A first look at the Clean Energy Act and the Green New Deal

Three young women holding climate action signs

Students joined more than 200 other grassroots activists for a lobby day at the General Assembly on Tuesday. Photo Ivy Main

Climate and energy activists have been pinning their hopes on the 2020 legislative session to produce a framework for transitioning our economy to 100 percent carbon-free energy.

After years of talking big but delivering little in the way of carbon reductions and clean energy, the General Assembly is under pressure to finally deliver.

Much of the initial focus and discussion so far has been on two very different omnibus bills, the Clean Economy Act and the Green New Deal Act. But dozens of other bills also aim to reform Virginia energy law in ways both big (breaking up the monopolies) and small (clarifying HOAs’ abilities to regulate solar panels) — and everything in between (removing barriers to customer solar, taxing fossil fuel investments).

In the coming days I’ll post summaries of many of these bills. But for now, let’s take a look at the two omnibus bills that have energized so many activists. Both have their strong points; both would benefit from strengthening amendments. And both are guaranteed to be better than anything Dominion will put forward in the coming days, if rumors of such a bill prove correct.

The Clean Economy Act

HB1526 (Del. Rip Sullivan, D-Fairfax) and SB851(Sen. Jennifer McClellan, D-Richmond) are the Clean Economy Act put forward by a coalition of renewable energy industry and environmental groups. This is a massive bill, running to 37 pages and covering diverse aspects of the electric sector, and yet it is also surprisingly restrained in its ambitions.

The CEA’s goal is a zero-carbon electricity supply by 2050, a goal that allows nuclear energy to keep its role in the mix, and also one that, after an initial kick, requires a ramp-up of renewable energy of only 3% per year from 2021 to 2050. Utilities also must achieve energy efficiency savings that start slow and creep upwards to a top rate of 2% per year in 2027; utilities generally can’t build new generation unless they first meet the efficiency targets.

The very modest pace of the required investments in renewable energy and efficiency leaves no room for utilities to argue that the targets cannot be met or will cause economic pain. On the contrary, critics can justly complain they are too easy. On the other hand, the bill has lots of elements utilities still won’t like, including an energy storage mandate, community solar, net metering reforms and a limited moratorium on new fossil fuel generation.

The bill includes provisions for joining the Regional Greenhouse Gas Initiative to reduce statewide electric sector carbon emissions 30% by 2030, in accordance with DEQ’s regulations finalized last year. The state would auction carbon allowances, with 50% of proceeds funding energy efficiency programs for low-income, disability, veteran and elderly residents; 16% going to energy efficiency measures on state and local property; 30% for coastal resilience; and 4% for administrative costs.

The renewable portfolio standard provisions look more complicated than they are, but even so, understanding what’s going on is not a job for the meek. First off, note that the RPS only applies to “total electric energy,” which does not mean, you know, total electric energy. The code defines the term to mean total electric energy minus electricity produced by nuclear power. Since nuclear provides about 30% of Virginia’s electric generation, that means the RPS percentages look 30% bigger than they really are. (This is a neat trick Dominion devised years ago to make our voluntary RPS sound more meaningful. People fell for it, which is why our voluntary RPS is widely described as targeting 15% renewable energy by 2025 instead of about 10%.)

Thus, the nominal RPS goal of 41% by 2030 does not mean that Virginia would get 41% of its electricity from renewable energy by 2030. The true percentage would be 41% of 70%, or — oh Lord, now I have to do math — somewhat under 30%.

Not incidentally, 30% by 2030 is the renewable energy target Governor Ralph Northam set in his Executive Order 43 back in September, and that squares pretty well with Dominion’s building plans. (The CEA, however, strives mightily to ensure that less expensive independent developers get a good share of the business.)

