VIRGINIA Embarks on Large Scale Transition to Clean Energy — Part 2

by Diana Gooding on April 17, 2020

Planning for much more solar & wind power

Virginia energy policy made interesting by Gov. Northam & VA Legislature

From a Report by Ivy Main, Power for the People VA, April 3, 2020

Virginia joins RGGI, less CO2 emissions

Virginia’s Department of Environmental Quality has already written the regulations that call for Virginia power plants to reduce emissions by 30 percent by 2030. The mechanism for achieving this involves Virginia trading with the Regional Greenhouse Gas Initiative, a regional carbon cap and trade market.

The regulations have been on hold as the result of a budget amendment passed last year, when Republicans still ruled the General Assembly. After July 1, DEQ will be able to implement the regulations, with the commonwealth participating in carbon allowance auctions as early as the last quarter of this year or the first quarter of 2021.

In addition to joining RGGI, the Clean Energy and Community Flood Preparedness Act also allows the commonwealth to earn money from the allowance auctions. The Department of Housing and Community Development will spend 50 percent of auction proceeds on “low-income efficiency programs, including programs for eligible housing developments.”

The Department of Conservation and Recreation will get 45 percent of the auction proceeds to fund flood preparedness and climate change planning and mitigation through the Virginia Community Flood Preparedness Fund. The last 5 percent of proceeds will cover administrative costs, including those for administering the auctions.

Energy efficiency savings become mandatory, not just decorations

Two years ago, the Grid Transformation and Security Act required Dominion and Appalachian Power to propose more than a billion dollars in energy efficiency spending over 10 years, but the law didn’t say the programs had to actually be effective in lowering electricity demand.

This year that changed. For the first time, Virginia will have an energy efficiency resource standard (EERS) requiring Dominion to achieve a total of 5 percent electricity savings by 2025 (using 2019 as the baseline); APCo must achieve a total of 2 percent savings. The SCC is charged with setting new targets after 2025. At least 15 percent of the costs must go to programs benefiting low-income, elderly or disabled individuals, or veterans.

The EERS comes on top of the low-income energy efficiency spending funded by RGGI auctions.

Dominion and Appalachian Power ramp up renewables and energy storage

The Clean Economy Act requires Dominion to build 16,100 megawatts of onshore wind and solar energy, and APCo to build 600 megawatts. The law also contains one of the strongest energy storage mandates in the country: 2,700 MW for Dominion, 400 MW for Appalachian Power.

Beginning in 2020, Dominion and Appalachian must submit annual plans to the SCC for new wind, solar and storage resources. We’ll have a first look at Dominion’s plans just a month from now: the SCC has told the company to take account of the Clean Economy Act and other new laws when it files its 2020 Integrated Resource Plan on May 1.

The legislation provides a strangely long lead time before the utilities must request approval of specific projects: by the end of 2023 for APCo (the first 200 MW) or 2024 for Dominion (the first 3,000 MW). But the build-out then becomes rapid, and the utilities must issue requests for proposals on at least an annual basis.

In addition to the solar and land-based wind, Dominion now has the green light for up to 3,000 MW of offshore wind from the project it is developing off Virginia Beach, and which it plans to bring online beginning in 2024. All told, the Clean Economy Act proclaims up to 5,200 MW of offshore wind by 2034 to be in the public interest.


See also: Virginia lawmakers agreed to join a regional carbon market. Here’s what happens next. – Virginia Mercury, Sarah Vogelsong, April 14, 2020

“By joining RGGI, Virginia will take part in a proven, market-based program for reducing carbon pollution in a manner that protects consumers,” Northam said in a statement Sunday. “I am proposing important refinements and I look forward to signing it into law soon.”

Clearing these political hurdles, though, is only the beginning of the administration’s work. Virginia will become a full participant in RGGI starting Jan. 1. Here’s what will happen between now and then.

