WASHINGTON, D.C. — Updates from utility regulators have advocates of shared solar cheering in the nation’s capital, but booing across the Potomac River in Virginia.
In the District of Columbia, renewable energy proponents are apprehensive yet hopeful that regulators are on the verge of resolving a long-running billing dispute between the city and Pepco over a shared solar program geared for low-income residents.
“There’s optimism with the [D.C.] Public Service Commission’s response, though certain details and next steps are up in the air,” Stephanie Johnson, executive director of the Mid-Atlantic-based Chesapeake Solar & Storage Association, said about the directive issued on June 30.
The order is not a final ruling on a complaint the city filed against the utility in late March.
However, Johnson is encouraged that commissioners also seem open to conducting an audit at the request of the District’s energy and environment department to get to the bottom of how Pepco allegedly shortchanged subscribers of solar credits.
Meanwhile, in Virginia, advocates are discouraged by a final decision the State Corporation Commission released Thursday. It jeopardizes the future of a new shared solar program by saddling non-low-income subscribers in Dominion Energy territory with an average monthly utility fee of $55.
“Unfortunately, the Virginia State Corporation Commission adopted an anti-consumer, anti-business monthly minimum bill in its final rules,” said Charlie Coggeshall of the Coalition for Community Solar Access.
The high minimum bill perpetuates “a culture of egregious overcollections by Dominion Energy,” he added.
Broadly, community programs allow utility customers to buy solar energy via subscriptions to shared, local arrays instead of installing panels on their own rooftops. 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 the array developers pay down construction and operation costs.
It’s an appealing arrangement for customers unable to afford the upfront expense of rooftop panels, residents with shaded southern exposure or subject to homeowner association restrictions, and renters without control of their rooftops.
The Virginia decision came five months after State Corporation Commission hearing examiner D. Mathias Roussy Jr. rocked Coggeshall and others by recommending that Dominion Energy would be within its bounds to charge shared solar customers a $55 monthly minimum fee. The four options Roussy considered ranged from a low of $7.58 proposed by Coggeshall’s coalition to a high of $74.28 from Dominion.
Coggeshall, the coalition’s Mid-Atlantic regional director, said the double-digit fee challenges the economics of shared solar in Virginia.
While low-income subscribers are exempt from the minimum bill, regional solar developers have clearly stated that they need market-rate customers to enroll for a shared model to be viable.
“The vision was to include a broad spectrum of subscribers when the legislation was passed a couple of years ago,” Coggeshall said in an interview from his North Carolina office. “The idea was to provide access to everybody. Now we have the potential for undermining that access.”
D.C. regulators preparing shared solar audit
Over in the District, the three-member Public Service Commission has given the joint complainants and Pepco until July 20 to file additional legal briefings.
The dispute came to light on March 23 when the D.C. attorney general and the Office of the People’s Counsel filed a complaint alleging that Pepco has shorted low-income enrollees and the city by as much as $665,000 over the last couple of years.
City officials claimed that “Pepco’s pattern of systemic violations” is undercutting all aspects of community solar by weakening public confidence and causing financial harm.
Violations such as failing to provide promised discounts on energy bills to market-rate and low-income enrollees, not compensating community solar owners and operators, and undercounting energy being generated by the arrays have compromised the District’s ability to meet stringent standards aimed at reducing greenhouse gas emissions.
Additionally, both city offices want the commission to procure an independent third-party audit of Pepco’s metering and crediting processes.
Importantly, commissioners said in their recent nine-page order that Pepco “does not deny the underlying facts” presented in the complaint. Instead, Pepco argues that its “actions are not violative of any law or Commission Rule.”
Thus, the commissioners wrote, “This matter is a question of law rather than a dispute over genuine issues of fact requiring an evidentiary hearing.”
However, they also noted that records the city already submitted “reflect that Pepco’s process is less than clear about whether [shared solar] accounts have been properly credited as Pepco claims. This may be a simple accounting issue that can be resolved through an audit.”
The commission stated that staffers would begin preparing a “scope of work” for an audit, which would be shared with Pepco and city officials.
While the Chesapeake Solar & Storage Association’s Johnson applauds the commission’s willingness to hold Pepco accountable via an audit, she said fuzzy details in the order mean solar advocates have more questions than answers about what might unfold with the case.
“We hope they will issue a rulemaking proceeding to increase their oversight of the [community solar] billing process within the District,” she said.
Johnson was referencing the commissioners’ statement that they might choose to open a rulemaking proceeding to consider altering the city’s shared solar regulations.
“Both sides should also be aware that regardless of our ruling on the legal arguments,” such modifications would “make the process more transparent and responsive to persons who are trying to help the District meet its climate goals,” commissioners wrote.
