Virginia Electricity Policy Needs a Tune-up

The Virginia electricity utility, Dominion Virginia Power, is proposing to impose excessive and potentially unlawful charges on its customers who install solar systems. Further, Dominion’s actions are punitive to those customers who own clean renewable solar systems, actually harm all Virginians, and are the result of a misguided policy.

Dominion proposed these charges in response to legislation allowing utilities to recover costs associated with net metered distributed generation — i.e., solar arrays installed at a home or business. However, Dominion’s calculations fail to give due and equal consideration to the fact that solar power reduces future infrastructure needs and operation costs. Solar systems produce near their maximum output during the peak usage on the system, and distributed solar produces that energy where it is consumed.  This means solar power displaces the need to transmit electricity over long distances when electricity generation is most expensive and the capacity to transmit and distribute the electricity is most dear.  (Electrical systems — generators, transmission lines, and distribution lines — maintain sufficient capacity to meet the peak usage plus a safety margin.)

PJM, the grid operator that manages the high voltage transmission system in all or parts of 13 states and Washington, D.C., reported that for 2010, congestion on the system — lack of sufficient transmission capacity resulting in a sub-optimal and more costly operation of the system — cost customers $1.4 billion. In 2010, the Dominion territory was the most congested zone in PJM.  Distributed generation such as solar alleviates congestion.

Why unlawful.  Dominion’s charges impose higher costs on a customer with a solar system than one without.  This is an apparent violation of Virginia Code Section 56-234 that states that utilities have a duty to furnish “adequate service at reasonable and uniform rates.” to customers who take service “under like conditions.” 

Why harmful to all Virginians.  Dominion’s charges will severely dampen solar energy growth in Virginia — and potentially eliminate these clean sources of electricity and local jobs.  The federal government uses tax policy to incentivize solar, and Virginians’ tax dollars support this federal policy.  Unfortunately, Dominion’s unjustified implementation of this law ensures that Virginia will not receive its fair share of these incentives.

Why punitive to solar owners. Financial modeling demonstrates that Dominion’s proposed charges would make impacted solar systems un-economic. While there may be a few Virginians who would decide to pursue un-economic projects, the vast majority would forego this path towards energy independence.

As a political appointee in the President George W. Bush administration, I speak as a fiscal conservative who understands that our current approach to energy usage and supply is not sustainable. Whether you — as I — recognize the folly of sending trillions oversees to pay for this unsustainable, insecure system, or you recognize the need to replace our ancient fossil-fueled power plants; whether you wish to maintain the beauty of the woods in which I camp with my kids, or you understand that the U.S. needs to regain technological leadership by investing in the energy technologies of the future; for whatever the reason, I request that you make your voice heard and say ENOUGH to this misguided and harmful policy.

Dominion is inadvertently perpetrating an unsustainable system. As an energy producer, Dominion should be encouraging renewable energy, not killing it.

MDV-SEIA represents the interests of photovoltaic and solar thermal equipment manufacturers, installers, distributors and component suppliers, including more than 45 companies in Virginia.  We represent hundreds of Virginia jobs in the fastest growing industry in the United States. We have requested and been granted a hearing on this case by the Virginia State Corporation Commission. The hearing will be held on November 3, and I invite you to join MDV-SEIA in opposition of Dominion’s standby rate proposal. Documents pertaining to the case can be found here, select “Search Cases” and enter case PUE-2011-000888.

To learn more or to support these efforts please email us at and write in the subject line “Dominion Stand By Rate case.”  

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Francis Hodsoll founded E&E Frontiers with over 20 years experience in the energy markets, finance, and general management. He brings extensive experience in developing and structuring power plant projects; negotiating PPAs and related contracts; providing public policy advocacy and policy formulation; and providing the market analysis, quantitative modeling, pro forma forecasting in support of these transactions. E&E Frontiers is a leader in renewable energy public policy. As Executive Director of MD-DC-VA Solar Energy Industries Association, Francis leads the organization’s operations and implements its strategic direction. Francis has testified before the VA State Corporation Commission, MD legislature, DC City Council, MD PSC and DE PSC on Renewable Portfolio Standards; long-term contracts; net metering; economic and jobs impact; and SREC (Solar Renewable Energy Credits) procurement. Francis has held multiple executive positions in the private and public sectors. Francis was a CFO for a developer and operator of renewable power plants. He also was appointed Deputy Director of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) where he also served as CFO. He earned his MBA from the MIT Sloan School of Management and his BA in Economics from Colby College. Francis has strong public speaking experience and has authored numerous articles. He has spoken at conferences on project development and finance, wholesale and environmental markets, and general energy policy. His recent speaking engagements include American Public Power Association, Environmental Markets Association, MD-DC-VA Solar Energy Industries Association and the Colorado School of Mines. Francis has written numerous articles on energy deregulation, wholesale energy risk management, project development, and renewable energy market trends.

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