved that accomplishes both,” Barnes said.
Appalachian Power spokesperson Teresa Hamilton Hall said that the utility looks forward to participating in the SCC-directed working group meetings, but that “we don’t have anything to share at this time regarding potential programs or expectations.”
Minimum fee should be ‘truly minimal’
Roussy, the hearing examiner, noted in his decision that the SCC fielded about 190 comments, nearly all opposed to Dominion’s proposed minimum fee of $74.28.
For instance, John Warren, director of the Virginia Department of Energy, encouraged the commission to adopt a minimum bill that facilitates a viable program. He stated that “while some customers may be willing to pay higher bills to participate, that number will drop considerably if bills greatly increase.”
Harrisonburg area resident Joy Loving, a Dominion net metering customer, might have summed up commenters’ sentiments most succinctly by stating that commissioners should reject the utility’s proposed minimum fee “and replace it with one that is truly minimal.”
Robert J. Trexler, Dominion’s director of regulation, said that Virginia statute and rules “emphasize that the purpose of the minimum bill is to promote fairness by ensuring that subscribing customer pay their fair share of the costs of the [shared solar program], and conversely, safeguard non-participating customers from bearing shifted [program] costs.”
The Mid-Atlantic-based Chesapeake Solar and Storage Association said Dominion’s proposed fee strays far from standard rate design and removes the potential for customers to save money.
Broadly, solar advocates said the hearing examiner’s report ignored the benefits that renewable energy can provide to the electric grid and all ratepayers, including decreased transmission and power generation costs.
The comment period on Dominion’s proposed minimum fee closed a month ago.
“We hit a speed bump,” Coggeshall said about the hearing examiner’s recommendation. “Now we’re waiting for a commission decision. We remain optimistic.”