Three Virginia electric co-ops ask to make community solar programs permanent

As Virginia moves to decarbonize its electric grid by midcentury, some of its electric utilities that don’t get as much attention as Dominion Energy and Appalachian Power Company are seeking to make their community solar programs permanent.

Rappahannock Electric Cooperative, Northern Neck Electric Cooperative and A&N Electric Cooperative, which serves Virginia’s portion of the Eastern Shore, are making the request to the State Corporation Commission after three years of running pilot programs.

The model they are proposing is different from the one used by Dominion under a 2020 law directing the utility to set up a form of community solar known in Virginia as shared solar. Appalachian Power has neither community solar nor shared solar in its territory.

“Ultimately, we want to offer member-consumers the choices that they want in terms of renewable options,” said Sam Brumberg, vice president of regulatory affairs and general counsel of the Virginia, Maryland & Delaware Association of Electric Cooperatives. “Community solar is one way of offering another option to member-consumers.”

Community solar programs allow residents to get their energy from small solar facilities not located on their property. The programs are particularly appealing for those who rent, live in multifamily buildings or have shady yards or other physical restrictions that prevent them from mounting panels on their own roof.

Legislation in 2017 required Dominion and Appalachian Power and allowed the electric co-ops — nonprofit utility companies whose customers have an ownership stake in the organization and which often serve rural areas — to start community solar pilot programs. Legislation in 2020 directed Dominion to establish a permanent shared solar program, while a separate bill required Dominion and Old Dominion Power, a small utility in the far southwestern corner of the state, to establish a shared solar program for multifamily buildings.

According to filings with the State Corporation Commission, Rappahannock Electric Cooperative has had more than 1,000 members sign up for the community solar program, while Northern Neck Electric Cooperative has had 2,500 and A&N Electric Cooperative has had 20. 

Kyle Allwine, a spokesperson for Northern Neck Electric Cooperative, said the utility is “proud” of its program, which “delivers on our commitment to deliver affordable and reliable electricity, while also encouraging the use of solar-generated electricity.”

A&N Electric Cooperative spokesperson Jay Diem said the utility implemented its program following requests from customers for solar-generated electricity.  

“We’re trying to keep up with the need as it arises,” Diem said.

The three co-ops are drawing power from a solar farm in Clarke County near Rappahannock’s service territory and from a Cape Charles facility closer to Northern Neck and A&N territory. Old Dominion Electric Cooperative, which supplies power to nine electric co-ops in Virginia, has power purchase agreements with the developers of the solar facilities and delivers the electricity from them to the cooperatives.

The co-op programs use a subscription model in which participants buy blocks of energy from the facility in amounts that correspond to how much electricity they use. Community solar subscribers also pay a monthly fee: Rappahannock is asking to charge $5.57, while A&N is asking to charge $5.28 and Northern Neck is proposing $5.26 from October to May and $5.89 from June to September. 

The fees were designed “to recover all the costs of the pilot program to ensure that non-participating members are not subsidizing Subscribers,” the initial applications from all three co-ops states.  

Concerns about non-participating customers subsidizing participating customers’ costs are known as cost shifting, which occurs when a participating customer only pays only for the cost of generating their electricity, but not other costs such as its transmission. Those additional costs must then be borne by nonparticipating customers. 

Dominion’s shared solar program requires participants to pay a minimum monthly bill of $55.10, from which low-income customers are exempt. The utility has argued the minimum bill is necessary to cover potential cost shifting. A separate multifamily shared solar program operated by Dominion has an $16.78 administrative fee customers must pay monthly.

Concern over cost shifting has also blocked the development of shared solar in Appalachian Power territory, most recently through the failure of a bill from Sen. John Edwards, D-Roanoke. 

“The community solar programs are designed as a product that has a slight additional cost versus regular electric service,” Brumberg said, noting that the Dominion program is structurally different from the co-ops’ programs in that it allows solar developers to receive a portion of program fees. ”It was meant to be consumer friendly.”

The other key difference between the co-op programs and Dominion’s shared solar program is that Dominion adds a credit to customers’ bills to account for the electricity they generate. (The minimum bill is imposed after accounting for any bill credits.) In Virginia, Brumberg said the bill credit is what distinguishes community solar from shared solar. 

“Shared solar will likely come, eventually,” Brumberg said, noting the co-op association is working with ODEC to introduce a program in the next three years. “We’re working hard to make sure that when it does, it’s done right, fairly, and is as easy as possible for member-consumers.”