Regular readers of this blog know I discourage Virginians from spending their money on so-called green energy offerings from Dominion Energy, Appalachian Power, or REC sellers like Arcadia. They might make you feel better about the electricity you use, but the best products do little to put new solar projects on the grid, and the worst are actually counter-productive.
There is a better way to put solar on the grid and salve your conscience, while also cutting out the middleman. Take the money you were going to pay to Dominion Energy for its Green Power Program (or are already paying, if I didn’t warn you off soon enough), and give it to someone who will put actual solar panels on actual houses in Virginia.
That someone might be Jeff Heie, whose non-profit, GiveSolar, works with low-income home-builder Habitat for Humanity in Rockingham County, Virginia to outfit Habitat homes with rooftop solar. The homeowner gets a 4-kilowatt system that cuts their electricity bill by $40; they commit to sending half that amount back to GiveSolar to help pay for the cost of solar on future Habitat homes.
GiveSolar keeps installation costs down by holding solar “barn-raisings” using volunteers from the community and a solar company, Green Hill Solar, that is willing to install at cost. As a result, a 4-kW system can be installed for $5,000, about half price.
Eventually GiveSolar expects its Solar Seed Fund to be self-funding as owners of Habitat homes send in their $20 per month repayments, but meanwhile the organization needs donations to get the program up and running. Heie hopes to raise $100,000 to put solar on 20 homes.
It sounds like a lot of money, until you consider that Dominion reports it has 30,000 Virginia customers enrolled in its Green Power Program. If all those customers are currently spending an average of just $5 per month on pointless RECs, and if they sent that money to GiveSolar instead, Heie would raise 150% of his goal every month.
Indeed, Heie has plans to take his model to other Habitat for Humanity affiliates around Virginia; he told me he has already heard from five that are interested in installing solar. His approach has also won him the support of other nonprofits, including Solar United Neighbors of Virginia, which is helping to raise $20,000 for the first four projects in Rockingham County and has secured a $10,000 matching grant.
There is a huge need for projects like these. Many low-income Virginia residents spend more than 6 percent of their income on electricity and home heating. Legislators have responded with programs providing funding for low-income energy efficiency programs; capping energy costs for customers who qualify under a percentage-of-income calculation; authorizing Dominion to install solar on some low-income homes (with the utility’s usual profit-margin, and without the barn-raising); and establishing a shared solar program that, if successful, will give some low-income residents the ability to buy electricity from community solar facilities.
But the potential for rooftop solar to lower energy costs and displace fossil fuels is so huge, and these government programs so limited, that there’s still plenty of room for GiveSolar’s inexpensive, hands-on, and self-sustaining approach. The Habitat homeowners who benefit pay the money back over time, creating a virtuous cycle. Donors don’t have to guess whether their money is building solar projects; they can see it happen, and even take part. Neighbors help neighbors, and by doing so, help the planet.
The State Corporation Commission recently finalized regulations for the Multifamily Shared Solar Program, created by the General Assembly to give residents of apartment buildings and condominiums the ability to use solar energy from panels installed on their buildings. But in implementing the program, the SCC also made sure it can never be used.
Dominion Energy is largely to blame here, as it so often is whenever customer-sited solar encounters barriers. The utility proposed to lard up the program with fees, none of them allowed by the law. But it’s the SCC’s agreement with Dominion that’s the problem—and not just for people in apartment buildings who want solar, but for the future of any solar in Virginia that isn’t utility-owned.
2020’s Solar Freedom law set out to make it easier for residents and businesses to install solar onsite. At the heart of the law is net metering, the program that credits solar owners for excess electricity fed back into the grid. Net metering makes solar affordable for customers, so giving more people access to net metering means more private investment dollars, more jobs and a more resilient power grid.
The multifamily shared solar provision is meant to extend net metering-like benefits to residents of apartment buildings and condominiums, who don’t own their building and its roof themselves. The law allows the building owner—a landlord or condo association—to have solar panels installed on the property, and let residents buy the electricity produced. Residents who sign up for solar are to be credited for the solar electricity at the utility’s retail rate, giving the residents a benefit equivalent to net metering. The only added cost the utility is allowed to impose is an administrative fee.
“Administrative fee.” You probably think you know what that term means: a fee to cover the cost of administering the program because, duh, what else could it mean? It would pay for someone to do paperwork, or to tweak the billing software. It couldn’t amount to more than a buck or two for a customer in the program.
You think that way because you are not a Dominion lawyer. With no definition of “administrative fee” in the law, and no dollar limit, Dominion’s lawyers went to work shoveling every conceivable expense they could come up with into the humble little fee until it resembles one of those memes of a kitten the size of Godzilla. Now the administrative fee includes the utility’s transmission and distribution costs; standby generation; balancing costs; “nonbypassable charges”; even “banking, balancing and storing fees related to the utility’s processing and handling of the excess bill credits.”
Then the SCC, faced with this long list of fees that have nothing to do with program administration and aren’t authorized in the law, closed its eyes and signed on.
However, the regulations don’t tell us what all the kitten-stuffing charges add up to. To determine the dollar amounts, the SCC references “parallel rate proceedings,” by which it means regulations being written to implement a different law, also passed in 2020, creating a much larger program under the name of Shared Solar. And right now, in those parallel rate proceedings, Dominion is insisting that those various fees should add up to nearly $75 per customer per month. Mind you, that amount does not include the cost of the electricity from the solar panels. Adding $75 to the price of electricity makes the cost of buying solar energy through the program far more than the cost of buying electricity from Dominion.
Carrying those charges over to the multifamily program instantly kills it. No landlord would install solar expecting residents to pay an extra $75 per month for their electricity. The result makes a mockery of Solar Freedom’s intent for “robust project development and shared solar program access for all customer classes.” Indeed, the law expressly requires the utility to credit customers at the retail rate, which is to be “inclusive of all supply charges, delivery charges, demand charges, fixed charges, and any applicable riders or other charges to the customer.” The whole point is to block the utility from piling on costs, excepting only that little kitten of an administrative fee
At this point the only way to salvage the multifamily program is for the General Assembly to amend the law. With the SCC refusing to understand the meaning of “administrative,” the only thing legislators can do is put a dollar limit on the kitten. Indeed, a dollar seems like the right amount.
That would resurrect the multifamily solar program. As for the shared solar program, where Dominion first came up with the idea of penalizing customers $75 a month for buying solar energy from someone else, the SCC is still working on regulations.