The drafters of the Clean Economy Act also chose not to change the code’s existing kitchen-sink definition of renewable energy, foregoing an opportunity to fix the mischief Dominion has got up to lately with what I call its Green Power for Suckers program and the Great Thermal REC Boondoggle. Instead, the RPS provisions exclude biomass and sometimes waste, then limit which specific technologies qualify for each tier of the RPS. The result is that even without changing the definition of renewable energy, biomass and thermal RECs have no place in the CEA mix, municipal waste incineration is limited to existing facilities and old hydro dams will cease to qualify when their contracts run out.

The system of tiers also allows the CEA to prioritize among technologies and project sizes.

  1. Offshore wind has its own tier beginning in 2027, as well as detailed instructions for how it will be developed.
  2. Tier II covers distributed (under 3 MW) Virginia-based wind, solar and anaerobic digestion (presumably meaning biogas from things like pig manure, reflecting Dominion’s deal with Smithfield Foods). This tier is divided into sub-tiers that ensure smaller projects are represented, and 10% of each tier is supposed to be sourced from projects serving low-to-moderate income persons. This tier begins at 3% of the RPS total in 2021, increasing to 9% in 2028, and then bouncing around strangely between 7 and 9% thereafter.
  3. Tier III can be met with Virginia wind, solar, wave, tidal, geothermal or energy from waste (poorly defined, but with a limit on the number of eligible RECs that, I’m told, just covers the output of existing waste incinerators in Virginia), or landfill gas (also from existing landfills and with a limit). These projects don’t have a size limit. Utilities are instructed to issue annual requests for proposals to acquire Tier III resources. Tier III begins at 30% of the RPS, gets as high as 43% in 2030, and then declines as offshore wind in Tier I takes a greater share.
  4. Tier IV can be met with renewable energy certificates from wind, solar and some hydro sources inside or outside Virginia, but within the PJM, the regional transmission organization that coordinates the electric grid in all or parts of 13 states, including Virginia, and the District of Columbia. Tier IV starts at 38% of the RPS total, goes as high as 51% in 2023, and then declines by fits and starts until it is less than 20% in the out years.
  5. The fifth tier consists of the old hydro RECs from PJM with existing purchase contracts. These begin at a whopping 29% of the total but decline rapidly to 6% in 2023 and even less thereafter.

Solar installers who focus on Virginia may be dismayed by the modesty of the in-state requirements. Only Tier II serves distributed generation, and all its sub-tiers and low-income provisions don’t make up for the fact that distributed generation must account for less than 0.3% of total statewide demand in 2021 (3% of the initial 14% goal, adjusted downward for nuclear). This may well be less than the amount of net-metered solar we will have then anyway, with or without the CEA. By 2030, distributed renewables would still account for less than 2.5% of total generation in Virginia, a far cry from the 25% or more that studies have shown is possible.

Meanwhile, Tiers IV and V allow RECs from utility-scale facilities located anywhere within PJM, accounting for more than half the RPS total for the first several years. If utilities choose to buy these out-of-state RECs instead of building new renewable energy in Virginia for this tier, ratepayers will be paying for economic development and jobs in other states, rather than supporting clean energy jobs at home.

(As I’ll describe below, this is an even bigger drawback of the Green New Deal Act.)

Defenders of the PJM RECs approach cite market efficiency and cost; RECs from states that don’t have RPS laws tend to be cheap, and allowing them to qualify for our RPS means projects will get built wherever it is cheapest to do it. That justifies allowing a small percentage of PJM RECs, but not making those RECs the centerpiece.

The CEA already has another, and better, cost-containment measure. If prices of RECs go too high, utilities have an option of paying into a fund administered by the state Department of Mines, Minerals and Energy instead. The money will be used for energy efficiency and renewable energy projects in Virginia benefiting mainly low-income residents. This “deficiency payment” alternative is a standard feature of other states’ RPS laws; it provides a critical cost cap while not letting utilities off the hook.

The CEA also includes community solar provisions and removal of certain barriers to net metering. It raises the net metering cap to 10%, raises the commercial size cap to 3 MW, removes all caps on third-party power purchase agreements, eliminates standby charges on residential and agricultural customers, and allows customers to install facilities large enough to meet 150% of their previous year’s demand. (These net-metering provisions intentionally duplicate five of the eight provisions of the Solar Freedom legislation, HB572, SB710 and others.)

