Solar Advocates Challenge Dominion Standby Rate on Residential Solar Systems
Hearing before the State Corporation Commission to be held November 3rd
The Virginia State Corporation Commission has granted MDV-SEIA a hearing to oppose new electricity charges being proposed by Dominion's Virginia Electric and Power Company (Dominion). The hearing at the Commission's offices will be held November 3. Dominion has proposed these rates on net metered distributed generation - i.e., solar arrays installed at a home or business.
According to MDV-SEIA, Dominion's proposed charges are excessive and potentially unlawful on its customers who install solar systems. Further, MDV-SEIA argues that 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 claims it proposed these charges in order to recover the costs associated with serving these customers. The company states "[it] is required to be available to provide supplemental and backup service at all times including when the on-site
generation fails or is being serviced, or is otherwise non-functioning, such as, when the sun sets daily in the case of a solar generator."
"Dominion's calculations fail to give due and equal consideration to the fact that solar power reduces operating costs and future infrastructure needs," says Francis Hodsoll, Executive Director of MDV-SEIA. Hodsoll states that "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."
MDV-SEIA asked Dominion what analysis had been done to determine the company's avoided costs from customer-owned solar arrays. Dominion responded that avoided costs were not relevant. In addition, Dominion admitted that no such analysis had been conducted. The company claimed that the lack of such data didn't matter because the law authorizing the utility to collect the new standby charges does not require the utility to consider such avoided costs.
"Dominion's proposal defies common sense," says Hodsoll. "It's equivalent to a car dealer refusing to accept the factory rebate on a new car because the dealer would rather charge its customers full price. Such a business practice makes sense only if you're a monopoly like Dominion whose customers can't shop elsewhere."
Further, MDV-SEIA points out that 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.
"Dominion's charges will severely dampen solar energy growth in Virginia -discouraging these clean sources of electricity and unnecessarily impeding the local job creation," says Hodsoll. "The federal government uses tax policy to incentivize solar system installation, and Virginians' tax dollars support this federal policy. By needlessly discouraging the installation of large residential solar systems in Virginia, Dominion's proposal ensures that Virginians will not receive their fair share of these federal incentives for solar systems".
"Virginia can have a thriving solar market that creates jobs and opportunities across the Commonwealth, but it will require leadership at the state level to make this a reality," said Tom Kimbis, Vice President of Strategy and External Affairs for the national Solar Energy Industry Association. "Virginia needs pro-renewable policies that foster a competitive, innovative business environment - not what amounts to a tax increase on homeowners who choose to go solar."
MDV-SEIA represents the interests of photovoltaic and solar thermal equipment manufacturers, installers, distributors and component suppliers, including more than 45 companies in Virginia employing hundreds of Virginians in the fastest growing industry in the United States.
It appears that the good folks at Dominion "Global Warming Starts Here" Power have really stepped in it this time. Earlier today, I was on a conference call with the 
