Washington Gas has been emailing its Virginia customers this month to offer them rebates if they buy new gas appliances, including home heating equipment (up to $700) and water heaters (up to $400). What the message doesn’t say is that this is a terrible deal. Customers will be able to get far bigger incentives if they wait until January and buy electric equipment instead.
Under the just-passed Inflation Reduction Act (IRA), Uncle Sam will provide tax credits of up to $2,000 per year for electric heat pumps that provide both heating and air conditioning as well as heat pump water heaters. Lower-income customers will be able to access upfront discounts of up to $8,000 for a heat pump, $1,750 for a water heater, $840 for an induction stove, and other amounts for additional upgrades. If you’re converting from gas and your electric panel isn’t sized to handle the extra electric load, the IRA will help with an upgrade. (For a full rundown of rebates and tax credits for homes, see this list from Rewiring America.)
It used to be that gas furnaces were more efficient and cheaper to operate than most electric heating options, but today the reverse is true: An EnergyStar heat pump uses energy more efficiently and costs less to operate than a fossil fuel furnace or boiler. A heat pump water heater, which I’d never even heard of until recently, is more efficient than either gas or a standard electric hot water heater and, again, saves money on operation.
Advances in heat pump technology and induction stoves, concerns about climate change and growing awareness of the dangers of burning fossil fuels indoors mean the switchover from gas to electricity would have happened without the IRA. But the IRA’s rebates are expected to goose the transition and transform the building sector.
Many consumers haven’t heard about the IRA’s rebates yet, and they may not have given much thought to home electrification. They need this information, but they sure won’t get it from their gas company.
Washington Gas is pushing its gas appliance rebates now for an even bigger reason, though, and one that makes it especially important that customers give them a pass: Installing an expensive new gas furnace locks you into the company’s fond embrace for the life of the furnace, no matter how high natural gas prices go.
It’s true that electric appliances will further tie you to your electric utility (unless you have solar panels), and electricity rates have been going up as well. But electricity rates are going up mainly because fossil fuel costs have skyrocketed. Dominion Energy Virginia, for example, cited a 100% increase in the price of natural gas when it asked for a rate hike this summer. As the electric grid gets greener year by year, lower-priced wind and solar energy will have a moderating effect on electricity prices. Your gas utility, on the other hand, will never have anything to sell you but gas.
It gets worse. Gas companies have to maintain their network of pipelines and other infrastructure regardless of how many customers they have. Those costs will be spread over a shrinking rate base as more and more customers switch over to electricity, raising rates for the remaining customers. If you buy a new gas furnace now, you will be trapped in that shrinking pool of customers, paying ever more to maintain pipelines.
Today, Washington Gas charges customers a flat “system charge” of $11.25 per month, plus supply and distribution costs based on how much gas is used that month. Customers who electrify their homes escape the monthly system charge and gain the convenience of dealing with just one utility. But the real savings come in not being part of a shrinking rate base paying an ever-larger share of the gas company’s fixed costs.
That makes Washington Gas’s rebate offer doubly dangerous for customers who don’t know about the IRA. Someone whose old gas furnace is on the fritz might see the email and decide to use that small rebate to buy a new gas furnace, when they would be far better off keeping the old one limping along for a few more months. Come 2023, they would then reap the benefit of an electric heat pump with a much larger rebate or tax credit.
Consumers are set to save a lot of money and energy under the IRA’s incentives for home electrification — but not if they get locked into fossil fuels first.
Governor Glenn Youngkin issued a press release on October 3 presenting what he says is his energy plan. Accompanying the press release was 26 pages labeled “2022 Virginia Energy Plan,” but that can’t be what he’s referring to. I mean, the Virginia Code is pretty specific about what makes up an energy plan, and this isn’t it.
Under Virginia law, the energy plan must identify steps the state will take over the next 10 years consistent with the Commonwealth Clean Energy Policy’s goal of a net-zero carbon economy by 2045 “in all sectors, including the electric power, transportation, industrial, agricultural, building, and infrastructure sectors.” Not only does Youngkin’s document not do that, it doesn’t even mention the policy it’s supposed to implement.
It’s also missing critical pieces. The plan is supposed to include a statewide inventory of greenhouse gas emissions, but it’s nowhere to be found. The inventory is the responsibility of the Department of Environmental Quality, which reports previous inventories on its website from 2005, 2010 and 2018. The one specifically required to be completed by October 1, 2022 isn’t there, nor is there any indication it’s in the works and just unfortunately delayed. Did I miss some fine print about how the requirement doesn’t apply if the governor is a Republican?
In fact, there is no discussion about climate change in Youngkin’s energy plan. The word “climate” appears nowhere. He simply ignores the problem: a modern Nero, fiddling while the planet burns.
Instead, Youngkin’s document mostly attacks the laws Virginia has passed in recent years to implement its decarbonization goals, including the Virginia Clean Economy Act, legislation allowing the state to participate in the Regional Greenhouse Gas Initiative and the Clean Cars law. In their place he offers a bunch of random ideas — some with merit, some without, some spinning off on tangents.
I did not really expect a conservative Republican with presidential aspirations to embrace all the recommendations for the energy plan that I laid out last month, or those from the many environmental, faith and consumer groups that support Virginia’s clean energy transition. Going further and faster down the road to decarbonization is a tall order for politicians beholden to fossil fuel interests, no matter how much it would benefit the public.
Yet Youngkin doesn’t have a lot of ammunition to use against the switch to renewable energy. With soaring coal and natural gas prices, it’s hard to keep pretending that fossil fuels are low-cost. The insistence that we need them for reliability is the only straw left to grasp at.
And indeed, underlying Younkin’s attack on the VCEA is a misunderstanding of how grid operators manage electricity. The critique boils down to “baseload good, intermittent bad.” But baseload is not the point; meeting demand is the point. Demand fluctuates hugely by day and hour. If grid operators had nothing to work with but slow-ramping coal plants or on/off nuclear reactors and no storage, they’d have as much trouble matching demand as if they had nothing but renewable energy and no storage. Pairing low-cost wind and solar with batteries makes them dispatchable — that is, better than baseload.
That’s not to say there aren’t good reasons to invest in higher-cost resources, but “baseload” is a red herring that stinks up Youngkin’s entire argument.
To his credit — and notwithstanding his “baseload” fixation — Youngkin supports Virginia’s move into offshore wind energy even with the high cost of the Coastal Virginia Offshore Wind project and other early U.S. developments. (The plan notes that Virginia’s project will be the largest “in the Free World,” a weirdly retro way to tell us China has leapt far ahead in installing offshore wind.)
The plan also supports removing barriers to customer purchases of solar energy, including shared solar and a greater ability for renewable energy suppliers to compete with utilities for retail sales. This is all phrased as a consumer choice issue rather than an endorsement of greater utility investments in solar; regardless, these would be welcome moves.
It’s also good to see the governor’s endorsement of rate reform. Republicans have been at least as much to blame as Democrats for Dominion Energy’s success in getting laws passed that let it bilk ratepayers. It will be interesting to see if Youngkin actually pursues the reforms he touts.
Less encouraging are Youngkin’s desires to jump into hydrogen (I’m guessing not the green kind, since we hardly have an excess of renewable energy) and, worse, to deploy “the nation’s first” commercial small modular nuclear reactor (SMR) in Southwest Virginia within 10 years.
You know what will happen there, right? Ratepayers will foot the bill, and it will be very expensive.
But unlike offshore wind, SMRs aren’t proven technology; they remain firmly in the research phase. The U.S. Department of Energy is hoping for a demonstration project “this decade.” If successful, the industry believes SMRs will eventually be able to produce electricity at a price that’s only two or three times that of solar and wind energy. Which begs an obvious question: Is there a reason to build SMRs?
Nor has anyone figured out the nagging problem of what to do with the radioactive waste, including the waste piling up at today’s nuclear plants because it’s too dangerous to move and there’s no place to put it. So Youngkin’s plan also “calls for developing spent nuclear fuel recycling technologies that offer the promise of a zero-carbon emission energy system with minimal waste and a closed-loop supply chain.” Great idea! But how about focusing on that first, Governor?
That’s not where Younkin is putting his focus, though. Last week, he proposed spending $10 million on a Virginia Power Innovation Fund, with half of that earmarked for SMR research and development. The announcement said nothing about waste.
Look, I happen to know some earnest climate advocates who believe SMRs are the silver bullet we’ve been waiting for. I follow the research with an open mind while also noting the astonishing advances in renewable energy technology announced almost daily. But the climate crisis is here and now. We can’t afford to press pause on known carbon-free technologies for 10 years in the hope that something even better will pan out.
Investing in research and development of new technologies is an important role for government, but kicking the climate can down the road isn’t an option. Rather than attacking our energy transition, Youngkin would have done more for Virginia by using his plan to build on it.
It was the best of summers, it was the worst of summers. It was the summer the United Nations declared a healthy environment a universal human right, and a summer that shattered heat records across the globe. The U.S. enacted a historic climate bill not long after the Supreme Court struck down the Environmental Protection Agency’s Clean Power Plan. Climate scientists said there was still hope for keeping global warming below 1.5 degrees Celsius, while the American West’s worst drought in 1,200 years continued for its 22nd summer.
The struggle to keep climate change from spinning out of control feels nothing short of epic, as if ordinary mortals were powerless observers to a battle between giants that will determine whether and how we survive. Yet if we weren’t collectively doing what modern humans do — burning fossil fuels, clearing land for agriculture, raising and eating billions of animals, driving on the roads we paved, making things in factories, consuming and consuming — there would be no epic struggle. We are the giants.