In addition to all of this, the CEA includes a mandate for 2,400 megawatts of energy storage by 2035, with interim targets beginning with 100 MW by the end of 2021.

And just in case Dominion thinks that somehow all this still leaves room for any new fossil fuel plants, the CEA ends with a one-year moratorium on the permitting of any new carbon-emitting generating units that an investor-owned utility might want to build, until the government produces a report with recommendations for achieving a carbon-free electric sector by 2050 at least cost to ratepayers.

If I’d been writing this bill, I would have accelerated the timeline and focused the RPS more on Virginia projects, including rooftop solar. But as a framework this is still a strong bill, and it’s possibly the best we can do this year.

The Green New Deal

HB77 (Del. Sam Rasoul, D-Roanoke) is the Green New Deal Act. Its major features include a moratorium on any new fossil fuel infrastructure; a very aggressive timetable for 100% renewable energy by 2036; energy efficiency standards and a mandate for buildings to decrease energy use; low-income weatherization; job training; a requirement that companies hire workers from environmental justice communities; and assistance for workforce transition for fossil fuel workers.

The GND looks almost nothing like the Clean Energy Act. Its moratorium on new fossil fuel infrastructure is far broader than that in the CEA, covering not just electric-generating plants but also pipelines, refineries, import and export terminals and fossil fuel exploration activities.

It directs DMME to develop a climate action plan that addresses mitigation, adaptation and resiliency, supports publicly-owned clean energy and incorporates environmental justice principles. Forty percent of funds spent under the plan are to be targeted to low-income communities and communities of color.

The GND’s energy efficiency mandates are tougher than the CEA’s, requiring savings of 2.4% per year beginning immediately. These savings will be achieved not just by weatherizing buildings, upgrading heating and cooling, etc., but also by dramatically improving new buildings and requiring installation of rooftop solar wherever feasible.

DMME is also required to set performance benchmarks for scholarships, low-interest loans, job training programs and renewable energy projects to serve EJ communities (“until such date that 100 percent of the energy consumed in such communities is clean energy”), as well as a mandate that 50% of the workforce for energy efficiency and clean energy programs come from EJ communities.

(We should pause here for a reality check. We’re talking about Virginia, where many excellent programs that are already on the books currently go unfunded, and underinvestment in education and social services means companies can’t find enough qualified workers as it is.)

With all its aims of putting the energy transition on steroids, the Green New Deal also has a surprisingly weak RPS. In fact, it appears utilities would not have to build renewable energy projects in Virginia at all — or for that matter, close any fossil fuel plants.

The bill doesn’t actually say so, but it appears to contemplate that the very fast ramp-up of renewable energy to 80% by 2030 can be achieved by utilities buying renewable energy certificates from other states. I’m told Delegate Rasoul has confirmed this is his intention. There is no requirement for utilities to buy from in-state producers.

There is a practical reason for this: given how far behind Virginia is in developing wind and solar, allowing utilities to buy out-of-state RECs is probably the only way to meet an 80% by 2030 target. These RECs are traded on the open market; that makes it easy for utilities to comply, and eliminates reliability concerns because utilities can continue to run their existing fossil fuel plants as usual.

But there’s the rub: the bill contains no requirement to build wind and solar in Virginia, and utilities can run their fossil fuel plants as usual. That’s not the energy transition a lot of people are looking for.

[Update January 23: Dominion did not file a separate bill, but has drafted language it proposes to shoehorn into another bill from a friendly legislator, likely Senator Lucas’ SB998. The proposal is almost comically bad. If it comes with a slogan, it will be “Leave the Driving to Us.” We’ve seen what that means. Watch your wallets.]

