“It might have happened without this bill.”
“I think it was going to develop anyway.”
Both comments were made today about the prospect that Virginia will actually see 5,500 megawatts (MW) of new solar and wind generation installed within its borders in the next few years, the amount of new solar designated as “in the public interest” by Dominion’s Senate Bill 966. The law takes effect July 1.
The comments came at a continuing legal education forum sponsored by Richmond law firm GreeneHurlocker PLC and attended by many of the key players in the legislative struggle over Senate Bill 966. The discussion of the bill itself was a replay for most, but the follow up discussion of its likely impacts got interesting quickly. The audience included legislative staff and several key players from the State Corporation Commission staff.
(The firm also distributed updated copies of its excellent summary of Virginia electricity regulation, reflecting the recent changes.)
That first quote above is from Francis Hodsoll, a former investment banker who is now CEO of SolUnesco based in Reston. Hodsoll said his was one of up to 26 renewable energy companies that spent perhaps tens of thousands of hours negotiating with Dominion to bring more solar to the Commonwealth, and not just as special projects “ring fenced” for specific customers such as Microsoft or Amazon.
He noted that Virginia is the southern-most state in the renewable-hungry PJM territory, which is why several of the ring fenced projects are underway or in development. But Virginia has only 56 MW of solar serving general customers and only those 56 MW have gone through the most rigorous SCC. The actual legal weight of the phrase “in the public interest” on the SCC’s authority remains a source of concern for the solar developers, he said, but they are enthusiastic about the 2018 law.
Similar enthusiasm was voiced by the second person quoted above predicting that the solar developments were likely without the bill, Eric Hurlocker of the host law firm. When asked to provide a letter grade to the legislation he gave it an A but was open about why: the chaos and confusion it creates “will invigorate business.” The crowd of lawyers listening joined in his laughter, but of course he wasn’t actually kidding.
Will Cleveland of the Southern Environmental Law Center, asked to provide the same letter grade, gave the bill an incomplete – or really “too soon to tell.” He identified several “atrocious” elements in it, but clearly he hopes it does live up to all or a least some of the marketing hype about renewable energy and a modernized grid that supports further innovation and cost savings.
Matt Gooch from the Office of the Attorney General, careful to say this was his opinion and not that of Attorney General Mark Herring, said the bill earned an A from the utility and its stockholders, he gave it a C as a boost to the wind and solar industries, but added “the big losers were the customers, the people who pay for electricity.”
As everybody understood during the session and as was emphasized again today, the bill does not – does not – mandate the development of a single megawatt of renewable energy. Nor does it force the SCC to approve any particular application. The legislation used much stronger language elsewhere in the bill to dictate policy to the SCC on paying for underground power lines.
And nothing I heard today undermined my personal opinion that the pleasing green energy smiley face on the cover of the bill was nothing but a cover story for the violently anti-consumer elements buried in its bowels and its multiple enactment clauses. To the extent you see more solar farms or wind turbines in Virginia, they were coming anyway. The Northam Administration’s pending carbon regulation and the federal investment tax credits will have far more to do with that outcome.
The other big element of the bill popular with environmentalists was a requirement that the two major utilities invest about $1 billion (of ratepayer money) in various energy efficiency programs designed to reduce the demand for energy (see enactment clause 15 in the bill). But Assistant Attorney General Gooch raised a good question about that, too. Given that the purpose of these programs is to drive down demand, thus depriving the utility of revenue, will that lost revenue count toward the $1 billion of “cost” required? Or will the utility be allowed to recover that lost revenue, profit margin included, meaning the programs might actually cost consumers $2 billion?
That was one wrinkle on this bill that was not noticed (or at least brought up) during the session. You can bet the chess grand masters at Dominion have gamed that out, but in the meantime Hurlocker’s expectation will be fulfilled: chaos and confusion equals billable hours.