In follow-up interviews, Pepco spokespeople have repeatedly stated that credit mix-ups stemmed from antiquated software that required the utility to manually adjust individual subscribers’ bills. They said they were frustrated when city officials opted to file a complaint because they were in the midst of fixing problems addressed at meetings with city officials.
On Friday, Pepco spokesperson Addie Kauzlarich said the utility continues to take steps “to evolve our processes and systems to support the community renewable energy facility program and the intricate billing required to provide customers with timely credits on their bills.”
“We are prepared to further address the legal issues raised in this matter and look forward to our continued work with the PSC … to support the District’s clean energy and climate goals, equitably and inclusively,” Kauzlarich said.
Washington, D.C.’s climate targets include a commitment to halving greenhouse gas emissions below 2006 levels by 2032 and becoming carbon-neutral by 2050. Legislation passed in 2013 created a model for community solar projects. Three years later it formed Solar for All, an environmental justice program open to subscribers in low- and moderate-income households.
Roughly 5,000 of the 6,800 households signed up for community solar citywide are enrolled in Solar for All. Its legislative mandate is for 100,000 enrollees to save 50% on their monthly electric bills by 2032.
Dominion fee is ‘excessive and unworkable’
Regional solar developers have been itching for the opportunity to break into Virginia’s shared solar market — if the price of the minimum fee was set low enough.
They have said that a $55 fee — combined with a monthly administrative fee that Dominion has estimated at between $10 and $20 — would add up to be as large as an average household’s electric bill. That’s enough to discourage market-rate customers from participating.
Why, developers ask, should they risk investing in what would likely be an unsupported array?
Armando Gaetaniello, vice president of business development for Neighborhood Sun, said in a spring interview that his Silver Spring, Maryland-based company wanted to reach into Virginia.
In Virginia, no single community solar project could be larger than 5 megawatts. The idea was to incrementally stimulate a series of small-scale distributed generation projects, roughly 1 MW apiece.
“The whole purpose of community solar is to make it accessible and equitable, and to have people transition away from fossil fuels,” Gaetaniello said then. “Otherwise, you would have to be a super privileged household to pay for it. Solar will be an exclusive product that doesn’t work for the masses.”
Coggeshall, of the coalition, said the concept of a minimum fee associated with shared solar is unique to Virginia’s program and not seen in other states.
Democratic Sen. Scott Surovell finagled Senate Bill 629 through the General Assembly in 2020 by reluctantly including a measure that allowed the State Corporation Commission to set a monthly minimum fee that let Dominion account for costs of implementing shared solar and for use of the grid infrastructure.
Surovell, who represents a district near D.C., has maintained all along that the fee had to be reasonable so as to attract customers seeking fairly priced renewable energy.
The program was timed to roll out in Virginia next year, in tandem with Dominion’s unveiling of a new customer information system contrived to accommodate shared solar billing.
Initially, it would be capped at 150 MW. Both solar and environmental justice advocates had lauded the law for requiring that at least 30% of the enrolled customers qualify as low-income. If that bar was met, the program could grow by another 50 MW.
In setting a minimum fee of $55.10, the State Corporation Commission wrote in its seven-page final order that “… the Commission has established, pursuant to its delegated discretion under this statute, a minimum bill that reasonably includes costs the Commission deems relevant to ensure subscribing customers pay a fair share of the generation, transmission, distribution, and fixed costs of providing electric service.”
That $55.10 figure assumes 1,000-kilowatt-hour usage and 1,000 kWh subscription rate to shared solar by an enrolled residential customer.
In that same ruling, commissioners agreed with Dominion and Roussy, the hearing examiner, in setting shared solar bill credit rates at 11.7 per kWh for residential customers. Those credits would total $117.65 for the 1,000 kWh participant.
Rates are 7.1 cents per kWh and 5.9 cents per kWh for commercial and industrial customers, respectively.
Johnson, of the Chesapeake Solar & Storage Association, called the $55 minimum bill “excessive and unworkable” because it sets Virginia apart from neighboring markets.
“While D.C., Delaware, Maryland and other jurisdictions have moved to expand community solar benefits by providing a full retail credit to participating customers, Virginia’s minimum bill imposes a significant cost on participating customers.”
At the moment, shared solar advocates are unsure how to proceed in Virginia. It’s unclear whether the State Corporation Commission’s ruling stymies the program permanently or merely stalls it until developers can fashion a viable, across-the-board economic model.
Coggeshall certainly isn’t giving up yet.
“While highly disappointed,” he said, the coalition “will continue to invest in Virginia.”