Dominion to charge fee to heavy users of solar power

State regulators approved a controversial Dominion Virginia Power plan on Wednesday that adds a charge for larger home users of solar energy.

Dominion plans to impose a monthly "standby" charge, starting in April, on residential customers with solar systems that generate between 10 and 20 kilowatts. Today, that fee would apply to only one customer, according to Dominion.

Most homeowners' solar systems produce about 3 or 4 kilowatts, so they wouldn't see the standby charge. But they - and companies that sell and install solar equipment - fear that Dominion will seek to expand the fee to all solar users in the future and stymie the budding development of residential renewable energy.

"When I go out to somebody's house, it is already tough enough" to sell the cost benefits of solar without the standby charge, said Richard Good, president of Solar Services Inc., an installation company based in Virginia Beach. "That's a pretty big disincentive."

Dominion sought the charge even though it only covers one customer because the cost of solar is falling. "As the price continues to decline, more and more folks may get into this," said Dianne Corsello, Dominion's manager of customer solutions and new technology.

Dominion officials wouldn't identify the customer who will have to pay the fee, but Don Dugger thinks it may be him. This spring, he installed a solar system that can generate nearly 12 kilowatts of electricity at his home in Brodnax, about 30 miles west of Emporia.

"What they're basically doing is penalizing me because I'm embracing the right thing to do," he said. "It's basically a roadblock and discouragement for people who want to do solar power."

Dugger and others with home solar systems record their electricity usage on "net" meters. The special meter ticks forward when Dugger's family uses Dominion's electricity but winds backward when the sun shines and produces their power.

A state law that took effect in July allows power companies to collect a standby charge from customers with home net-meter systems of 10 kilowatts or larger. Dominion applied to the State Corporation Commission that month for approval of the charge.

The company argued that the charge covers its costs to keep the power flowing to solar customers at times when the sun doesn't shine. It still must maintain the poles, wires and operating equipment for those customers.

"We're required to have an infrastructure to serve that customer when that customer needs us," Corsello said.

Dominion plans to charge $4.19 per kilowatt for a solar customer's average peak usage of the company's electricity each month. Hypothetically, a homeowner with a 20-kilowatt solar system would pay $59.55 per month on average, or almost $715 a year, according to the company's filing with the state.

Like all Dominion residential customers, solar system owners pay a flat monthly rate of $7 to connect to Dominion's distribution system. They also pay about 11 cents per kilowatt hour - the amount of kilowatts used in an hour - for their use of the company's electricity. That covers Dominion's costs to run power plants and transmit electricity across its grid to homes and businesses.

"I'm still paying a power bill," said Dugger, who estimated he pays Dominion about $2,000 a year.

About 300 consumers filed comments, most opposing Dominion's proposal. The Maryland, DC, Virginia Solar Energy Industries Association, based in Washington, launched a statewide campaign against the standby charge.

Ruth McElroy Amundsen and her husband spent about $28,000 in 2009 to put a 3-kilowatt solar system in their home in Norfolk's Lakewood section. They got a $10,000 federal tax credit and sell the power they produce as renewable energy credits to companies that need to offset pollution. That brings in about $1,200 to $1,300 a year, and the solar system has trimmed $600 to $800 a year from their electricity bills, she said.

Amundsen hopes to pay for the system in about a decade, she said. If Dominion extended the standby fee to smaller solar systems like hers, however, it would not only take her longer to see a return on her investment but it also would eat into her monthly savings.

"I don't think it's justified," she said.

Dominion has no plans to seek the fee for customers with smaller solar systems, because the law doesn't allow it, Corsello said. She added, though, that the justification would be the same for all solar users.

Dugger invested about $75,000 in solar equipment to help offset his future energy costs as he approaches retirement, he said. His bills have dropped by about $300 during the summer months of heaviest electricity use.

If his standby charge reached $60 during those months, he said, it's like a 20 percent tax.

"All that does is erode our consumer ability to use solar power," Dugger said.

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com