State regulators have approved Appalachian Power Co.’s latest plan to harness more solar and wind power with the goal of generating all carbon-free electricity for Virginia utility customers by 2050.
It will cost Appalachia $32 million over the next rate year, the State Corporation Commission found. To cover utility expenses, the board authorized a rate increase that adds an additional $2.37 to the average residential customer’s monthly bill.
In an order written late Friday afternoon, the SCC said it was following sweeping clean energy law “while doing the best to protect customers who expect and deserve reliable, affordable service.”
The Virginia Clean Economy Act, which the General Assembly passed in 2020, requires Appalachia to annually update a plan that documents its progressive movement toward the law’s directive to go green by mid-century.
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For the year beginning Aug. 1, CSC has accepted Appalachia’s application to own or purchase power from four solar farms in Virginia, a fifth in West Virginia and a wind farm in Illinois. Together, the solar and wind units will produce approximately 493 megawatts of renewable energy.
The total Appalachian capacity in Virginia, West Virginia, and Tennessee is approximately 6,000 megawatts. About two-thirds of that comes from two coal-fired power plants in West Virginia.
To meet Clean Economy Act requirements, Appalachian expects its solar capacity to reach 3,300 megawatts by 2040, combined with nearly as much wind power. 2040 is also the scheduled shutdown date for coal-fired power plants in West Virginia.
“The CSC’s decision is an important next step in the company’s generational transformation,” Appalachia spokeswoman Teresa Hall said.
The total cost of the transition will be spread over many years and will greatly exceed the $32 million approved for the coming year.
But “the increase is only half the picture,” Hall wrote in an email, adding that over time customers will benefit from lower fuel costs for coal and natural gas, which currently make up approximately 83% of Appalachia’s energy portfolio.
“Because this amount can vary significantly depending on market conditions, the Company does not quantify this amount,” Hall said in his email.
Other measures planned to achieve the Clean Economy Act’s goal of curbing climate change include the development of energy storage and the use of renewable energy certificates.
A renewable energy certificate is essentially the currency of the green energy market. A certificate is the legal right to one megawatt-hour of energy from a non-fossil source and can come from an Appalachian-owned facility or be purchased from a third-party generator on an open market.
The owner of such a certificate then “withdraws” it, which is how compliance with the Clean Economy Act is measured.