Virginia Clean Economy Act to retire most of Virginia’s coal-fired facilities by Dec. 31, 2024

Va.’s 100% clean energy shift: Part of a ‘bigger wave’? E&E News | David Iaconangelo A landmark legislative session for energy came to an end in Virginia last week, after the Democratic-controlled General Assembly mounted a late push to pass numerous new regulations on fossil fuels and promote zero-carbon sources of electricity. One of the measures, which Democratic Gov. Ralph Northam is expected to sign, would make Virginia a participant in the Regional Greenhouse Gas Initiative (RGGI), the East Coast’s cap-and-trade system for carbon dioxide emissions. The governor is also expected to sign the “Virginia Clean Economy Act,” which would make Virginia the first state in the South to move toward 100% carbon-free electricity. It would require the state to decarbonize its power by 2050 and establish new mandates for a renewable build-out. Cale Jaffe, an associate professor of environmental law at the University of Virginia and a former attorney at the Southern Environmental Law Center, said he “never would have imagined something like the Virginia Clean Economy Act to be remotely possible” when he began lobbying the Legislature for renewable policies over a decade ago. “This is an absolute sea change,” he said in an email. Other bills that passed in February and March would ban hydraulic fracturing in much of the state along with offshore drilling for oil and gas, while a third — already signed by Northam — creates a 27-member environmental justice council to advise the governor.

The Virginia Clean Economy Act would retire most of Virginia’s coal-fired facilities by Dec. 31, 2024. Dominion has been pushing to save one:  The legislative package requires Dominion Energy and Appalachian Power company, the state’s two largest utilities, to retire nearly all of their coal and oil burning thermal generating plants by 2024 and comply with mandatory energy-efficiency standards by 2025. The bill also speeds adoption of rooftop solar by making it more economical for homeowners by providing more cost savings and the increased ability to work with private companies to install panels under financial plans that can avoid up-front installation costs. The Washington Post reports that the Clean Economy Act will create many new employment opportunities in wind and solar industries.

In a news release last Tuesday, the Sierra Club’s Virginia Chapter lauded these developments, but advocated for a complete transition to renewable energy. “These coal plants are no longer viable in today’s energy market, and represent an outdated form of energy generation that fuels the climate crisis,” said the Sierra Club in a statement. “Virginia communities will breathe cleaner air and have cleaner power when…the last coal units close.” Though some argue that natural gas produces much lower global warming emissions from its combustion than coal or oil, the drilling and extraction of natural gas from wells and its transportation in pipelines result in methane leakage, which “is 34 times stronger than CO2 at trapping heat over a 100-year period and 86 times stronger over 20 years,” according to the Union of Concerned Scientists.

A new law also gives the State Corporation Commission more authority to regulate how Dominion writes down its coal fired generating plants that are being retired early. “The utility has an obligation to its shareholders. We have an obligation to the ratepayers,” said state senator Richard Stuart.

  • The Virginia Senate passed a bipartisan House bill 35-5 on Thursday, giving state regulators control of cost recovery over power plant retirements, despite opposition from Dominion Energy. (The bill is HB 528 Electric generation facilities; SCC shall determine retirement of facilities.)
  • The bill would require the Virginia State Corporation Commission to determine the length of time that a utility can recover “any appropriate costs” from retiring coal and gas generation early. The measure undoes a former provision that gave Dominion the flexibility to skirt refunds on coal and natural gas plants retired early.
  • The bill is seen as a key example of the Democrat-led legislature standing up to Dominion, despite nearly a decade of successful lobbying from the utility.

HB 528 would allow a neutral third party to manage the cost of retiring coal plants by establishing a recovery period that “best serves ratepayers,” according to the bill, introduced by Del. Suhas Subramanyam, D. The utility fought hard against this measure, according to advocates for the bill. Under the current law, Dominion is allowed to recover as a one-time expense the remaining balance of retired units, without refunding the overearning to customers, Subramanyam said.

“Today is the first time that a bill that Dominion has opposed has made it out of the Senate in at least a decade,” Cassady Craighill, spokesperson for Clean Virginia, told Utility Dive. “It’s really hard to overstate how dominant Dominion has been for so long. These legislators have been taking a lot of money from Dominion.” The change is largely thanks to a new class of delegates, Craighill said, following the state’s November elections, establishing “an appetite to pass something really big like energy reform.”  “This bill would have never passed in previous years, because of the opposition from regulated utilities,” the bill’s sponsor, Subramanyam, said in a statement.  The Virginia Senate initially voted 27-13 on HB 528 on Wednesday before legislators quickly voted to reconsider, facing pressure from five Dominion lobbyists outside the Senate chamber to delay a final decision, according to the Associated Press.  The bill is on its way to the governor’s desk after the House accepted the Senate’s amendments on a 50-43 vote.

Last month, the House voted to extend consideration of HB 1677 to 2021, giving legislators a year to consider ending Dominion’s monopoly on electric generation. Supporters of the bill see this as a win, adding that the utility has previously been able to stymie deregulatory efforts. The extra year can be an advantage to a growing coalition of supporters for the bill, Craighill said. Clean Virginia is one of the original members of the Virginia Energy Reform Coalition established in 2019. This bill would have restored a system of electric utility rate review that could have returned hundreds of millions in overearnings to customers of the Investor-Owned Utility. Advocates have argued that such a review, known as a Chapter 10 review in reference to the portion of Title 56 of the state code that outlines it, is necessary to “reset” Dominion’s base rates after several decades of overearnings. In a letter dated Jan. 27, SCC Director of Utility Accounting and Finance Kimberly Pate estimated that since 1994, Dominion has overearned approximately $3.4 billion, with about $1.3 billion of that returned to customers as refunds or rate credits. A Feb. 11 letter from Pate estimated that if the company’s most recent haul of overearnings, from 2018, was refunded, the average customer using 1,250 kilowatts per month would see a $7 reduction in their monthly bill. “This is about protecting the consumer, protecting the ratepayer. … That money belongs in the pockets of the people of Virginia,” Jones told the Senate Commerce and Labor Committee.


