By Kenric Ward | Watchdog.org Virginia Bureau
FREDERICKSBURG — Environmental groups say Virginia‘s renewable-energy program is a loophole-riddled corporate giveaway that allows utilities to boost rates without building a single wind or solar facility in the Old Dominion.
Republican Attorney General Ken Cuccinelli calls the whole subsidy arrangement a waste.
Under the law, power companies can increase bills when they invest in renewable-energy ventures, which may be more expensive than fossil fuels. Loose wording in the legislation allows Dominion Virginia Power and Appalachian Power to pass along costs to Virginians even when the “green” projects are out of state.
To date, Dominion has used a handful of Virginia-based biomass projects — including a new hybrid coal-biomass plant in Wise County — to supplement its much larger out-of-state ventures.
Though virtually all of its renewable projects are located elsewhere, the utility is authorized to charge Virginia customers $76 million more when a rate freeze thaws next year.
“Dominion is dragging its feet,” charged Kirsten Collings of the Chesapeake Climate Action Network. “Its 15-year plan calls for a 0.4 percent increase in renewable energy here.”
Jim Norvelle, spokesman for Dominion, said the company has 1,000 megawatts of renewable generation in development. Projects include converting three Virginia coal-fired power stations to biomass by the end of 2013. (One megawatt can power 250 homes.)
While continuing to import 315 megawatts from decades-old hydro-electric stations in North Carolina, Dominion has an application pending with the State Corporation Commission to build 30 megawatts of commercial rooftop solar capacity in Virginia, Norvelle said.
Glen Besa of the Sierra Club of Virginia discounts Dominion’s efforts and said the utility is garnering state-sanctioned subsidies on the cheap.
“Hydro is all ancient and represents no new renewable electricity on the grid, no new investments and no new jobs,” he said.
As for biomass, Besa asserted, “There is a lot of air pollution associated with burning wood waste.”
And solar? “Thirty megawatts is a drop in the bucket — far behind states like New Jersey and North Carolina,” Besa said.
Appalachian Power, which is authorized to charge Virginia customers $19 million for out-of-state projects, does not have any plans for renewable-energy facilities in the commonwealth, said company spokesman Todd Burns. The utility recently filed for 0.2 percent rate increase to cover costs of its renewable ventures elsewhere.
Collings said the added expense for renewable power is comparable to the new rates that Dominion will pass along for its Virginia City hybrid. She said the average customer charge for that plant is $1.32 per month vs. $1.37 for renewables.
Collings and others say the original impetus for the Virginia law was to generate jobs and renewable power in-state. Now they call it a poster child for regulatory reform.
“The law is not being used in the way it was intended at all. It needs to be changed,” said Delegate Scott Surovell, D-44th District.
“If Virginians are paying more (for renewable power), it ought to be creating Virginia jobs and Virginia investment. There’s no reason to be exporting millions of dollars to other states,” he said.
Surovell said he is hopeful that the law will be amended at the 2013 session. He successfully tacked on language to legislation earlier this year to require that animal waste used in the production of energy come from Virginia.
“We don’t need whatever they have up in (Washington) D.C.,” he mused.
Dominion tried to build a wind farm in Virginia. But the company’s plan to install mountaintop turbines in Tazewell County was rejected by the County Commission.
Sierra Club’s Besa said Tazewell’s opposition shouldn’t stop Dominion from looking elsewhere.
“Roanoke County has a proposed project as does Highland County that Dominion could invest in or acquire,” he suggested.
Rick Webb, a senior scientist at the University of Virginia’s Department of Environmental Sciences, said utilities would be better off harnessing wind energy offshore, where air currents are stronger and more consistent.
Norvelle said Dominion is one of several companies interested in bidding on 113,000 acres off of Virginia Beach for up to 2,000 megawatts of wind generation.
Here, too, private utilities reap public subsidies.
Dominion received a two-year, $500,000 grant from the U.S. Department of Energy with a goal to find innovative ways to reduce the cost of offshore wind generation by 25 percent.
And this week, Gov. Bob McDonnell announced that his fiscal 2013 budget will include $500,000 for research and data collection to assist and accelerate private development of Virginia’s offshore wind resources.
Dominion has said it is committed to meeting a voluntary renewable energy goal of 15 percent by 2025, but environmentalists say that’s just spin, and that the state is letting the utilities off easy by not establishing in-state benchmarks.
“To put this into perspective, IKEA recently unveiled the largest solar array in Virginia atop its store in Woodbridge. With this one step, a single furniture store has built more solar energy in Virginia than Dominion, one of America’s largest utilities,” said Phillip Ellis, field organizer with the Sierra Club.
IKEA said the store’s 2,100 rooftop panels — part of a nationwide installation program— will produce approximately 636,199 kilowatts a year, without a state subsidy.
Cuccinelli, whose office serves as the state’s consumer advocate in utility matters, is opposed to mandatory renewable-energy standards and accompanying corporate credits.
“It has long been the position of the attorney general that the program unnecessarily increases the costs for customers,” Cuccinelli spokesman Brian Gottstein told Watchdog.org.
Virginia’s renewable-energy law also gets a skeptical review from UVa’s Webb.
“The problem (with the enhanced rate of return embedded in the state’s renewable-energy law) is that there is no process or requirement in place to determine what, if anything, this incentive actually buys in terms of reduced fossil-fuel powered generation or pollution reduction,” Webb said.
“In my view, the environmental community should be seeking to have these benefits quantified before incentives are approved,” he said.
“Until the Virginia General Assembly fixes the renewable energy standard to ensure that utilities actually earn their bonuses with new clean energy, the Renewable Portfolio Standard (for energy) will remain little more than a corporate handout,” Collings said.
“If Virginians are going to fund a renewable energy bonus, they should get the benefits — jobs and cleaner air.”
Contact Kenric Ward at firstname.lastname@example.org or (571) 319-9824.