VA PPA deemed illegal

Dominion has squashed a 20-year renewable energy power purchase agreement (PPA) between a local solar company and a Virginia university, citing violations of regulations that give state utilities exclusive power supply rights.

Washington and Lee University's 450 kW solar array is the largest in Virginia. It was installed by Secure Futures, a Virginia-based company that helps colleges design, finance, install and operate solar arrays. The Washington and Lee project includes more than 1,500 PV panels and will supply around 3 percent of the university's power needs. The agreement was supported by the local City Council, which unanimously passed a 20-year tax exemption on solar equipment.

But it turns out that what seemed like an ideal situation to grow renewable energy could also be interpreted as illegal in the state of Virginia.

Utilities in the state are regulated by the Virginia State Corporation Commission and receive exclusive rights to supply power within a geographic service area. Third-party providers such as Secure Futures are eligible for an exemption -- as long as they can provide enough renewable energy to meet 100 percent of their customer's demand.

Secure Futures interpreted this provision to mean that it was legally in the clear so long as 100 percent of the power production came from renewables. Dominion, however, contested that in order to quality for an exemption the array would have to cover 100 percent -- not 3 percent -- of the university's energy needs.

In an email comment to FierceEnergy, Dominion spokesperson Jim Norvelle said the utility supports the addition of solar power in its service area (about 500 customers have installed personal renewable energy) but wants to make sure new developments are within regulations.

Choosing to avoid litigation, Secure Futures worked with Dominion to adjust its arrangement with Washington and Lee. The deal changed from a PPA into a model where the school rents the equipment in order to generate its own power. A bill to permit PPAs in Virginia is currently working its way through the state legislature.

For more:
-see this article

Related articles:
VT school wins solar array from GMP  
A shift in solar innovation