While Virginia’s largest electricity utility enjoyed smooth sailing in the halls of the General Assembly, renewable-energy advocates struggled to get a foothold this session.
Dominion Virginia Power — which relies overwhelmingly on fossil-fuel and nuclear power generation — easily achieved its top priority in the 2014 session: legislative permission to write off some $400 million it’s spent planning a nuclear plant that may never be built.
In contrast, advocates of renewable energy failed to achieve their top legislative objective: an incentive program aimed at encouraging installation of solar, wind and other such systems.
The differing fates of the two electric-power initiatives provide a telling glimpse of the political-power dynamics in Richmond.
The renewable-energy measure started on an ambitious note. In its original form, it would have authorized up to $100 million a year in tax credits for installing systems that derive energy from sunlight, wind, falling water, biomass, waste, landfill gas, wave motion, tides or geothermal power.
That was quickly downgraded into a grant program that would be capped at $10 million a year — a minuscule piece of Virginia’s $50 billion budget.
Lawmakers put off any decision on the measure until 2015.
The Senate sponsor of the legislation, Tommy Norment, a Republican from James City County, says the most he’s hoping for now is a $70,000 budget provision to allow regulations to be written in anticipation of launching a program next year.
Advocates say it’s a baby step toward catching up with neighboring states that are outpacing Virginia in encouraging renewable energy.
“We have so much ground to cover,” says Tony Smith, president and chief executive of Secure Futures, a Staunton-based solar-energy company. “We pale in comparison to our surrounding states.”
North Carolina, Maryland and Delaware, for example, offer state tax credits or other incentives for solar-power systems.
The absence of such incentives in Virginia is reflected in the state’s puny solar-generating capacity, which is less than 5 percent of North Carolina’s.
On-site solar-power systems allow homeowners and businesses to reduce their electricity bills by tapping a free, inexhaustible energy source. And, unlike fossil fuels, solar power releases no greenhouse gases or other pollutants.
Those surrounding states also have mandatory renewable-portfolio standards, which require utilities to generate a minimum of their electricity from renewable sources. Virginia has only a voluntary standard, and Dominion has lobbied hard to keep it that way, arguing that a mandatory standard could drive up rates.
“They’re defending a business model that works for them,” Smith says. “It’s a business model that is threatened by distributed power generation.”
David Botkins, a Dominion spokesman, counters that the utility is undertaking several renewable-energy initiatives. He cites a planned series of large-scale rooftop solar installations, the first one on the campus of Old Dominion University; a proposal to build two test wind turbines off the Virginia Beach Oceanfront; and the conversion of three coal-consuming generating plants to use biomass material.
“We are in the mix in renewables in a big way,” Botkins says.
Renewable-energy advocates argue that those technologies need a jump-start to level the playing field as they compete with regulated utilities such as Dominion that have a state-guaranteed rate of return.
“The problem is, you’ve got one player who gets to participate,” says Francis Hodsoll, president of E&E Frontiers, a Northern Virginia-based energy consulting firm. “It’s the nature of markets. When you’ve got competition, you get innovation.”
Supporters say the grant program proposed this year would generate some 1,300 jobs with a $245 million economic impact over five years.
The absence of such policies is driving renewable-energy entrepreneurs out of Virginia and into states with a more favorable economic climate, they say.
Dominion took no position on the renewable-energy measure, but it mounted a full-court press for the nuclear write-off, which passed both chambers of the Assembly by overwhelming margins despite the objections of Attorney General Mark Herring.
The utility said it needed the measure as a signal that it has the state’s support for building a third nuclear plant.
Critics say the write-off will make it less likely that Dominion rate-payers will see refunds or rate reductions, even as state regulators project that the company will collect $280 million in excess earnings during the next two years. Dominion disputes that contention and maintains that adding more nuclear capacity could result in lower rates.
The resources deployed by Dominion at the statehouse dwarf those of the renewable-energy industry — or, for that matter, virtually any other interest group that lobbies the legislature. The utility employs 11 lobbyists to pitch its point of view.
The company was the biggest corporate campaign donor to state candidates last year, swelling their coffers by nearly $1 million, according to a compilation by the Virginia Public Access Project, a nonprofit tracker of money in politics.
Dominion also was the biggest source of gifts and trips to lawmakers, passing out excursions to the Masters golf tournament, Washington Redskins football tickets and other perks.
The renewable-energy industry gave a total of $67,000 in campaign contributions to Virginia candidates last year — 1 percent of all donations from the energy and natural resources sector.
Delegate Ron Villanueva, a Virginia Beach Republican and the House sponsor of the languishing incentive proposal, says he hopes Gov. Terry McAuliffe’s administration will get on board with the idea.
“We need to incentivize the renewable-energy industry,” Villanueva says. “It desperately needs our help.”