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Legislators seek to expand renewable energy use

RICHMOND — The state legislative commission overseeing electricity deregulation pushed forward Friday a proposal that would require a percentage of Virginia’s power supply to come from renewable sources.

The Commission on Electric Utility Restructuring stopped short of endorsing the draft bill for a “renewable portfolio standard.” It would increase over a decade the portion of renewable power used by Virginians, starting at almost 4 percent and growing to 20 percent by 2016.

Renewable sources include wind, sun, geothermal extraction of heat from the Earth’s crust, and biomass that uses organic materials such as wood, plants or waste.

The proposal, which Democratic Sen. Mary Margaret Whipple of Arlington is expected to sponsor in the coming General Assembly session, resembles measures initiated in the past few years in 22 states and the District of Columbia. Representatives from the Chesapeake Climate Action Network, a coalition of renewable power producers and environmental groups that is pushing the legislation, described the benefits of a renewables standard to the commission during its meeting Friday.

The law would aim to diversify the state’s energy resources and lower its dependence on fuels such as oil and natural gas, which are subject to volatile market prices. Studies of renewable portfolio standards in some states have found that consumers saved up to $5 on their natural gas... more [truncated due to possible copyright]  
The Commission on Electric Utility Restructuring stopped short of endorsing the draft bill for a “renewable portfolio standard.” It would increase over a decade the portion of renewable power used by Virginians, starting at almost 4 percent and growing to 20 percent by 2016.

Renewable sources include wind, sun, geothermal extraction of heat from the Earth’s crust, and biomass that uses organic materials such as wood, plants or waste.

The proposal, which Democratic Sen. Mary Margaret Whipple of Arlington is expected to sponsor in the coming General Assembly session, resembles measures initiated in the past few years in 22 states and the District of Columbia. Representatives from the Chesapeake Climate Action Network, a coalition of renewable power producers and environmental groups that is pushing the legislation, described the benefits of a renewables standard to the commission during its meeting Friday.

The law would aim to diversify the state’s energy resources and lower its dependence on fuels such as oil and natural gas, which are subject to volatile market prices. Studies of renewable portfolio standards in some states have found that consumers saved up to $5 on their natural gas heating bills for every megawatt hour of electricity produced from renewables, said Pat DeLaquil, a network board member.

That is in addition to the health advantages of reducing reliance on air-polluting fossil fuel plants, he said. Under the proposed portfolio standard, power suppliers could generate their own renewable-sourced electricity or purchase it from other producers.

The commission pushed along the draft bill so the General Assembly could consider it this year but didn’t recommend lawmakers approve or reject it. As a matter of legislative practice, the commission is supposed to review and move forward any proposed law involving electricity deregulation for it to receive serious consideration.

Commissioner John Watkins, a Republican state senator from Midlothian, is planning to sponsor a bill that would provide tax credits for producers of electricity from renewable sources – a proposal the commission also passed through to the General Assembly without endorsement.

Watkins said he supported the eventual implementation of a renewable portfolio standard, but he expressed concerns about requiring Virginia utility companies to buy potentially more costly renewable power outside their own generation territories, which could make it difficult for them to operate under current capped rates.

That bill includes an exemption for power companies with frozen rates, though they would have to meet the renewables standard in place at the time the caps come off.

The current rate controls on Dominion Virginia Power, which delivers electricity to most of Hampton Roads, will save residential customers an average of $260 for 2005 and 2006, the company reported to the commission Friday. State law froze the prices that Dominion can charge to cover its fuel costs through mid-2007.

Company shareholders, not ratepayers, have absorbed the purchase of industry-favored fuels such as coal and natural gas, which has more than tripled in market price since the fuel rate was set, said Mark McGettrick, chief executive of Dominion Generation, the power-producing arm of parent company Dominion Resources Inc., based in Richmond.

Fuel rates represent about 22 percent of a Dominion electricity bill. The remaining 78 percent covers the company’s operating costs to move and deliver power, and the state has capped those rates until 2010.

Some of Dominion’s large industrial customers have challenged the assertion that capped rates have brought savings, noted Howard Spinner, director of the economics and finance division of the State Corporation Commission. Those groups have suggested that Dominion’s operating rates might have been lower under the old methods of regulation.

Spinner presented to the commission a state regulators’ report on electricity competition and said no alternative suppliers have succeeded in offering prices that beat current utility rates. Higher fuel prices continue to make it difficult for competitors to attract Virginia customers.

“It’s not looking good for choice,” Spinner said.

The report found some “ominous” industry trends, such as heavy emphasis on plants that run on natural gas and its increasing costs. In addition, the repeal of a federal law that restricted power company mergers is now prompting industry consolidation that likely will leave fewer players in the marketplace.

All of that, the report suggested, could lead to high consumer prices once the state’s rate caps end.

Source: http://home.hamptonroads.co...

JAN 7 2006
https://www.windaction.org/posts/912-legislators-seek-to-expand-renewable-energy-use
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