Virginia lawmakers are expected to fill an open seat this month on a state board that could determine whether the state becomes a regional leader on renewable energy, energy efficiency and grid modernization.
“The State Corporation Commission is where the rubber meets the road,” says Cale Jaffe, director of the Environmental and Regulatory Law Clinic at the University of Virginia.
Government agencies and the Legislature can lay out rules for pollution control and energy generation, but it’s the commission that has the power to say ‘yea’ or ‘nay’ to related proposals by utilities.
Virginia’s Grid Modernization and Security Act (SB966) went into effect July 1.
“That legislation creates the possibility for clean energy wins, but doesn’t guarantee anything,” explains Will Cleveland, staff attorney with the Southern Environmental Law Center, an advocacy organization in Charlottesville. “The commission plays a critical role here.”
“The SCC exists to regulate the monopoly utilities in Virginia,” he continues. “But we have an odd tension here.”
Utility executives are required to maximize profits, but keep rates reasonable and service reliable for captive ratepayers, Cleveland explains.
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Energy efficiency advocates worry regulators will be too conservative when evaluating cost-effectiveness.
Virginia energy efficiency programs will get a $1 billion boost over the next decade, but how much bang for the buck the state gets for that money will hinge on how utilities and regulators decide to spend the money.
The state’s sprawling new energy law, the Grid Transformation and Security Act of 2018, includes a requirement that utilities invest more than $1.3 billion over the next decade in programs that help customers conserve energy.
Virginia’s utilities have historically lagged in efficiency spending. A 2017 report by the American Council for an Energy-Efficient Economy (ACEEE) ranked Dominion Energy’s programs 50th among the 51 largest utilities.
In 2015, Dominion Energy spend $31 million on efficiency programs — less than 0.5 percent of yearly revenue. That average for large utilities that year was 2.7 percent of revenue, according to the ACEEE report.
The new law in Virginia commits Dominion to spending $870 million on regulated efficiency programs over 10 years, or about $87 million per year. It also has to contribute $6 million annually to a state weatherization fund.
The money has potential to help thousands of customers buy smart thermostats, add insulation, or replace inefficient lighting and appliances, all of which could save money, create jobs, and delay the need to build expensive new generation or transmission infrastructure at ratepayers’ expense.
“Unfortunately, all of that potential could easily slip away,” said Chelsea Harnish, executive director of the Virginia Energy Efficiency Council (VAEEC).