Dominion’s Proposed Solar Program Fee Is Absurdly High
A client of Dominion Energy wrote to me recently asking what her condo association could do to switch to solar power. The roof of the building can hold many more solar panels than needed to power the needs of the common space. Is it possible to sell excess electricity to individual residents to power their units?
I get this question often, and in 2020 the Virginia General Assembly attempted to change the answer from “no” to “yes”. As a member of solar freedom legislation, the State Corporations Commission was tasked with creating a shared solar power plant program for residents of multi-family buildings like condominiums and apartment buildings, with orders to make the program available from January 1, 2021. In other words, it should be available today.
And yet, I still have to tell people that they can’t do it now, and maybe never will, unless the CSC changes course. Potential customers will only have to a last chance this month to try to save the program. On March 25, the CSC will collect public testimony at a testimony hearing to answer the seemingly simple question that threatens the viability of the multi-family shared solar program. The law allows Dominion to collect administrative fees from customers who participate in the program. How much should it be?
Administrative costs do not seem sufficient to block a program for more than a year, let alone for the deep six. Dominion’s role in the multi-family shared solar program is limited to doing the accounting to ensure that each unit gets credit for the share of electricity the resident purchases. It shouldn’t cost very much, maybe a dollar or two per month per customer.
Yet Dominion proposes to impose administrative fees of more than $87 per month – fees so absurdly high that they would force participants to pay far more for electricity generated on the roof of their building than for electricity Dominion delivers them from elsewhere in the state. CSC temporarily blocked the utility from implementing these fees, but it also stacked the game to make high fees almost inevitable.
And it’s a program killer. Rooftop solar is still much more expensive than large offsite solar installations, so keeping fees low is essential to keep the economy running. It is also a question of fairness. Owners of single-family homes with rooftop solar panels benefit from Virginia’s net metering program, which guarantees them a one-to-one credit for any excess electricity generated. Multifamily residents deserve something similar.
Indeed, the point of putting the multi-family shared solar program into Solar Freedom — a law otherwise focused on removing barriers to net metering — is to benefit Virginians who have been shut out of the solar market because they don’t own their own roofs. . Renters in particular are more likely to have lower incomes than owners of single-family homes, so offering them the program is important to achieve the goal of reducing the energy load of low- and middle-income residents and ensuring that the transition to clean housing energy benefits people at all income levels.
I’m not just guessing the intent behind Solar Freedom. I know the goal is to provide residents of multi-family buildings with an analog to net metering, as I drafted most of the legislation as it was introduced, working with local government allies and legislators who introduced it. We wanted building owners and occupiers to be able to work together to install solar power onsite, without interference from SCC and without the utility requiring a reduction in action.
But as often happens with legislative sausage making, the bill changed as negotiations and committees progressed. CSC was tasked with developing a formal program and Dominion was tasked with administering it. However, the new wording made it clear that the original objective remained. The CSC should write regulations that “reasonably allow the creation and financing of shared solar installations” and “enable all classes of customers to participate in the program and ensure participation opportunities for all classes of customers.”
The legislation provides that participants will be credited on their utility bills for their share of the electricity produced by the solar panels. The SCC must perform an annual calculation of the invoice credit rate “as the effective retail rate for the Customer’s fare class, which shall include all supply charges, delivery charges, request charges, fixed charges, and any riders or other charges applicable to the Customer.” To the definition of “invoice credit rate” is added the warning that the rate “must be defined in such a way that the shared solar program results in robust project development and access to the shared solar program for all categories of customers.
This language is consistent with the goal of putting multi-family buildings on an equal footing with single-family homes by making rooftop solar energy affordable. But, contrary to the original legislative language, and contrary to net metering rules, the final version of Solar Freedom directs the CSC to “allow investor-owned utilities to recover reasonable program administration costs.
And this is the opportunity that Dominion wants to exploit. As soon as the SCC began the process of drafting rules for the multi-family shared solar program, Dominion argued that administrative fees should be based on virtually all operating costs of an electric utility. Instead of the multi-family program reflecting net metering, Dominion modeled a larger program under a very different law. Shared Solar legislation, also passed in 2020, creates a program for community solar installations that can be on-site or off-site, can serve many more customers anywhere in Dominion territory, and can even be cut into a large-scale solar installation. ladder. the shared solar law specifically allows Dominion to charge most customers a “minimum bill” with a list of components, and also administrative costs.
Things are not going well for the Shared solar program at CSC. A hearing examiner recently advised the commission adopts a minimum bill of more than $55, based on a SCC staff recommendation. It didn’t bother the hearing reviewer or staff that the number puts the cost of shared solar power above the cost of Dominion’s own electricity, a program killer according to Community Solar Developers.
But cramming the minimum bill items into the administrative costs of the multifamily program would be an even bigger blow to a program whose economy is already constrained by the small size of on-site projects. It also seems obvious from a simple reading of the two laws that the General Assembly did not intend to charge multi-family residents the fees it authorized for Shared Solar participants.
Unfortunately for clients, CSC approved cramming in the concept of last July, ignoring this simple legislative intention. On this basis, SCC staff proposed options for the administrative fee of $16.78 or $57.26, whichever is higher using the same reasoning that just led to the Hearing Reviewer’s $55 recommendation in the Shared Solar Program.
CSC should reject those numbers and instead embrace the dollar or two it will actually cost to run Dominion’s multi-family shared solar program. But to do so, the commissioners will have to reverse their earlier and blatant decision and adopt what seems to be (to them) the new concept that the General Assembly wanted to give to the ordinary meaning of its words. Only then will residents of multi-family buildings gain their solar freedom.
Note: Persons wishing to testify at the SCC hearing should Register before March 22.