The two programs are based on very different laws. Where Solar Freedom’s multifamily solar provision mimics net metering, and therefore allows the utility to charge only an administrative fee, the shared solar law explicitly contemplates customers paying a “minimum bill” that will include transmission and distribution, standby charges, and so on, in addition to a (presumably for-real) administrative fee. All those bloated charges that Dominion shoehorned into the administrative fee for apartments and condos in clear violation of the legislative mandate, are expressly allowed by the shared solar law.
Except, of course, no one said anything about $75. If customers have to pay Dominion $75 in addition to whatever they have to pay to the solar provider, no one will sign up, and there will not be a program.
The implications are not confined to shared solar laws. Dominion is laying a foundation to set a high floor for customer billings that will be independent of how much electricity residents use, where it comes from, whether their use of renewable energy provides a public benefit, or even whether customer-generated solar reduces other utility costs.
The solar industry and other parties have strenuously objected to Dominion’s calculations. They have also asked the SCC to hold an evidentiary hearing on the amount of the minimum bill to be charged to shared solar customers (and by extension, to multifamily solar customers via kitten-stuffing). The request gives the SCC a chance to weigh benefits as well as costs, and produce an outcome that will ensure a future for shared solar in Virginia.
This column originally appeared in the Virginia Mercury on July 15, 2021.
The Virginia Chapter of the Sierra Club released its 2021 Climate, Energy and Justice Scorecard today, grading state legislators on their votes on key issues during the last General Assembly session. Votes scored include energy policies, climate solutions, voting rights and environmental justice. Sixty-three out of one hundred forty legislators scored an “A.”
The organization’s press release highlights the adoption of the Clean Car Standards as the standout win for the environment. The scorecard also notes progress on other transportation bills, residential building codes, pipelines, plastic waste and energy equity.
A lot of utility reform bills that Sierra Club supported went down to defeat, and votes against those bills pulled down the grades of several Senate Democrats who sit on the Commerce and Labor Committee. Senators Barker, Saslaw, Lewis and Lucas were especially notable for their alignment with utility interests.
More than $4.3 billion in federal stimulus dollars will be flowing to Virginia this year as part of the American Rescue Plan, with cities and counties in line for another $2.7 billion. In a joint statement in May, Governor Northam and Democratic leaders laid out spending priorities that included rehabilitating and upgrading the infrastructure in public schools. The General Assembly plans to meet for a special legislative session in August to allocate the funds. In addition to the federal money, Virginia also finds itself in the happy position of having surplus funds of its own to spend.
As it stands now, the federal funds cannot be used for new school construction, a restriction that upsets school officials in areas with aging schools and no budget to replace them. But whether some money is spent on new schools or not, the General Assembly should not just throw dollars out the door and hope for the best. Virginia has an enormous opportunity to improve student health and learning, correct historic injustices, and meet the demands of the climate crisis, but only if the right standards are in place from the outset.
First, funding should be prioritized to Title 1 schools, which are those with at least 40 percent of children from low-income families. Given Virginia’s history of segregation and racism, a high number of Title 1 schools are in Black communities, while others are in parts of rural Virginia that have been left behind economically. Title 1 schools on average are older and in worse condition than schools in more affluent areas, and the students are more likely to suffer from asthma and other health problems that are exacerbated by mold and poor indoor air quality. Improving indoor air quality and student well-being should be the primary goals for all new or renovated facilities, and it makes sense to start with the students most in need.
Second, while many localities are attracted to the idea of shiny new schools, in most cases it takes less time and costs less to retrofit an old school that is structurally sound than to tear it down and build new. It’s also better for the environment, even if the new school would be built to a “green” standard. Children don’t need new buildings; they need healthy, high-performing buildings. A beautiful remodel of the historic school their parents and grandparents attended could be just what the doctor ordered.
Third, new or renovated schools should be required to meet the highest standards for energy efficiency, including windows, insulation and HVAC. New construction should also be all-electric, as should most renovated buildings. This maximizes taxpayer savings on energy costs over the lifetime of the building, supports the goal of healthy indoor air, and is consistent with Virginia’s commitment to phase out fossil fuels.
Fourth, if the roof will be new or upgraded, it should be made solar-ready, allowing the school to take advantage of third-party power purchase agreements (PPAs) or solar services agreements to install solar panels. Leveraging private capital to pay for the school’s primary energy source stretches construction dollars. These agreements provide financing for solar facilities at no upfront cost and typically save money for schools from the outset. Once the solar panels are paid off, energy bills plummet and savings pile up.
New schools and deep retrofits can even achieve net-zero status affordably, and ought to be required to do so in most cases. Net-zero schools become a source of community pride and offer educational benefits as students learn about energy and how solar panels work. According to a study conducted for Fairfax County Public Schools, the additional upfront cost of building a net-zero-ready school (one that will produce as much energy as it uses once solar panels are added) is only about 5 percent more than standard construction, and the additional cost is recovered through energy savings in under 10 years. Renovating older schools to net-zero costs 11 percent more, but still pays off in 15 years.
Even if we weren’t worried about climate, these standards would make sense for student health and taxpayer savings. Yet today, school districts are not required to build high performance schools, and most don’t. The result is higher operating costs, and in some cases school boards being told that their brand-new schools won’t support solar. Solar companies say it’s probable that solar would be just fine, but this shouldn’t even be an issue. Yet it will continue to be cited as an obstacle if solar-readiness is not made standard.
Our children deserve better. Virginia should seize this year’s historic opportunity to invest in healthy, high-performing schools that are free of fossil fuels and will deliver long-term benefits for taxpayers and the climate.
Four things happened after I wrote last week about Power for Tomorrow’s strange advertising campaign attacking Clean Virginia: the Fredericksburg Freelance-Star ran an op-ed from Power for Tomorrow’s executive director, Gary C. Meltz, opposing deregulation in the electric sector; the Virginia Mercury ran a response to my article from Mr. Meltz; another mailer arrived from Power for Tomorrow, even more unhinged about Clean Virginia and what it calls “their Texas-style policies”; and the Roanoke Times ran an op-ed from Republican Senator David Sutterlein in favor of electricity choice.
Mr. Meltz’ Freelance-Star op-ed argues that regulated monopolies produce lower cost power for consumers than competitive markets. Instead of developing the argument, however, most of the op-ed is devoted to horror stories about Texas and Maryland.
