With new Democratic leadership, General Assembly faces flood of energy proposals

The week after elections swept Democrats to power in the General Assembly, environment and clean energy activists struggled to get their sea legs in the new ocean of possibilities that suddenly opened up before them.

“I think everyone’s a little surprised by the power dynamics and the shift in the political calculus,” said Tim Cywinski, communications coordinator for the Sierra Club’s Virginia chapter, at the time.

Now, on the brink of the session, energy lobbyists’ hazy sense of optimism is assuming more defined lines. The renewables boom has brought fresh developments in solar and wind to the commonwealth — and attendant concerns about land use, viewsheds and wildlife impacts — but many industry watchers are predicting the General Assembly will focus much of its attention on top-line issues like carbon caps, energy efficiency and affordability, clean energy mandates and consumer energy choice.

Those debates will be consequential not only for the policy they establish going forward, but also for the new political map they draw in a Virginia increasingly aware of the outsized influence of Dominion Energy, the state’s largest electric utility, in the Capitol.

“I think we are in a day in Virginia in which we are reassessing our energy structure. There are going to be, I think, a rash of proposals that deal with our energy utility monopoly,” said Del. Jay Jones, D-Norfolk, during a Dec. 12 news conference announcing the bipartisan Fair Energy Bills Act that he is co-sponsoring with Del. Lee Ware, R-Powhatan.

But Cassady Craighill, communications director for Charlottesville millionaire Michael Bills’ advocacy group Clean Virginia, which launched an aggressive assault on Dominion’s monopoly, urged caution for advocates and Democrats emboldened by election outcomes. (The company is expected to push its own legislation, as it has in past sessions, but has a policy of not speaking with the Virginia Mercury.)

“We have to acknowledge that Dominion is still a huge player in Virginia politics,” she said.

Omnibus-style bills incorporating a diverse range of proposals and policy tweaks, like the 2018 Grid Transformation and Security Act that continues to shape Virginia’s energy landscape, have already been rolling out — and more can be expected. 

Back in November, as he speculated on the upcoming session, Virginia League of Conservation Voters Deputy Director Lee Francis mused, “I don’t see two bills here. I think we’re going to see 20. I think we’re going to see a lot of aggressive policy proposed in 2020.”

Here’s a glimpse at what some of those policies are likely to focus on in the session that starts this week: 

Carbon trading

Last session saw a flurry of excitement from environmentalists over the possibility of Virginia becoming the first southern state to cap carbon emissions when the Air Pollution Control Board approved an administrative rule that would let the state join the Regional Greenhouse Gas Initiative, a cap-and-trade market involving 10 other New England and mid-Atlantic states.

But budget language added by Republicans prohibiting Virginia from spending any funds on RGGI membership — language that Gov. Ralph Northam ultimately decided not to veto — ultimately kneecapped the move.

Now, with Democrats in control of the General Assembly, RGGI is back on the menu. 

“I think the legislature has a mandate to act to address climate change. I think that starts with RGGI,” said Francis. “We’ve been debating RGGI here in Virginia going back to 2016, and I think it’s time to get that across the finish line. It’s time to cut the red tape, and it’s also time to pass it by statute.”

Northam, in a budget announcement in Virginia Beach, again pledged his commitment to the measure, and legislators are beginning to line up with proposals to enact it. Those include the Virginia Alternative Energy and Coastal Protection Act from Del. Joseph Lindsey, D-Norfolk, and the Clean Economy Act that has been announced, but not filed, by sponsors Sen. Jennifer McClellan, D-Richmond, and Dels. Rip Sullivan, D-Fairfax, Jennifer Carroll Foy, D-Prince William, and Alfonso Lopez, D-Arlington.

If the General Assembly does move forward with RGGI, legislators will have to decide whether they simply want to repeal the 2019 budget language, a move that would let the existing carbon cap regulation go into effect, or whether they want to pass a new law joining the coalition. Under the first scenario, proceeds from RGGI allowance auctions would flow to emitters for certain sanctioned purposes, while under the second, proceeds could go to the state for disbursement.

Energy efficiency

Consistent with Virginia’s uptick in interest in equity issues, energy efficiency is shaping up to be a major talking point in the upcoming legislature.

Lindsey’s Alternative Energy and Coastal Protection Act would require up to 30 percent of RGGI revenues to go toward energy efficiency efforts, with 20 percent directed to low-income communities. The Clean Economy Act would require utilities to meet annual efficiency benchmarks — and would bar them from building new generation facilities if they fail to do so. And the Green New Deal Act again being put forward by Del. Sam Rasoul, D-Roanoke, would set energy efficiency targets for buildings and mandate that significant amounts of energy efficiency funding be directed toward environmental justice communities.

