Clean energy and climate action are mainstream concepts with the public these days, but at Virginia’s General Assembly they have yet to gain much traction. Last year saw one renewable energy bill after another die in committee, along with legislation mandating lower energy use through energy efficiency and climate measures like having Virginia join the Regional Greenhouse Gas Initiative (RGGI).
The only major energy legislation to pass the GA in 2018 was the infamous SB 966, the so-called “grid mod” bill that included spending on energy efficiency and a stipulation that 5,500 megawatts (MW) of utility-owned or controlled solar and wind is “in the public interest.” But the bill didn’t actually mandate any efficiency savings or renewable energy investments, and it contained no support for customer-owned solar.
So clean energy advocates and climate activists are trying again, though the odds against them look as tough as ever. Republicans hold a bare majority of seats overall, but they dominate the powerful Commerce and Labor Committees that hear most energy bills. And Republicans overall (though with some exceptions) are more hostile to clean energy legislation than Democrats, and more willing to side with utilities against customers and competitors.
In particular, the House energy subcommittee has been a regular killing field for renewable energy bills. It consists of 7 Republicans and 4 Democrats, and last year every clean energy bill but one lost on party-line votes. Bills don’t advance to the full committee, much less to the House floor, unless they garner a majority in the subcommittee.
Over at Senate Commerce and Labor, Republicans hold an 11-4 majority on the full committee, and none of the Democrats are what you would call environmental champions. The electric utility subcommittee does not appear to be active this year.
A scattering of other clean energy and climate bills have been assigned to House Rules (which Republicans dominate 11-6) and Appropriations (12-10), where a subcommittee will several energy-related bills with fiscal impacts (at least three have been assigned to date). Some Senate bills will go to Finance.
Of course, this is an election year in Virginia, with every House and Senate seat up this fall. Legislators have reason to worry that the 2017 “blue wave” could turn into a 2019 flood tide that sweeps out not just vulnerable Republicans, but Democrats facing primary challenges from the left.
Will that persuade some of them to finally support clean energy, or at least some of the pragmatic initiatives that have broad popular support?
That’s the hope driving a number of bills framed around supporting market competition and customer choice, enabling private investments in renewable energy, and saving money for consumers and taxpayers. These are themes that appeal as much to conservatives as to liberals.
But a lot of these bills have the same problem they’ve always had. Dominion Energy opposes them, and Dominion controls the legislature.
Both Dominion and elected leaders maintain the fiction that it’s the other way around. That fiction allowed Senator Wagner and Delegate Kilgore, the chairmen of the Commerce and Labor Committees, to “refer” solar bills for secret negotiation between utilities and the solar industry via the private, closed-door Rubin Group.
About that Rubin Group
Frankly, I’ve never understood the notion that the solar industry ought to be able to work things out with the utilities so legislators don’t have to make decisions themselves. Solar installers negotiating with Dominion is like mice negotiating with the cat. The cat is not actually interested in peaceful coexistence, so it’s hard to imagine an outcome that makes life better for the mice.
And however much they insist they support solar, Kilgore, Wagner and company act like they’re secretly pleased that Kitty is such a good mouser. I don’t know how else to explain the way they lecture the mice on the virtues of compromise.
The Rubin Group has managed to produce legislation where the interests of the utilities and the solar industry align, primarily in ways that help utility-scale solar farms. When it comes to net metering and customer solar generally, however, Dominion hasn’t been willing to give up anything unless it gets something in return—and as it already has everything but the crumbs, progress seems to have stalled. I hear negotiations remain ongoing, however, so this isn’t the last word.
On the other hand, the solar industry did reach an accommodation with the electric cooperatives this year over customer solar. As member-owned non-profits, the coops are sometimes more responsive to the desires of their customer-owners, and this seems to be evidence of that. (Though see this blogpost from Seth Heald about the failures of democracy and transparency at Virginia’s larges coop, an issue now in litigation before the SCC.)