In both states, poor regulation unquestionably led to high bills, in Texas because customers were allowed to choose “low-cost” billing options that charged them astronomical real-time power costs during the winter freeze, and in Maryland because unscrupulous power providers lured low-income customers into overpriced contracts with up-front goodies like gift cards. Power for Tomorrow would like you to think these abuses are the inevitable result of deregulated markets, but it doesn’t follow.
Coming from the opposite direction, Senator Sutterlein’s op-ed argues that Dominion has abused its political power for private gain. He cites legislation like the notorious 2015 “rate freeze” bill that allowed the company to hang on to over-earnings it would otherwise have had to refund to customers. His cure for these abuses is deregulation, allowing customers to choose other electricity providers. But again, it’s not obvious that curbing Dominion’s excessive profits requires deregulation, rather than better regulation by the General Assembly and the SCC.
Personally, I’m agnostic on this issue. I would welcome a data-driven discussion of whether carefully-designed free markets deliver more for the public than a well-regulated monopoly system coupled with a ban on campaign contributions from public utilities.
But if Power for Tomorrow is really interested in consumer protection, it’s just plain weird that its ads are so squarely focused on trying to take down Clean Virginia, an organization whose entire purpose is to secure lower costs for consumers. It’s hard not to suspect that the real point of the attack ads is to protect the high profits of Power for Tomorrow’s utility funders.
According to Mr. Meltz, those over- the-top mailers are indeed getting results for Power for Tomorrow. In his Virginia Mercury letter, Meltz says his organization’s “education campaign” has produced 4,324 letters to elected officials and 1,607 petition signatures. Meltz also says Power for Tomorrow’s funding (and spending) will become a public record when they submit paperwork to the IRS. He doesn’t say when that will be; and he isn’t telling us the answers now.
Dominion Energy held its annual shareholder meeting virtually on May 5. Prior to the meeting, some shareholders submitted questions to the company in hopes of getting better transparency about its thinking regarding a range of pressing questions facing both the company and society at large. In an article that ran in the Virginia Mercury the week before the meeting, I offered a list of questions I’d really like answers to as well.
I wasn’t able to attend the shareholder meeting, but I understand the questions mostly did not get answers at that time, with the exception of a non-sequitur CEO Bob Blue offered up in response to a question about third-party sales of renewable energy (read on!). The company has promised to email responses to the people who submitted questions.
2. In last year’s IRP, Dominion’s preferred scenario would have it keeping its gas plants open indefinitely, even past 2045, when the Virginia Clean Economy Act requires them to be closed. The refusal to plan for full compliance with the law almost certainly impacts the decisions Dominion is making today. Now that Bob Blue has taken over the reins of Dominion from former CEO Tom Farrell, has that changed, and can we expect Dominion to take actions consistent with a full phase-out of fossil fuels before 2045?
3. The energy transition will require construction of tens of thousands of megawatts of solar on hundreds of thousands of acres of land across Virginia. However, community resistance to utility-scale solar farms in Virginia is growing, in large part because they look more like industrial uses than like agricultural uses. As a result, some projects are not being permitted, a costly waste of the company’s time and resources. It’s possible to combine solar with traditional agricultural uses like animal grazing, or to install native plants to support pollinators and provide wildlife habitat, both of which would increase community acceptance. Dominion installs pollinator plantings along some of its transmission line rights-of-way, so the company has experience in this area. Will Dominion begin doing this at its solar projects? If not, what is Dominion doing to “sweeten the pot” for local communities in order to secure permits?
4. Dominion offers residential customers the option of a renewable energy product that includes biomass energy, a source that is not carbon-free and produces more air pollution than coal. The inclusion of biomass also makes the tariff more expensive than it would be without biomass. In contrast to this unattractive option, two years ago Dominion received SCC approval to sell solar to residential customers via a “community solar” product. This would have appealed to far more customers, but Dominion never followed through. Why not?
5. With no solar option available, residents who don’t own a house with a sunny roof are currently shut out of the solar market in Dominion’s Virginia territory. In 2019 and 2020 the General Assembly considered legislation that would have allowed customers to buy renewable energy from third party providers. The bill passed the House each year but failed in a Senate committee due to Dominion’s opposition. If Dominion isn’t interested in selling solar to its customers today, why not let them buy it from others?
Mr. Blue reportedly answered this question at the meeting by exclaiming, “Because deregulated markets don’t work, they fail! Look at Texas!”
I can, with difficulty, draw a line from the question to Blue’s answer, but it is not a straight one. Nor is it an honest one, since the causes of the Texas debacle don’t apply here (beyond a similar overreliance on natural gas).
Here is the answer that is most probably true: “We threw together our so-called renewable energy offering for the sole purpose of blocking out competitors, and the SCC stupidly let us get away with it. If we cared about climate change, we would offer a clean renewable energy product people actually want, but we only care about profit. That requires us to keep our customers locked in, but nothing says we have to make them happy.”
But because hope springs eternal, I’ll also add an answer that I would much prefer Mr. Blue to give: “Under my new leadership, we are taking climate science seriously and will develop the renewable energy options our customers want. My goal is to offer a solar tariff so good that none of our customers will want to look elsewhere, and the question will become moot.”
6. According to Dominion’s 2020 IRP, data centers make up 12 percent of Dominion’s load in Virginia, a number that has been increasing by 20 percent per year. Data center operators say they want renewable energy but have trouble getting it from Dominion. The biggest tech companies negotiate deals for solar, but smaller customers have fewer attractive options. What is Dominion doing to ensure that data centers have access to solar energy at attractive market rates?
Notice how the answers to the previous question apply here. Dominion has a huge opportunity to lead on climate, requiring only that the company actually care.
7. A year ago Dominion canceled the Atlantic Coast Pipeline, losing the almost $3 billion already spent on the project but saving the additional $5 billion-plus it would have cost to complete the project. About the same time, Dominion sold off its entire gas transmission business, indicating it had come to see pipelines as poor investments. This makes sense since the company already gets all the gas it needs through existing pipelines, and going forward, climate policies and the increasing competitiveness of renewable energy and battery storage mean gas use will decline. But then the company contracted for 12.5% of the shipping capacity of the Mountain Valley Pipeline through its subsidiary Public Service Company of North Carolina, at a cost of at least $50 million per year. How can the company justify this investment? Is there an exit clause in the contract, or will shareholders suffer in the event the company is not allowed to pass this cost on to ratepayers?
