PSC approves out-of-state renewable projects

State utility regulators have approved a request from Appalachian Power and Wheeling Power to recover costs from agreements for renewable power facilities in Virginia and Illinois.

The West Virginia Public Service Commission ruled that the American Electric Power subsidiaries had shown that renewable generation is needed to meet the energy needs of incoming large industrial customer Nucor Steel and other customers that have expressed an interest in wind and solar power.

Appalachian Power and Wheeling Power had urged the commission to commit to the state's jurisdictional share of costs from the facilities under Virginia's mandatory standard for renewable energy portfolios for electric utilities like Appalachian Power.

The utilities proposed to recover the costs for two agreements to acquire renewable facilities in Virginia and Illinois through a renewable power tariff already approved by the commission in a previous case. The companies expect net project costs to be offset by the benefits from those facilities, including the sale of renewable energy certificates to be paid by customers subscribing to the tariff.

The tariff is offered on a voluntary basis to all customers.

The companies have defined renewable energy certificates as legal entitlements to the environmental attributes from 1 megawatt-hour of renewable energy.

In its order issued Tuesday, the commission declined to specify a date or first-year surcharge rate increment.

The commission said it will approve projected rate increments for the first year that one of the projects in Virginia is owned by Appalachian Power per company testimony filed last year reporting a construction surcharge of 0.00313 cents per kilowatt-hour for residential service.

Appalachian Power spokesman Phil Moye said Wednesday the company will "need to look at where the developers are" regarding material and permits to ascertain in-service dates and rate impacts.

Moye said the company anticipates that the impact on customers other than renewable tariff subscribers will be "negligible or even positive" over time.

The commission's order covers three projects: the 4,875-megawatt Amherst solar facility in Amherst County, Virginia, with a projected in-service date of June; the 204-megawatt Top Hat wind facility in Logan County, Illinois; and the 20-megawatt Horsepen solar facility in Louisa County, Virginia.

Appalachian Power proposed acquiring the Amherst and Top Hat facilities via purchase and sale agreements and the latter via a 30-year power purchase agreement with Idaho-based renewable energy developer Clenera.

Appalachian Power said upon filing its application last January that the Amherst facility has been developed by Georgia-based SolAmerica and that the Top Hat facility is being developed by an affiliate of Illinois-headquartered energy developer Invenergy. The Top Hat wind farm is estimated to start commercial operation in late 2025, Moye said Wednesday.

In June, the commission approved Appalachian Power's request to purchase and recover the costs of buying a 50-megawatt solar facility to be constructed by a New York-based company.

Appalachian Power and Wheeling Power reported a revenue requirement of $3.4 million for West Virginia ratepayers for that facility. Bedington Energy Facility LLC, a Delaware subsidiary of Torch, plans to invest $100 million to build a solar facility on 750 acres on a Berkeley County brownfield site, according to an agreement between the county and Bedington exempting the company from personal property tax payments for 15 years.

After that time, the company is to assume ownership of machinery equipment on the site from the Berkeley County Development Authority.

Appalachian Power proposed acquiring all of the equity interests from Bedington Energy Facility LLC, the entity that would own the facility. The utility then would merge Bedington into Appalachian Power.

Virginia utility regulators signed off on the renewable projects in July.

Nucor Steel West Virginia Vice President and General Manager John Farris submitted a letter of support for the proposed Berkeley County solar project before the commission approved it, noting that the availability of renewable energy was a "key consideration" in Nucor's decision to build a $2.7 billion sheet mill in Mason County.

State officials also approved more than $300 million in taxpayer subsidies to help lure the steelmaking giant to West Virginia last year.

Appalachian Power and Wheeling Power originally proposed three other renewable facilities that it shelved: the Firefly solar facility in Pittsylvania County, Virginia; the Dogwood solar facility in Bedford County, Virginia; and the Sun Ridge solar facility in Rockingham County, Virginia.

In September, the utilities withdrew the Dogwood project from consideration, saying Madison Energy Investments had terminated a power purchase agreement with Appalachian Power after Madison couldn't obtain local permits to build the project.

The utilities withdrew the Firefly and Sun Ridge projects last month.