The Virginia State Corporation Commission has approved a petition from Dominion Virginia (Dominion) to build and own two “utility-scale” solar generation projects. It found that while the capacity and energy from the projects are not needed to serve Dominion’s load growth in the short term, the projects will also be used to provide environmental attributes to Scout Development LLC, a subsidiary of Facebook, Inc. (Facebook) under Dominion’s Schedule RF. Under Schedule RF, customers that take service under certain cost-based tariffs and bring at least 30,000,000 kWh of incremental load to the company’s system can voluntarily commit to the development of new renewable generation facilities by agreeing to purchase the environmental attributes of those facilities in the form of renewable energy certificates (RECs).
As a condition of its approval, the commission required a 20-year performance guarantee to protect Dominion’s customers from the risk of underperformance by the solar generators, which it said would drive up the costs to customers. The commission found that for Dominion’s customers to break even on these projects, the solar facilities must produce a collective capacity factor – the time generating power – of at least 25%. It pointed out, however, that that the actual capacity factors of other solar generators in Virginia have been below 20%. The commission found that customers would bear the costs of underperformance in two ways; (1) customers would have to make up the shortfall in REC revenues from Facebook and (2) customers would bear the costs of energy purchases necessary to make up the shortfall. Re Virginia Electric & Power Co., Case No. PUR-2018-00101, Jan. 24, 2019 (Va.S.C.C.).