With the solar industry stalled in its talks with Dominion and a sense of urgency mounting, customer groups and other solar industry alliances have stepped into the void. Several bills seek to preserve and expand the market for customer solar with bills removing policy barriers. The most comprehensive of these is the Solar Freedom legislation put forward by Delegate Keam (HB 2329) and Senators McClellan and Edwards (SB 1456), removing 8 non-technical barriers to renewable energy deployment buy customers. Other net metering bills have similar provisions that tackle just one barrier at a time.
Another group of bills don’t seem intended to win Republican support, much less Dominion’s. Bills that will dramatically alter our energy supply, put Virginia at the forefront of climate action and rein in utility power have no chance of passage this year, but may become part of a platform for strong climate action next year if a pro-environment majority wins control of the GA.
The list below may look overwhelming, so let me just note that this is not even comprehensive, and additional bills may yet be filed.
I’ve separated the bills into categories for easier reference, but watch for overlap among them. I’ve put Solar Freedom up first (because I can!); after that, bills are ordered by number, with House bills first.
HB 2329 (Keam) and SB 1456 (McClellan and Edwards) is the Solar Freedom bill that removes barriers to renewable energy installations by utility customers, mostly in the net metering provisions, and adds language to the Commonwealth Energy Policy supporting customer solar. The 8 provisions are:
- Lifting the 1% cap on the total amount of solar that can be net metered in a utility territory
- Making third-party financing using power purchase agreements (PPAs) legal statewide for all customer classes
- Allowing local government entities to install solar facilities of up to 5 MW on government-owned property and use the electricity for other government-owned buildings
- Allowing all customers to attribute output from a single solar array to multiple meters on the same or adjacent property of the same customer
- Allowing the owner of a multi-family residential building or condominium to install a solar facility on the building or surrounding property and sell the electricity to tenants
- Removing the restriction on customers installing a net-metered solar facility larger than required to meet their previous 12 months’ demand
- Raising the size cap for net metered non-residential solar facilities from 1 MW to 2 MW
- Removing standby charges for residential and agricultural net metering customers
Other renewable energy bills
HB 1683 (Ware) gives electric cooperatives greater autonomy, including authority to raise their total system caps for net metering up to 5% of peak load.
HB 1809 (Gooditis) follows up on last year’s HB 966 by making the renewable energy and energy efficiency provisions mandatory. If utilities don’t meet annual targets, they have to return their retained overearnings to customers.
HB 1869 (Hurst), SB 1483 (Deeds) and SB 1714 (Edwards) creates a pilot program allowing schools that generate a surplus of solar or wind energy to have the surplus credited to other schools in the same school district.
HB 1902 (Rasoul) would provide a billion dollars in grant funding for solar projects, paid for by utilities, who are required to contribute this amount of money through voluntary contributions (sic).
HB 1928 (Bulova) and SB 1460 (McClellan) expands utility programs allowing third-party power purchase agreements (PPAs) for renewable energy while continuing to restrict the classes of customers who are allowed to have access to this important financing tool.
HB 2117 (Mullin) and SB 1584 (Sutterlein) fixes the problem that competitive service providers can no longer offer renewable energy to a utility’s customers once the utility has an approved renewable energy tariff of its own. Now that the SCC has approved a renewable energy tariff for APCo, this is a live issue.
HB 2165 (Davis and Hurst) and HB 2460 (Jones and Kory), and SB 1496 (Saslaw) provide an income tax credit for nonresidential solar energy equipment installed on landfills, brownfields, in economic opportunity zones, and in certain utility cooperatives. This is a Rubin Group bill.
HB 2192 (Rush) and SB 1331 (Stanley) is a school modernization initiative that includes language encouraging energy efficient building standards and net zero design. It also encourages schools to consider lease agreements with private developers, but does not seem to contemplate the more common use of third-party power purchase agreements.
HB 2241 (Delaney) establishes a green jobs training tax credit.
HB 2500 (Sullivan) establishes a mandatory renewable portfolio standard (RPS) for Virginia, eliminates carbon-producing sources from the list of qualifying sources, kicks things off with an extraordinarily ambitious 20% by 2020 target, and ratchets up the targets to 80% by 2027.
