A national association of businesses focused on renewable energy, energy efficiency, smart grids, energy storage and other technologies is pushing Virginia’s gubernatorial candidates to embrace what it calls “a transformational change” in how energy is consumed and generated in the state.
“Evolving consumer preferences, dynamic new technologies and aging infrastructure are causing the energy system as we have known it to modernize,” says a memo by Advanced Energy Economy, delivered Friday to the campaigns of GOP nominee Ed Gillespie and Lt. Gov. Ralph Northam, the Democratic nominee. “And with this change comes opportunity.”
The policy paper by the group, which represents about 1,000 businesses in 27 states, outlines priorities aimed at creating jobs in Virginia in energy efficiency, solar and wind generation, and energy storage, among other emerging industries.
Gillespie’s campaign said the GOP nominee will be putting forward “a detailed, substantive plan to address energy priorities in the commonwealth to ensure our energy policies help foster economic growth.”
“As governor, he’ll help lead efforts to diversify Virginia’s energy portfolio for more affordable and reliable energy,” spokesman David Abrams said in a statement.
Northam said in a statement that revenue in the clean energy industry has grown from $500 million to $2 billion over the past three years.
“It’s clear to everyone that the future is in renewable energy,” Northam said. “In just the last year alone, our solar jobs have increased by 65 percent, making us one of the fastest-growing markets in the country.”
While the state can do more, it is “incumbent upon the legislature to develop better standards to require the purchases of renewable energy sources,” he said.
The priorities outlined in Advanced Energy Economy’s policy paper include opening doors for third-party providers to compete in utility resource planning, which is now largely driven by the state’s incumbent investor-owned utilities, Dominion Energy and Appalachian Power, with the oversight of the State Corporation Commission, which regulates utilities.
That means building on and broadening regulations that require utilities looking to build power plants to consider third-party market alternatives, including renewable generation and storage options, said Dylan Reed, a policy associate with the group.
“It should be the cheapest market alternative for consumers,” he said.
Utilities have traditionally taken a dim view of power purchase agreements, in which third-party providers own on-site or off-site renewable generation sources such as solar arrays and sell the power to customers at lower rates than they would have paid to the utility.
Though there are pilot programs in place, the restrictions — including a cap of 50 megawatts in Dominion’s territory and minimum and maximum wattage limits — have made them generally unattractive for developers, Reed said.
“Only one solar developer has been able to make it work,” he added.
Another target is energy efficiency.
“Energy efficiency is the lowest cost and most readily available resource to meet energy demand,” the memo says. “However, Virginia is trailing behind other states in taking full advantage of these resources, forgoing billions of dollars in benefits and thousands of well-paying jobs.”
To blame is the state’s “current regulatory environment,” Advanced Energy Economy says, namely a structure that includes no incentive for electric utilities to encourage customers to cut consumption.
“Gas utilities in Virginia and electric utilities in many other states have decoupled their sales volume from revenues, meaning they have neither an incentive nor a disincentive to reduce customer demand,” the memo says.
The group wants the next governor to encourage additional partnerships between its members and utilities and large energy users, prioritize energy efficiency and renewable energy in budget proposals, appoint members of the SCC who “understand the value and potential of all advanced energy technologies,” and create a task force to upgrade the electric grid in Virginia.
Advanced Energy Economy also calls for immediate legislative action on power purchase agreements to give residential, industrial and commercial customers “an explicit legal framework” for such agreements; making energy storage advancement a part of the mission of the Virginia Solar Energy Development Authority; and creating more renewable energy purchasing options for large companies.
“These solutions should work for utilities, developers and customers alike and should encourage renewable energy as well as maintain and attract corporations to the commonwealth,” the paper says. “Companies should have access to viable renewable energy options regardless of what utility territory they are located in.”
Dominion and Appalachian Power have filed for so-called green tariffs that would offer customers in their service areas 100 percent renewable energy products. But those programs, which have yet to be approved by the SCC, have been seen by opponents as efforts to keep out competitors.