One lawmaker compared the passage of the statute, which requires the state to move to 100 percent carbon-free energy, to landing on the moon.

Dan Gearino, Inside Climate News, APR 16, 2020

Virginia State Capitol. Credit:  Zach Gibson/Getty Images
Virginia is the latest state to make a committment to clean energy, after Gov. Ralph Northam signed a bill requiring the state to achieve 100 percent clean energy by 2045. Credit: Zach Gibson/Getty Images
Inside Clean Energy

During the months that Virginia state Sen. Jennifer McClellan worked to pass a groundbreaking clean energy law, she liked to say that the process was like trying to land a plane that was on fire.

Then, when it passed, she found a new metaphor: It was like landing on the moon.

“I literally wanted to jump up and say, ‘The eagle has landed,'” she said.

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The bill, which Gov. Ralph Northam signed on Sunday, makes Virginia the latest state to require a transition to 100 percent carbon-free or renewable energy, and the first in the South. This club now includes five other states—California, Hawaii, New Mexico, New York and Washington—plus Puerto Rico and Washington, D.C.

Also, Maine and Nevada have enacted laws that set goals—as opposed to requirements—for 100 percent clean energy.

(A note on terminology: Renewable energy means wind and solar and other renewable sources. Carbon-free energy includes nuclear plus renewable sources. “Clean energy” doesn’t have a clear definition, but people often use it interchangeably with “carbon-free.”)

The '100 Percent' Club

The Virginia law was made possible after Democrats gained control of the Virginia House of Delegates in last November’s elections, to go along with the party’s existing majority in the Senate and control of the governor’s office.

McClellan was a lead sponsor of the measure, which says the state must end the use of fossil fuels in the electricity system, by 2045 for large utilities and by 2050 for other electricity producers.

This transition begins with a moratorium on new fossil fuel power plants that begins now and will last until 2022, at which time the legislature could extend it. This is a big shift for a state that got 61 percent of its electricity from natural gas last year, plus 3 percent from coal. Nuclear is the other major source with 31 percent, and all renewables are in the low single digits.

While closing the door to fossil fuels, the law sets the parameters for big expansion of renewable power. It says Virginia must develop 5,200 megawatts of offshore wind power by 2034, more than double the previous target. The law also increases caps that otherwise were limiting the growth of rooftop solar and allows for new financing methods for customers who want rooftop solar.

Energy conservation gets a big boost with requirements that big utilities meet new targets by 2025 for helping customers find ways to use less electricity.

Virginia's Path to Carbon-Free Electricity

The law will have a transformative effect on Dominion Energy, the Virginia-based utility that serves a majority of the state’s customers.

Rather than oppose the bill, Dominion engaged in the process and helped to shape the measure in a way that gives the company an opportunity to grow by building and owning renewable energy projects.

McClellan said the bill was able to pass because its supporters built a coalition of clean energy businesses and environmentalists. One of the central players was Advanced Energy Economy, a trade group for clean energy companies that acted as a bridge to the broader business community, she said.

The coalition worked with lawmakers to come up with a bill that could get enough support to pass. It was the culmination of work McClellan had been doing since she was first elected to the legislature in 2006.

“The real lesson is patience and persistence,” she said. “You may not get what you want the first time, but you keep at it, you keep at it, you keep building that coalition.”

What May Be the Next Southern State to Require 100 Percent Clean Energy?

As recently as two years ago, it was unthinkable that Virginia would set a timetable to eliminate fossil fuels from its electricity system.

But considering how fast states and utilities are moving to embrace clean energy, it is now plausible that other Southern states might soon follow Virginia’s lead.

I asked Will Cleveland, a senior attorney for the Southern Environmental Law Center, what states might be next.

Maintenance workers on a solar farm. Credit: Robert Nickelsberg/Getty Images
States are quickly moving toward renewable energy to replace fossil fuel energy sources. Credit: Robert Nickelsberg/Getty Images

At the top of his list is North Carolina, if Democrats can pick up enough seats in the November election to gain control of the state House and Senate and if Gov. Roy Cooper, a Democrat, is re-elected.

I want to be careful when talking about the partisan differences. Some Republicans, in North Carolina and other states, support legislation that would accelerate the transition to clean energy. But these plans so far have not gained traction in any state under Republican control.

North Carolina’s largest utility is Duke Energy, which has announced a corporate plan to get to net-zero emissions by 2050. Cleveland said he sees this as a sign that the company may be willing to work on a state plan the way Dominion did in Virginia. North Carolina also is a leading solar power state, ranking second in the country in installed solar.

After North Carolina, the next candidate would be South Carolina, Cleveland said. This assumes that North Carolina would go first and that South Carolina would have evidence from the other states of how a clean energy plan can help the economy. The two biggest utilities in South Carolina are subsidiaries of Duke and Dominion.

“If Dominion and Duke in South Carolina were to decide that clean energy was the future of growth for their business … it creates more potential,” Cleveland said. “It’s no longer just these fringe environmentalists, but the business interests as well.”

But the most important part of all this is that Virginia is leading the way.

“It’s massive,” he said.

The rest of the South is very challenging territory for clean energy advocates who want to pass far-reaching legislation. To underscore this, eight of the dozen or so states that have no renewable energy requirements are in the South. The exceptions in the region are—you guessed it—Virginia, North Carolina and South Carolina.