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Editorial: Behind the scenes, some important negotiations over renewable energy

Editorial: Behind the scenes, some important negotiations over renewable energy

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Six years ago, a light bulb — a metaphorical one — lit up over the heads of Roanoke officials.

The city was spending $490,000 a year to heat, cool and otherwise power the Berglund Center.

The Berglund Center also has a big, flat roof — the kind of surface that would be perfect for solar panels.

What if the city could use that rooftop space to generate solar power to cut the Berglund Center’s power bill?

That’s great in theory, but complicated in practice: The city calculated it would cost $1.6 million to install a solar array. That would pay for itself over time, but the upfront cost was daunting. The city didn’t have that kind of cash laying around.

There was another way, though: What if the city could work out a deal where an outside vendor paid the cost of the solar installation, then sold the power to the city at a rate cheaper than what the city was paying Appalachian Power? Those sorts of deals are called “power purchase agreements” and there was just one problem: At the time, they were illegal in Virginia. Why? Because electricity isn’t a free market commodity; utilities are regulated monopolies and if the city could buy power from somebody else, then there’s no longer a monopoly.

The bottom line: The deal never happened, the Berglund Center roof remains just a roof, and the city is still paying those big electrical bills to Appalachian Power.

Here’s why we’re telling you all this now: There’s a good chance all this will change in the next year or so.

Virginia laws have changed, most notably with the Clean Economy Act that the most recent General Assembly passed. In the years since Roanoke tried to solarize the Berglund Center, Virginia has opened the door to a lot more renewable energy and Power Purchase Agreements. This isn’t about that, though. This is about something else. You know what they say about details. This is about those details.

You, as a household consumer, don’t get to negotiate your utility rates. You either pay or you don’t. Do you want the power to come on? Then you pay. Local governments, though, get to negotiate. And they do so collectively, through the Virginia Municipal League and the Virginia Association of Counties. You know how labor unions negotiate with companies over pay and benefits? This is sort of the same thing.

Those local governments are now negotiating with Appalachian Power for a new contract — and one of the big questions is how much renewable energy they’ll be allowed to generate on their own. Just because the law might allow power purchase agreements doesn’t mean the contract does. This contract negotiation between local governments and Appalachian is one of those things that doesn’t generate many headlines, but can dramatically shape how your tax dollars get used.

Here’s how fast the world is changing. The last contract was two years ago. At the time, local governments had little interest in renewable energy — Roanoke was an exception. “But we saw it was going to be a thing,” says James Ervin, the Rocky Mount town manager who chairs the negotiating committee, “so we included a certain number of megawatts.” That contract allowed for 3 megawatts of renewable energy, might be enough to power about 750 homes. “Boy, did we underestimate that,” Ervin said.

This time around there’s a lot of interest among local governments. They’re pushing for as much as 40 megawatts in the next contract —a 13-fold increase. What Appalachian thinks about this is a matter of some dispute. Appalachian itself doesn’t have much to say about the negotiations. The environmentally focused Energy News Network says negotiations are “stalled.” Ervin says that’s not so — they’re just slow and complicated, but he expects eventually there will be a deal. In general, utilities aren’t keen on localities generating their own power — that’s money they’re not making. That’s a particular concern for Appalachian, whose service area really isn’t growing that much population-wise.

There also are technical issues of how power flows back and forth: That solar-powered Berglund Center might not generate power all the time — sometimes the arena would need to buy power from the grid (at nights when a high-voltage rock band is cranking up), sometimes it could sell power back into the grid (on sunny days when there are no events scheduled). That’s pretty cool if you’re thinking about saving the planet, but maybe not if you’re a power company engineer or accountant. Power generation can be pretty predictable if you’ve got one big coal-burning plant, but once you start dealing with lots of little power inputs at an arena here and a school there and a city hall someplace else, well, it gets complicated. Ervin says it will likely take until next year to sort them all out. “They’re not saying we want to burn coal until the world comes to an end,” he says of the Appalachian negotiators, “but they are concerned that if you put a megawatt facility in middle of Giles County, how do you haul that back to the grid?”

We’ll let them work out all that. Here’s the big picture: Ervin sees a “massive boom in small-scale renewables” coming to rural Virginia as the price of renewable energy continues to drop. Local governments have a lot of buildings that are uniquely suited for solar panels —schools, for instance. Ervin says this is an issue that has brought together two interest groups that usually don’t talk to one another — environmentalists who want to reduce carbon emissions and fiscal conservatives who want to reduce spending. Here’s a way to do both.

Somewhere people are still engaged in passionate ideological arguments over renewable energy, but out in the real world the marketplace is rendering a lot of those moot as the price of renewables keeps coming down. “It’s finally reached a tipping point that it’s no longer considered hippiesque to alter your carbon footprint because it also alters our rate balance,” Ervin says. So here’s where the world is headed: The next contract with the utility serving the Appalachian coalfields could open the door for Dickenson County to move forward on its goal of putting solar panels on the roof of Ridgeview High School. Energy News Network says that could save the cash-strapped county $10,000 a year — and allow Roanoke to cut those power costs at the Berglund Center. Will that save the planet? Hard to say. But it would save taxpayers a different type of green.

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