Solar groups say $55 minimum bill for shared solar is ‘unworkable’

Dominion contends minimum bill is necessary to prevent cost shifting

By: - March 15, 2022 12:03 am

Dominion Energy’s Whitehouse solar farm in Louisa County generates 20 megawatts on a 250 acre site. The Virginia Department of Environmental Quality is imposing more stringent stormwater regulations for solar development. (Dominion Energy)

Solar advocacy groups say a Virginia regulator’s recommendation that Dominion Energy charge ratepayers who sign up for a new community solar program a minimum monthly bill of $55 would be the highest such charge in the nation and would hobble the program by making it too expensive 

The minimum bill “will severely undermine the ability to attract customers if they’re not going to have a reasonable level of savings to participate,” said Charlie Coggeshall, director of policy and regulatory affairs for the Coalition for Community Solar Access, a group that works in roughly a dozen states nationwide to encourage community solar. 

“It will certainly deter many Virginians from participating in it,” said Tim Marvich, vice president of distributed energy resources for Charlottesville-based Apex Clean Energy. 

Dominion, however, has argued that a high minimum bill is necessary to avoid the shifting of costs from ratepayers who choose to participate in the program — known as shared solar in Virginia — to non-participating ratepayers. 

“The suggestion that shared solar customers should expect to receive significant discounts from their standard bill by virtue of participating in the program — and that the law would require this type of economic incentive — is extraordinary and unprecedented,” the company wrote in a brief to the State Corporation Commission this January. 

“As with any program, solar developers ultimately may determine that participation in the shared solar program is not in their economic best interest. That is their decision to make,” company lawyers continued. “The point is that the law does not require the commission or the company — on the backs of nonparticipating customers — to guarantee that developers will find the shared solar program a worthy investment.” 

In a community or shared solar program, multiple households agree to purchase a portion of the energy generated by a solar array. 

Such projects are touted as a way to increase access to solar among renters and people unable to use rooftop panels either because of insufficient sunlight or poor roof conditions. 

“The ability to put solar on your roof is something that’s not available to everybody,” said Coggeshall. Community solar, he said, “really is an easy way to expand access.” 

Since 2017, lawmakers have been encouraging the development of community solar. That year, the General Assembly passed a law requiring Dominion and Appalachian Power to develop community solar programs. Dominion’s Virginia Community Solar program remained inactive for several years, but company spokesperson Lucy Rhodes said Monday that it “is set to launch this May, and thousands of customers are pre-enrolled.” 

In the meantime, the General Assembly in 2020 ordered the creation of a shared solar program in Dominion territory that would operate according to the same general principle as the existing community solar program but would be structured along somewhat different lines. Under the legislation, third-party groups would develop community solar facilities, sign up interested customers and sell the power to the utility. Participating customers would get a bill credit from Dominion in proportion to the power generated by the facility. 

The law also ordered the SCC to set a minimum monthly bill for shared solar customers to cover their “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 were required to make up 30 percent of the customer pool, were exempted from the minimum bill. 

Rhodes said the requirement of a minimum bill to avoid cost-shifting is “the fairest and most equitable way to administer the program.” 

The State Corporation Commission
The State Corporation Commission regulates Virginia electric utilities. (Ned Oliver/ Virginia Mercury)

But how much that minimum should be has been controversial. The Coalition for Community Solar Access proposed that it be $7.58. The State Corporation Commission offered two options: $10.95 or $55.10. And Dominion pushed for $75.10, a suggestion that led the legislation’s patrons to write a letter to the SCC saying that the proposal “would limit the program’s practical availability to the very wealthiest energy customers.”  

This February, SCC Hearing Examiner Mathias Roussy recommended that the commission opt for the $55.10 proposal, which was calculated by adding the company’s basic service charge to pre-existing nonbypassable charges, a $1 administrative charge and a variable charge for distribution and transmission services based on customer usage.  

Solar advocates said that if approved, the minimum bill would be the highest charge of its kind for community solar in the nation.

“All the successful programs in the country, there’s nowhere near any kind of administrative cost or something at that level,” said Coggeshall. 

Asked about what circumstances in Virginia might require such costs to be higher than they are in other states, Rhodes said that “it’s difficult to compare shared solar programs across the country, given the different utility structures, markets, legal requirements and other differences between states.” 

The Coalition for Community Solar Access and nonprofit Appalachian Voices both argued that Roussy’s recommendation is flawed because it doesn’t take into account the benefits shared solar offers the grid and accepts Dominion’s contention that the program would shift costs to other customers without robust proof. 

Roussy noted in his recommendation that “it is correct that the record does not include evidence that specifies exactly what cost shift would occur under Dominion’s proposed minimum bill, or any of the other proposed minimum bills.”

“If Dominion were so concerned about the costs shifted to non-participating customers, it should have endeavored to support its proposal with evidence quantifying this purported cost shift,” wrote Southern Environmental Law Center attorney Will Cleveland in a brief for Appalachian Voices. “The failure to meet this burden of proof should not result in program participants bearing completely speculative costs that have not been proven with evidence.” 

Marvich said Apex was still interested in developing community solar in Virginia but that “it’s been a challenge working in the commonwealth.” 

“The development part is usually the hardest part,” he said. “But it turns out that this regulatory piece with Dominion is the more challenging part.”

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Sarah Vogelsong
Sarah Vogelsong

Sarah is Editor-in-Chief of the Mercury and previously its environment and energy reporter. She has worked for multiple Virginia and regional publications, including Chesapeake Bay Journal, The Progress-Index and The Caroline Progress. Her reporting has won awards from groups such as the Society of Environmental Journalists and Virginia Press Association, and she is an alumna of the Columbia Energy Journalism Initiative and Metcalf Institute Science Immersion Workshop for Journalists.