But being integral to the problem also makes every person integral to where we go from here. Powerlessness is an illusion. Like a murmuration of starlings wheeling through the air in a synchronized but unchoreographed ballet, small choices by individuals cascade across society and shift its direction, unpredictably and sometimes radically.
This is why there remains a case for hope, if not actual optimism, even as climate change accelerates toward climate chaos. Humans, working individually and collectively, have removed the biggest technological barriers to stopping the rise in greenhouse gas emissions. Most of the policy and economic barriers continue to crumble too, especially when it comes to replacing fossil fuels with wind and solar. As a result, our power supply will continue to get cleaner even in states that prefer their air polluted.
Government must still do much more, and many technical challenges still need to be worked out. For the first time, though, a decarbonizing grid finally gives ordinary people a role in determining the continued habitability of our planet, through individual actions that collectively push society in a new direction.
We’ve done this before. Consider the anti-littering campaign of the 1960s that made a once-commonplace behavior unthinkable for millions of Americans. Or take the public response to the ozone hole crisis of the 1970s, when scientists discovered that the chemical aerosols emitted by spray cans were migrating up to the stratosphere and reacting with sunlight to eat away at the Earth’s protective ozone layer. While the federal government dithered, consumers acted. They abandoned aerosols in favor of pump bottles for cleaning products, roll-on deodorants and sprays reformulated to remove the chlorofluorocarbons (CFCs) causing the problem. The public response led to government action, culminating in the 1987 Montreal Protocol phasing out CFCs worldwide.
Individual choices change history when people recognize the need to alter their behavior, but only if they have acceptable alternatives that others can copy easily. Once it becomes commonplace, the planet-friendly choice can even feel like the only morally acceptable option. Individuals and even companies want to avoid the stain of public opprobrium — the reason so many corporations today have adopted sustainability goals.
Many threats are too great to leave to voluntary action, or too hard for enough people to understand or act on individually. We needed top-down policies to decarbonize the electric sector; voluntary investments in rooftop solar alone could never do it. We will always need government agencies like the EPA and the Food and Drug Administration to regulate toxins and dangerous products. Simply trying to empower consumers can backfire, as Californians found when a right-to-know law enacted by proposition led to companies labeling pretty much everything as cancer-causing, just to be on the safe side.
But consumer choice will be a key factor in decarbonizing buildings and transportation now that renewable energy is taking over the electric grid. As people learn about the dangers of using natural gas indoors, they will opt instead for high-efficiency heat pumps and electric induction stoves, and builders will respond to changing demand by no longer connecting homes to gas lines. The new Inflation Reduction Act, with its generous rebatesfor home electrification, sped up the timeline for the demise of gas, but consumer preference will be the deciding factor.
Similarly, the IRA’s rebates for electric vehicle purchases will make consumers the killers of Big Oil. The transportation sector makes up the biggest slice of U.S. carbon emissions, and most of that is attributable to personal automobiles. Getting people out of their cars and on to bicycles or mass transit has been frustratingly hard because most of our communities were built around the automobile. The arrival of electric vehicles finally offers such an attractive alternative to the gas guzzler that it’s just a question of when, not if, the internal combustion engine goes the way of the horse-drawn buggy.
The battery technology that makes electric vehicles possible also allows every gasoline-powered tool to be electrified, including lawn mowers, weed-whackers and leaf blowers. Gasoline-powered lawn equipment is astoundingly polluting, in terms of both carbon emissions and smog-creating volatile organic compounds. It’s also so noisy that neighbors will pressure neighbors to switch to electric as the technology gets better and cheaper. California, Washington, D.C. and many localities have banned gas-powered leaf blowers, but consumer preference alone should eventually eliminate the market for them.
Consumer choice could also lower carbon emissions in sectors of the economy that are famously difficult to electrify. Within a few years you may be able to fly on a plane using biofuel or live in a building made with low-emission steel and concrete that sequesters carbon. As we’ve seen with other technologies, though, mass adoption depends on these alternatives being cheaper, better-performing or both. That will take time.
Eating a plant-based diet stands out as the individual action with the greatest climate impact, according to the climate solutions handbook Drawdown. People are beginning to catch on to the meat industry’s outsized impact on climate change, but it’s the second condition — people having alternatives they really like — that keeps the meat industry in business. Veganism is on the rise (led, of all people, by athletes), but meat consumption continues to grow too.
If some visionary thinkers are right, in a few years we will all happily be eating lab-grown meat and healthy plant-based meat substitutes because they will outcompete animal products on price, taste and convenience. Removing animals from our food supply will have cascading beneficial effects as it frees up land now used to grow animal feed for more planet-friendly uses such as carbon-sequestering forests and wildlife habitat.
For now, as anyone who has tried to stick to a diet can tell you, knowing what you ought to do is the easy part. Getting all of humanity to adopt a carbon diet is the challenge of our time. If we’re lucky and make the right choices, we may still have time to redirect the human murmuration toward a sustainable economy.
A few weeks after I wrote about rising natural gas prices, Dominion Energy Virginia asked the SCC for permission to raise the price of electricity by about $9 per month for the average residential customers, citing higher fuel costs. Virginia law allows utilities to pass through its fuel costs to customers, without a profit margin, making it unlikely the SCC will turn down the request. Natural gas is Dominion’s largest fuel source, so its electricity rates are highly vulnerable to price swings in the market for fracked gas.
That makes this a really peculiar time for Dominion to launch a new solar energy purchase option that will add about $20 per month on average for customers who elect to meet their entire electricity demand with solar, without exempting them from the coming bill increase due to higher gas prices. If the company were trying to discourage people from signing up for its solar product, it could hardly have chosen a better time. The fact that the company delayed the launch of this program for more than three years, only to offer it now, makes it all the more suspect.
Dominion’s solar option, confusingly (and wrongly) called “Community Solar” is the product of legislation passed in 2017, three years before the General Assembly authorized private solar developers to sell to Virginia customers. The 2020 legislation dubbed the private program “shared solar,” and it remains mired in SCC rulemaking.
But Dominion Community Solar is different. As I wrote back in 2018, when the SCC approved the program (and its launch seemed imminent), this program is really a solar tariff. Dominion generates electricity from solar and puts it on the grid, and customers who want to run their homes and businesses on solar pay extra on their bill.
As part of the deal, participants also get the renewable energy certificates (RECs) associated with the solar energy. That prevents Dominion from selling the RECs to anyone else or using them to show compliance with Virginia’s new renewable portfolio standard (RPS). This is important to avoid double-counting and ensure that solar paid for by the voluntary market is in addition to the solar developed to serve customers under the RPS.
The $20 premium for the program will sound unreasonably high to people who have experience with community solar in other states, where it is typically offered at a discount to regular grid power. In many states, private developers build the solar facilities and sell the output to participants. The rate is typically fixed for many years, because solar has low O&M costs and uses no fuel. Customers still pay their utility for transmission and distribution, but the community solar fee replaces utility-delivered generation rates. Accordingly, participating customers are insulated from price increases due to higher natural gas (or coal) costs.
That is not Dominion Community Solar. Dominion’s program requires customers to pay for all the utility’s costs of running its generating plants and purchasing fuel and paying for rate adjustment clauses (RACs), including those for new renewable energy facilities that serve the entire rate base and RECs bought for the RPS. These solar-only customers will also have to pay Dominion’s costs for buying carbon allowances in the RGGI market, which the company incurs as a result of generating power from fossil fuels. (Dominion is hoping Governor Youngkin will succeed in pulling Virginia out of RGGI and has suggested shifting compliance costs from riders to base rates in the meantime, clearly as a way to mitigate the rate increase due to high gas prices.)
Dominion Community Solar customers will pay for all these costs of fossil fuel generation, and the cost of Dominion building renewable energy facilities for all its other customers. And then on top of all that, they will pay an extra $20 per month.
Let’s leave aside the question of whether $20 is even a fair premium for a solar tariff. Ultra-high gas prices, RPS riders and RGGI compliance costs are all new since the SCC authorized Dominion’s program in 2018. It’s hard to imagine the SCC agreeing today that program participants should pay all these costs in addition to the cost of developing community-sized solar arrays.
But something else has changed too: The shared solar legislation passed in 2020 promised customers the alternative of being able to buy solar from a third-party provider, unhooking participants from the roller-coaster ride of fossil fuel prices. As I noted before, though, shared solar is mired in proceedings at the SCC, where Dominion is seeking to impose such high fixed costs on participants as to make the program impossible to offer.
Dear readers: Many of you know that although I write independently of any organization, I also volunteer for the Sierra Club and serve on its legislative committee. Today, the Sierra Club’s Virginia Chapter urgently needs funds to support its legislative and political work towards a clean energy transition. So for the first time I’m passing the hat and asking you to make a donation to our “Ten Wild Weekends” fundraising campaign. And if you’re free on June 12, come join the Solar Walk in Richmond that I’ll be co-leading!
Even before taking office, Governor Glenn Youngkin made two rookie mistakes: he declared his intention to pull Virginia out of the Regional Greenhouse Gas Initiative (RGGI) by executive order, not realizing it can only be done by legislation; and he nominated the much-reviled Trump-era EPA chief Andrew Wheeler to be his Secretary of Natural Resources, apparently unaware the appointment would need approval from the Democratic-led Senate he had just infuriated with the RGGI announcement.
Evidently not a man to admit a blunder, on his first day in office Youngkin signed an executive order directing the Department of Environmental Quality to notify RGGI of his intent to withdraw Virginia from the carbon-cutting program, and to develop an “emergency regulation” to send to the Air Pollution Control Board for the same purpose. The language in the order is a little less than he pledged, and yet still not legal.
These are unfortunate signs that Youngkin, who ran for governor as a moderate Republican, intends to govern as a burn-the-house-down extremist when it comes to the environment.
