On Thursday, Virginia Attorney General Ken Cuccinelli released a scathing, comprehensive report on the ineffectiveness of Virginia’s voluntary Renewable Portfolio Standard (RPS). The following are excerpts of his findings:
On the environment: “The vast majority of spending to meet Virginia’s RPS goals, which is charged to customers, has been related to pre-existing, out-of-state projects. Some of these pre-existing facilities provided power for more than 80 years before the RPS adder was in effect… In short, the RPS adder has provided few, if any, environmental benefits and has not addressed the environmental concerns that were raised in 2007.”
On fuel diversity: “While it was likely anticipated that the RPS adder would increase the fuel diversity of the utilities, it has not done so. Because the utilities have largely met their obligations by purchasing out-of-state RECs, the RPS has not caused them to build new renewable energy facilities.”
On the economy: “The RPS adder has not created any significant economic development in Virginia… There have been no plant openings or upgrades undertaken for the purpose of compliance with an RPS program that would have a positive economic impact on Virginia communities.”
On these points, Cuccinelli hits the mark. The RPS does not require that utilities generate or purchase energy from within the Commonwealth. There is also no differentiation between renewable fuel types that can be used to meet the law. Thus, our two utilities, Dominion Virginia Power and Appalachian Power Company, can and have relied heavily on ancient, out-of-state hydro dams to meet the modest RPS goals. In fact, in its most recent SCC filings, Dominion acknowledged that it met the requirements without using energy from a single facility built this century.
The environmental community finds itself in total agreement with Cuccinelli about the extent of this terribly flawed piece of legislation. The question becomes, what should be done about it?
At the conclusion of his report, the Attorney General recommended that we repeal the bonus tied to RPS compliance. If a utility successfully complies with the RPS, they are entitled to receive a ratepayer-funded bonus. For ApCo, this amounted to $15 million over the last two years. Dominion is eligible to receive $76 million for their previous two years of compliance. These bonuses, Cuccinelli concludes, are unjustified given the meager returns by way of renewable energy development in Virginia.
If the law remains as is, there is little chance that Virginia will see utility scale wind and solar power to the extent we all envisioned when the RPS was passed in 2007. If Cuccinelli’s recommendations take effect, the chances become zero. Removing the bonus while keeping the goals voluntary provides absolutely no incentive for Dominion or ApCo to build utility-scale wind and solar facilities in this state. A voluntary program without a bonus is totally ineffectual. Utilities will opt-out of the program because as a business entity, they lack any incentive to participate. Thus, business will go on as usual. Our utilities will continue to rely on fossil fuels that exacerbate climate change. Virginia will regress and will drift further away from the clean energy future we hoped for in 2007.
A much better fix is a solution backed by the Chesapeake Climate Action Network. Proposed legislation will tie any RPS bonuses to investment in Virginia-made wind and solar energy. This solution will ensure that Virginians are getting the benefits of a cleaner environment. It also creates a market that fosters growth in the renewable energy sector which will create thousands of jobs within our borders.
I applaud the Attorney General for his thoughtful analysis on this issue. It has given us all the opportunity to think critically about the RPS and debate it in the court of public opinion. The Attorney General should be commended by environmentalists and concerned consumers alike for his criticism of the law’s effectiveness. But we must move forward and strengthen the law in order to grow an important industry in this state and clean up our environment. The Attorney General’s proposal will cause Virginia to take a step backwards. This, we simply can’t afford.