8. Dominion is currently pursuing relicensing of its two aging nuclear reactors at North Anna, which are already beyond their 40-year design life. According to the 2020 IRP, Dominion plans to run the North Anna reactors, as well as its two reactors in Surry County, at least through 2045, the period covered by the IRP. Nuclear is a carbon-free resource, but so are wind and solar, and nuclear plants in other states are closing because they are no longer economically competitive. What will it cost Dominion to refurbish these nuclear plants to keep them in operation safely so far beyond their design life? And what will it cost the company if, in spite of refurbishing, one or more of the reactors can’t pass a safety inspection, or even suffers a major failure?
9. Millions of customers in Virginia, North Carolina and South Carolina are at risk from hurricanes and other weather events that can knock out power for many days at a time. Today, onsite solar-plus-storage can keep critical facilities operating and allow community centers and schools to serve local residents who have lost power, ensuring they have a place to store medicines that need refrigeration and to charge cellphones, motorized wheelchairs and other devices. If Dominion were to supply the batteries for these facilities, the company could access them for grid storage and services when they are not needed as backup power. In addition to offering a new profit center, it would relieve some of the pressure on line crews who work to restore power after a storm. When will Dominion offer this lifesaving service to its customers?
10. Electric vehicle charging will increase demand for electricity in Virginia, and it also offers an opportunity for the company to deploy vehicle-to-grid technology, making use of the batteries in buses and private vehicles to help balance the grid. Virginia’s General Assembly rejected legislation that would have allowed Dominion to own and control the batteries in school buses in Virginia, but it passed a bill to help local school districts buy electric buses. Will Dominion now support the ability of the school districts to buy electric school buses and own the batteries themselves, and work with them to implement a vehicle-to-grid program?
Virginia’s General Assembly made history in 2020 by becoming the first state in the South to pass a law requiring the full decarbonization of its electric sector. The Virginia Clean Economy Act requires our two largest utilities, Dominion Energy and Appalachian Power, to close all Virginia carbon-emitting power plants by 2045. As of 2050, the state will not issue carbon allowances to any other power plants in the commonwealth, including those owned by electric cooperatives and independent generators.
Less than a year later, President Joe Biden wants to move up the date for a carbon-free electric grid nationwide to 2035. Biden is also targeting a net-zero carbon economy by 2050. On that, Virginia is actually more ambitious, at least on paper, since the Commonwealth Energy Policy sets a goal for a net-zero economy by 2045.
But the electric sector has to come first, mainly because it’s the linchpin for reductions in the rest of the economy. Clean electricity allows for clean transportation when cars, trucks and buses are electrified, and for clean buildings when gas heating and gas appliances are replaced with electric. It’s harder to zero out emissions from industry and agriculture; we do need more time to develop cost-effective solutions for those.
The good news is the U.S. is already halfway to zero, according to a new report from Lawrence Berkeley National Laboratory that compared CO2 emissions from the power sector today to projections 15 years ago. But a lot of that achievement came from replacing coal with fracked gas, with energy efficiency and renewables making up the rest. From here on in, efficiency and carbon-free sources have to carry the whole load.
What would it take for Virginia to achieve a carbon-free grid just 14 years from now, half the time allowed by the VCEA? Questions fall roughly into three categories: cost, feasibility and reliability. All three will be easier to overcome if the whole country is working together towards a single goal, especially if the federal government does more than just point the way. But there’s a strong case for optimism regardless.
Cost is the biggest concern in the minds of most people, but it shouldn’t be. It’s been three years since solar became the cheapest form of new power generation in Virginia, and prices continue to drop. The International Energy Administration declared last year that falling prices mean solar is “becoming the new king of the world’s electricity markets,” poised to become the primary source of new electricity generation worldwide by 2030. (Did you read about the solar project in Saudi Arabia that will deliver solar at barely over a penny per kilowatt-hour?)
Wind has been the cheapest form of generation for years in many states, and its price is still falling. Of course, for Virginia the big wind opportunity lies offshore. Offshore wind technology is still in its infancy in the U.S., making it relatively expensive, but its price trajectory is also steeply downward. Once the industry scales up and American manufacturing, supply chain and workforce replace European imports, prices will fall further — though it may never match solar on price.
The only expensive part of an all-renewables scenario right now is the challenge of keeping supply in sync with demand. But as with wind and solar, the cost of battery storage technologies has been falling.
Meanwhile, what happens to our existing fossil fuel plants? Closing coal plants was already the right move for consumers. Virginia’s few remaining coal plants don’t run much and are money sinks. Dominion’s newest coal plant, for example, has a 10-year net present value of negative $472 million. Shuttering coal plants will save money today as well as speeding us along the path to zero carbon.
By contrast, we have a lot of gas plants that currently make money, so our utilities are even more loath to plan for their demise. Dominion spent most of the last decade building out a huge fleet of natural gas combined-cycle plants on the theory that fracking would make gas a cheap fuel forever. The theory ignored the growing competitiveness of wind and solar that was evident even early on in the building spree. This isn’t just hindsight talking; in 2013 I wrote that Dominion’s newly-approved 1,358-megawatt Brunswick County Power Station was destined to become a giant concrete paperweight as clean energy displaced fossil fuels. Yet a few years later Dominion added to its paperweight collection with the even larger Greensville County Power Station.
In both cases the equally short-sighted State Corporation Commission approved these investments, so bad luck, ratepayers: we are stuck paying off the capital costs whether the plants run or not. That does not mean we have to operate them; projections show that by 2030 it will be cheaper to turn gas plants into solar panel factories while we run our grid on wind and sunlight.
A rapid transition to a carbon-free grid poses logistical challenges. We need enough suitable land to hold all that solar. (Agrivoltaics will help.) The federal government needs to identify new areas of the ocean for offshore wind turbines. We also need solutions to seasonal fluctuations in demand. We need new transmission lines. We need enough lithium for batteries, steel for turbines, silicon for solar and a trained workforce, stat!
Federal coordination will be key to solving many of these challenges, but we can also reduce land acquisition and transmission barriers if we don’t insist on replacing large, utility-owned fossil fuel power plants only with large, utility-owned wind and solar farms. Virginians will benefit far more if we prioritize solar and storage on rooftops, parking lots, brownfields, closed landfills and rights-of-way. That’s not just about space, but about assigning value to benefits like storm resilience, emergency preparedness and local jobs.