It’s surprising to see Youngkin pursuing Trumpist energy policies, and not just because they failed so dismally when Trump tried them. As the former CEO of a multibillion-dollar private equity investment company, Youngkin is, presumably, not an idiot. He has acknowledged climate change is real and affecting Virginia, and he has access to the same polls the rest of us do that show Americans are concerned and want government action to address the crisis. Corporate America is also calling for action; CEOs of more than 70 of the world’s largest corporations wrote a letter last June calling on governments to adopt policies capable of capping the global rise in temperature at no more than 1.5 decrees Celsius.
The legislation that put Virginia into RGGI will lead to a 30 percent cut in the Commonwealth’s electric sector CO2 emissions by 2030. Companion legislation, the Virginia Clean Economy Act (VCEA), extends the carbon cutting out to 2050, to hit zero carbon emissions from the electric sector. Youngkin complains that RGGI costs ratepayers money, but it’s not like the money raised through carbon allowance auctions disappears into the ether: it pays for coastal flood-control projects and low-income energy efficiency programs that Virginia wasn’t funding before. Maybe Youngkin intends to replace these hundreds of millions of dollars with some of the federal funding coming to Virginia through the federal infrastructure bill—you know, the legislation that Virginia’s Republican congressmen voted against.
Or maybe he doesn’t really care about the human consequences of his actions, since Virginia governors can’t run for reelection. Even last fall Youngkin was being talked about as a potential presidential candidate based on his ability to say nothing of substance for an entire campaign season. It was a good trick, but it’s a hard one to pull off twice. If Youngkin runs for president, he’ll be doing it as the guy who started his governorship by torching Virginia’s climate action plan.
Whether they are fellow flame-throwers or not, General Assembly Republicans are rallying around the new governor. Two bills filed last week seek to do legally what Youngkin wanted to do by executive fiat. SB532 (Stuart) and HB1301 (Kilgore) would repeal the Clean Energy and Community Flood Preparedness Act, direct DEQ to suspend the Commonwealth’s participation in the Regional Greenhouse Gas Initiative and remove provisions for using revenues from the auctions.
SB81 (Stanley) would prohibit the Air Pollution Control Board from considering health, environmental, scientific, or economic factors when making regulations—an attack on both RGGI and clean car regulation, as well as on the independence and very mission of the Air Board. SB657 (Stuart) also attacks the Air Board’s authority (and that of the Water Board for good measure).
HB118 (Freitas) goes bigger. It repeals key features of the VCEA, including achieving zero carbon emissions by 2050; allowing the SCC to approve new fossil fuel plants only if a utility has met energy-saving goals and can prove cost-effectiveness; allowing utilities to recover costs of compliance with Virginia’s new renewable portfolio standard; and making wind, solar and offshore wind projects “in the public interest,” magic words that assure utilities they will get paid for making these investments.
The Freitas bill might pass the House, now that Republicans hold a slim majority, but neither of these two bills should pass the Senate with Democrats in charge. Creating the framework for the energy transition was a signature success for Virginia Democrats, and it’s hard to imagine a scenario in which they will let it be taken from them.
That isn’t stopping other Republicans from taking their own shots. Several bills seek to undermine the energy transition in various ways; all of them are bad policy.
HB74 (also Ware) would subsidize certain large industrial customers by allowing them to share in the benefits, yet exempting them from the costs, of the energy transition, shifting their share of the costs onto all other customers.
HB5 (Morefield) raids the RGGI funds to get money for his own district.
HB892 (Kilgore) and SB398 (McDougle) subsidize RGGI costs for certain fossil fuel generators, another raid on the funds.
HB1204 (Kilgore) prevents the RPS from taking effect until 2025 and guts the carve-out for distributed generation permanently. It also removes the authority of the Air Pollution Control Board over air pollution permits for “minor” sources of pollution.
HB1257 (Kilgore, on a roll!) guarantees customers access to natural gas in the name of “energy justice,” banning local electrification efforts, and making it really hard for the city of Richmond to terminate its gas utility.
HB1261 (Bloxom) also strips the Air and Water Boards of their permit-granting authority.
HB73 (Ware) and SB761 (Sutterlein) eliminates language putting wind, solar and offshore wind in the public interest, undercutting the market certainty that put Virginia into the top ranks for solar energy in the past year and attracted a major offshore wind turbine blade manufacturing facility to Portsmouth. (The bill also lets the SCC put costs of new facilities into a utility’s rate base instead of tacking on a rate adjustment clause. If this were the only thing the bill did, it would be worth supporting.)
Not all the bills we are likely to see this year have been filed yet, so there is a good chance we will see further attacks on climate action, all with the pretense of saving money. I will continue updating this post when I hear of other bills like these.
Speaking of things that cost ratepayers money, bills to subsidize coal are back this year. As we have all learned, coal is no longer a competitive fuel in Virginia. It lost out first to fracked gas, and more recently to solar. But in a compromise with coalfields Republicans, the VCEA excluded one coal plant, the Virginia City Hybrid Energy Center (VCHEC) in Wise County, from a requirement that Dominion Energy Virginia close its Virginia coal plants this decade. In theory, VCHEC could stay open until 2045, when the VCEA requires Dominion to reach zero carbon across all its generation.
In reality, though, the reprieve isn’t enough to save the coal plant. Dominion’s own analysis, from its 2020 Integrated Resource Plan case, assigned VCHEC a net present value of negative $472 million just for the ten years from 2020-2029. Dominion didn’t try to extend that analysis out to 2045, but clearly the cost to customers from running a money-losing coal plant for 25 years would top a cool billion. Not surprisingly, the SCC is considering requiring Dominion to retire VCHEC to save money for its customers.
Given concerns about RGGI’s cost to consumers, you might think Southwest Virginia Republicans would lead the charge to retire the money-losing coal plant in their midst. You would be wrong. To understand why, it will help you to know that the counties making up Southwest Virginia are not in Dominion’s service territory, but in Appalachian Power’s. The people who benefit from keeping a coal plant open in Wise County are not the same people who have to pay for the plant’s spectacular losses.
As an excuse to keep the plant open, coalfields Republicans claim it’s to help the environment. Yes, really. Some of VCHEC’s fuel is waste coal excavated from the piles of mining waste that litter the coalfields, a toxic legacy of the era when coal was king and environmental regulations went unenforced. Burning the waste coal is one way to get rid of it, though not the only way or, for that matter, the right way.
As a new report from the Appalachian State School of Law discusses, the federal infrastructure bill (again, the same one Virginia Republicans voted against) will provide millions of dollars to Virginia to remediate abandoned minelands, including these piles of toxic waste. (The report, titled Addressing Virginia’s Legacy GOB Piles, has been sent to General Assembly members but is not yet available online.)
In a letter to Senator John Edwards, report lead author Mark “Buzz” Belleville expressed his strong disagreement with bills aimed at encouraging the burning of waste coal. As he wrote, “Waste coal is of lower quality, requiring additives for combustion and resulting in even greater CO2 emissions and traditional air pollution than newly-mined coal. As the report notes, existing GOB piles can be disposed of or remediated in other manners that do not undermine Virginia’s commitment to a transition to clean energy.”
Rather than use the coming federal funds to remediate GOB piles, Republicans would prefer that Dominion customers be forced to pay hundreds of millions of dollars in higher energy costs and put more pollution into the air.
So at the same time they rail against the costs of RGGI and VCEA, Republicans are using waste coal as a reason to raise costs even more.
HB656 (Wampler) dangles a tax credit for using waste coal.
SB120 (Hackworth) and HB657 (Wampler) declare waste coal a “renewable energy” source and exempts VCHEC from the requirement that it close by 2045.
HB894 (Kilgore) outright prohibits the SCC from requiring Dominion to retire VCHEC “before the end of its useful life.” (Would that be before or after Virginia becomes so hot we all move to Canada?)
HB1326 (Kilgore, trying everything he can think of) makes it “in the public interest” for utilities to use waste coal, and gives utilities a way to charge ratepayers extra for doing so.
Electricity customers had better get used to being used as a political football by legislators who attack the costs of the energy transition but have no qualms about making ratepayers subsidize coal.
This post originally appeared in the Virginia Mercury on January 20, 2022. It has been updated to include bills filed since then.
Virginia’s thirteen electric cooperatives were exempted from most provisions of the 2020 Virginia Clean Economy Act, which caps carbon pollution from power plants and requires investor-owned utilities to meet renewable-energy and energy-efficiency targets. In lobbying for the VCEA exemption, cooperatives no doubt touted their claimed status as member-owned and democratically governed. In theory that means co-op members can direct their co-ops to adopt programs friendly to consumers and the environment. But events last month showed again that some of the commonwealth’s electric co-ops are not as democratic as they claim.
Summer is annual-meeting time for electric co-ops. Like all consumer cooperatives, electric co-ops are owned by their customers (called “member-owners”). Democratic control of the cooperative is one of seven “cooperative principles” that all electric cooperatives claim to adhere to. The key to genuine democratic control is board-of-director elections, which happen at each co-op’s annual meeting, where member-owners vote for board candidates.
Two examples from Virginia electric co-op annual meetings last month demonstrate ways large and small in which incumbent co-op boards game the election process to help their favored board candidates. The most egregious case occurred at Rappahannock Electric Cooperative (REC), which serves rural and suburban Virginians in 22 counties. In a five-way race in REC’s August board election there was a clear winner among co-op member-owners who selected a candidate. Hanover County businessman Roddy Mitchell got more than twice as many member-owner votes as any of the four other candidates. You might call that a landslide win.
