Senate subcommittee advances geothermal carve-out, interconnection cost-sharing and APCO securitization; other energy and insurance bills move forward

The Senate subcommittee on energy advanced several bills during a long Feb. 3 hearing, adopting substitutes and voting to report measures on geothermal renewable energy credits, interconnection cost sharing for small solar projects, a securitization proposal for Appalachian Power Company (APCO), and other energy and insurance items.

A substitute expanding how geothermal renewable energy certificates are treated in the state Renewable Portfolio Standard (RPS) won committee approval and was carried forward. Senator Servile, the bill’s patron, told the panel the substitute creates a small, phased 1% carve-out for geothermal in the RPS beginning in 2028 and gives the State Corporation Commission (SCC) authority to develop a conversion formula for geothermal energy savings. “It creates a small 1% carve out for geothermal and the RPS as of 2028,” Servile said. The substitute also removes a requirement that utilities pay deficiency payments if geothermal RECs (REXs) do not exist; instead, utilities are excused from deficiency payments when no geothermal REXs are available. Greg Habib of Gentilock, representing the Geothermal Exchange Organization, said the substitute addresses a practical problem: because geothermal RECs are not currently tracked in the same way as other RECs, the substitute directs utilities to run quarterly RFPs and accept geothermal bids where available, and protects ratepayers by removing deficiency payments if no bids are available.

The committee also advanced a bill from Senator Evan to spread certain substation and interconnection upgrade costs among qualifying small solar projects rather than charging the full cost to an individual project. Evan described instances in Alexandria where schools faced unexpected interconnection costs — $1,370,000 for a fiber connection at one high-school project and $104,500 and extended delay at an elementary school — that threatened project timelines and budgets. The substitute would require the SCC to establish separate cost-sharing programs for jurisdictional and non-jurisdictional public customers and to spread costs among participating projects (50 kW–2 MW) on a per-kilowatt-hour basis. Mike Zazinski of the SCC said staff has…