“We can’t allow binding energy efficiency targets to fall off the radar,” said Harry Godfrey, executive director of Virginia Advanced Energy Economy, which was part of a coalition drafting the Clean Economy Act.

Affordability

Much of the anti-Dominion campaign mounted by Clean Virginia focused on energy affordability and the difference between electric rates and electric bills, a distinction that has sparked interest among lawmakers. 

Virginia’s system of regulation allows utilities to recoup the costs of specific projects like plant construction or coal ash cleanup through “rate adjustment clauses,” separate charges that are added to electric bills in addition to the base rate. According to the State Corporation Commission, the average bill for a Dominion customer using 1,000 kilowatt hours increased more than 25 percent between 2007 and 2019, largely as a result of those riders. 

One bipartisan proposal from Jay Jones, D-Norfolk, and Lee Ware, R-Powhatan, known as the Fair Energy Bills Act, aims to address that gap. Drafted in consultation with the Southern Environmental Law Center and Virginia Interfaith Power and Light, the measure — which has been announced by not filed — would restore State Corporation Commission authority to review electric rates set by public utilities. That authority was stripped from the commission by the General Assembly in 2015 under a controversial “rate freeze” law that, when combined with the 2018 Grid Transformation and Security Act, has led to reviews being halted until 2021. 

Ware said at the bill’s unveiling that he expected to get “broad and bipartisan support” for the measure. 

“It has been a generation since there has been an unimpeded rate case before the State Corporation Commission,” he said. “Virginia citizens and businesses, the vast majority of whom are served by Dominion, look to the SCC to ensure that electric rates are set properly.”

Clean energy standards

Less likely to have a smooth passage through the General Assembly than RGGI will be a clean energy standard, also known as a mandatory renewable portfolio standard.

In layman’s terms, that’s an enforceable requirement set by a legislature that a certain amount of a state’s energy must come from renewable sources. 

Currently Virginia has what’s known as a voluntary standard. Established in 2007 and a subject of debate ever since, the voluntary standard set a goal for investor-owned utilities to obtain 15 percent of their energy from renewable sources by 2025. The catch, of course, is that it’s not binding. 

Making that standard mandatory, as has been proposed in many prior years, is a goal of not only the Clean Economy Act (which is prepared to chart a course to 100 percent clean energy by 2050 in deeply wonky step-by-step fashion), but also a bill by Sen. Barbara Favola, D-Fairfax. 

“The voluntary RPS doesn’t create enough market certainty,” said Godfrey. “We have a voluntary standard right now, and we are lagging our neighbors when it comes to the development of renewable resources.”

Consumer energy choice

This past year has seen multiple efforts by large corporations to protect and increase the amount of choice they have in energy providers. 

Numerous large retailers, including Walmart and Costco, have sought to combine all of their buildings’ energy use to take advantage of a loophole in Virginia law that allows customers who consume more than five megawatts of electricity annually to stop getting their power from the monopoly utility and instead “shop around.” Others have fought to maintain the ability of non-utility companies known as competitive service providers to sell “100 percent renewable energy” to customers in the absence of a similar offering by a utility.

Now lawmakers are translating those stirrings of desire for customer energy choice into bills, with several expected to be announced this week. 

The most sweeping so far is a proposal first filed by Ware that seeks to de-monopolize Virginia’s entire electric generation market. The version of the bill that has been filed would force all utilities, electric cooperatives and municipal electric authorities to decouple their power generation activities from their distribution and transmission and institute a system of customer choice. 

Ware’s office, however, said that the legislation is undergoing revisions. A version known as the Virginia Energy Reform Act sponsored by Ware and Del. Mark Keam, D-Fairfax, is expected to be announced Tuesday, according to a press release from the Virginia Energy Reform Coalition.

Other proposals seek to remove existing barriers to consumer choice. 

One measure sponsored by Democratic Dels. Jeff Bourne of Richmond and John Bell of Chantilly would remove a part of state law that closes the renewable energy market once the electric monopoly begins offering 100 percent renewable energy itself. That bill is being backed by the Renewable Energy Buyers Alliance, an industry group that includes companies such as Amazon and Microsoft.

Another bill would also remove the market closure provision but also make it easier for large companies to shop around for energy. This measure is being backed by competitive service provider Direct Energy and is expected to be carried by Sen. Jeremy McPike, D-Woodbridge, and Del. Mike Mullin, D-Newport News.