For the same reason, we should insist on building homes better. Houses that are well insulated need less heat in the winter and air conditioning in the summer, reducing the problem of seasonal swings in energy demand. (They are also healthier and more comfortable.)
A rapid transition to a carbon-free grid is a climate imperative, but it’s still a tall order for a utility or a regulator whose job it is to keep the lights on. Batteries, energy efficiency and demand response programs can do only so much. Planners will also have to factor in the likelihood that by 2035, many vehicles will be electric, and electricity will replace gas appliances in new buildings and retrofits. Balancing supply and demand 24/7 with just today’s tools would not be an easy job.
And, fortunately, they will not be working with today’s tools. The pace of change in energy and computer technology over the past 14 years will be matched or exceeded by the pace of the next 14. Green hydrogen gets all the press, but hundreds of other innovations will also combine to make a zero-carbon energy supply feasible and reliable — and, not incidentally, far better for people and the planet than what we have now.
In fact, we are witnessing the launch of a new era in energy, what Tony Seba’s RethinkX Project calls “the fastest, deepest, most profound disruption of the energy sector in over a century,” driven by low-cost solar, wind and battery storage (SWB).
The Project’s report Rethinking Energy 2020-2030 puts it this way: “The SWB disruption of energy will closely parallel the digital disruption of information technology. Just as computers and the Internet slashed the marginal cost of information and opened the door to hundreds of new business models that collectively have had a transformative impact upon the global economy, so too will SWB slash the marginal cost of electricity and create a plethora of opportunities for innovation and entrepreneurship. What happened in the world of bits is now poised to happen in the world of electrons.”
So, a carbon-free grid by 2035? Bring it on, President Biden. Virginia is ready.
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.
It is never fun to see our fellow Americans suffer, whether it’s from pandemic diseases or weather disasters. Our hearts go out to the residents of Texas who suffered without electricity and heat for days, some of them also without safe drinking water, and a few of them even dying from exposure, fires or carbon monoxide poisoning as they tried to keep warm.
On the other hand, picking apart the preposterous excuses from Texas leaders seeking to avoid responsibility for the fully preventable power outages and the misery that accompanied them—well, that’s another matter. And it’s made so much easier by those leaders’ insistence on trying to score political points instead of admitting that at least some of the blame rests on their shoulders.
Take Governor Greg Abbott, who went on Fox News to blame liberals for the debacle. Ignoring his state’s failure to plan for climate change and invest in power grid winterization, he told talk show host Sean Hannity the problem was actually the portion of the state’s electricity supply that comes from wind and solar. “This shows how the Green New Deal would be a deadly deal for the United States of America. Our wind and our solar got shut down, and they were collectively more than 10 percent of our power grid, and that thrust Texas into a situation where it was lacking power on a statewide basis.”
No one in Abbott’s echo chamber pointed out that a) solar actually did just fine, b) states like Iowa and South Dakota, with much worse winter weather, rely much more heavily on wind power than Texas does, yet there are no stories about their turbines seizing up and their grids collapsing, and c) if a shortage of ten percent shuts your grid down, you have way more problems than you can blame on the Green New Deal. In fact, the biggest factor in the grid failure was some 28,000 megawatts of coal, nuclear and gas power that went offline, as the Electric Reliability Council of Texas reported.
And then there was Ted Cruz. I’m not referring to the farce of his skipping out on the post-storm misery to fly to Cancun, then pinning it on his daughters before high-tailing it home to make a show of handing out relief supplies. That incident just reminds us that no matter how deep our divisions, Americans can always find unity in our collective loathing of Ted Cruz.
No, in this case I want to point to a pair of tweets from Cruz, almost exactly two years apart. February 13, 2019: “Success of TX energy is no accident: it was built over many years on principles of free enterprise & low regulation w more jobs & opportunities as the constant goal. We work to export this recipe for success t more & more states so that all Americans enjoy the same prosperity.”
And here he is on February 22 of this year, reacting to news that free enterprise and low regulation had produced $5,000 electric bills for some customers in the aftermath of the storm: “This is WRONG. No power company should get a windfall because of a natural disaster, and Texans shouldn’t get hammered by ridiculous rate increases for last week’s energy debacle. State and local regulators should act swiftly to prevent this injustice.”
Luckily for us, lots of other people have been more interested in understanding what happened and preventing it from happening again than in trying to duck blame and score political points. The real story, it turns out, is simple at its core: “low regulation” meant the Texas grid and power providers did not adequately prepare for winter storms that climate change is making worse than they used to be. And because the Texas grid is cut off from the rest of the country (a feature, not a bug, to cowboy politicians), when the crisis hit there was no way to import power from other states that were better prepared.
Let’s take a closer look at what went wrong, how it could have been avoided, and what lessons it offers for the rest of us.
The setup: an isolated grid with “free enterprise and low regulation”
The grid that serves Texas is uniquely isolated, which also gives it a unique vulnerability. The Electric Reliability Council of Texas serves most of the state, and no other states. Texans are proud of that (or were before this month), because it means there is no role for federal regulators like FERC. It also means that when power ran out, ERCOT couldn’t just import it from parts of the country with a surplus. Of course, states near Texas also suffered in the storm, so there may not have been a lot of surplus power to be had. It is worth noting, though, that the border city of El Paso fared better than the rest of Texas because it is not part of ERCOT but part of a larger regional transmission organization (RTO) serving several southwestern states.
Another feature of ERCOT is the low regulation that Ted Cruz celebrated. ERCOT keeps it simple for power generators. They get paid for the power they produce. Other RTOs have what is called a “capacity market” to reward generating plants just for being available to run when called on, and they penalize participants who fail to perform. ERCOT does neither. With a reserve capacity of only about ten percent and no way to guarantee generators would be available when needed, ERCOT had set itself up for trouble.
If generators had faced penalties for nonperformance, they could have—and almost certainly would have—spent the money needed to prepare their facilities for colder-than-usual weather. Winterization is a normal cost of doing business for a power provider in a northern state, but Texas winters are usually warm enough not to require it. If you won’t be penalized for not winterizing, you have little incentive to do it when you’re competing on cost with other power sellers.
