Daily News-Record, Apr 6, 2022
Open Forum: Doug Hendren
Congratulations to Harrisonburg Electric Commission for establishing the “Friendly City Solar Program.” You listened to customers wanting clean energy but unable to install their own. Thank you also for supporting a growing base of solar net-metering customers, enabling Harrisonburg in 2018 to become Virginia’s first city to pass 1% solar power, and now closing in on 2%. You have enabled Harrisonburg to be the birthplace of a unique “solar barn-raising” tradition and the GiveSolar model for solarizing Habitat for Humanity homes. We are fortunate to have a municipal utility — public power owned by the city. I have attended many monthly HEC meetings; the commissioners take their responsibility seriously.
Shifting to clean energy is essential. We are all aware of the growing seriousness of climate disruption, and other uncounted costs of extracting, transporting, defending and burning dirty fuels — in lives and in dollars. Local residents have worked on these issues for years through Climate Action Alliance of the Valley, 50by25, Sierra Club and EPSAC. Our City Council has stepped up as well, creating EPSAC (2017), an Environmental Action Plan and a Renewable Energy Resolution (both 2020), and an updated 2040 Vision Statement (2021).
What is the right price for solar? Residential power from Dominion’s Acorn Drive solar farm will cost 11.5 cents per kilowatt-hour of electricity. This is higher than HEC’s regular residential price of 9.9 cents (base rate of 8.48 cents plus a fuel adjustment factor, currently 1.439 cents). A fuel adjustment factor is necessary because the cost of fuel fluctuates. Increased natural gas costs last October raised HEC residential rates by about 12%. Solar power, in contrast, has no fuel but sunshine, and no fuel adjustment factor.
It may seem sensible to pay more for clean energy. HEC’s price is only a little higher than Rappahannock Electric Cooperative’s solar (10.7 cents). Other localities, however, get solar cheaper than conventional power, like Fairfax County (6.9 cents). Prices depend on who owns it.
Why are we paying more? The current price, while high, is probably the best HEC can do without our help. Why? The contract with Dominion Energy requires 100% of HEC’s power to come from Dominion. Except when instructed by Dominion, HEC cannot generate any power itself. This does not apply to “behind-the-meter” residential, commercial or school solar.
To provide more clean energy, HEC must buy it from Dominion, which will own and operate our local solar farm, selling power to HEC, who sells it to us. Dominion is an investor-owned utility, serving its shareholders. Dominion wields considerable monopoly power, holding most of the cards in any negotiation. Dominion is permitted by law to pass on all costs to ratepayers, plus a 10% profit, including “impairment costs” for stranded assets, such as early retirement of coal-burning plants. In 2021, HEC paid Dominion $7.2 million in impairment costs. Buying solar from Dominion includes paying for their old, polluting plants, coal ash liabilities, and built-in profits.
Can we do better? Maybe not until the next contract (2031). Utility contracts are typically negotiated eight years ahead. For competitively priced solar in 2031, we must negotiate for it today. One successful approach is a “carve-out” in the Dominion contract, allowing HEC to generate, say, up to 10% of its power locally.
The price gap is widening. Competitively priced solar, already cheaper than power from dirty sources, is today the power of choice for low-income residents in some markets (for example, New Orleans). According to HEC, Dominion prices are scheduled to go up on average at least 3.6% per year for every year in the next decade. The U.S. Department of Energy (google “Sunshot Initiative”) says solar prices will fall by about the same amount by 2030, to just a fraction of the cost from dirty sources. It is particularly unfair to deny low-income residents access to cheap solar power going forward.
Will more local solar reduce HEC revenues? No. With the increased electrification of homes and businesses, and electric vehicle adoption, overall grid demand will at least double between now and 2040. Rooftop solar is by comparison a drop in the bucket. Operating local HEC-owned generation could be profitable at or below HEC’s current standard rates. The higher rates from the Dominion-Acorn solar farm should not set the standard for Harrisonburg’s future. We can do better, and should insist on access to a competitively priced alternative — strengthening HEC in the process. Local generation will also strengthen our community, by keeping at home in our local economy some of the $50 million currently flowing out to Dominion every year.
Any solar that displaces fossil fuels is good. We should do what we can to ensure our community is getting it at a competitive price. Therefore, HEC should obtain a 10% carve-out in its contract with Dominion, allowing it to generate electricity from low-cost, locally owned renewable sources.
Doug Hendren lives in Harrisonburg.
Climate Action Alliance of the Valley 