For decades, rural electric cooperatives clung to coal, reluctant to squeeze renewable energy into their tight relationship with fossil fuels.
But that grip is loosening. Look no further than Old Dominion Electric Cooperative in central Virginia’s Glen Allen, 15 miles north of Richmond.
The generation and transmission utility has 30 megawatts of operating solar, another 135 MW on the way soon, and a pending proposal to add up to another 400 MW in the next four years. That could add up to a tenfold leap, or beyond, by 2025.
“We felt that was the biggest bite we could take at the moment,” Kirk Johnson, Old Dominion’s senior vice president for member engagement, said about its spring bid for up to 400 MW. “But it’s a pretty healthy bite for us.”
The combination of tumbling prices, forceful prodding from their distribution brethren and progressive top leadership — Marcus Harris arrived three years ago as president and CEO — has opened Old Dominion’s eyes to solar possibilities.
Earlier this year, it became the second generation and transmission co-op nationwide to set a goal of achieving net-zero carbon emissions by 2050. Since 2005, the co-op has almost halved emissions of heat-trapping gases.
For years, solar advocates and utility watchdogs have called out co-ops as laggards on the energy transition front.
Critics say co-ops’ three main shortcomings are being too coal-dependent, hamstrung by fossil-fuel reliant long-term contracts that can stretch for decades, and failing to deliver on the promise of democracy at the foundation of their governance model because so few members vote for boards of directors.
In 2016, researcher John Farrell co-authored a deep dive into what stymied co-ops and how the problems could be solved. He directs the Energy Democracy initiative at the Institute for Local Self-Reliance, a Minneapolis-based research and advocacy organization.
Today, he’s encouraged by news that generating co-ops across the country are embracing renewables, often nudged by bullish distribution co-ops.
“I’ve definitely seen a shift,” he said in an interview. “It’s a fascinating dynamic because when co-ops decide to move, they can do it really quickly, much faster than an investor-owned utility.”
Figures from a March report issued by the National Rural Electric Cooperative Association seem to back Farrell’s optimism.
Co-ops had 1.3 gigawatts of community, distributed and utility-scale solar online at the end of 2020. Another 4.8 GW is slated to be functioning in the next three years. That same report reveals modest growth of solar projects online and planned by generation and transmission co-ops in the last five years. However, arrays are becoming larger and more plentiful.
Dropping solar prices are a giant factor, Farrell said, but equally important is peeling back the myth perpetrated by utilities that upping renewables in the fuel mix would interfere with grid reliability.
“There are so many tools in their toolbox” to manage that, he said about the availability of demand response, battery storage and other stabilizers. “It’s striking how long it has taken some of them to get around to this.”
Customers have leader’s ear
Mike Keyser heads up BARC, one of the 11 distribution co-ops in Virginia, Delaware and Maryland served by Old Dominion. BARC serves some 13,000 electric meters in Virginia’s Bath, Alleghany and Rockbridge Counties near the West Virginia border.
He praised Harris for listening and responding to customers’ pleas for more green electrons.
“That’s where this request for 400 megawatts comes from,” Keyser said. “I’ve been really excited about the changes Marcus has made. Old Dominion didn’t have to be nudged at all.”
It’s just one signal that generating and transmitting co-ops are realizing that they can evolve over time in a rational and cost-responsible way, he noted.
“There’s been a belief that we’re stuck with coal plants and have to see them through to the end of their useful life,” Keyser said. “This proves there’s a way we can slowly transition.”
Keyser was enthusiastic about solar even before he arrived at BARC in 2010. The attorney and Seattle native came to Virginia with a deep grasp of renewables. He had led a Stanford University project in American Samoa that replaced diesel-powered generators with Tesla batteries and a small solar grid.
BARC is on track to deliver 100% carbon-free electricity by 2035 via a mix of nuclear, hydropower and renewable energy credits.
Keyser has been dogged about linking his customers in the Alleghany Highlands to solar energy. BARC’s initial dip into photovoltaics, an innovative community solar garden, went live in 2016, a year before the state Legislature passed a law to spur similar projects.
Community solar is just one piece of his efforts to “make solar available in every manner possible.” What he calls Solarize BARC also folds in rooftop arrays and utility-scale projects.
For instance, BARC and Old Dominion are collaborating on an inventive arrangement involving a 2.5-megawatt solar project being developed by EDF Renewables. Old Dominion will buy all generation via a power purchase agreement with the builder, and sell half to BARC’s community solar program. The other half will support a shared savings arrangement that reduces peak demand costs for both co-ops.
Keeping up with an IOU
Mid-Atlantic solar specialist Rachel Smucker said she figures this won’t be the last large request for proposals Old Dominion issues for solar because they are ramping up quickly.
“This is crucial, so that no Virginian is left out of the clean energy transition,” said Smucker, now regulatory affairs and policy associate at CleanChoice Energy. “This is a great step forward.”
Smucker, who had a similar position at Chesapeake Solar & Storage Association, also pointed out that Old Dominion’s latest request for 400 MW is almost on par with Appalachian Power, the smaller of the two investor-owned utilities serving Virginia.
The Virginia Clean Economy Act of 2020 requires Appalachian Power to procure 600 MW of solar by 2030. Appalachian Power, a subsidiary of American Electric Power, serves 537,055 Virginia customers via 556,999 meters.
As a comparison, Old Dominion serves roughly 440,000 meters in Virginia and an estimated 1.1 million people statewide.
The Clean Economy Act directs Dominion Power to deliver 100% carbon-free electricity by 2045 and Appalachian Power to follow suit in 2050. While the law doesn’t encompass co-ops, they are expected to comply with caps outlined in an East Coast compact addressing climate change, the Regional Greenhouse Gas Initiative.
Old Dominion’s foray into solar began in 2017 when it worked out power purchase agreements with a Dominion Energy subsidiary to buy solar power from two Virginia projects, the 10-megawatt Clarke County Solar farm and the 20-megawatt Cherrydale Solar farm.
Last year, the co-op tacked on an additional 60 MW when it doubled the size of its original agreement with independent power producer EDF Renewables, and opted to build 15 new solar arrays in Virginia and Delaware. In tandem, the co-op is intent on adding 75 MW of solar at a site in Sussex County purchased 12 years ago as potential acreage for a coal-fired power plant.
That 135 MW total is a combination of utility-scale and local projects. The first array is expected to go online later this year.
Responses to Old Dominion’s latest solar proposition, the 400 MW, are due by May 27. Developers are invited to include battery storage as an option.
“There’s nothing magic about it,” Johnson said. “We figured, let’s put that number out there and see what we get. We’re optimistic that with the request being fairly large, we will get a price we are comfortable with.”
Johnson is fully aware of the criticism solar advocates level at Old Dominion for binding its distribution co-ops to a wholesale power contract that extends through 2053. Critics say customers investing in on-site solar and energy efficiency have less ability to control their electric bills because co-ops implement rate structures that include higher fixed customer connection charges.
Johnson countered that such a contract is beneficial because it prevents co-ops from being subject to the whims of the wholesale market and “keeps us together as a family.”
“Some people misconstrue what the contract is,” he concluded. “They think it’s a contract for coal instead of an underlying financial arrangement that allows us to cost-efficiently build what we need to build.”