ERCOT was vulnerable for another reason. Demand for power in Texas is usually higher in summer, with air conditioners running, than it is in the state’s typically mild winters, so ERCOT plans for that. But in cold weather, gas-fired power plants face competition for fuel, when some of the gas supply goes for heating buildings. This month, when gas wells and pipelines also froze up, there simply wasn’t enough fuel to go around. ERCOT’s overreliance on gas proved to be a liability much greater than the smaller amount of renewable energy on the grid.
The last important feature of the Texas system is retail competition. Electricity customers in ERCOT can choose among dozens of power providers. Some providers keep rates constant; others offer a variable rate that just passes through the wholesale cost of power, with only a small monthly fee added. When wholesale rates are low, the consumer saves money on a plan like that. But regulators didn’t insist on any safeguard to protect customers against the possibility of wholesale prices spiking to astronomical levels due to a power shortage. That’s exactly what happened in the aftermath of this month’s storm.
That $5,000 power bill Cruz criticized? That’s unfettered free-market supply-and-demand at work. It’s a feature, not a bug. If you don’t like that feature, Senator Cruz, maybe low regulation isn’t for you. Helping consumers avoid power bills in the thousands of dollars would have been easy, but it would have required a little bit of regulation.
The storm; or how nature takes no interest in political posturing
Well before this storm hit, ERCOT was fully aware of the vulnerabilities of its particular brand of laissez-faire operations. Ten years ago, in the wake of another winter storm, Texas operators were warned of the dire consequences that could ensue if they did not require generators to winterize operations.
But, they didn’t, and this chart from the U.S. Energy Information Agency shows what happened to generation as a result. Before the storm, you can see natural gas and coal plants running less when high winds produce plenty of cheaper wind power, then cranking up when wind speeds drop. As the week goes on, power supply from natural gas plants increases to meet higher demand from colder weather, while other generation holds steady. Then suddenly you see every category of energy resource except solar drop in output, as critical components of some generating units freeze up and the units fall offline, while fuel supplies also dwindle. Some wind generation falls off, but so does coal, nuclear, and—especially—natural gas, just as they are all needed most.
The storm was, to be sure, one of the worst winter storms ERCOT had ever faced. And the situation could have been worse. If operators had not proactively cut power to customers, demand in excess of supply would have damaged grid infrastructure so severely that large swaths of the population would have been without power for weeks or months. (Let us now praise faceless bureaucrats, for they just saved Texas.)
So it was bad, and could have been worse. Why didn’t Texas prepare for it, even after being warned? I have one theory. People who cling to simplistic notions that global warming “should” produce only warmer winters have a tiresome habit of pointing to cold weather as evidence that climate change isn’t real, but I think they also take secret comfort in the idea that if the planet is warming, extreme cold weather events will become less common, with less need to prepare for them. If your political philosophy requires you to see regulation as an evil, your own willful misunderstanding of climate science might provide all the excuse you’re looking for not to act.
Could it happen here?
Bad weather can happen anywhere, and it’s always safer not to gloat. That said, several features distinguish ERCOT from PJM, and Texas from Virginia. As noted before, PJM has a capacity market that rewards even otherwise-uneconomic generators for hanging around being ready to produce at short notice, and those generators are penalized if they don’t perform when needed. As a result, we are much less likely to see the kind of power shortage and price spikes that Texans experienced. (Not that PJM is without flaws. Its capacity market unnecessarily discriminates against wind and solar, its policies are making the integration of renewable energy harder than it ought to be, and it has incentivized such an oversupply of gas generation that consumers are paying higher prices for the inefficiency. But that’s another story.)
Virginia also features monopoly power companies rather than retail choice. There is plenty of disagreement as to whether that is good or bad for consumers. The monopoly model requires strong regulation to ensure captive consumers aren’t being overcharged, and are being offered the products they want—like renewable energy. Critics (and I’m among them) have argued that Virginia isn’t doing enough on this front.
On the other hand, the retail choice model depends on consumers being well informed, and also requires regulators to scrutinize the tactics of power providers and punish the ones who take advantage of unwary consumers. So, ironically, a deregulated electricity market requires strong regulation to protect participants. Strong regulation could have prevented Texas providers from offering residential customers a tariff based on wholesale prices, with risks that residents couldn’t easily understand or mitigate against.
Texas was also more vulnerable to disruption because power generators were not required to winterize their plants or penalized for not doing so. Sure, a winterized plant would have turned a hefty profit in this storm, but in a more average winter, the extra cost would not have paid off. The option not to winterize isn’t a good one in PJM. As a result, when the power does go out in PJM, the problem is inevitably in the delivery infrastructure, not the generation.
Virginia’s system of vertically-integrated utilities means our utilities own their electric generation as well as the power lines. They can charge customers for building and maintaining those generating facilities, so they have less incentive to skimp on weatherization. That increases the reliability of those facilities. But even if several power plants in Virginia were to fail all at once, we could still draw power from more than 1,200 facilities across PJM, or even from the larger Eastern Interconnection. By design, Texas does not have that option.
One distinction between ERCOT and PJM that doesn’t make a difference, in spite of Governor Abbott’s claims, is the greater percentage of wind in ERCOT than in PJM. Wind actually makes up 23% of generation in ERCOT, more than perhaps Abbott wanted to admit, given that most of it came online under his watch. In PJM, wind makes up only about 3%. If Abbott were correct that wind turbines can’t handle winter weather, that would be a reason for more northern grids like PJM to avoid wind. But of course, Abbott’s claim is political wishful thinking divorced from reality. Wind turbines operate just fine in the much colder winters of Iowa, the Dakotas, Canada—heck, even in the frigid and stormy North Sea, where offshore wind ramps up production in winter.
As for solar, you could see from the chart that it was not affected by the cold weather. Texas residents who were lucky enough to have both rooftop solar and batteries spent the aftermath of the storm bragging about never losing power. That’s a compelling argument not just for more solar in the generation mix, but for more distributed generation in particular, including solar microgrids and resilience hubs to help communities weather future storms.
In the wake of this month’s storm, the independent Electric Power Research Institute (EPRI) analyzed what went wrong and issued recommendations for Texas grid operators. Among the unsurprising recommendations: ERCOT should do better planning for resource adequacy and increase its interconnections to other power systems so it does not have to go it alone.
I would add one more recommendation: keep your ideology out of it. You can’t deliver reliable power that is also reasonably priced without robust regulation. If leaders refuse to learn from this winter, they’ll simply set up Mother Nature for another opportunity to mess with Texas.
A version of this article appeared in the Virginia Mercury on February 25, 2021.
