A Virginia Senate committee on Friday advanced two bills, both on 10-5 votes, that would introduce a shared solar program to Appalachian Power customers and expand the availability of Dominion Energy’s existing program.
The votes in the Senate Commerce and Labor Committee to send SB 253 and SB 255 from Senate Majority Leader Scott Surovell, D-Fairfax County, to the full state Senate came a day after the House Labor and Commerce voted to move similar bills from Del. Rip Sullivan Jr., R-Fairfax County, forward to the full House of Delegates.
Shared solar, or community solar, allows a customer to buy electricity from a solar company without needing to own solar panels. Proponents say it can help customers save money using clean energy, but electric utilities and others have expressed concern about shared solar programs shifting costs onto other ratepayers.
Representatives of Appalachian Power and Dominion Energy said Friday they support Surovell’s bills. Both bills drew supportive comments before the committee, and nobody spoke in opposition.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
While both bills deal with shared solar programs, there are key differences in how those programs would operate in Appalachian’s service territory compared to Dominion’s.
The Appalachian bill would establish a shared solar program in the utility’s service territory for the first time. With nearly 500,000 customers, Appalachian is the second-largest electric utility in the state behind Dominion Energy and the largest in Southwest Virginia.
“We’ve been working on this for four years trying to get it done,” Surovell said. “We finally were able to get something that — not everybody’s happy with this, by the way, but nobody’s opposed to it. It’s a good compromise.”
The proposed legislation would set Appalachian’s shared solar program at a maximum capacity of 50 megawatts, while Dominion’s program, first authorized in 2020, would gain another 150 megawatts for a total of 350.
“Obviously, Apco’s smaller, and so this program is smaller,” Surovell said.
Unlike Dominion Energy’s shared solar program, the Appalachian program would not reduce costs specifically for low-income customers. Under Dominion’s program, low-income customers are exempt from a monthly minimum bill that other shared solar subscribers must pay regardless of how much electricity they use.
The House version of the Appalachian-related bill includes language requiring that low-income customers will save at least 10% on their bills compared to not being in the shared solar program. The Senate version that cleared the committee Friday lacks that language.
“A key part about this program for it to be successful is that it’s got to reduce bill costs for Virginians,” Josephus Allmond, staff attorney with the Southern Environmental Law Center, said in an interview. “The research out there shows that not many people sign up for premium renewable products from their utilities. And we’d argue that the shared solar facilities provide enough benefit to the grid and to the utilities and to the ratepayers that lower costs are warranted.”
Surovell said another difference between his Appalachian and Dominion bills is that under the Appalachian program, the solar company would bill customers directly. In the Dominion program, the solar company’s billing is integrated with the utility’s, and customers receive a credit for the solar energy on their utility bills.
“Apco has a very different billing system and they couldn’t absorb that cost; it was extremely expensive,” Surovell said.
One point of contention since Dominion’s program was established is the minimum monthly bill, currently around $62.
Dominion says shared solar subscribers should pay their fair share toward operating and maintaining the electric grid. Shared solar proponents say that the current minimum makes shared solar cost-effective only for Dominion’s low-income subscribers, who are exempt from it.
Both bills direct the State Corporation Commission, which regulates electric utilities in Virginia, to decide the two shared solar programs’ minimum bills while considering the value that solar energy provides to the overall electric system.
“This bill requires them to deduct the benefits of solar against the cost to the ratepayers,” Surovell said. “It gives the SCC still complete, hundred-percent discretion in order to set the minimum bill; it just requires them to show their math.”
Surovell said Dominion’s shared solar program was meant to be for both full rate-paying customers and low-income customers. But because of the minimum bill, solar developers have focused exclusively on the low-income market.
“That’s not what we intended, and this sort of restores it to what our intent was and gives the parties another shot to try to get a working program,” he said.
Surovell said the benefits that solar power provides to electric utilities could include upgrades that make the grid more resilient, helping the utilities achieve their state-mandated clean energy goals, and reducing pollution and climate change.
Sen. Mark Obenshain, R-Rockingham County, asked whether the SCC is “in the business of quantifying the intangible benefits” such as the impact on climate change.
“I would support this if it addressed quantifiable benefits, but I think it’s still shifting to the rate base benefits that are just impossible to quantify,” Obenshain said.
Surovell said calculating such benefits is within the SCC’s discretion as it prepares to undergo a formal process over the next two years to determine the value of solar energy.
Another part of the proposed legislation concerns renewable energy certificates, which are essentially market instruments created when a company produces solar energy and which utilities such as Appalachian and Dominion can buy to help meet standards for how much of their electricity portfolio is composed of renewable energy.
The bills include language specifying that solar developers under Appalachian’s new program or Dominion’s expanded program can’t keep and sell such renewable energy certificates themselves but must retire them so the utilities can earn that credit toward meeting state-mandated clean-energy goals.
Both programs also contain provisions to establish incentives for building shared solar projects on brownfields, landfills and rooftops in an effort to reduce the impact of such projects on agricultural land.
