December 30, 2011

Perhaps you remember the Dominion Power print ads that ran last year. Big, glossy spreads showing seagrass bending in the breeze, with a picture of a wind turbine and the words, “Natural. Abundant. Renewable. Wind. That’s why we’re harnessing it to help power Virginia’s energy future.”

Only, it turns out, it isn’t. It never was. Forced to reveal the energy sources the company uses to meet Virginia’s voluntary renewable portfolio standards, Dominion admitted that its customers in Virginia are getting precisely zero wind power.

How about solar energy? Nope. Nada. Zilch.

And yet Dominion will be collecting millions of extra dollars from its ratepayers as a reward for meeting the goals of the state’s renewable portfolio standard, or RPS.

Mind you, Dominion isn’t required to include renewable energy among the generation sources it uses. It can choose to forgo the extra “basis points” (cash) awarded for meeting benchmarks. But if it meets the goals, by statute it is allowed to collect millions of ratepayers’ dollars for doing so.

So if Virginia has a goal for renewable energy and Dominion is pocketing money for meeting it, what is it selling us?

In addition to some hydropower projects that long predate the RPS law, Dominion uses some Virginia biomass (i.e., wood); to make up the rest, it buys “renewable energy certificates” from other companies that give it credit for energy produced elsewhere. The list of these certificates, released this fall in litigation before the Virginia State Corporation Commission, shows they relate to hydropower, biomass or landfill gas-to-energy, with the majority of them pre-World War II projects, and none of them placed in service in the past 10 years. Most states won’t accept these renewable energy certificates for their RPS laws, so they are very cheap.

Yes, the Dominion family owns some wind farms, one just across the state line in West Virginia. But we aren’t getting a single electron of that energy, because Dominion sells it to other states that have much tougher standards for what counts as renewable energy. For us in Virginia, Dominion buys cheap certificates that no one else wants.

That’s a great deal for Dominion. According to the Southern Environmental Law Center, $1.7 million could buy enough of these certificates to satisfy Dominion’s 2010 RPS targets, qualifying the company to collect an extra $76 million over two years from its ratepayers.

If Dominion actually builds the solar projects in Virginia that it says it plans to, it has said that it will sell certificates for the energy they produce into another state with a serious RPS, so it can maximize profit. Under the rules of the game, though, the buyer elsewhere will then be recognized as the owner of the renewable energy. Dominion could not also claim to be supplying its Virginia customers with wind or solar.

That explains why Dominion’s interest in Virginia wind and solar seems limited to its desire for great ad copy. But it doesn’t explain the company’s hostility to anyone else investing in Virginia renewables. The State Corporation Commission recently granted Dominion’s request to impose a “standby” charge of up to $60 per month on customers who install solar projects in the 10- to 20-kilowatt range (about twice the size of an average home’s usage). It’s enough to make these projects uneconomic and destroy the market for them. At a time when Dominion claims we need to build more power to meet demand, it is doing its best to keep small businesses from doing precisely that.

Even worse is its treatment of a Staunton-based solar company called Secure Futures, which has stepped up to the plate to put solar installations on university campuses, using a third-party power purchase agreement to ease financing. This summer, Dominion hit Secure Futures with “cease and desist” letters, claiming it can’t legally sell solar power to Washington and Lee University within Dominion’s exclusive service territory under Virginia law. Dominion, you understand, will not sell solar power to Washington and Lee, but it seems determined to make sure no one else does, either.

So watch for Dominion’s next renewable energy ad campaign, which will probably feature sunshine and promises of solar for Virginia. Just don’t make the mistake of believing it.

The writer is vice chair of the Virginia Chapter of the Sierra Club.