Don’t let the long list fool you. While the majority of the bills we’ve been following have either passed both chambers or seem well on their way to doing so, some of the most impactful bills are now dead, and others have been amended into meekness.
The entire category of Utility Reform got emptied out into the dumpster in Senate Commerce and Labor, which also killed Jeff Bourne’s “right to shop” bill that would have opened up the renewable energy market. They are all now found under “Dead and Buried” at the end.
Kaye Kory’s building code bill that would have ensured the Virginia residential code meet the minimum requirements of the national energy efficiency model code has been amended to require that the national code merely be considered. An additional sentence saying essentially “we really mean it” only partially redeems the amendment.
On the other hand, the Clean Cars Standard is alive and well, showing that ambitious bills can succeed when a large enough coalition pushes hard enough (and when Dominion will benefit from higher electricity sales). Even a few Republicans voiced support, though they would not go on record to vote for it. But the EV rebate bill may be in some peril, and it was supposed to be the carrot that brought auto dealers on board.
As for school buses, stay tuned.
Renewable energy and storage
HB1925 (Kilgore) establishes, but does not fund, the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program. Passed both the House and Senate unanimously and now goes to the Governor.
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. HB2215 was incorporated into HB1994, which passed the House 93-6 (nay votes from Brewer, Campbell, R.R., Gilbert, LaRock, Poindexter, and Wright) and the Senate 39-0. The bills now go to the Governor.
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. This is a priority bill for renewable energy industry associations. HB2006 passed the House 88-11-1 and Senate 37-1-1 (Amanda Chase was the nay vote). SB1201 passed the Senate 38-0-1 (must have slipped by Chase) and House 91-6-1 (nay votes from Batten, Cole, M.L., Freitas, LaRock, Webert, and Wright. The bills now go to the Governor.
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). Passed the House 99-0 and Senate 39-0. Senate companion billSB1420 (Edwards) also passed Senate and House unanimously, so this is another done deal. It now goes to the Governor.
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. Passed the House 89-9, reported from Senate Ag. but then referred to Finance for reasons no one can understand.If it doesn’t get hung up there it is likely to pass the full Senate.
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. (Why doesn’t the bill just go ahead and include that authorization? Don’t ask me.) This is another renewable energy industry bill. HB2201 passed the House 71-29 and Senate 34-3-1 (Chase, DeSteph and Reeves were the only holdouts). SB1207passed the Senate 37-0 and is on its way to the House floor. Another done deal.
HB2269 (Heretick) provides for increases in the revenue share localities can require for solar projects based on changes in the Consumer Price Index. Passed the House 91-8, passed the Senate 37-1-1 (the sole nay vote came from, yes, Amanda Chase). It now goes to the Governor.
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. Passed the Senate 39-0, still bouncing around House committees but with no opposition.
SB1295 (DeSteph) requires utilities to use Virginia-made or US-made products in constructing renewable energy and storage facilities “if available.” After much criticism it was amended to read that the products must be “reasonably available and competitively priced,” after which the now-happily-pointless bill passed the Senate 37-0-2 and has gone on to be reported from House Commerce and Labor unanimously.
Energy efficiency and buildings
HB1811 (Helmer) adds a preference for energy efficient products in public procurement. Passed the House 55-44 along party lines. Passed the Senate 25-14 but with amendments limiting it to state agencies and softening the language—because, you know, why force localities to save taxpayer money if they would rather waste it? The House then rejected the amendments; the Senate has requested the bill be sent to a conference committee.
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 61-38; passed Senate 26-12-1. It now goes to the Governor.
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. Passed the House 53-45; reported from Senate General Laws with an amendment delaying its effectiveness to 2023 for localities with populations under 100,000; referred to Finance.
HB2227 (Kory) and SB1224 (Boysko) 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. It turns out the homebuilders who oppose higher efficiency standards have more clout with committee chairs David Bulova in the House and George Barker in the Senate than consumer and environmental advocates do. The Senate bill never even got a hearing in committee. After much negotiation, the amended House bill now merely requires the Housing Board to “consider” adopting amendments “at least as stringent as those contained” in the latest IECC, and must “assess the public health, safety, and welfare benefits” involved, “including potential energy savings and air quality benefits over time compared to the cost of initial construction.” Republicans still wouldn’t vote for it, so it passed the House only on a party-line vote of 55-45. In the Senate, it passed General Laws 8-4 but was then sucked over to Finance on the pretense that it would cost money. Once again, this is either incompetence on someone’s part or a deliberate effort to gum up the process of legislating. I’ll just note that a great many bills incorrectly hauled into Finance are ones opposed by that committee’s senior Republican, Tommy Norment.
HB1919 (Kory) authorizes a locality to establish a green bank to finance clean energy investments. Fairfax County has requested this authority. Passed the House 55-43 on another party-line vote. Passed the Senate with a substitute 25-13. The substitute does not appear to me to hurt the bill, but the House will have to agree to it, or go to conference.
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 3 years, leaving out other plant owners like ODEC. With further amendments, both bills have passed both chambers unanimously and will go to the Governor.
HB1899 (Hudson) and SB1252 (McPike) sunset the coal tax credits, because it is absolutely crazy that Virginia continues to subsidize coal mining while we’ve committed to close coal plants. Amended to give the coal companies one more year of subsidies before the program ends January 1, 2022. HB1899 passed the House 54-45 and the Senate 21-17 (Republican Hanger voting with Democrats); SB1252 passed the Senate 22-17 and House 55-45.It now goes to the Governor.
SB1265 (Deeds) makes it easier for DEQ to inspect and issue stop-work orders during gas pipeline construction. An amendment slightly weakened the bill before it passed the Senate 38-0. It has reported from House Ag. and should now be before the full House.
SB1311 (McClellan) originally required 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. The bill has been amended significantly and the stop-work language removed. It does require pipeline applicants to submit detailed erosion and sediment control plans, and expands the applicability of the requirement to areas with slopes with a grade above 10 percent, a number that is currently 15 percent. Passed the Senate 20-17. In House subcommittee it picked up a new substitute and that was reported out of committee. If that passes the full House it will need to go back to the Senate. I’m told negotiations on the language continue.
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. This turned out to be harder than one would have thought for a bill that was just supposed to help implement a section of a previous year’s bill.With some amendments it passed the House 54-46, the usual party-line split except that Democrat Sam Rasoul joined the Rs. It passed the Senate 20-19 but only with a substitute saying it won’t take effect unless passed again next year. That’s the equivalent of voting it down, except that in this case it gives the bill a chance to go to a conference committee to work out the remaining concerns.