Nuking clean energy: how nuclear power makes wind and solar harder

Dominion Resources CEO Tom Farrell is famously bullish on nuclear energy as a clean solution in a carbon-constrained economy, but he’s got it wrong. Nuclear is a barrier to a clean-energy future, not a piece of it. That’s only partly because new nuclear is so expensive that there’s little room left in a utility budget to build wind and solar. A more fundamental problem is that when nuclear is part of the energy mix, high levels of wind and solar become harder to achieve.

To understand why, consider the typical demand curve for electricity in the Mid-Atlantic, including Virginia. Demand can be almost twice as high at 5 p.m. as it is at 5 a.m., especially on a hot summer day with air conditioners running.

Average hourly load over a one-week period in January, April and July 2009. Credit B. Posner.

Average hourly load over a one-week period in January, April and July 2009. Credit B. Posner.

The supply of electricity delivered by the grid at any moment has to exactly match the demand: no more and no less. More than any other kind of generating plant, though, the standard nuclear reactor is inflexible in its output. It generates the same amount of electricity day in and day out. This means nuclear can’t be used to supply more than the minimum demand level, known as baseload. In the absence of energy storage, other fuel sources that can be ramped up or down as needed have to fill in above baseload.

Wind and solar have the opposite problem: instead of producing the same amount of electricity 24/7, their output varies with the weather and time of day. If you build a lot of wind turbines and want to use all the electricity they generate (much of it at night), some of it will compete to supply the baseload. Although solar panels produce during daylight when demand is higher, if you build enough solar you will eventually have to cut back on your baseload sources, too.

With enough energy storage, of course, baseload generating sources can be made flexible, and wind and solar made firm. Storage adds to cost and environmental footprint, though, so it is not a panacea. That said, Virginia is lucky enough to have one of the largest pumped storage facilities in the country, located in Bath County. Currently Dominion uses its 1,800 MW share of the facility as a relatively low-cost way to meet some peak demand with baseload sources like coal and nuclear, but it could as easily be used to store electricity from wind and solar, at the same added cost.

Without a lot of storage, it’s much harder to keep wind and solar from competing with nuclear or other baseload sources. You could curtail production of your wind turbines or solar panels, but since these have no fuel cost, you’d be throwing away free energy. Once you’ve built wind farms and solar projects, it makes no sense not to use all the electricity they can produce.

But if nuclear hogs the baseload, by definition there will be times when there is no load left for other sources to meet. Those times will often be at night, when wind turbines produce the most electricity.

The problem of nuclear competing with wind and solar has gotten little or no attention in the U.S., where renewables still make up only a small fraction of most states’ energy mixes. However, at an October 27 workshop about Germany’s experience with large-scale integration of renewable energy into the grid, sponsored by the American Council on Renewable Energy, Patrick Graichen of the German firm Agora Energiewende pointed to this problem in explaining why his organization is not sorry the country is closing nuclear plants at the same time it pursues ambitious renewable energy targets. Nuclear, he said, just makes it harder.

How big a problem is this likely to be in the U.S.? Certainly there is not enough nuclear in the PJM Interconnection grid as a whole to hog all the baseload in the region, and PJM has concluded it can already integrate up to 30% renewable energy without affecting reliability. But the interplay of nuclear and renewables is already shaping utility strategies. Dominion Virginia Power is on a campaign to build out enough generation in Virginia to eliminate its imports of electricity from out of state. And in Virginia, nuclear makes up nearly 40% of Dominion’s generation portfolio.

Now Dominion wants to add a third nuclear reactor at its North Anna site, to bring the number of its reactors in Virginia to five. If the company also succeeds in extending the life of its existing reactors, the combination would leave precious little room for any other energy resource that produces power when demand is low.

That affects coal, which is primarily a baseload resource. It would also impact combined-cycle natural gas plants, which are more flexible than coal or nuclear but still run most efficiently as baseload. But the greatest impact is on our potential for renewables.

This desire to keep high levels of nuclear in its mix explains Dominion’s lack of interest in land-based wind power, which produces mostly at night and therefore competes with nuclear as a baseload source. Dominion’s latest Integrated Resource Plan pretty much dismisses wind, assigning it a low value and a strangely high price tag in an effort to make it look like an unappealing option.

