Solar developers ask regulators to suspend Dominion interconnection rules
While the group says the rules impede small-scale solar development, Dominion says they’re needed for grid safety and reliability
Solar panels. (Sarah Vogelsong / Virginia Mercury)
Virginia solar developers are asking state regulators to suspend recent rules set by Dominion Energy to connect small-scale solar projects to the grid.
The group of solar developers and advocacy organizations who have filed the petition with the State Corporation Commission under the name Distributed Solar Alliance say the rules use a generation calculation that is unnecessary and shift development risk to customers. In turn, that has led to delays and cost increases that have stalled several projects.
The new interconnection rules “would have the effect of throttling distributed solar on public schools, municipalities, universities, hospitals, any kind of rooftop solar without precedent and outside of the rulemaking process by the State Corporation Commission,” said Tony Smith, president and founder of Secure Solar Futures, a member of the Distributed Solar Alliance.
Dominion, however, counters that the rules are needed to maintain the safety and reliability of its electric grid as it faces an influx of solar projects attracted by the 2020 Virginia Clean Economy Act. That legislation mandates the development of over a gigawatt of distributed solar, projects that individually generate up to 3 megawatts of electricity.
“Although the Commission exercises regulatory authority over the Company, the Company is ultimately responsible for the safe and reliable operation of its system, and the Commission should be highly skeptical of a request … which would second-guess and overrule the Company’s judgment in doing so,” wrote McGuireWoods attorney Jontille D. Ray on behalf of Dominion in a response to the developers’ petition.
Dominion referred the Mercury to its filings in the case in response to questions.
The rules under debate require projects with a capacity of between 250 kilowatts and 3 megawatts to conduct substation improvements such as transformer upgrades and use both a dedicated transmission line known as “dark fiber” and a relay panel.
The dark fiber line and relay panel allow the utility to disconnect a project from the grid in an emergency.
The petition points to nine projects that developers say have been negatively impacted by the rules.
The alliance says one project, the 975 kilowatt Augusta Solar community solar project in Augusta County that is being developed by Secure Solar Futures alongside the Charlottesville-based Local Energy Alliance Program, is being forced to pay an additional $1 million to meet Dominion’s requirements of installing 4.5 miles of dark fiber and completing substation improvements.
Another project is a smaller 85 kilowatt project in Norfolk that Norfolk Solar is developing and Convert Solar is installing. A new pole and transformer that are required under the rules will cost $16,054, or about 11% of the total $142,887 project costs, said Norfolk Solar founder Ruth McElroy Amundsen. That will put the project’s profits into the negative, she said.
Dominion has not refuted the cost increases.
“It’s not ideal to me because it’s Dominion’s equipment,” said Amundsen, referring to the infrastructure her company will have to install. “It just seems like all of these changes are pricing solar out of feasibility of any financing. We can’t just make it pay with the barriers that Dominion is putting in place. I’ve got like 15 solar installs that I own; I haven’t seen any of them being unsafe or unreliable, so I’m not seeing the data for that.”
Smith and Amundsen argue other utilities that operate within the regional grid of which Virginia is a member, PJM Interconnection, don’t have the same interconnection rules set by Dominion. Instead, they say, those utilities rely on other technologies to ensure safety and reliability, such as inverters that shut off the flow of electricity when it exceeds an allowable level.
But Dominion in its filings contends such solutions are inadequate, pointing to information from the Electric Power Research Institute, an energy research nonprofit working with energy companies, academia and government, that found that inverters are unable to disconnect a solar project in less than the 2 second limit required by the International Electrical and Electronics Engineers, whose standards are required to be met in sections of state code. The inverters have also in some cases been found not to work, Dominion said in its filing.
“Because it is the utility that has the ultimate responsibility to respond to the system emergency resulting from this situation, the Company has made the decision to require the use of protection systems that are proven to perform when called upon during emergency conditions,” Ray wrote.
Testing the need for upgrades
In order to determine if a project developer will need to conduct transmission upgrades, Dominion relies on a test known as a light load to cumulative generation capacity screen, which the developers say is too restrictive.
According to the test, if the total capacity of distributed generation facilities on a grid circuit connected to a substation exceeds one-third of the lowest load amount for that same circuit between 8 a.m. and 8 p.m, upgrades are needed.
The Distributed Solar Alliance says that ratio is not “good utility practice,” as required by state code.
“Good Utility Practice is not intended to be limited to the optimum practice … but rather to include practices, methods, or acts generally accepted in the region,” previously established interconnection rules state.
Dominion disagrees, referencing a survey from the Electric Power Research Institute that found 17 of 35 utilities use a similar approach to determining whether upgrades are necessary, and five use the same one-third ratio. The rules in general are based on industry standards, the North Carolina Utilities Commission Interconnection Rules and Procedures and regulations governing interconnection of distributed generation resources, Dominion states.
Getting rid of the test “puts the grid at risk and jeopardizes the safety and reliability of the distribution system and the public when down wires remain energized,” Ray wrote.
The final major dispute between Dominion and the developers concerns the utility’s requirement that users of the electricity sign a contract known as a Small Generator Interconnection Agreement, or SGIA, which shifts project risk from the third-party developer to the customer.
In contrast, another type of contract often used for solar known as a power purchase agreement, or PPA, places the project risk on the developer, with the customer simply purchasing and using the power generated by the facility.
In the case of a 900 kilowatt project being developed by Secure Solar Futures for Prince William County Public Schools’ Freedom High School, the petition argues the SGIA is “unacceptable” and dissuades public entities like school divisions from obtaining solar through small-scale projects.
“The unacceptable requirement to sign an SGIA that would contradict our solar PPA contract, would impede an already tight budget with our school division,” Jennifer Rokasky, the division’s energy education coordinator, wrote in a May 25 letter included in the petition. “It is punitive and dissuades public entities from pursuing a Solar PPA, which can help save money on utility costs and work towards reducing greenhouse gas emissions to leave a more sustainable future for our students. Are these costs fair? Appropriate?”
In response, Dominion points to state law on net metering, a form of billing in which solar customers use the energy they generate to offset their utility bills.
“An eligible customer-generator … shall bear all reasonable costs of equipment required for the interconnection to the supplier’s electric distribution system,” the code states.
Dominion says in its filing that it is “willing to … explore other options regarding execution of the SGIA.”
A desire for fewer barriers
As Virginia continues its push to decarbonize the electric grid, renewables advocates say barriers must be removed.
Dan Holmes, legislative director at Clean Virginia, a group founded by Charlottesville millionaire Michael Bills explicitly to oppose Dominion’s influence in the General Assembly, said having more distributed solar can ensure reliability of the grid by placing generation closer to demand and avoiding outages that may be in different portions of the grid.
The SCC recently approved a suite of distributed solar projects proposed by Dominion, either through PPAs or facilities the company owns.
Those projects will count toward the target set by the VCEA for Dominion to develop 1,100 megawatts of distributed generation.
Smith, of Secure Solar Futures, said the interconnection rules make achieving the distributed generation goals difficult.
“It’s a very huge roadblock,” he said.
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