But through REC’s needlessly arcane and confusing proxy-voting process, REC’s board was able to allocate some 6,000 additional votes to the board-favored candidate, thereby swinging the election win to him. That board-favored candidate came in fourth out of five when looking at votes that member-owners cast for candidates.
When a board controls 40 to 60 percent or more of all votes, as REC’s board generally does, the board effectively controls the election outcome and “democracy” is an empty label.
REC’s board controls huge numbers of votes each year because proxy ballots left blank are deemed by REC’s board as a delegation of the member-owner’s vote to the incumbent board to decide whom to cast them for. Moreover, REC offers those who send in a proxy, even a blank one, a chance to win cash prizes. That encourages member-owners to submit blank proxies, even if they have no interest in the election or makeup of the board. REC election tally forms going back over a decade show that every year REC’s incumbent board controls enough proxies to control election outcomes. For at least the past twelve years no candidate has won a race without getting the board-controlled votes.
So the way to win an REC board election is to please incumbent board members, not to get the most votes from member-owners. That isn’t fair and it isn’t democratic. It leads to board groupthink, insulates boards from the concerns of member-owners, and discourages well-informed, knowledgeable co-op members from running for board.
A National Rural Electric Cooperative Association governance task force report recommended against using board-controlled proxies to swing election results. But REC’s board continues to ignore that recommendation years after it was made.
Meanwhile, neighboring Shenandoah Valley Electric Cooperative’s (SVEC) board changed the co-op’s bylaws at a closed board meeting in June to help out an incumbent board member facing a strong challenge from another candidate in the August election. The board added a bylaw provision saying that in the case of a tie between an incumbent and non-incumbent candidate the incumbent would be deemed the winner of a one-year board term!
As if that isn’t bad enough, REC board chair Chris Shipe said publicly a few weeks ago that SVEC’s board is considering changing its (fair) direct election process next year to a proxy system like REC’s. If SVEC follows through on that, then its board, like REC’s, will be able to determine election outcomes. That would make SVEC’s new tie-vote bylaw unnecessary. There are no ties when incumbent board members control election outcomes.
SVEC’s board would then be fully insulated from member-owner concerns. That would greatly help incumbent board members, who recently approved major fixed-monthly-charge increases that disproportionately affect the co-op’s low-income member-owners and those who’ve invested in rooftop solar or energy efficiency.
There is currently no government oversight of Virginia electric co-op elections, and no law to ensure fair board-election procedures, prohibit abusive proxy practices, or prohibit using board-imposed bylaw changes to favor incumbents. This is important because electric cooperatives are essential service providers that operate as monopolies. Monopoly utilities seldom act in the best interest of their customers unless subjected to meaningful scrutiny, accountability, and independent oversight. Such oversight is lacking when entrenched co-op boards have ironclad control of board-election outcomes. It’s time for the General Assembly to step in and ensure basic, fair election practices to give Virginia electric cooperative member-owners a true say in the governance of the utilities they own.
Seth Heald is a retired U.S. Justice Department lawyer and has a master of science degree in energy policy and climate. He is a member-owner of Rappahannock Electric Cooperative and co-founder of Repower REC, a campaign to bring genuine democracy to Virginia’s electric co-ops. More information at RepowerREC.com.
Before the start of the 2021 legislative session, I highlighted three areas where Virginia needed to make significant progress to support its climate agenda: transportation electrification, improving the energy efficiency of buildings and giving consumers greater access to renewable energy.
The General Assembly delivered on one-and-a-half out of three. If we add bonus points for smaller successes, maybe we can call it a total of two. The transportation category truly outperformed expectations, but building efficiency underperformed and renewable energy access didn’t perform at all.
In the transportation sector, the General Assembly passed the Clean Car Standards requiring manufacturers to deliver more electric vehicles to Virginia dealers (HB1965); approved a statewide study of transit equity (HJ542); approved (but so far has not funded) an electric vehicle rebate program (HB1979); directed the SCC to report on ways to electrify transportation (HB2282); and established a school bus electrification fund (also empty for now)(HB2118).
Together these bills address two of the most significant ways we can reduce emissions from the transportation sector: supporting the move away from the internal combustion engine to electric vehicles and improving mass transit options.
The House rejected a second school bus electrification bill that, as originally drafted, would have allowed Dominion Energy Virginia to own, control and profit handsomely from the batteries in as many as 1,250 new electric school buses. Adding non-polluting school buses across Virginia and testing the value of vehicle-to-grid technology would have been exciting, but Dominion couldn’t help taking a good idea and trying to make it into another bloated profit center. Given the odor of Dominion boondoggle, the question isn’t why the House rejected the bill, but why the Senate was willing to swallow it.
Still, it’s clear electric school buses are an idea whose time has come, and vehicle-to-grid technology could have real benefits for ratepayers. Dominion is already testing the technology with school bus batteries in a smaller pilot program, so we can expect to see more on this topic next year. Meanwhile, advocates hope to see funding emerge to implement HB2118, possibly from the federal stimulus bill now under consideration in Congress.
Improving the energy efficiency of new homes should have been an equally popular idea with legislators. Virginia will be spending hundreds of millions of dollars retrofitting existing homes in the years to come, so it makes sense to ensure that new houses don’t immediately join the queue of homes needing upgrades to be climate-ready. Unfortunately, beefing up the energy efficiency provisions of Virginia’s residential building code (HB2227) proved a hard sell in the face of entrenched opposition from the homebuilders’ lobby and surprising resistance from even some Democratic legislators.
The legislation originally would have mandated adoption of the latest national energy efficiency code provisions, but it was amended to leave it up to the discretion of the code-writing board whether to require new homes to achieve this higher level of efficiency. They already had that authority; however, the board will now have to consider factors that favor stricter standards, like the long-term cost of ownership. For that reason I’m counting this bill as half a win. Whether or not the board decides to take the hint, improving efficiency in new homes is a topic we will see a lot more of in the future — and next time it is likely to come with more urgency and added features.
Energy efficiency bills did better when they addressed only government bodies. Legislation that passed now favors energy-efficient and water-efficient products in public procurement, and requires EV charging and energy/carbon tracking capability for new public buildings.
Unfortunately, 2021 was another bad year for my third priority, giving consumers the right to buy renewable energy from competitive suppliers. The House supported the “right to shop” bill (HB2048), but Senate Commerce and Labor once again proved itself a bulwark of defense for the monopoly utility model against the interests of residents and corporate customers alike. Killing the bill does nothing to lessen the demand from consumers. If Dominion does not move soon to offer better renewable energy options itself, we can expect to see this legislation return.
Senate Commerce and Labor further cemented its reputation as Dominion’s best friend by dispatching the full suite of utility reform bills that had won bipartisan support in the House. Only three senators on the 15-member committee consistently voted in favor of the reforms, ensuring that none of them got to the Senate floor.
Various other bills advanced the energy transition in smaller, focused bites. But perhaps the best news is that nothing this year marked a retreat from the commitment the General Assembly and the governor made last year to move Virginia toward a cleaner and more equitable energy supply.
Below is a brief round-up of the climate and energy bills that passed this year, including the ones mentioned above. The governor will still have to sign the bills before they become law, but we are not expecting any surprises.
Renewable energy and storage
• HB1925 (Kilgore) establishes, but does not fund, the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program.
• HB1994 (Murphy) expands the definition of small agriculture generators to include certain small manufacturing businesses such as breweries, distilleries and wineries for the purposes of the law allowing these businesses to aggregate meters and sell renewable energy to a utility.
• HB2006 (Heretick) and SB1201 (Petersen) change the definition of an “electric supplier” to include the operator of a storage facility of at least 25 MW, exempting them from state and local taxation but allowing a revenue share assessment.
• HB2034 (Hurst) clarifies that the program allowing third-party power purchase agreements (PPAs) applies to nonjurisdictional customers (i.e., local government and schools) as well as jurisdictional customers (most other customers) of Appalachian Power and Kentucky Utilities.
• HB2148 (Willett) provides for energy storage facilities below 150 MW to be subject to the DEQ permit by rule process as “small renewable energy projects.” This is a priority bill for renewable energy industry associations.
• HB2201 (Jones) and SB1207 (Barker) expands provisions related to siting agreements for solar projects located in an opportunity zone to include energy storage projects; however, according to existing language, the provision only takes effect if the GA also passes legislation authorizing localities to adopt an ordinance providing for the tax treatment of energy storage projects. This is another renewable energy industry bill.
• HB2269 (Heretick) provides for increases in the revenue share localities can require for solar projects based on changes in the Consumer Price Index.
• SB1258 (Marsden) requires the State Water Control Board to administer a Virginia Erosion and Sediment Control Program (VESCP) on behalf of any locality that notifies the Department of Environmental Quality that it has chosen not to administer a VESCP for any solar photovoltaic (electric energy) project with a rated electrical generation capacity exceeding five megawatts. The provisions become effective only if the program is funded..
• SB1295 (DeSteph) requires utilities to use Virginia-made or U.S.-made products in constructing renewable energy and storage facilities “if available.” As amended, the products must be “reasonably available and competitively priced.”
Energy efficiency and buildings
• HB1811 (Helmer) adds a preference for energy efficient and water-efficient products in public procurement.
• HB1859 (Guy) amends last year’s legislation on Commercial Property Assessed Clean Energy (C-PACE) loans to allow these loans to be extended to projects completed in the previous 2 years; it also expressly excludes residential buildings of less than 5 units and residential condominiums.
• HB2001 (Helmer) requires state and local government buildings to be constructed or renovated to include electric vehicle charging infrastructure and the capability of tracking energy efficiency and carbon emissions. Local governments are authorized to adopt even more stringent requirements. It now has an amendment delaying its effectiveness to 2023 for localities with populations under 100,000.
