Solar groups and Virginia’s lead energy agency are asking regulators to hold a hearing on Dominion Energy’s plans to charge shared solar customers a minimum bill of almost $75, contending the price tag could hinder customer participation
In an April 30 letter to the State Corporation Commission, Department of Mines, Minerals and Energy Director John Warren said “the high amount” proposed by the utility could “have a significant inhibiting effect” on customer participation.
“Dominion’s proposal may prove to be reasonable in the context of Virginia’s regulatory environment,” he wrote. “However, that is not possible to ascertain without the thorough assessment that a hearing will provide.”
Shared solar, often called community solar, has long been a priority for renewables advocates, who tout it as a way to broaden the accessibility of the technology. Under shared solar, more than one household draws power from a nearby solar array.
“Only 25 to 50 percent of customers can put a solar system on their roof,” said Brandon Smithwood, senior director of policy for Dimension Renewable Energy, a solar company that operates in Virginia and is part of a coalition pushing for a smaller minimum bill. “It might be because they have a big tree. It might be because their roof is sagging. It might be because they’re a renter and don’t own their roof.”
Many utilities nationwide, however, have resisted community solar.
As with rooftop solar, community solar customers receive bill credits for the energy their solar panels feed back into the grid in an arrangement known as net metering. Those credits reduce the revenues utilities receive, and many claim they also result in customers not paying their fair share of the costs of operating the larger grid.
Dominion pointed to potential cost shifts to oppose shared solar laws before the General Assembly in 2020, and the key shared solar law that ultimately emerged sought to address the concern by ordering regulators to set a minimum monthly bill for customers who signed up for the program.
That minimum bill, the law specified, should “ensure subscribing customers pay a fair share of the costs of providing electric services” and “minimize the costs shifted to customers not in a shared solar program.”
Low-income customers, who by statute must make up 30 percent of the customer pool for the first 150 megawatts of the program, would be exempt from the requirement.
In plans filed with the State Corporation Commission this spring, Dominion pegged that “fair share” at $74.90 for the average residential customer using 1,000 kilowatt-hours per month, excluding administrative costs.
“This covers the cost of delivering electricity, providing electricity from other sources when solar isn’t available and other charges applicable to all customers. This largely tracks the bill structure for all customers, since shared solar customers are only purchasing a replacement generation source. All other components of the customer charges remain the same,” said Dominion spokesperson Aaron Ruby in an email. “We believe this is a fair and equitable approach.”
Solar groups and the legislative patrons of the law, however, describe the proposed minimum bill as “excessive” and “too high” and say it would keep shared solar from getting off the ground at a time when Virginia is working to decarbonize its electric grid by 2050, largely through the sweeping Virginia Clean Economy Act of 2020.
“The intent of this legislation was to open the door to solar energy for Virginians,” wrote Sen. Scott Surovell, D-Fairfax, and Del. Jay Jones, D-Norfolk, in a letter to the State Corporation Commission. A requirement that 30 percent of all program subscribers be low income was also included “to ensure that the shared solar program would not solely benefit wealthier energy users,” they added. “The proposed minimum bill would limit the program’s practical availability to the very wealthiest energy customers.”
The Chesapeake Solar and Storage Association and Coalition for Community Solar Access, two groups that together represent almost 200 solar companies and nonprofits in the region, contended Dominion’s proposal “will not be economically viable for developers or customer subscribers.”
“If an excessive minimum bill renders Virginia’s program non-viable, and developers instead invest in other markets outside of Virginia, Virginians will lose out on the benefits of shared solar program and the growth of Virginia’s clean energy economy,” they wrote.
Smithwood said that while minimum bills and fixed charges aren’t uncommon for solar, whether rooftop or shared, “$75 would be a massive outlier” — more than 10 times the $6.58 basic charge paid by every Dominion customer.
In his April 30 letter, DMME Director Warren told regulators the agency was “not aware of a single program in another state that has a value for their fixed charge comparable to the high cost Dominion has assigned to their proposal.”
Asked if the utility was aware of a shared or community solar program operated by another utility that had a comparable minimum bill or fixed rate, Ruby replied that “there may be utilities in other states that are shifting the cost of shared solar onto non-participating customers. But … the Virginia General Assembly expressly prohibited that because it’s unfair and inequitable.”
In place of the $75 plan, the solar groups are proposing a much smaller minimum bill: $7.58. In a letter sent to all 140 members of the General Assembly Tuesday afternoon, CHESSA executive director David Murray described the proposal as “consistent” with a recent ruling by South Carolina utility regulators to set a $13.50 monthly minimum bill for residential Dominion customers in that state who install rooftop solar.
CHESSA, the Coalition for Community Solar Access, DMME, Surovell and Jones have all asked regulators to schedule a formal evidentiary hearing on Dominion’s proposal.
Ruby said Dominion does not object to a hearing and would “welcome the opportunity to further discuss the issues.”