HB 2547 (Hugo) and SB 1769 (Sturtevant) makes changes to the net metering program for customers of electric cooperatives. The overall net metering cap is raised from the current 1 percent to a total of 5%, divided into separate buckets by customer type and with an option for coops to choose to go up to 7%. Customers will be permitted to install enough renewable energy to meet up to 125% of previous year’s demand, up from 100% today. Third-party PPAs are generally legal, with a self-certification requirement. However, the coops will begin imposing demand charges on customers with solar, to be phased in over several years, replacing any standby charges. In the House version only, one additional provision allows investor-owned utilities (Dominion and APCo) to ask the SCC to raise the net metering cap if they feel like it, but I’m told it is not expected to be in the final legislation. This bill was negotiated between the coops and the solar industry via the “Rubin Group.”
HB 2621 (Ingram) and SB 1398 (Stanley) authorize a locality to require the owner or developer of a solar farm, as part of the approval process, to agree to a decommissioning plan. This is a Rubin Group bill.
HB 2641 (Gooditis) makes third-party power purchase agreements for distributed renewable energy resources legal statewide.
HB 2692 (Sullivan) allows the owner of a multifamily residential building to install a renewable energy facility and sell the output to occupants or use for the building’s common areas.
HB 2741 (Aird) establishes a rebate program for low and moderate-income households that install solar.
HB 2792 (Tran) and SB 1779 (Ebbin) establishes a 6-year pilot program for municipal net metering for localities that are retail customers of investor-owned utilities.
HJ 656 (Delaney) would have the Virginia Resources Authority study the process of transitioning Virginia’s workforce from fossil-fuel jobs to green energy jobs.
SB 1091 (Reeves) imposes expensive bonding requirements on utility-scale solar farms, taking a more drastic approach than HB 2621 (Ingram) and SB 1398 (Stanley) to resolving the concerns of localities about what happens to solar farms at the end of their useful life.
Energy Efficiency (some of which have RE components)
HB 2243 (Sullivan) creates an energy efficiency revolving fund to offer no-interest loans to local government, public schools, and public institutions of higher learning.
HB 2292 (Sullivan) and SB 1662 (Wagner), dubbed the “show your work bill,” requires the SCC to provide justification if it rejects a utility energy efficiency program.
HB 2293 (Sullivan) establishes a stakeholder process to provide input on the development of utility energy efficiency programs.
HB 2294 (Sullivan) establishes mandatory energy efficiency goals for electric and gas utilities.
HB 2295 (Sullivan) creates an energy efficiency fund and board to administer it.
HB 2332 (Keam) protects customer data collected by utilities while allowing the use of aggregated anonymous data for energy efficiency and demand-side management efforts.
SB 1111 (Marsden) requires utilities to provide rate abatements to certain customers who invest at least $10,000 in energy efficiency and, by virtue of their lower consumption, end up being pushed into a tier with higher rates.
SB 1400 (Petersen) removes the exclusion of residential buildings from the Property Assessed Clean Energy (PACE) program, which allows localities to provide low-interest loans for energy efficiency and renewable energy improvements on buildings.
HB 2070 (Bell, John) provides a tax deduction for energy saving products, including solar panels and Energy Star products, up to $10,000.
Energy transition and climate
HB 1635 (Rasoul, with 9 co-patrons) imposes a moratorium on fossil fuel projects, including export facilities, gas pipelines and related infrastructure, refineries and fossil fuel exploration; requires utilities to use clean energy sources for 80% of electricity sales by 2028, and 100% by 2036; and requires the Department of Mines, Minerals and Energy to develop a (really) comprehensive climate action plan, which residents are given legal standing to enforce by suit. This is being referred to as by the Off Act. (Update: HB 1635 passed Commerce and Labor on January 23 and heads to the floor of the House. Read this blogpost to understand what’s going on.)
HB 2735 (Toscano) and SB 1666 (Lewis and Spruill) is this year’s version of the Virginia Coastal Protection Act, which would have Virginia formally join the Regional Greenhouse Gas Initiative (RGGI). It dedicates money raised by auctioning carbon allowances to climate adaptation efforts, energy efficiency programs, and coalfields transition. The Governor has made this bill a priority.
HB 1686 (Reid, with 14 co-patrons) and SB 1648 (Boysko) bans new or expanded fossil fuel generating plants until Virginia has those 5,500 MW of renewable energy we were promised. This is referred to as the Renewables First Act.
