Gusts of wind and rays of sunlight will provide more electricity to customers of Appalachian Power Co. in the coming years, as a sweeping new law pushes the utility into an era of renewable energy.
The Virginia Clean Economy Act, passed this year by the General Assembly, requires Appalachian and Dominion Energy to be totally carbon-free by 2050.
Appalachian – which for years has relied heavily on coal and more recently natural gas to serve about 500,000 western Virginia customers – will acquire 210 megawatts of solar power and 200 megawatts of wind power over the next five years.
It will be the first step toward meeting the clean economy act’s directive, Appalachian said in a plan filed Nov. 2 with the State Corporation Commission.
“Our blueprint meets the law’s requirements while keeping customer costs as low as possible,” Chris Beam, Appalachian’s president and chief operating officer, said in an announcement of the plan.
In addition to investing more in renewable energy, Appalachian intends to find ways to store electricity generated by wind turbines and solar panels and develop more energy efficiency measures.
By 2050, the company expects to have added 3,400 megawatts of solar, 2,200 megawatts of on-shore wind and 400 megawatts of energy storage to its current energy portfolio.
Today, coal-burning power plants generate about 60% of Appalachian’s power. Natural gas accounts for 19%.
The utility would likely not be moving as fast toward renewable energy were it not for the Clean Economy Act, said Lee Francis, deputy director of the Virginia League of Conservation Voters.
“But the marketplace is pushing even straggling companies like ApCo to move in the direction of wind and solar,” he wrote in an email. “The VCEA pushed that timeline up.”
In Appalachian’s defense, Francis added, it has a relatively small generation base in Virginia. That makes change more difficult than it is for a utility giant like Dominion, which enjoys more flexibility with its numerous coal, gas and nuclear plants.
“With that said,” Francis wrote, “we weren’t seeing ApCo show any meaningful push to be innovative and make these types of changes to their system until they were told to do so by the legislature.”
The Clean Economy Act applies only to Virginia customers, so it’s possible that coal and natural gas plants in other states could still be serving Appalachian’s customers in West Virginia and Tennessee after 2050, to some degree.
In fact, some of that power may still go to Virginia customers, as it’s impossible to distinguish the source of electrons once they enter the power grid.
“It is not only possible, but likely, that Appalachian’s customers will be consuming some electricity generated from non-renewable sources well past 2050,” company spokeswoman Teresa Hall said in written responses to questions. “But, the better way to look at it is that APCo will be acquiring or contracting for renewable output equal to its Virginia load, which results in an equivalent amount of fossil generation to be idle, somewhere on the grid.”
The new law requires Appalachian and Dominion to set a schedule for closing coal and natural gas plants in Virginia.
Appalachian no longer has any in-state coal plants, although it currently draws the bulk of its power from facilities that burn the fuel in West Virginia. It plans to close its only Virginia natural gas plant, the 62-year-old Clinch River Plant in Russell County, which was converted from coal to natural gas several years ago.
As for wind, Appalachian currently relies on contracts with five utility-scale wind farms in West Virginia, Indiana and Illinois.
Plans for its first venture into solar, a power-purchase agreement with a provider in Campbell County, were launched before the Clean Economy Act was passed. The 150-acre bank of solar panels is expected to go online next year. Appalachian also sought bids in January for 220 megawatts of solar energy from other sources.
Switching to renewable energy, even over 30 years as envisioned by the act, will not be cheap.
Bills are expected to go up by 3.5% over the next five years to cover the costs, Appalachian said in its report filed with the SCC. That would be in addition to a request for an overall base rate increase of 5%, which is pending before the regulatory agency.
Long-term projections are less reliable but show that the average residential customer could be paying 55% more by 2035, according to the report. But those calculations “are subject to significant revision and are highly dependent upon assumptions,” Hall said.
The League of Conservation Voters is sensitive about costs, “especially when we are in uncertain times like we are now with the pandemic,” Francis wrote in his email.
To guard against excessive costs being passed on to consumers in the form of higher bills, the league wants tougher regulation by the SCC. That, combined with energy efficiency measures and the elimination of a fuel factor portion of bills that covers coal and natural gas, should guard against excessive rates, it said.
In the long run, the act passed by the Democrat-controlled legislature should pay off, according to Francis.
“Political dynamics in Virginia have shifted and so has our energy policy,” he wrote.
Had the law not been passed, he added, “Virginia’s utilities would be in a race right now to build a glut of natural gas infrastructure – power plants, distribution networks and the like – that more than likely would have outweighed the investments we’ll see in the energy technology of tomorrow.”