Dear Source:
As Chairman of the Legislature’s Energy and Environmental Protection Committee, I am pleased to report that renewable energy has grown rapidly in the Virgin Islands. Water and Power Authority (WAPA) customers who "go green" save a lot on their WAPA bills and solar installers earn good money. The renewable energy helps WAPA by reducing the power demand during the peak usage time, which is around 2 o’clock each day. Renewable energy also challenges WAPA because WAPA’s electric grid is not yet set up to handle large injections of intermittent energy. There is a cap of 5 megawatts on St. Croix and 10 megawatts on St. Thomas-St. John.
The Legislature spurred the renewable energy growth in 2009 with Act 7075. It offered incentives for Virgin Islanders to invest in renewable energy such as Solar Water Heaters and Solar Electric (Photovoltaic) panels.
In recent weeks, the Legislature passed the Feed-In Tariff Act (FIT) and the Governor signed it into law as Act 7586. This establishes the right of every WAPA customer to become a customer-generator and receive payment from WAPA at the avoided cost (presently 26¢ per kilowatt-hour). This opens the door to any Virgin Islander with a roof or yard to benefit from solar and wind energy, even without up-front money of their own.
We are ready to pass Bill 30-0347 which amends Act 7075. Act 7075 has served well for five years, but is in need of revision. The Legislature must update legislation as more residents utilize renewable energy and as conditions change.
The most important change is to correct a technicality to allow Main Street Power Corporation to complete the 4.2 Megawatt solar array in Donoe that was originally contracted by WAPA with Lanco. This solar array will reduce the LEAC by producing electricity without the expenditure of any fuel.
There is a "cap" (capacity limit) set by Act 7075 for renewable energy in the Net Metering and Feed-In Tariff programs of 5 megawatts for St. Croix and 10 megawatts for St. Thomas-St. John. These numbers came through negotiations with WAPA and express the maximum intermittent renewable energy the present WAPA grid equipment can handle. In five short years, St. Croix is already hitting its cap! St. Thomas-St. John will soon reach the cap. If we as a people do nothing, the renewable energy industry will come to a screeching halt. Bill 30-0347 brings a stay of execution:
Act 7075 did not specify how WAPA was to calculate the cap. Following suggestions from Karl Knight of the VI Energy Office and Bevan Smith of DPNR, 30-0347 proposes to define the cap in a way which allows for 15% more solar energy to be installed. This is a stop-gap measure that buys us some time. In the coming months our next step is to work with WAPA, VIEO, the PSC, and the solar industry to increase the cap by giving WAPA stabilization and storage.
The Committee refined these two measures (30-0347 & Act 7586) by using a Roundtable format in which we brought together 24 stakeholders. We rolled up our sleeves and went through the proposed Legislation line-by-line. It was unbelievable how much discussion each line produced. We thoroughly vetted and modified the bills until all stakeholders reached consensus. (You can read about the Roundtables on my website www.visenate.org by clicking on "Committee on Energy.")
Clearly we must pass Bill 30-0347. However in recent days, Senators have received dozens of calls from individuals asking us to hold or kill 30-0347. Some come from people who are afraid that the investment they made under Act 7075 may be in jeopardy. Other callers know the truth, but they simply don’t want to see any modification of the current incentives for Net Metering as relates to the new Feed-In Tariff Program.
As I write, I interrupt the call to speak with a caller who has heard that his Net Metering System benefits for the 4-kilowatt systems that he and his neighbors have installed will be terminated under 30-0347. I tell him, "If your net metering system is larger than 10 kilowatts, it will sunset in 2025. However, if it is smaller than 10 kilowatts, it will not expire at all, so you will see no change to your net metering arrangement." I add that large systems of over 10 kilowatts can convert to FIT program at any time. He hangs up as a satisfied constituent.
It seems that most of those who call are fearful due to misinformation and rumors; some have a selfish interest in keeping Act 7075 exactly as it is because of special treatment. Thankfully, there are a few who have valid issues that could improve Bill 30-0347. I have something to say to each of these groups:
For those who fear losing benefits due to rumors & information, I am setting out the facts in this letter and on visenate.org. I am also asking VI Energy Office to assist through its public education mandate; call or check their website, vieo.org.
Just as the rebates expired, so to must the Net Metering program evolve to harmonize Feed-In Tariff, with new Net Metering being reserved for systems under 10 kW. Larger systems will be built henceforth under the provisions of the Feed-In Tariff Act. Net Metering is an "early adopter incentive" and installers knew that from the start.
Large systems of 10 kilowatts and above must convert to FIT in 2025, because FIT is sustainable and Net Metering is not. Installers have known from the start that if literally everyone went with Net Metering, WAPA would have no income and would collapse. If everyone went with Feed-In Tariff, WAPA would transition from being a generator of power to a broker of power. WAPA would have to modernize, and it could modernize because the buy and sell price are different, so it earns money handling the transmission and distribution. The Legislature gave powerful incentives to invest in renewable energy generation, but they were not perpetual.
Early adopters who built large systems will make their investment back several times over by 2025. They then can switch to FIT and receive payment from WAPA for the electricity they produce. Of course they have the right to lobby senators for what they want. However Senators have a duty to look out for the whole population; it our goal is to create "green" opportunity and price relief for all Virgin Islanders, not just those who were blessed to have the resources and vision to invest early. If early adopters of large net metering systems feel that 2025 is not a fair transition year, I ask that they publicly explain their rationale for another date.
Thanks to those who are calling and emailing with suggestions to 30-0347, we will review them as possible amendments to the Bill.
The Roundtable will reconvene via teleconference next week, tentatively 2 pm on May 28. Obtain 30-0347 and amendments 31-1019 at visenate.org. Call my offices 712-2307 if you wish to participate, and email us ([email protected]) your written suggestions by Friday May 23 so that it can be circulated and analyzed. The correct email address appears next to the bill on visenate.org. Late submissions will be considered subsequently.
We’ve been working on 30-0347 for six months. It has been vetted thoroughly in a rigorous Roundtable process. It contains vital and urgently needed changes to Act 7075.
I urge every Virgin Islander who is struggling under the burden of high electricity costs and low reliability to "go green" with the Net Metering or Feed-In Tariff program. Fossil fuel is expensive and fluctuates, while our Creator has set a stable price for the solar and wind energy he sends to us: free!
Thank you for the opportunity to update the People of the Virgin Islands on where we are with renewable energy, and where we are going.
Craig Barshinger
Senator-at-large, Chairman of the Committee on Energy and Environmental Protection