HB 2611 (Poindexter) would prohibit Virginia from joining or participating in RGGI without support from two-thirds of the members of the House and Senate, making it sort of an anti-Virginia Coastal Protection Act.
HB 2501 (Rasoul) directs the Division of Energy at DMME to include a greenhouse gas emissions inventory in the Virginia Energy Plan.
HB 2645 (Rasoul, with 13 co-patrons), nicknamed the REFUND Act, prohibits electric utilities from making nonessential expenditures and requires refunds if the SCC finds they have. It also bars fuel cost recovery for more pipeline capacity than appropriate to ensure a reliable supply of gas. Other reforms in the bill would undo some of the provisions of last year’s SB 966, lower the percentage of excess earnings utilities can retain, and require the SCC to determine rates of return based on cost of service rather than peer group analysis.
HB 2747 (Kilgore) and SB 1707 (Chafin) create a Southwest Virginia Energy Research and Development Authority which will, among other things, promote renewable energy on brownfield sites, including abandoned mine sites, and support energy storage, including pumped storage hydro.
HJ 724 (Rasoul) is a resolution “Recognizing the need for a Green New Deal in Virginia which promotes a Just Transition to a clean energy economy through lifting working families.”
Other utility regulation
HB 1718 (Ware) requires an electric utility to demonstrate that any pipeline capacity contracts it enters are the lowest-cost option available, before being given approval to charge customers in a fuel factor case.
HB 1840 (Danny Marshall) allows utilities to develop transmission infrastructure at megasites in anticipation of development, charging today’s customers for the expense of attracting new customers.
HB 2477 (Kilgore) would eliminate one of the few areas of retail choice allowed in Virginia by preventing large customers from using competitive retail suppliers of electricity, including for the purpose of procuring renewable energy, in any utility territory with less than 2% annual load growth. (I haven’t confirmed this, but that might be Dominion as well as APCo.)
HB 2503 (Rasoul) requires the State Corporation Commission to conduct a formal hearing before approving any changes to fuel procurement arrangements between affiliates of an electric utility or its parent company that will impact rate payers. This addresses the conflict of interest issue in Dominion Energy’s arrangement to commit its utility subsidiary to purchase capacity in the Atlantic Coast Pipeline.
HB 2691 (O’Quinn) establishes a pilot program for electric utilities to provide broadband services in underserved areas, and raise rates for the rest of us to pay for it, proclaiming this to be in the public interest.
HB 2697 (Toscano) and SB 1583 (Sutterlein) supports competition by shortening the time period that a utility’s customer that switches to a competing supplier is barred from returning as a customer of its utility from 5 years to 90 days.
HB 2738 (Bagby) and SB 1695 (Wagner) authorizes utilities to acquire rights of way on land that the Virginia Economic Development Partnership Authority decides could attract new customers to the site, and allows utilities to recover costs from existing customers. Because, you know, having utilities seize Virginians’ land for speculative development is already going so well for folks in the path of the pipelines. Who could complain about paying higher rates to help it happen more places?
SB 1780 (Petersen) requires, among other things, that utilities must refund to customers the costs of anything the SCC deems is a nonessential expenditure, including spending on lobbying, political contributions, and compensation for employees in excess of $5 million. It directs the SCC to disallow recovery of fuel costs if a company pays more for pipeline capacity from an affiliated company than needed to ensure a reliable supply of natural gas. It requires rate reviews of Dominion and APCo in 2019 and makes those biennial instead of triennial, and provides for the SCC to conduct an audit going back to 2015. It tightens provisions governing utilities’ keeping of overearnings and provides for the allowed rate of return to be based on the cost of providing service instead of letting our utilities make what all the other monopolists make (“peer group analysis”).
This article originally appeared in the Virginia Mercury on January 17, 2019. I’ve updated it to include later-filed bills and one or two that I missed originally.
Ivy, thank you thank you thank you!!! Without this exhaustive yet readable breakdown of what’s going on in Richmond regarding energy, I would never been able to come to grips with it. I will refer to this often in coming weeks.
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Indispensable legislative update! Thank you Ivy.