Regulators approve Dominion’s green energy plan but cut a mostly coal-fired plant from its portfolio

State regulators on Thursday approved a proposal by Dominion Energy to sell customers exclusively renewable energy, a move that will largely trigger the closure of Virginia’s small renewable electricity market. 

Despite sharp criticism from environmental and renewable energy groups as well as large companies like Walmart, the green tariff proposal, known as Rider TRG, was found by the State Corporation Commission to be “just and reasonable and in the public interest.”

Under the plan, about 50,000 residential customers in Dominion territory will be able to buy 100 percent renewable energy derived from about a dozen solar, hydropower and biomass plants either owned by the utility or whose power it has contracted to buy. A typical customer using 1,000 kilowatt hours per month who signs up for the program would see their monthly bill rise by about $4. 

A sunset provision recommended in April by Hearing Examiner Mary Beth Adams that would have required Dominion to sign up at least 15,000 customers to the program within six months or else shut it down was rejected by the commission, which cited its authority to modify or amend the program at any time and address any issues during a mandated annual update. 

But regulators did accept one of Adams’ recommendations: the exclusion from the renewable energy portfolio of the Virginia City Hybrid Energy Center in Wise County. A co-fired coal and biomass plant, Virginia City currently relies on coal for more than 90 percent of its fuel needs and has never run without it, a fact that sparked criticism from every participant in the case besides Dominion.

“Here we simply use our discretion to acknowledge an obvious fact: Those customers who choose to purchase ‘100 percent renewable energy’ in no universe would believe they are purchasing power from a generating unit in which the primary fuel is coal,” the commission wrote in its July 2 order. “Such would be a bizarre outcome for a statute intended to give those customers a 100 percent renewable option.”

Dominion celebrated the ruling as “great news for our customers in Virginia, who now have the option to meet 100 percent of their energy needs with renewable energy generated by facilities in Virginia and the surrounding region.”

“We are planning to grow our renewable energy production tenfold over the next 15 years as part of our commitment to net zero carbon emissions and helping our customers to lower their carbon footprint,” a company statement said.

But not everyone was happy. Much of the wrangling over Rider TRG over the past year has focused on a provision of state law that only allows third-party energy providers to sell fully renewable energy if the utility that controls the territory doesn’t also offer such a product. 

For years the provision went largely ignored, but falling renewables prices and rising public interest in decreasing fossil fuel reliance encouraged several non-utility companies to expand into Virginia. One, Direct Energy, said it had signed up about 1,000 megawatts of customer load in Virginia since September, demonstrating that Virginians are looking for other options for their electricity. 

“We are disappointed that the SCC approved Dominion’s TRG one-size-fits all offering despite overwhelming opposition from virtually all parties in this proceeding,” said Direct Energy Director of Corporate and Regulatory Affairs Ron Cerniglia in a statement. “It should not be lost that NOT ONE customer or customer group expressed support for Dominion’s proposal and the Governor and Legislature made historic strides this year to recognize that competitive customer choice is an integral component of the Commonwealth achieving its 100% carbon reductions goals.”

Both Direct Energy and energy provider Calpine fought vigorously to retain their position in Virginia following a move by Dominion to establish its own program and curtail further growth by competitors. But efforts to do away with the market closure law were only partially successful at the General Assembly this winter. 

Legislation from Del. Jeff Bourne, D-Richmond, that would eliminate the provision from the books unexpectedly passed late in the session, but it included a requirement that the law be re-enacted during the 2021 session in order to take effect.

After Dominion files its finalized program plan and it is accepted by regulators, third-party companies will be allowed to continue selling renewable energy only to existing customers already receiving energy from them, separate rulings by the SCC Thursday found. 

This story has been updated with comments from Dominion and Direct Energy.