The General Assembly made progress on climate in 2021, but our work here is hardly done
The Virginia State Capitol.. (Ned Oliver/Virginia Mercury)
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.
Electric utility rate reform efforts quashed by Senate committee
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; Marsden has submitted a budget amendment. This is also a priority bill for renewable energy industry associations.
• SB1295 (DeSteph) requires utilities to use Virginia-made or 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 of Jan. 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.
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