by Steve Haner

The Virginia State Corporation Commission, consisting of three judges all picked by the General Assembly while Democrats were in control, has delivered another stern warning that the Virginia Clean Economy Act is unworkable and will greatly increase electricity costs within Virginia as it reaches failure.

Despite the concerns expressed in its 21-page opinion issued April 15, the Commission did approve another wave of solar projects for Dominion Energy Virginia, along with one of the two new battery projects the utility proposed.  However, several other projects the company wanted were turned down as being too costly for the pitiful amounts of energy provided.   

The new projects approved and the cost overruns on solar projects previously approved will still combine to cost ratepayers billions of dollars more over time, and will add another $2.38 to the monthly bill of a residential customer using 1,000 kilowatt hours of electricity as of May 1.  

The language of the final order mirrors dire staff testimony reported on in Bacon’s Rebellion in January. In the weeks in between, the Virginia General Assembly has come and gone and done nothing to address the issues described. On the contrary, the bills it passed — most now signed by Governor Abigail Spanberger (D) — doubled down on the Virginia Clean Economy’s mandates or found new and different ways to increase the future price of power.

Following similar reasoning to the staff report, the Commission took note of the 2020 Virginia Clean Economy Act’s imposition of a cash penalty on Dominion’s customers if it fails to meet the law’s goals for produced electricity with no carbon emissions, the so called “deficiency payment.” It sees logic in viewing that as a cap on how much ratepayers should have to spend on these high-cost, low energy output generation units that qualify for a “renewable energy certificate” or REC. 

Deficiency payments “serve to suggest an upper zone beyond which it may be increasingly unreasonable to secure a REC. And relatedly, they signal a statutory recognition that projects within an RPS portfolio are not to be approved at any cost. That said, the potential triggering of deficiency payments is a cause for concern. As Staff correctly noted, these are costs to be borne by ratepayers that do not directly result in improved generation, transmission, or distribution services,” the Commission wrote.

That last phrase “costs borne by ratepayers that do not directly result in improved…services” is a polite way to say, “these are payments for nothing.”

The Commission also took note of the huge cost of energy produced by these solar and battery projects, mainly because of their intermittent operational tempo.  “Staff also testified that of the 21 (proposed) resources, 15 projects are expected to deliver energy at a higher levelized cost than the Company’s offshore wind facility.  For comparison purposes, total estimated costs of the Company’s (first wave of) Solar Projects were approximately $2,051 per kilowatt (“kW”); whereas in this case, the total estimated costs of the (wave six) Solar Projects are $2,932 per kW, with one (wave six) Solar Project having costs exceeding $4,000 per kW.”

The phase six projects are costing almost 50 percent more than the first set of projects approved under the 2020 VCEA?  What happened to the promises that renewables were rapidly dropping in cost? 

The SCC rejected all the utility’s requests for small, distributed solar projects as too expensive. These small projects that package and market multiple small solar generators to sell into the utility are beloved by the climate obsessed. Dominion wanted approval of three of them that would cost $35.8 million and produce less than 7 megawatts of electricity when running. That worked out to almost $5,300 per kilowatt. The order called that unreasonable. 

The SCC stops short of stating this conclusion, but it is clear why the Democrats so attached to the ideology of the VCEA are so bitterly opposed to the data center industry. As the demand for electricity goes up, the failure of the VCEA and its tremendous costs become inevitable. As part of this application process, Dominion provided a model of how it would comply with the VCEA’s mandate to eliminate the use of all carbon-emitting power by 2045. 

“In this environment of load growth, the dynamics of the Renewable Portfolio Standard are placed under particular strain. This is most clearly seen in the Forced Retirements by 2045 Portfolio. The Company describes this scenario as infeasible based on build limit assumptions, capital requirements, reliability concerns, and customer affordability concerns.

“Staff concurs, noting that “even if the aspirational suite of resources modeled by the Forced Retirements by 2045 Portfolio were feasible, it would be unlikely to be in the ratepayer’s best interest.” At $270.4 billion, this scenario involves almost three times as much in capital expenditure as the Company’s preferred plan. The value of the Forced Retirements by 2045 Portfolio, Staff states, “is to provide all interested parties, policy makers and the public generally, with insight into the level of investment and effort that would be needed to be fully compliant with (VCEA).

“Increased sales to large-load customers with almost 24/7/365 demand will require a great deal of additional energy, both generated in-state and transmitted from elsewhere on the PJM grid. These sales will need to be paired with RECs or incur deficiency payments, and for the foreseeable future many of those incremental sales will be fulfilled by energy produced from sources that do not generate RECs.”

In a better world, a few dozen elected Democrats (and more of the Republicans, too) would read this opinion through a couple of times and learn something. Sitting through a legislative meeting on these issues might be less like listening to a concert of fingernails on blackboards.