SB1282 (Morrissey) directs DEQ to conduct a statewide greenhouse gas inventory, to be updated and published every four years. Passed the Senate 22-16. (It picked up one Republican vote: Jill Vogel.) It has reported from House Ag. 13-8 on a party-line vote and now goes to the floor.
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. Amendments make the bill slightly more friendly to biomass and natural gas than the introduced bill had been, but it remains an improvement on existing law. Senator Norment, who opposed last year’s bill as well as this year’s, tried to run out the clock on it by getting it referred to Finance after it was reported from Commerce and Labor, but Finance promptly reported it. It passed the Senate 21-18 (party line) and the House 55-45.
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. Passed the Senate 38-0 and the House 79-20 with a couple of very minor amendments that the Senate agreed to, so this now goes to the Governor.
The reform category was well-populated at halftime, but that was then, and this is two weeks later. In the interim, Senate Commerce and Labor met—first the subcommittee, whose five members expressed great concern about harm to Dominion Energy’s profits and none about ratepayers getting fleeced, then the full committee, which wasn’t much better. All the bills in this committee can now be found in our graveyard section at the end.
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. It picked up minor amendments along the way and easily passed the House and Senate with no dissenting votes (until Delegate Cole voted nay at the end, possibly a recording error). The bill goes now to the Governor.
HB1965 (Bagby) is the Clean Car Standard bill, which would require manufacturers to deliver more electric vehicles to Virginia dealers beginning in 2025. To get agreement from the dealers, this bill was “packaged” with HB1979 (rebates for EVs), which dealers wanted to ensure the customers would be there. Passed the House 55-44. Senator Newman made a last-ditch effort to kill the bill through amendments on the Senate floor, which were rejected. Passed the Senate 21-15, with a few Republicans not voting.
HB1979 (Reid) creates a rebate program for new and used electric vehicles. Passed the House 55-45. Senate Finance amended it to require it to be reenacted next year, and that substitute bill passed the Senate 21-17. The different House and Senate versions will go to conference, where advocates hope to get the reenactment clause stricken; if not, the bill is dead.
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 seems to be an empty fund.Passed the House 55-44-1. In the Senate, the bill reported from Finance but ran into trouble on the floor. Reportedly Senator Lucas did away with the bill by “rolling it into” her SB1380 in spite of their dissimilarities. This is not yet reflected in LIS, and the floor vote is being delayed from day to day.
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. Passed the House 76-23, passed the Senate 38-1 (yes, that was Chase dissenting again). Now goes to the Governor.
HJ542 (McQuinn) requests a statewide study of transit equity and modernization. Passed the House 77-19. Senate Finance amended it to change who is to do the study, then agreed to it by a voice vote.
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. Passed the Senate 22-15, passed the House 57-42; now off to the Governor.
SB1380 (Lucas) authorizes electric utilities to partner with school districts on electric school buses. The utility (read: Dominion) can own the batteries and the charging infrastructure, earning its usual rate of return from ratepayers, and use the batteries for grid services and peak shaving. Passed the Senate 33-4. The House amended the bill to make it better but then voted it down anyway by a vote of 34-53. After that, the House agreed to reconsider the vote and pass it by for the day. . . and the next day, too. Lucas seems to expect to change minds by her power move to eliminate competition from the Keam bill.
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. Passed the Senate 39-0 and the House 100-0. Goes next to Governor.
DEAD AND BURIED
In numerical order, House bills first
HB1914 (Helmer) changes “shall” to “may” in a number of places, giving the SCC discretion over when to count utility costs against revenues. HB1835 (Subramanyam) was incorporated into this bill. Passed the House 60-39. I had hopes this one might survive in the Senate due to its elegant simplicity, but no. Killed in C&L 8-7, with Saslaw, Lucas, Barker, Lewis and Mason joining Republicans Norment, Newman and Obenshain to PBI (pass by indefinitely). The 7 senators who voted not to kill were Spruill, Edwards, Deeds, Marsden, Ebbin, Surovell and Bell.
HB1934 (Simon) requires local approval for construction of any gas pipeline over 12 inches in diameter in a residential subdivision. Killed in committee.
HB1937 (Rasoul) was this year’s version of the Green New Deal Act. But like last year, it never even got a hearing, in part because it rocked too many boats, and in part because it was a lousy bill.
HB1984 (Hudson) gives the SCC added discretion to determine a utility’s fair rate of return and to order rate increases or decreases accordingly. Passed the House 64-35, killed in Senate C&L 11-4. Only Democrats Edwards, Deeds, Ebbin and Bell voted against the motion to PBI.
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. Passed the House 67-32, killed in Senate Commerce and Labor due to the obsequiousness of the committee members.
HB2049 (Bourne) would prevent utilities from using overearnings for new projects instead of issuing refunds. Passed the House 56-44, killed in Senate Commerce and Labor 11-4. Senator Spruill, ordinarily a secure vote for Dominion, joined Deeds, Ebbin and Bell in dissent.
HB2067 (Webert) lowers from 150 MW to 50 MW the maximum size of a solar facility that can use the Permit by Rule process. Tabled in House committee.
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. Passed the House 62-38, killed in Senate Commerce and Labor 12-3.
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. HB2057 (Ware) was incorporated into this bill, and it passed the House 63-37. Killed in Senate Commerce and Labor. This time Republican Steve Newman joined Deeds, Ebbin and Bell in dissent, though Newman had voted to kill the similar SB1292.
HB2265 (Freitas) 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; however it also would declare that planning and development of new nuclear generation is in the public interest. Killed in subcommittee.
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. Killed in subcommittee.
HB2292 (Cole) was labeled the fossil fuel moratorium bill but included many other parts of the Green New Deal as well. It suffered the same fate, and for the same reasons.
SB1292 (McClellan) was the only utility reform bill to begin in the Senate instead of the friendlier House. It would require 100% of utility overearnings to be credited to customers’ bills, instead of 70%, as is the case today. Killed in Senate Commerce and Labor 11-3, with Deeds, Mason and Bell the dissenters.
SB1463 (Cosgrove) would create a loophole to let HOAs to ban solar once again. It turned out even the HOA lobby didn’t like the bill. It was stricken by the patron in committee.