How the Tides have Shifted for Virginia Energy Policy in 2020

By Antonia Douglas

Under Governor Northam’s direction, Virginia’s Energy Policy shifted quite dramatically from when he first took office in January 2018 to what we have at the end of the 2020 Legislative Session. For years, legislators, policymakers, and business – Dominion Energy – have been avoiding the writing on the wall that climate change is having a substantial impact on Virginians, whether it be the fate of our historic sites in Williamsburg, the crop yield in the Shenandoah Valley, or an even more miserable pollen season in Richmond. The effects of climate change in Virginia are apparent and affecting the well-being of Virginians every day. There is hope that these effects of climate change can be slowed down or even mitigated with drastic changes in our energy sector.

The energy sector is one of the biggest polluters when it comes to greenhouse gas emissions (“GHGs”), not only in the country but in each state. Many states are responding to global calls for clean energy and making actual changes which reflect the climate change crisis. Today the energy sector accounts for 30% of the carbon dioxide emissions in Virginia. To stimulate change in the state, Virginia needs steadfast change to its energy sector. This past September Governor Northam enacted Executive Order 43, which set a 30% renewable energy goal by 2030 and a 100% carbon-free goal by 2050 for Virginia. Governor Northam’s Executive Order 43 was an exciting and monumental moment for the Commonwealth. Still, a majority of it was not legally binding without major action by the General Assembly.

The new decade has been a busy start for Virginians as the General Assembly started its 2020 session on January 8. With the recent flip in both, the House and Senate gave climate and energy activists the morale boost they needed to make 2020 the year where the legislature created a framework to transition the Virginia economy to 100 %? renewable. While dozens of other bills aim to reform Virginia energy law, the focus was on two very different omnibus bills. These two bills would not only create this framework, but it would codify Governor Northam’s Executive Order 43, the Clean Economy Act, and the Green New Deal Act.

While the Green New Deal was relatively short-lived, the Clean Economy Act lived on and is currently sitting on Governor Northam’s desk waiting for his signature. A coalition of the renewable energy industry and environmental groups put forward the Clean Economy Act (“CEA”). Delegate Rip Sullivan of Fairfax and Senator Jennifer McClellan of Richmond are the sponsors of the act in the House and Senate, respectively. The goal of the CEA is to bring zero-carbon electricity supply to Virginia by 2050. One of its key features is the required increase of 3 % in renewable energy every year from 2021 to 2050. Also, under energy efficiency, utilities must achieve energy savings that increase to 2% a year by 2027. These modest increases of required investments in renewable energy and efficiency leave no room for the utilities to argue that the targets will cause them economic discomfort. The CEA also includes a provision for joining the Regional Greenhouse Gas Initiative to reduce statewide electric carbon emissions by 30 percent by 2030.[1] This provision is in accordance with DEQ’s carbon regulations finalized last year.

Further, the CEA includes provisions that created a mandatory renewable portfolio standard where 41 percent of Virginia’s total electric energy will be generated by renewable energy by 2030.[2] But with the generation of total electrical energy and with around 30 percent of Virginia’s electric generation coming from nuclear power, Virginia would only be receiving roughly 30 percent of its electricity from renewable sources. This number is a nod to the 30 percent by 2030 renewable energy target set by Governor Northam in his Executive Order 43. Also, the CEA does not change the code’s existing definition of renewable energy, foregoing the opportunity to exclude biomass, biogas, and other dirty renewables from Virginia’s RPS. Lastly, the CEA includes provisions to include community solar and remove barriers to net metering. The CEA raised the net metering cap to 10 percent, raises the commercial size cap to 3 MW, removes all caps on third-party power purchase agreements, and eliminates standby charges on residential and agricultural customers. And the cherry on top of the CEA is a one-year moratorium on the permitting of any new carbon-emitting generating units that an investor-owned utility might want to build.

Lastly, outside of the CEA, an array of other energy bills has been passed by both the House and Senate that further customer-sited solar or net metering. One is the Solar Freedom Bill, which lifts barriers to customer-sited renewable energy such as rooftop solar. The new provisions lift the net metering cap to 6% for IOUs; raise the PPA cap to 1,000 MW in Dominion territory and 40 MW in APCo territory; remove standby charges below 15 kW in Dominion territory and completely for APCo; raise the residential size cap to 25 kW and the commercial project sizer cap to 3 MW; and much more. Also, in the realm of nuclear energy, a Senate Bill defined “clean” and “carbon-free” energy that not only Virginia law has been silent on but also Governor Northam’s executive order. The bill defines clean or carbon-free energy to “include nuclear energy for the purposes of the code . . . and declares that nuclear energy is considered a clean energy source for the purposes of the Commonwealth Energy Policy.”

The CEA is not perfect by any means, and the clean energy transformation it strives for is incomplete. While the bill is a step in the right direction, its provisions: mostly do not apply to electric cooperatives; requires utility customers to subsidize biomass use by paper companies;  gives Dominion free rein on spending; provides weak energy efficiency targets; and focuses primarily on utility-scale projects and forgets about the importance of customer-sited projects. All in all, this legislation and hopefully new law is groundbreaking and transformational for Virginia Energy Policy. Almost overnight, Virginia went from the bottom of the totem pole to be one of the leaders in clean energy policy and reform. The future in Virginia energy policy will be an exciting one to watch.

 

 

[1] 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.

[2] Total electric energy is defined by the Va Code to mean total electric energy minus electricity produced by nuclear power.