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Va. utilities, solar advocates reach consensus on legislative proposals

Virginia's investor-owned utilities and clean energy advocates reached agreement on four legislative proposals that could increase solar power installations while boosting the profit potential for solar developers and utilities.

Dominion Resources Inc. utility Dominion Virginia Power and American Electric Power Co. Inc.'s Virginia utility, Appalachian Power Co., along with electric cooperatives in the state and solar advocate MDV-SEIA, are part of a diverse group of stakeholders that has been meeting since spring on potential policy changes for renewable energy. Mark Rubin, executive director of the Virginia Center for Consensus Building at Virginia Commonwealth University, mediated the discussions.

"It was a joint request of all those parties to get a facilitator in to see if they could draft consensus legislation," Rubin said in a Dec. 16 interview. "The goal was to try and encourage the coordinated development of solar generation throughout Virginia at a variety of scales and sizes."

The agreement comes as states and utilities across the country are reviewing, and in some cases dramatically changing, their rules for rooftop solar and net metering.

Rubin said the group reached agreement on two proposals designed to accelerate large-scale renewable energy projects. The first would modify the state's "permit by rule" statute, which is a streamlined approval process designed for facilities with nameplate capacities of less than 100 MW. This process allows the Virginia Department of Environmental Quality to issue bulk permits to construct and operate qualifying renewable energy projects. The proposal would increase the cap for both solar and wind projects to 150 MW, according to Rubin.

The second proposal would create a margin on power purchase agreements for large-scale solar projects built by third-party developers. This would essentially allow utilities to profit from these agreements.

"Right now, utilities get no return at all on these projects," Rubin said. "The idea here is to create a stimulus for third-party solar development."

A third proposal, designed for mid-size facilities, would authorize utility-administered community solar projects under a three-year pilot program.

"It's not community solar in the most traditional sense, where the community owns it," Rubin said. The utility would manage the program, likely through contracts with customers, and a third-party developer would build the projects, with three-quarters of them under 2 MW of capacity. The group worked with the Southern Environmental Law Center and other environmental advocates on this community solar proposal "so it could be something that everybody could live with," Rubin noted.

A fourth proposal, supported by the agriculture community, implements a specific net metering tariff and framework for farm owners who generate their own electricity, according to Rubin. The farmers would receive compensation for any electricity they supply to the distribution grid.

"Essentially, the utilities would be entering into agreements to purchase the output from those solar [projects] at market price, including a capacity credit," he said. The proposal caps eligible projects at 1.5 MW and 150% of the farm's usage, Rubin added.

The group has presented drafts of the proposals to legislators and is hopeful they will be introduced in the Virginia General Assembly when it convenes in January 2017. Although rooftop solar was extensively discussed, the group did not reach consensus on a rooftop solar proposal, Rubin said. The stakeholders, however, did agree to revisit the issue after the upcoming General Assembly session.

Dominion Virginia Power, known legally as Virginia Electric and Power Co., referred questions on the proposals to Rubin. Appalachian Power did not immediately respond to a request for comment.