• HB2227 (Kory) originally required the Board of Housing and Community Development to adopt amendments to the Uniform Statewide Building Code within one year of publication of a new version of the International Code Council’s International Energy Conservation Code (IECC) to address changes related to energy efficiency and conservation. The bill would have required the Board to adopt building code standards that are at least as stringent as those contained in the new version of the IECC.
• HB1919 (Kory) authorizes a locality to establish a green bank to finance clean energy investments.
• HB1834 (Subramanyam) and SB1247 (Deeds) originally required owners of carbon-emitting power plants to conduct a study at least every 18 months to determine whether the facility should be retired; and to give notice of any decision to retire a facility to state and local leaders within 14 days. Both bills were amended so that the retirement analysis is now just a part of the integrated resource planning process of investor-owned utilities, currently every three years, leaving out other plant owners like cooperatives.
• HB1899 (Hudson) and SB1252 (McPike) sunset the coal tax credits as ofJan. 1, 2022.
• SB1265 (Deeds) makes it easier for DEQ to inspect and issue stop-work orders during gas pipeline construction.
• SB1311 (McClellan) requires pipeline applicants to submit detailed erosion and sediment control plans and stormwater management plans to DEQ.
• HB2330 (Kory) is the legislation the SCC asked for to provide guidance on the Percentage of Income Payment Program under the Virginia Clean Economy Act.
• SB1282 (Morrissey) directs DEQ to conduct a statewide greenhouse gas inventory, to be updated and published every four years.
• SB1284 (Favola) changes the name of the Commonwealth Energy Policy to the Commonwealth Clean Energy Policy, and streamlines the language without making major changes to the policies set out last year in Favola’s successful SB94. That bill overhauled the CEP, which until then had been a jumble of competing priorities, and established new targets for Virginia to achieve 100 percent carbon-free electricity by 2040 and net-zero carbon economy-wide by 2045.
• SB1374 (Lewis) sets up a Carbon Sequestration Task Force to consider methods of increasing carbon sequestration in the natural environment, establish benchmarks and identify carbon markets.
EVs and Transportation energy
• HB1850 (Reid) increases the roadway weight limit for electric and natural gas-fueled trucks to accommodate the extra weight of batteries or natural gas fuel systems.
• HB1965 (Bagby) is the Clean Car Standards bill, which would require manufacturers to deliver more electric vehicles to Virginia dealers beginning in 2025.
• HB1979 (Reid) creates a rebate program for new and used electric vehicles; however, the GA provided no funding.
• HB2118 (Keam) establishes an Electric Vehicle Grant Fund and Program to assist school boards in replacing diesel buses with electric, installing charging infrastructure, and developing workforce education to support the electric buses. It currently has no funding.
• HB2282 (Sullivan) directs the SCC to develop and report on policy proposals to accelerate transportation electrification in the Commonwealth. The bill also limits how utilities get reimbursed for investments in transportation electrification: they must recover costs through normal rates for generation and distribution, and not through rate adjustment clauses or customer credit reinvestment offsets.
• HJ542 (McQuinn) requests a statewide study of transit equity and modernization.
• SB1223 (Boysko) adds a requirement to the Virginia Energy Plan to include an analysis of electric vehicle charging infrastructure and other infrastructure needed to support the 2045 net-zero carbon target in the transportation sector.
[This post was updated January 22 to include two bills filed just ahead of the deadline. See SB1463 under Renewable Energy, and HB2330 under Climate.]
The 2021 General Session is in full swing, with bills being heard at all hours of the day, every day of the week. We’re now told the session will be extended to 45 days as it normally is in odd years, buying a little time for committees to act before the new “crossover” date of February 6.
Meanwhile, the list of bills I’ve corralled over the past week has grown to nearly 50. I’ve included the updated list here—scroll down.
Unless you’re paid to lobby, you may have only a few minutes at a time to contact legislators about the bills you want to see passed (or in some cases, defeated). So how do you set priorities?
Let me propose three criteria for you to lobby for a bill:
If enacted, the legislation would achieve progress on the issue you care about, in a way you approve of;
The legislation has a shot at passage; and
Your lobbying could make a difference
Do you like the bill? You might think this one is easy, but I recommend reading the whole bill before you decide to support one, and not just the summary. In my experience, the summaries are often misleading or incomplete. And even if you agree with the apparent goal of a bill, you might conclude the specifics are unwise or could lead to unintended consequences. But don’t dismiss a bill because it doesn’t go far enough or have everything you want. They seldom do.
Can it pass? This largely depends on who is against it, and how much influence they have. It used to be that if the utilities opposed a bill, it would die. Last year we saw a rebellion against that norm, but utilities are still formidable foes—and there are plenty of other powerful interests who can sink a bill.
There is a second reason some bills don’t have a chance: they cost money. If legislation requires public spending and the patron hasn’t got that figured out, the committee that hears the bill is likely to send it to the Appropriations Committee to die.
Can you make a difference? It’s a waste of your time to lobby for a bill that can’t pass, unless your game plan is to build momentum for future years. On the other end of the scale, sometimes a bill has been negotiated before it is even introduced, or it makes technical amendments that no one opposes; those bills don’t need your help. Focus on the bills where you believe public support matters. (And then get your friends involved, too.)
Three bills to consider for your priority list. These bills pass all three tests. They would make a difference on climate and they all have a shot, but they need public pressure to win votes.
Right to shop for renewable energy, HB2048. Consumers of all kinds want the right to buy renewable energy from suppliers other than their utility, and the provision for low-income residents to receive a discount is a clear winner. Dominion is fighting this threat to its monopoly, but it’s on the wrong side of history. It has been referred to the House Labor and Commerce committee, subcommittee 3 (members: Sullivan (Chair),Keam,Lopez,Bagby,Heretick,Ayala,Kilgore,Ware,Marshall,O’Quinn,Ward
If you have time to adopt additional bills, you might consider adding one or more of the utility reform measures. I’m also partial to HB1925 to bring renewable energy to the Coalfields, which would pair nicely with HB1899/SB1252, sunsetting the coal tax credits. I could go on, but you’ve heard enough.
Here is the whole list, updated this morning, and hopefully now comprehensive:
Renewable energy and storage
HB1925 (Kilgore) Establishes, but does not fund, the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program. Kilgore put in a similar bill last year, which unfortunately did not pass. With no budget impact, this ought to pass easily. But I said that last year, too.
HB1937 (Rasoul) is this year’s version of the Green New Deal Act. It contains policy initiatives to prioritize jobs and benefits for EJ populations and displaced fossil fuel workers and requires a transition to renewable energy by 2035, though these latter provisions are poorly integrated into the VCEA.
HB1994 (Murphy) and HB2215 (Runion) expands the definition of small agriculture generators to include certain small manufacturing businesses such as breweries, distilleries and wineries for the purposes of the law allowing these businesses to aggregate meters and sell renewable energy to a utility.
HB2006 (Heretick) exempts energy storage systems from state and local taxation but allows a revenue share assessment. This is a priority bill for renewable energy industry associations.
HB2034 (Hurst) clarifies that the program allowing third-party power purchase agreements (PPAs) applies to nonjurisdictional customers (i.e., local government and schools) as well as jurisdictional customers (most other customers). Currently, PPA projects with local governments in APCo territory have been held up due to a contract provision between the localities and APCo, and it is hoped this legislation will break the logjam. [Passed House, now in Senate Commerce & Labor.]
HB2048 (Bourne) restores the right of customers to buy renewable energy from any supplier even once their own utility offers a renewable energy purchase option. In addition, third party suppliers of renewable energy are required to offer a discounted renewable energy product to low-income customers, saving them at least 10% off the cost of regular utility service.
HB2067 (Webert) lowers from 150 MW to 50 MW the maximum size of a solar facility that can use the Permit by Rule process. [Killed in committee.]
HB2148 (Willett) provides for energy storage facilities below 150 MW to be subject to the DEQ permit by rule process as “small renewable energy projects.” Although 150 MW is not “small,” the permit by rule process has worked pretty well, so this should be acceptable. This is a priority bill for renewable energy industry associations.
HB2201 (Jones) expands provisions related to siting agreements for solar projects located in an opportunity zone to include energy storage projects; however, according to existing language, the provision only takes effect if the GA also passes legislation authorizing localities to adopt an ordinance providing for the tax treatment of energy storage projects. (Why doesn’t the bill just go ahead and include that authorization? Don’t ask me.) This is another renewable energy industry bill.
HB2269 (Heretick) provides for increases in the revenue share localities can require for solar projects based on changes in the Consumer Price Index.
SB1201 (Petersen) changes the definition of an “electric supplier” to include the operator of a storage facility of at least 25 MW, and subjects them to the same reporting obligations as other suppliers.
SB1258 (Marsden) requires the State Water Control Board to administer a Virginia Erosion and Sediment Control Program (VESCP) on behalf of any locality that notifies the Department of Environmental Quality that it has chosen not to administer a VESCP for any solar photovoltaic (electric energy) project with a rated electrical generation capacity exceeding five megawatts. The provisions become effective only if the program is funded; Marsden has submitted a budget amendment. This is also a priority bill for renewable energy industry associations.
SB1295 (DeSteph) requires utilities to use Virginia-made or US-made products in constructing renewable energy and storage facilities “if available,” but it does not require any added cost to be reasonable. [Amended to resolve the reasonable cost issue.]
SB1420 (Edwards) is a companion bill to HB2034, clarifying PPA language for Appalachian Power territory.
SB1463 (Cosgrove) would reverse the progress made last year in preventing homeowner associations from unreasonably restricting rooftop solar. It would create a loophole to let HOAs ban solar once again. [Withdrawn by patron.]
