The Virginia State Corporation Commission (SCC) has declined to approve a Dominion (NYSE:D) subsidiary request to develop a 20-MW solar project in Northern Virginia, saying the company must first explore third-party alternatives via a solar request for proposals (RFP).
Dominion has proposed developing the Remington solar project near the town of Remington in Fauquier County. Dominion announced in January that a regulated subsidiary planned to build the project on a site that the company owns near the existing Remington natural gas power plant.
Dominion had hoped to bring the Remington solar project online in 2016. The company had said it expected the project to cost in the neighborhood of $47m.
But the SCC said in an Oct. 20 news release that Virginia law requires Dominion Virginia Power (also known as Virginia Electric and Power) to demonstrate it has considered alternative options, including third-party market alternatives, during its process for selecting the Remington Solar Facility.
The SCC must also consider the extent to which such a proposed facility is likely to result in unreasonable increases in rates paid by consumers, the SCC said.
In its final order, the SCC said, “As a ‘small renewable’ solar project, the Remington Solar Facility is one type of generation resource that the General Assembly has identified as in the public interest.” The SCC went on to say, “The General Assembly, however, has not declared it to be in the public interest that renewable power can only be obtained from the applicant’s own self-build project,… or at any price, no matter how burdensome to consumers.”
The Commission cited testimony from the Solar Association, the Mid-Atlantic Renewable Energy Coalition, and the Virginia Sierra Club that a ‘request-for-proposal’ process could have provided evidence as to whether lower-cost alternatives exist to provide this renewable power. The Commission also noted that the Attorney General’s Division of Consumer Counsel asserted that the company had failed to satisfy the statutory requirements necessary for SCC approval.
According to the record established for this case, the estimated cost of the proposed facility would be $2,350 per kilowatt. Its average annual operating capacity factor would be 22%.
By comparison, the estimated cost of Dominion’s combined-cycle gas generating station under construction in Brunswick County is $934/kW, with a much higher expected capacity factor, according to the SCC order in the case.
The SCC wrote, “The comparatively high cost to consumers and low capacity factor … underscore that serious and credible efforts, as required by the General Assembly, must be made to determine whether lower cost alternatives for obtaining renewable power are available in the market from third parties.”
Dominion Virginia Power is free to refile an application that meets all statutory requirements, including the requirement regarding third-party market alternatives, and that establishes the reasonableness and prudence of any costs proposed for recovery from consumers.
The SCC Case Number is PUE-2015-00006.
Company disappointed in SCC decision
“We are disappointed in this setback in our efforts to add renewable energy,” a Dominion spokesperson said in a statement.
“We believe we have shown this project is among the most cost-effective ways to add solar generated capacity in Virginia. Large-scale solar is needed in order to meet new federal carbon rules, diversify Dominion’s fuel mix and support bipartisan legislation passed in the General Assembly and signed by the governor, to build at least 500 megawatts of solar generation in the state by 2020,” the Dominion representative said.
“We are evaluating our options regarding this project,” the spokesperson said.