Dominion shows more interest in solar as a daytime source that fills in some of the demand curve above baseload. But given Dominion’s commitment to nuclear, its appetite for Virginia solar is likely to be limited. Already it insists that every bit of solar must be backed up with new natural gas combustion turbines, which are highly flexible but less efficient, more expensive and more polluting than combined-cycle gas, and add both cost and fuel-price risk.

Dominion’s seeming insistence that solar must be paired with gas to turn it into something akin to a baseload source is plainly absurd. It seems to be an effort to increase the cost of solar, part of an attempt to improve the company’s prospects of getting the North Anna 3 nuclear reactor approved in the face of its dismal economics.

Good resource planning would consider all existing and potential sources together, including using the existing pumped storage capacity in the way that makes most sense. We already know that North Anna 3 would be breathtakingly expensive. Evaluating it in the full context of other supply options will show it is even worse than Dominion acknowledges.

Dominion’s campaign to isolate Virginia’s power supply from the larger PJM grid also does a disservice to ratepayers. Keeping generation local benefits grid security when the generation is small-scale and distributed, but not when it’s a huge nuclear reactor sited on a fault line right next to two others. Otherwise, there is nothing wrong with importing power from other states. These are not hostile foreign nations. Pennsylvania is not going to cut us off if we don’t release their political prisoners.

In truth, it seems to be Tom Farrell’s plan to secure Dominion’s profitability for decades to come by walling off Virginia into a corporate fiefdom and controlling the means of production within it, like some retrograde Soviet republic. Utility customers, on the other hand, benefit much more from having our grid interconnected with PJM and the thousands of other power sources that help balance load and ensure reliability. One can only hope that Dominion’s regulators at the State Corporation Commission will see that.

Over the course of the next couple of decades, Virginia, like the rest of the U.S.—and indeed, the rest of the world—has to transition to an electricity supply that is almost entirely emissions-free. Very little planning has gone into making this happen, but several studies have shown it can be done. The Solutions Project offers a broad-brush look at how Virginia can combine onshore wind, offshore wind, solar and small amounts of other sources to reach a 100% clean energy future. Other researchers have done the same for PJM as a whole.

No doubt this will be a long and challenging journey, but the path we start out on should be the one most likely to get us to our goal. Nuclear seems likely to prove a stumbling block along the way, and an expensive one at that. Certainly, we shouldn’t make the problem worse.


Update: A number of commenters from the pro-nuclear camp have argued that nuclear is, or could be, more flexible than I’ve made it out to be. A new article in Utility Dive addresses this issue, concluding it is possible, but not easy, to make nuclear plants more load-following. France and Germany have succeeded to some degree, but U.S. nuclear plants pose greater challenges. “It can be done, but ‘the issue is that nuclear power plants weren’t designed to do that in the United States,’ said Jim Riley, senior technical advisor for nuclear operations at the Nuclear Energy Institute, an industry group that develops policy on issues related to nuclear energy.”

According to the article, some U.S. utilities are looking to tackle the challenge rather than retire their nuclear plants. These are nuclear plant owners that have to bid power into the wholesale market, where a nuclear plant, with its fixed operating costs, can’t compete with low-cost natural gas and renewable energy, especially at night. But of course, if you run a high-cost plant for fewer hours of the day, the average cost per kilowatt-hour increases.

Dominion doesn’t have to bid its nuclear into a wholesale market, so it has no incentive to try to run its plants flexibly. And given the astoundingly high cost of North Anna 3, curtailing its operation, and increasing the cost per kilowatt-hour produced, would be out of the question.

Your 2015 Virginia legislative session cheat sheet, part one: Clean energy bills

photo credit: Amadeus

photo credit: Amadeus

I’m starting my review of 2015 energy legislation with a look at bills dealing with renewable energy and energy efficiency. Most of these bills will be heard in the committees on Commerce and Labor, though bills that cost money (tax credits and grants) usually go to Finance.