Energy efficiency and buildings
HB1811 (Helmer) adds a preference for energy efficient products in public procurement.
HB1859 (Guy) amends last year’s legislation on Commercial Property Assessed Clean Energy (C-PACE) loans to allow these loans to be extended to projects completed in the previous 2 years; it also expressly excludes residential buildings of less than 5 units and residential condominiums. [Passed House with a substitute, now in Senate.]
HB2001 (Helmer) requires state and local government buildings to be constructed or renovated to include electric vehicle charging infrastructure and the capability of tracking energy efficiency and carbon emissions.
SB1224 (Boysko) requires the Board of Housing and Community Development to adopt amendments to the Uniform Statewide Building Code within one year of publication of a new version of the International Code Council’s International Energy Conservation Code (IECC) to address changes related to energy efficiency and conservation. The bill requires the Board to adopt Building Code standards that are at least as stringent as those contained in the new version of the IECC. This is one of the important bills I wrote about last week.
HB1919 (Kory) authorizes a locality to establish a green bank to finance clean energy investments. Fairfax County has requested this authority.
HB1834 (Subramanyam) requires owner of carbon-emitting power plants to conduct a study at least every 18 months to determine whether the facility should be retired. It also requires notice of any decision to retire a facility to be submitted to state and local leaders within 14 days, a step that allows transition planning.
HB1899 (Hudson) sunsets coal tax credits, because it is absolutely crazy that Virginia continues to subsidize coal mining while we’ve committed to close coal plants.
HB1934 (Simon) requires local approval for construction of any gas pipeline over 12 inches in diameter in a residential subdivision. The genesis of this bill is a particular project in Simon’s district, but I was surprised this isn’t a requirement already.
HB2292 (Cole) is similar to the Green New Deal bill but without the speeded-up RPS timeline. It contains a moratorium on permits for new fossil fuel infrastructure and requires programs for transitioning fossil fuel workers that guarantees them jobs at the same income they had before and provides early retirement benefits and pension guarantees. It also requires development of new job training programs; requires that 40% of energy efficiency and clean energy funding go to EJ communities; and mandates that 50 percent of the clean energy workforce come from EJ communities.
SB1265 (Deeds) makes it easier for DEQ to inspect and issue stop-work orders during gas pipeline construction.
SB1311 (McClellan) requires DEQ to revise erosion and sediment control plans or stormwater management plans when a stop work order has been issued for violations related to pipeline construction.
HB2281 (Ware) would exempt certain companies that use a lot of energy from paying for their share of the costs of Virginia’s energy transition under the VCEA, driving up costs for all other ratepayers. And thus the slow chipping away at the VCEA begins. Everybody’s got a reason they’re special. [Killed in subcommittee.]
HB2330 (Kory) is the legislation the SCC asked for to provide guidance on the Percentage of Income Payment Program under the Virginia Clean Economy Act.
SB1282 (Morrissey) directs DEQ to conduct a statewide greenhouse gas inventory, to be updated and published every four years.
SB1284 (Favola) changes the name of the Commonwealth Energy Policy to the Commonwealth Clean Energy Policy, and streamlines the language without making major changes to the policies set out last year in Favola’s successful SB94. That bill overhauled the CEP, which until then had been a jumble of competing priorities, and established new targets for Virginia to achieve 100% carbon-free electricity by 2040 and net-zero carbon economy-wide by 2045. This year’s bill shows the Northam Administration is now fully on board, and the result is a policy statement that is more concise and coherent.
SB1374 (Lewis) would set up a Carbon Sequestration Task Force to consider methods of increasing carbon sequestration in the natural environment, establish benchmarks, and identify carbon markets.
And because this category would not be complete without a bill from a legislator who thinks climate action is a bunch of hooey, we have HB2265 (Freitas), which would repeal provisions of the VCEA phasing out carbon emissions from power plants, repeal the restrictions on SCC approval of new carbon-emitting facilities, and nix the provisions declaring wind, solar, offshore wind and energy storage to be in the public interest. Oh, but in case you thought Freitas was just a free market believer, or cared about cost, the bill provides that planning and development of new nuclear generation is in the public interest.
Clean Virginia developed a full slate of bills, each a little different, that all restore SCC oversight over utilities and/or benefit customers with refunds.
HB1835 (Subramanyam) eliminates provisions that limit rate reductions to $50 million in the next SCC review of Dominion’s rates.
HB1914 (Helmer) changes “shall” to “may” in a number of places, giving the SCC discretion over when to count utility costs against revenues.
HB1984 (Hudson) gives the SCC added discretion to determine a utility’s fair rate of return and to order rate increases or decreases accordingly.
HB2049 (Bourne) would prevent utilities from using overearnings for new projects instead of issuing refunds.
HB2057 (Ware) changes how the SCC determines a fair rate of return for utilities and gives the SCC discretion in the treatment of certain utility generation and distribution costs, as well as in determining when a rate increase is appropriate. It also provides that when a utility has earnings above the authorized level, 100% of the overearnings must be returned to customers, up from 70% today. The SCC is also given authority to determine when a utility’s capital investments should offset overearnings.
HB2160 (Tran) gives the SCC greater authority to determine when a utility has overearned and gives the Commission greater discretion in determining whether to raise or lower rates and order refunds. It also requires 100% of overearnings to be credited to customers’ bills, instead of 70%, as is the case today.
HB2200 (Jones) makes a number of changes to SCC rate review proceedings, including setting a fair rate of return, requiring 100% of overearnings to be credited to customers’ bills, and eliminating the $50 million limit on refunds to Dominion customers in the next rate review proceeding.
SB1292 (McClellan) requires 100% of overearnings to be credited to customers’ bills, instead of 70%, as is the case today.
EVs and Transportation energy
The Virginia Mercury ran a good article this week that covered most of these bills.
HB1850 (Reid) increases the roadway weight limit for electric and natural gas-fueled trucks to accommodate the extra weight of batteries or natural gas fuel systems.
HB1965 (Bagby) is the Clean Car Standard bill, which would require manufacturers to deliver more electric vehicles to Virginia dealers beginning in 2025.
HB1979 (Reid) creates a rebate program for new and used electric vehicles.
HB2118 (Keam) establishes an Electric Vehicle Grant Fund and Program to assist school boards in replacing diesel buses with electric, installing charging infrastructure, and developing workforce education to support the electric buses.
HB2282 (Sullivan) directs the SCC to develop and report on policy proposals to accelerate transportation electrification in the Commonwealth. The bill also limits how utilities get reimbursed for investments in transportation electrification: they must recover costs through normal rates for generation and distribution, and not through rate adjustment clauses or customer credit reinvestment offsets.
HJ542 (McQuinn) requests a statewide study of transit equity and modernization.
SB1223 (Boysko) adds a requirement to the Virginia Energy Plan to include an analysis of electric vehicle charging infrastructure and other infrastructure needed to support the 2045 net-zero carbon target in the transportation sector.
SB1380 (Lucas) authorizes electric utilities to partner with school districts on electric school buses. The utility can own the batteries and the charging infrastructure and use the batteries for grid services and peak shaving.
SB1453 (Edwards) revises Titles 45.1 and 67 of the Virginia Code. “The bill organizes the laws in a more logical manner, removes obsolete and duplicative provisions, and improves the structure and clarity of statutes pertaining to” mining and energy. The bill is a recommendation of the Virginia Code Commission.
Last year Virginia’s General Assembly passed more than 30 separate clean energy bills, which together put Virginia on a path to zero-carbon electricity by 2050, enabled massive investments in renewable energy, storage and energy efficiency and eased restrictions on distributed solar.
But many of the bills that passed were not perfect, and most of the new mandates affect only the electric sector. Only about a quarter of Virginia’s greenhouse gas emissions comes from power plants, so getting serious about a zero carbon economy means finding ways to reduce emissions from transportation, buildings, industry and agriculture.
Unfortunately, building on last year’s progress will be hard this winter, not because there aren’t plenty of opportunities, but because the legislative session that starts Jan. 13 is likely to be exceptionally short and tightly-controlled. If, as expected, Republicans force a 30-day session limit(including weekends and holidays), that means each chamber must dispose of its own bills even faster than that to meet the crossover deadline (around Jan. 28, I’m told), when bills that have passed one chamber “cross over” to be considered in the other. Leadership has responded by strictly limiting the number of bills a legislator can carry, hoping not to overwhelm the committees that have to vet the bills.
One result is that complex bills haven’t got a prayer. Climate advocates and their legislative champions will be focused on bills that are narrowly-crafted (or at least short) and easy to explain.
Adding to the challenge, for those who want to weigh in with their legislators, is the fact that very few bills appear in the Legislative Information System yet, in another departure from prior years.
And then of course, there’s COVID-19, disrupting normal procedures and making it harder than ever for citizens to make their voices heard.
So yeah, ain’t we got fun?
What follows is a list of bills that are far along in the drafting process, have a patron, and are likely to be filed this year. I’m omitting other initiatives that don’t seem likely to make it into legislation this year or that I don’t have enough information to go on. I have not seen the language for any of these bills, so descriptions are based on previous years’ legislation, information from legislators and advocates, or both.
One of the most cost-effective ways to lower carbon emissions from buildings is by constructing them with an eye to saving energy right from the start. If the builder puts more insulation in the walls and attic, reduces draftiness and installs better windows, buyers will save money and future residents will have lower heating and cooling costs for decades. Any small increases in a buyer’s mortgage costs are recouped many times over in utility bill savings.
A national standard for energy efficiency in residential buildings even takes the guesswork out. The standard, known as the International Energy Efficiency Code (IECC), is updated every three years by a national organization referenced in the law setting out procedures for adopting Virginia’s residential building code. Unfortunately, the Board of Housing and Community Development (BHCD) has long ignored its statutory obligation to keep Virginia’s building code at least consistent with these nationally recognized standards.
