Bacon's Rebellion

Democracy Thrives in Sunlight

Pro-Solar Tweaks Advance in General Assembly

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by

James A. Bacon
in , , ,

If big corporate customers start generating their own electricity, who will pay to build and maintain the electric transmission-distribution grid?
If big corporate customers start generating their own electricity, who will pay to build and maintain the electric transmission-distribution grid?

As the General Assembly reaches the mid-point of its session, solar-energy legislation sponsored by Republicans has a very good chance of passing, reports Robert Zullo with the Richmond Times-Dispatch. 

The proposals emerged from lengthy discussions in a working group of Virginia’s electric utilities, electric cooperatives, and solar industry proponents. While the package is “a mixed bag,” said Will Cleaveland with the Southern Environmental Law Center, he conceded that it “leans slightly to the positive.”

According to Zullo, the package includes bills that:

  • Allows farmers to sell more renewable energy generated on their property to utilities;
  • Establishes a pilot community solar program for subscribing utility customers;
  • Allows streamlined permitting for small-scale renewable energy projects; and
  • Allows utilities to ask the State Corporation Commission for recovery of costs for pumped hydroelectric generation and storage facilities in Virginia’s coalfields. As envisioned, this pump-storage would be coupled with solar energy.

Bacon’s bottom line:

 Anything that injects more entrepreneurs and competition into the equation is a good thing. However, these bills leave unanswered perhaps the most important issue facing solar energy in the state: legal clarity for power-purchase agreements, specifically for arrangements involving third-party financing. A consortium of Fortune 500 corporations had requested clarification of laws that would make it easier for them to execute deals with third parties in order to generate their own solar energy. Power-purchase agreements are complex legal and financial instruments set up to extract maximum value from federal tax credits.

Many corporations have made a commitment to clean power and would like to derive a bigger percentage of their electricity from renewable energy sources, which in in most parts of Virginia means solar. From their perspective, the ideal law would allow them to generate their own solar electricity and sell surplus power back into the grid at the full retail rate. However, power companies argue that independent solar generators should recoup a lower wholesale rate for the electricity. Electric utilities oppose laws that allow competitors to capture retail market share without compensating the utilities (and their rate payers) for the cost of maintaining the transmission-distribution grid that everyone relies upon when the sun isn’t shining.

Until the General Assembly grapples with the fundamental issue of how to generate solar electricity without undermining the transmission-distribution grid, all the rest is window dressing.

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5 responses to “Pro-Solar Tweaks Advance in General Assembly”

  1. LarrytheG Avatar
    LarrytheG

    If I claimed that this logic sounds a lot like the defence of COPN, what would you say?

    in terms of WHERE such infrastructure exists to support larger solar connections – why not treat this the same way we treat the availability or non-availability of other infrastructure such as interstate highways, rail, and natural gas and let entrepreneurs decide where to seek market opportunity based on the geographic infrastructure availability rather than essentially make that issue a generic denial reason to be used anywhere the utility doesn’t want “competition”?

    Why does Jim Bacon want full competition for health care facilities but defends Dominions COPN-like excuses to fend off competition?

    what say you?

  2. James A. Bacon Avatar
    James A. Bacon

    Transmission-distribution lines owned by electric utilities are a natural monopoly. The U.S. has recognized for nearly 100 years that they must be regulated. By contrast, there is no such thing as a natural monopoly in the health care industry. The effect of COPN regulation is to exclude competition and create de facto monopolies that would never exist if the marketplace were allowed to work. The comparison has no merit whatsoever.

    1. LarrytheG Avatar
      LarrytheG

      Jim – a “natural” monopoly. ??? really? Do you think the state granted that monopoly to Dominion just as the state also did the COPN?

      why should the state de-regulate COPN and not Dominion’s monopoly the same way?

      You don’t want to protect the health care industry but you do want to protect Dominion from competition?

  3. V N Avatar
    V N

    Jim,

    I am not in favor of removing the “Electric utilities oppose laws that allow competitors to capture retail market share without compensating the utilities (and their rate payers) for the cost of maintaining the transmission-distribution grid that everyone relies upon when the sun isn’t shining.” provision. That is monopoly protection, maybe not in word, but in fact that is what it is. It is saying that new business can’t get a return so I can keep the monopoly.

    We already have monopolies in effect with health care. COPN actually does some good on several occasions. We need more of it.

  4. LarrytheG Avatar
    LarrytheG

    so… let’s take V N’s statement and wordsmith it for health care:

    ” I am not in favor of removing the “COPN oppose laws that allow competitors to capture retail market share without compensating the hospitals (and their rate payers) for the cost of providing Charity care to people who can’t pay when they visit the ERs” provision.

    it’s sounds just like the same duck quacking ….

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