Bills referred to Senate Commerce and Labor are heard by the full committee, which meets on Monday afternoons. It consists of 14 members: 11 Republicans and 3 Democrats. They form a tough lineup; none of these senators received better than a “C” on the Sierra Club’s Climate and Energy Scorecard.

The House bills are typically assigned to the 13-member Special Subcommittee on Energy (10 Republicans and 3 Democrats, no fixed schedule). Bills that do not meet the approval of Dominion Power can expect a quick death here on an unrecorded voice vote, never to be heard from again. But on the plus side, the meetings are often quite lively, like old-fashioned hangings.

Net metering bills

Net metering is the policy that allows owners of solar (or other renewable) energy systems to be credited for the excess power they feed back into the grid when the systems produce a surplus; the owners use the credits when their systems aren’t supplying power and they need to draw electricity from the grid. Virginia law restricts who can use net metering, and how much. Expanding net metering is a major goal of renewable energy advocates, who argue it offers a free market approach to growth—give customers the freedom to build solar projects, get the utility out of the way, and solar will thrive.

This year’s initiatives include:

  • SB 833 and SB 764 (Edwards—apparently identical bills), HB 1950 (McClellan), and HB 1912 (Lopez) raise the maximum size of a commercial project eligible for net metering, from 500 kilowatts (kW) currently to 2 megawatts (MW). This is a much-needed expansion of the net metering program if Virginia is going to make real headway with solar. We are told Edwards plans to conform his legislation to HB 1622, below.
  • HB 1622 (Sullivan) raises the maximum size of a commercial project to 1 MW, and the maximum size of a residential system from the current 20 kW to a whopping 40 kW. But note that it does nothing to limit the standby charges utilities can charge for residential projects over 10 kW. Given that these charges are so punitive as to kill the projects, raising the cap wouldn’t create new market opportunities unless it is accompanied by a limit on the amount of standby charges that utilities can tack on.
  • HB 1911 (Lopez) amends the language allowing utilities to impose standby charges on residential and agricultural customers with systems over 10 kW to add the requirement that the State Corporation Commission conduct a “value of solar” analysis prior to approving the charges. Most solar advocates would rather see the legislature repeal the standby charge provision altogether, given how the utilities have abused it. Barring that, legislators should set a dollar limit of no more than five or ten bucks a month. But in the absence of any such reforms, it does make sense to at least require the SCC to do this more substantive analysis, ideally building on the framework developed over the summer by the Solar Stakeholder Group.
  • HB 1636 (Minchew) establishes “community net metering” as well as increasing the commercial project cap to 2 MW. This bill is a high priority for the solar industry and the environmental community. It provides the solution for owners with shaded roofs, renters and others who can’t install solar themselves by letting them subscribe to a community generation facility in their own or a neighboring county. Other forms of renewable energy are also allowed, so residents in windy areas could go in on a small wind turbine that wouldn’t make sense for a single household.
  • HB 1729 (Sullivan) creates “solar gardens” consisting of community organizations with 10 or more subscribers. The generation facility can be as large as 2 MW. The bill seems intended to accomplish much the same purpose as Minchew’s bill, although it is limited to solar. However, it allows the utility to impose “a reasonable charge as determined by the [State Corporation Commission] to cover the utility’s costs of delivering to the subscriber’s premises the electricity generated by the community solar garden, integrating the solar generation with the utility’s system, and administering the community solar garden’s contracts and net metering credits.” Boy, we’ve seen that movie before. Given what we’ve seen the SCC do with standby charges, the bill should be amended to put a cap on the amount of that “reasonable charge” so legislators know they aren’t writing a blank check.
  • SB 350 (Edwards) authorizes programs for local governments to use net metering for municipal buildings, using renewable energy projects up to 5 MW. It also allows a form of community net metering targeted to condominiums, apartment buildings, homeowner associations, etc., with a renewable energy facility located on land owned by the association. These customers would be exempt from standby charges.