As a result of that, and BHCD’s slow review process, Virginia’s building code is still behind the 2012-2018 IECC’s consumer protections. Unless BHCD is compelled to protect residents consistent with national standards, sub-standard housing will continue to be built for years into the future.
Ideally, the attorney general or the governor would direct BHCD to correct its latest decision to extend substandard code protections. Regardless, this long history of our building code underperforming national standards calls for legislative action. Sen. Jennifer Boysko, D-Fairfax, is expected to introduce legislation that would require the BHCD to adopt the latest IECC within 12 months.
[Update: Boysko’s bill is SB1224. Delegate Kory has also introduced HB2227.]
Right to buy
It’s a strange paradox. The Virginia Clean Economy Act is one of the most ambitious clean energy laws in the U.S., calling on our utilities to add thousands of megawatts of solar and wind energy in the coming years. And yet most Virginia customers still can’t buy solar energy unless they install it on their own property.
This is an absurd position for Virginia to be in today, insisting on an energy transition but not allowing customers to actually go buy electricity from solar. Indeed, this restriction threatens Virginia’s ability to meet its carbon reduction goals, for one reason in particular: data centers.
Data centers are energy hogs, and this sector has grown so fast in Virginia it now makes up 12 percent of Dominion Energy’s total electric demand in the state. Most data center operators say they want to run on renewable energy, and we need them to make good on that. Otherwise, cutting carbon will be harder and more expensive for the rest of us.
But we have to make it possible for them to do so. Right now, only the really big companies, like Microsoft or Facebook, can get Dominion to come to the table on solar deals. The rest don’t have that kind of market power. Neither, of course, do residential customers and small businesses.
The irony is that customers actually had the right to go outside their utility to buy 100% renewable energy until just recently. The Virginia Code gives customers that right so long as their own utility wasn’t offering a 100% renewable energy product. But first Appalachian Power, and then Dominion Energy Virginia, triggered a “kill switch” by offering their own products. The trouble is, these products cost more, use existing facilities instead of adding new renewable energy to the grid, and in Dominion’s case, include the poison pill of dirty biomass energy.
Last year saw the passage of a bill patroned by Del. Jeffrey Bourne, D-Richmond, that would return to customers their right to go outside their utility to buy renewable energy from sellers who qualify as competitive service providers. But there was a catch: an amendment tacked on at the last moment made the bill effective only if passed again in 2021.
Delegate Bourne is bringing the bill back this year, with added language that would require competitive service providers who sell renewable energy in Virginia to offer a discount to low and moderate income consumers. The providers would have to offer 100% renewable energy at a 10% discount off the cost of the utility’s standard residential rate. [Update: the bill is HB2048.]
Solar for public schools and other government buildings
Last year the VCEA and Solar Freedom legislation expanded the ability of customers to finance onsite solar projects by raising the cap on third-party power purchase agreements (PPAs) and making the program available to a wider range of customers in Appalachian Power territory, where it had previously been restricted. The new limits in Dominion territory are 500 MW for “non-jurisdictional” customers like local governments and schools and 500 MW for “jurisdictional” customers like residents and businesses; in Appalachian Power territory the new limit is 40 MW for all customers. This year a bill from Sen. John Edwards, D-Roanoke, clarifies that the program in Appalachian Power territory applies to non-jurisdictional customers as well as jurisdictional customers.
The bill also expands a pilot program for municipal net metering established in 2019 that allowed a local government to use surplus electricity generated by solar panels on one building for another building also owned by the locality. As originally enacted, however, the pilot program did not allow the locality to use PPA financing for its solar panels, a restriction that prevents budget-conscious local governments from using the program. Senator Edwards’ bill will let local governments of both Dominion and APCo use PPAs for solar projects installed under the pilot program. In addition, the previous caps on the municipal net metering pilot program are removed in favor of the general PPA program caps.
[Update: Delegate Hurst introduced HB2049, which just addresses PPAs in APCo territory.]
What RGGI does for the electric sector, the Transportation Climate Initiative (TCI) is supposed to do for transportation. As Sarah Vogelsong reported last week, Virginia is participating in the development of the multistate compact designed to lower carbon emissions from the transportation sector 30 percent by 2032, but it hasn’t yet pledged to join the compact. There may be some details to work out before that happens, including resolving concerns from environmental justice leaders who believe more of the revenues should go to historically underserved communities. So whether we will see a TCI bill this year is anyone’s guess, but I’ve included it here because of the impact it would have if it does show up.
Three other transportation bills are more certain. One, called the Clean Car Standard, simply requires manufacturers of electric vehicles to send some of their vehicles to Virginia dealers, so consumers can actually buy them. (Weirdly, many dealers are opposed.) Del. Lamont Bagby, D-Henrico, is expected to carry the bill; its passage is a priority for a long list of environmental and grassroots groups. [The bill is HB1965.]
A bill from Del. David Reid, D-Loudoun, would have Virginia offer incentives for the purchase of electric vehicles, following recommendations from a 2019 study. I’m told we should also expect at least one bill from Del. Mark Keam, D-Fairfax, and one from Sen. Louise Lucas, D-Portsmouth, to get more electric school buses on the road. [Reid’s bill is HB1979. Keam’s is HB2118.]
Another bill would require a Transit Modernization Study, which would gather information about how the public is currently being served by the existing transit system, including details as specific as which bus stops in which communities have benches and covered facilities. The study will determine which transit systems have infrastructure needs related to safety, reliability and environmental impact, such that when funding is available, the results of the study can ensure that funding is allocated equitably and to be used to make non-car options more appealing. A patron will be announced soon. [The patron is McQuinn, and the bill is HJ542.]
Del. Shelly Simonds, D-Newport News, and Keam are expected to introduce a bill that will expand last year’s Environmental Justice Act to change how the state forms and carries out environmental justice policies within agencies, and to ensure greater public involvement in the permitting process at DEQ. Among other issues, residents often learn too late that Virginia’s Department of Environmental Quality has finalized a permit for a facility that will add to the pollution in their community. The legislation would also require DEQ to consider the cumulative impact of polluting facilities — that is, to take into account whether the community is already overburdened.
Low-income ratepayer protections
The State Corporation Commission has been busy writing implementing regulations for many of the programs established by 2020 legislation. Some of the rules that have come out of the SCC are disappointing enough that I wouldn’t be surprised to see corrective legislation, but probably not until next year. One exception, where legislation is needed right away, concerns the Percentage of Income Payment Program.
The PIPP is an important feature of the Virginia Clean Economy Act that caps utility bills for qualifying low-income customers. The SCC convened a stakeholder group to hammer out the details, but concluded the statute did not provide enough information to go on. An SCC order issued Dec. 23 left open critical elements of the program, and urged the General Assembly to provide additional legislative guidance. It is very late in the year to craft a response and secure a patron, but the administration and advocates are trying.
A bill from Sen. Jennifer McClellan, D-Richmond, adds specificity to the currently vague process that governs small to medium changes in pipeline routes and may impact permit conditions like erosion control measures. Currently it is unclear under what conditions DEQ must re-examine plans it has previously approved. The legislation will bring clarity and explicit direction to all parties involved. [The bill is SB1311.]
At least one and possibly two other bills that would affect pipeline construction are also said to be in the works, but I have no details. [See SB1265, from Senator Deeds.]
Fossil fuel moratorium
Last year’s Virginia Clean Economy Act contains a two-year moratorium on new fossil fuel electric generating plants. Del. Joshua Cole, D-Fredericksburg, is expected to introduce legislation expanding this into a permanent moratorium on all new fossil fuel infrastructure, to take effect in 2022. The bill would exempt retail projects like local gas hook-ups but would otherwise affect not just electric generation, but pipelines, fracking infrastructure, refineries and processing facilities.
Last year saw a number of bills that would affect how our utilities do business. These issues have not gone away, so we should expect to see legislation to strengthen SCC oversight and pare back the ability of utilities to pocket overearnings. [Clean Virginia produced a whole slew of bills. These include HB1835, HB1914, HB1984, HB2049, HB2160, and HB2200.]
Will there be bad bills?
Yes, we should expect to see a few bills from Republicans attempting to roll back parts (or all) of the Virginia Clean Economy Act, or trying to block Virginia’s participation in the Regional Greenhouse Gas Initiative. These aren’t expected to get far in the Democratically-controlled General Assembly. [So far the worst of the bunch is HB2265.]
This post originally appeared in the Virginia Mercury on January 4, 2021. It has been updated to reflect additional bill information.
One expected effect of the Clean Economy Act will be a boom in solar jobs across Virginia. Photo courtesy of NREL.
With Democrats in charge, Virginia passed a suite of bills that establish a sturdy framework for a transition to renewable energy in the electric sector.
At the center of this transformation are the Clean Economy Act, HB1526/SB851, and the Clean Energy and Community Flood Preparedness Act, HB981/SB1027. Other new laws direct further planning, make it easier for customers to install solar, improve the process for siting wind and solar farms, and expand financing options for energy efficiency and renewable energy.
Gov. Ralph Northam has signed some bills already, and has until April 11 to sign the others or send them back to the General Assembly with proposed amendments. Once signed, legislation takes effect on July 1.
I assume the Governor has other things on his mind right now than asking the General Assembly to tinker further with a bill like the Clean Economy Act, though bill opponents may be using the virus pandemic to argue for delay. That would be a self-defeating move; as the economy restarts, Virginia is going to need the infusion of jobs and investment that come with the build-out of clean energy. And one of the strongest arguments in support of our energy transition, after all, is that it will save money for consumers.