Third-party power purchase agreements (PPAs)

HB 1925 (Lopez) and SB 1160 (Edwards) replace the current PPA program in Dominion territory with one that applies to both Dominion and APCo territories. It increases the project cap from the current 500 kW to 1 MW, and raises the overall program size to 100 MW from (50 MW). As with the current program, projects under 50 kW aren’t eligible unless the customer is a tax-exempt organization.

Utility-scale solar

HB 2219 (Yost) declares it to be in the public interest for Dominion Virginia Power or Appalachian Power to build up to 500 MW of solar power—a truly welcome objective—and authorizes the utilities to apply to the SCC for a certificate of public convenience and necessity for individual facilities of at least 20 MW in size, regardless of whether the facility is located in the utility’s own service territory.

“In the public interest” are the magic words that push the SCC to approve something it might not otherwise. Both utility giants have shown an interest in building and owning utility-scale solar, even as they have taught the SCC to believe that solar owned by anyone else burdens the grid. The magic words let them escape the corner they backed themselves into. That would be necessary here, given that our SCC wrongly believes the public interest requires the lowest cost energy regardless of the consequences to public health, the environment, national security, and the economy.

The solar industry has two concerns about HB 2219: the effect on ratepayers, since Dominion’s previous solar efforts have cost well above market rates; and the effect on the Virginia solar industry—or rather, the lack of an effect, since Dominion has hired only out-of-state companies. Virginia ratepayers could save money and the state could build more solar if legislation simply required the utilities to buy 500 MW of solar, and let the market decide who builds it. But of course, that’s now how things work in Virginia.

I also think it is unfortunate that the bill allows utilities to build solar plants that are not in the utilities’ own service territories, and that it does not require them to use Virginia contractors. Surely there would be more support for a bill promising projects that support local economies with jobs and tax revenues, and that requires the hiring of local installers. These seem like small enough things to ask.

HB 2237 (Yancey) allows Dominion or APCo to recover the costs of building or buying a solar facility in the state of Virginia of at least 5 MW, plus an enhanced rate of return on equity, through a rate adjustment clause. It also states that construction or purchase of such a facility, and the planning and development activities for solar energy facilities, are in the public interest. (The magic words again.)

This bill doesn’t require anything or make huge changes. It simply treats solar the way the Code currently treats other forms of generation, with the exception that the “in the public interest” language was previously used only to endorse a coal plant (what became the Virginia City Hybrid Energy Plant in Wise County). And note that this bill requires that the facility be in Virginia, and opens up the possibility of our utilities buying the facility rather than constructing it themselves, which could open the door to competition. This seems like a good way to proceed.

Grants and tax credits

HB 1728 (Sullivan) establishes a tax credit for renewable energy. Great idea, but last year the Senate Finance Committee made it clear they would not pass a new tax credit, so I assume this is a non-starter.

Last year’s renewable energy tax credit bill was amended to create a grant program instead. It passed both houses, but without funding and with the requirement that it be passed again this year. It is back this year as HB 1650 (Villanueva). (It has been assigned to House Committee on Agriculture, Chesapeake and Natural Resources and is on the docket for 8:30 a.m. Wednesday, January 21. Odd: it ought to be in Finance.) The grant would equal 35% of the costs of a renewable energy facility, including not just wind and solar, but also things like biomass, waste, landfill gas, and municipal waste incinerators. Facilities paid for by utility ratepayers are not eligible, and the grant total is capped at $10 million per year. Prospects for the program aren’t great given the state’s tight budget situation, but the bill is a high priority for the solar industry.

Another tax-related bill is HB 1297 (Rasoul), which authorizes localities to charge a lower tax on renewable projects than on other kinds of “machinery and tools.” Last year, you may recall, the solar industry was successful in getting passage of a bill that exempted solar equipment entirely from local machinery and tools taxes. Proponents are trying to ensure that Delegate Rasoul’s well-intentioned bill doesn’t reverse last year’s victory on solar.

Bills specific to energy efficiency

HB 1730 (Sullivan) establishes energy efficiency goals for electric and natural gas utilities. The good news: the goals are mandatory. The bad news: the goals are modest to a fault: a total of 2% energy savings by 2030 for electricity and 1% for natural gas.

HB 1345 (Carr) extends the sales tax holiday for Energy Star and WaterSense products to include all Energy Star light bulbs; currently only compact fluorescent light bulbs are eligible.

PACE bills

PACE (Property Assessed Clean Energy) is a way to finance energy efficiency, renewable energy and water conservation upgrades to commercial and non-profit-owned buildings. Local governments sponsor the financing for improvements and collect payments via property tax bills. Since the energy savings more than pay for the increased assessments, PACE programs have been hugely successful in other states.

Last year a bill that would have let localities extend “service districts” to cover clean energy (PACE by another name) failed in the face of opposition from the banking industry. This year’s bills are also not labeled PACE bills, but they achieve the same end. Apparently the parties have worked out the problems, a hopeful sign that a multi-year effort will finally meet with success.

SB 801 (Watkins) and HB 1446 (Danny Marshall) are companion bills that would authorize local governments to work with third parties to offer loans for clean energy and water efficiency improvements, creating “voluntary special assessment liens” against the property getting the improvements. The Department of Mines, Minerals and Energy would develop underwriting guidelines for local loans to finance the work. HB 1665 (Minchew) is similar, and we are told it will be conformed to HB 1446.

Virginia Solar Energy Development Authority

HB 1725 (Bulova) and SB 1099 (Stuart) establish the Virginia Solar Energy Development Authority to “facilitate, coordinate, and support the development of the solar energy industry and solar-powered electric energy facilities in the Commonwealth.” This implements a proposal in the 2014 Virginia Energy Plan and is not expected to be controversial.

Virginia SREC registry

HB 2075 (Toscano) requires the SCC to establish a registry for solar renewable energy certificates (SRECs). It would not suddenly make Virginia SRECs valuable, but it would put the administrative framework in place to support a voluntary SREC market, or even a real one if Virginia were to adopt legislation requiring utilities to buy solar power.

Cross-cutting approaches to clean energy

A few bills would have a more sweeping effect on energy efficiency and renewable energy. HB 2155 (Sickles) is billed as an “Energy Diversity Plan.” It was supposed to be a “grand bargain” between utilities and the clean energy industries, with the McAuliffe administration participating as well, but we understand there are outstanding issues that make the bill’s future uncertain.

The big idea is to put all non-emitting energy sources into one category: primarily wind, solar, hydro and nuclear, but also adding in combined heat and power, demand response and energy efficiency. The bill creates a timeline that requires utilities to ramp up use of new, non-emitting sources gradually, beginning with 0.25% of retail sales in 2016 and ramping up to 35% in 2030.

The bill has the support of clean energy industries, but the idea of treating nuclear as a benign source of power on an even footing with efficiency and renewables concerns the environmental community.

I’ll write more about this bill if it looks like it has legs.

HB 1913 (Lopez) is the only bill of the bunch that directly targets Virginia’s Renewable Portfolio Standard (RPS). Maybe that shouldn’t be a surprise. Our RPS is a poor, sickly thing that most people have left for dead. To his credit, Lopez keeps trying. His bill keeps the RPS voluntary but beefs up the provisions to make the program meaningful, if a utility chooses to participate. Instead of mostly buying renewable energy certificates from things like old, out of state hydro dams, the bill would ensure that actual, real-world renewable projects get built. You know, what an RPS is supposed to do.

In addition, the bill folds into the RPS the state’s existing goal of 10% energy efficiency gains by 2022. Utilities have done very little toward meeting this goal. Putting it into the voluntary RPS might be the prod needed to get more efficiency programs underway.

Or it might cause a utility to drop out. Either way, the result would be better than what we have now, where Virginia pretends to have an RPS, and utilities pretend to care.

Update: Another net metering bill has been filed. SB 1395 (Dance) raises the commercial net metering cap from 500 kW to 2 MW.