So what happens after July 1? How does this all work? Let’s look at the way these major pieces of legislation will change the energy landscape in Virginia.
Virginia joins RGGI, and CO2 emissions start to fall.
Virginia’s Department of Environmental Quality has already written the regulations that call for Virginia power plants to reduce emissions by 30 percent by 2030. The mechanism for achieving this involves Virginia trading with the Regional Greenhouse Gas Initiative, a regional carbon cap and trade market.
The regulations have been on hold as the result of a budget amendment passed last year, when Republicans still ruled the General Assembly. After July 1, DEQ will be able to implement the regulations, with the commonwealth participating in carbon allowance auctions as early as the last quarter of this year or the first quarter of 2021.
In addition to joining RGGI, the Clean Energy and Community Flood Preparedness Act also allows the commonwealth to earn money from the allowance auctions. The Department of Housing and Community Development will spend 50 percent of auction proceeds on “low-income efficiency programs, including programs for eligible housing developments.”
The Department of Conservation and Recreation will get 45 percent of the auction proceeds to fund flood preparedness and climate change planning and mitigation through the Virginia Community Flood Preparedness Fund. The last 5 percent of proceeds will cover administrative costs, including those for administering the auctions.
Energy efficiency savings become mandatory, not just something to throw money at.
Two years ago, the Grid Transformation and Security Act required Dominion and Appalachian Power to propose more than a billion dollars in energy efficiency spending over 10 years, but the law didn’t say the programs had to actually be effective in lowering electricity demand.
This year that changed. For the first time, Virginia will have an energy efficiency resource standard (EERS) requiring Dominion to achieve a total of 5 percent electricity savings by 2025 (using 2019 as the baseline); APCo must achieve a total of 2 percent savings. The SCC is charged with setting new targets after 2025. At least 15 percent of the costs must go to programs benefiting low-income, elderly or disabled individuals, or veterans.
The EERS comes on top of the low-income energy efficiency spending funded by RGGI auctions.
Dominion and Appalachian Power ramp up renewables and energy storage.
The Clean Economy Act requires Dominion to build 16,100 megawatts of onshore wind and solar energy, and APCo to build 600 megawatts. The law also contains one of the strongest energy storage mandates in the country: 2,700 MW for Dominion, 400 MW for Appalachian Power.
Beginning in 2020, Dominion and Appalachian must submit annual plans to the SCC for new wind, solar and storage resources. We’ll have a first look at Dominion’s plans just a month from now: the SCC has told the company to take account of the Clean Economy Act and other new laws when it files its 2020 Integrated Resource Plan on May 1.
The legislation provides a strangely long lead time before the utilities must request approval of specific projects: by the end of 2023 for APCo (the first 200 MW) or 2024 for Dominion (the first 3,000 MW). But the build-out then becomes rapid, and the utilities must issue requests for proposals on at least an annual basis.
In addition to the solar and land-based wind, Dominion now has the green light for up to 3,000 MW of offshore wind from the project it is developing off Virginia Beach, and which it plans to bring online beginning in 2024. All told, the Clean Economy Act proclaims up to 5,200 MW of offshore wind by 2034 to be in the public interest.
Dominion’s plans for new gas plants come to a screeching halt.
Before the 2020 legislative session, Dominion’s Integrated Resource Plan included plans for as many as 14 new gas combustion turbines to be built in pairs beginning in 2022. In December, the company announced plans to build four gas peaking units totaling nearly 1,000 MW, to come online in 2023 and 2024.
But that was then, and this is now. The Clean Economy Act prohibits the SCC from issuing a certificate of convenience and necessity for any carbon-emitting generating plant until at least January 1, 2022, when the secretaries of natural resources and commerce and trade submit a report to the General Assembly “on how to achieve 100 percent carbon-free electric energy generation by 2045 at least cost to ratepayers.”
Even with no further moratorium, Dominion will find it hard to sell the SCC on the need for new gas plants on top of all the renewable energy and energy storage mandated in the Clean Economy Act. Solar and battery storage together do the same job that a gas peaker would have done — but they are required, and the gas peaker is not. Meanwhile, the energy efficiency provisions of the act mean demand should start going down, not up.
Dominion has already signaled that it recognizes the days of new gas plants are largely over. On March 24, Dominion filed a request with the SCC to be excused from considering new fossil fuel and nuclear resources in its upcoming Integrated Resource Plan filing, arguing that “significant build-out of natural gas generation facilities is not currently viable” in light of the new legislation.
Fossil fuel and biomass plants start closing.
By 2024, the Clean Economy Act requires the closure of all Dominion or APCo-owned oil-fueled generating plants in Virginia over 500 MW and all coal units other than Dominion’s Virginia City Hybrid plant in Wise County and the Clover Station that Dominion co-owns with Old Dominion Electric Cooperative.
This mandate is less draconian than it sounds; it forces the closure of just two coal units, both at Dominion’s Chesterfield plant. Other Dominion coal plants in Virginia have already been retired or switched to using gas or biomass, and one additional coal plant in West Virginia lies beyond the reach of the legislation. Oil-fired peaking units at Yorktown and Possum Point were already slated for retirement in 2021 and 2022. APCo owns no coal or biomass plants in Virginia.
Although the exceptions might appear to swallow the rule, the truth is that coal plants are too expensive to survive much longer anyway. One indication of this is a March 24 report Dominion filed with the SCC showing its fuel generation sources for 2019: coal has now fallen to below 8 percent of generation.
By 2028, Dominion’s biomass plants must shut down, another victory for consumers. All other carbon-emitting generating units in Virginia owned by Dominion and APCo must close by 2045, including the Virginia City plant and all the gas plants.
As of 2050, no carbon allowances can be awarded to any generating units that emit carbon dioxide, including those owned by the coops and merchant generators, with an exception for units under 25 MW as well as units bigger than 25 MW (if they are owned by politically well-connected multinational paper companies with highly-paid lobbyists).
Solar on schools and other buildings becomes the new normal.
In December, Fairfax County awarded contracts for the installation of solar on up to 130 county-owned schools and other sites, one of the largest such awards in the nation. Using a financing approach called a third-party power purchase agreement (PPA), the county would get the benefits of solar without having to spend money upfront. The contracts were written to be rideable, meaning other Virginia jurisdictions could piggyback on them to achieve cost savings and lower greenhouse gas emissions.
Fairfax County’s projects, along with others across the state, hit a wall when, on Jan. 7, the SCC announced that the 50 MW program cap for PPAs in Dominion territory had been reached. But with the passage of the Clean Economy Act and Solar Freedom legislation, customers will be able to install up to 1,000 MW worth of solar PPAs in Dominion territory and 40 MW in APCo territory.
Fairfax County schools will soon join their counterparts in at least 10 other jurisdictions across the state that have already installed solar. With the PPA cap no longer a barrier, and several other barriers also removed, local governments will increasingly turn to solar to save money and shrink their carbon footprints.
Virginia agencies start working on decarbonizing the rest of the economy.
In spite of its name, the Clean Economy Act really only tackles the electric sector, with a little spillover into home weatherization. That still leaves three-quarters of the state’s greenhouse gas emissions to be addressed in transportation, buildings, agriculture and industry. Ridding these sectors of greenhouse gas emissions requires different tools and policies.
Other legislation passed this session starts that planning process. SB94(Favola) and HB714 (Reid) establish a policy for the commonwealth to achieve net-zero emissions economy-wide by 2045 (2040 for the electric sector) and require the next Virginia Energy Plan, due in 2022, to identify actions towards achieving the goal. Depending on who the next governor is, we may see little or nothing in the way of new proposals, or we may see proposals for transportation and home electrification, deep building retrofits, net-zero homes and office buildings, carbon sequestration on farm and forest land and innovative solutions for replacing fossil fuels in industrial use.
Collateral effects will drive greenhouse gas emissions even lower.
Proposed new merchant gas plants are likely to go away. With Virginia joining RGGI and all fossil fuel generating plants required to pay for the right to spew carbon pollution, the developers of two huge new merchant gas plants proposed for Charles City County will likely take their projects to some other state, if they pursue them at all.
Neither the 1,600 MW Chickahominy Power Station and the 1,050 C4GT plant a mile away planned to sell power to Virginia utilities; their target is the regional wholesale market, which currently rewards over-building of gas plant capacity even in the absence of demand. The Chickahominy and C4GT developers sought an exemption from RGGI through legislation; the bill passed the Senate but got shot down in the House.
If the C4GT plant goes away, so too should Virginia Natural Gas’ plans for a gas pipeline and compressor stations to supply the plant, the so-called Header Improvement Project.
Other coal plants will close. Although the CEA only requires Dominion to retire two coal units at its Chesterfield Power Station, other coal plants in the state will close by the end of this decade, too. That’s because the economics are so heavily against coal these days that it was just a matter of time before their owners moved to close them.
Adding the cost of carbon allowances under RGGI will speed the process along. That includes the Clover Station, which Dominion owns in partnership with Old Dominion Electric Cooperative (ODEC), and the Virginia City Hybrid Electric plant in Wise County, Dominion’s most expensive coal plant, which should never have been built.
The Atlantic Coast and Mountain Valley Pipelines find themselves in more trouble than ever. If I had a dollar for every time a Dominion or Mountain Valley spokesperson said, “Our customers desperately need this pipeline,” I would not be worried about the stock market right now.
The fact is that no one was ever sure who those customers might be, other than affiliates of the pipeline owners themselves—and that doesn’t exactly answer the question. With Virginia now on a path away from all fossil fuels, neither pipeline has a path to profitability inside Virginia any longer, if they ever had one.
A version of this article originally appeared in the Virginia Mercury on March 31.