{ 2 comments… read them below or add one }

Mary Wildfire April 18, 2020 at 2:48 pm

Reading this stuff just leaves me grinding my teeth in sour jealousy. WV will never be progressive like East Virginia.


VA Mercury May 8, 2020 at 6:38 pm

Despite Clean Economy Act, Dominion Energy forecasts a strong role for natural gas in Virginia

From Sarah Vogelsong, Virginia Mercury, May 8, 2020

Despite highly publicized commitments by political leaders and Dominion Energy to transitioning the state off carbon sources in favor of renewable forms of energy, the state’s largest electric utility is continuing to bank heavily on natural gas, a long-range plan and statements to investors and shareholders reveal.

The continued allegiance to the fuel, expressed in Dominion’s forward-looking Integrated Resource Plan released May 1 and reiterated in investor and shareholder calls this week, sparked a sharp response from the two Democratic legislators who spearheaded Virginia’s historic Clean Economy Act this past session.

The utility’s long-range plan, said a joint statement from Sen. Jennifer McClellan of Richmond and Del. Rip Sullivan of Fairfax, “is tantamount to quitting the game before the first pitch is thrown.”

A legislatively mandated but not binding forward look, the IRP sketches out the demand the utility expects to fulfill over the next 15 to 25 years and how it anticipates meeting that demand.

This year’s plan was the first to reflect the ambitious climate change goals of both Gov. Ralph Northam and the new Democratic majority that took control of both houses of the General Assembly for the first time in a generation this winter.

Last September, Northam issued an executive order directing that Virginia’s electric grid become carbon-free by 2050. And this March, after months of negotiation with environmental groups, the renewables industry and Virginia’s two major electric monopolies, Dominion and Appalachian Power Company, the legislature passed the Virginia Clean Economy Act, which upped Northam’s ante to chart a course for the state’s grid to become carbon-free by 2045.

Among the provisions of the highly technical law are mandated targets for solar, wind and energy storage development, as well as binding standards for utilities’ renewable generation portfolios and energy efficiency provisions.

The Integrated Resource Plan released by Dominion last Friday incorporates many of the commitments fervently sought by clean energy advocates, including a roadmap for adding 16 to 19 gigawatts of new solar, five gigawatts of offshore wind and 2.7 gigawatts of energy storage over the next 15 years, with just under a gigawatt of natural gas energy as a “placeholder” to remedy potential reliability problems.

But while Dominion offered four possible paths forward for regulators to review, the IRP it released Friday ultimately recommended approval of its natural gas-heavy Plan B, which recommends retaining almost 10 gigawatts of natural gas as part of the utility’s portfolio “to address future system reliability, stability and energy independence issues.”

“In order to preserve the option to address probable system reliability issues resulting from the addition of significant renewable energy resources and the retirement of coal-fired facilities in the near term, the Company is evaluating sites and equipment for the construction of gas-fired [combustion turbine] units,” the IRP said.

A press release issued by the company along with its IRP filing emphasized that “natural-gas fired generation will continue to play a critical, low emission role in our system for decades to come.”

Two alternative plans outlined by the utility would retire all carbon generation by 2045 but, Dominion warned, would “severely challenge the ability of the transmission system to meet customers’ reliability expectations” and would require the company to import electricity from outside the state, “in part from CO2-emitting generation.” (The fourth plan, which outlines a scenario that ignores existing laws and regulations, serves only as a baseline and is not “realistic,” the utility noted.)

That importation, according to the IRP, could necessitate some $8.4 billion in transmission upgrades — and maybe more.

But even Dominion’s preferred course will come with a hefty price tag: the utility projected customer bills will rise by about $46 between now and 2030, of which about $19 is attributed to legislative mandates from the 2020 session such as the Clean Economy Act.

Exactly how much of a financial burden the VCEA would exact upon ratepayers’ was a hotly contested issue this winter. Supporters including the Northam administration argued that due to factors such as fuel savings and energy efficiency, customers could see their bills slightly fall or only rise marginally as a result of the law and other legislation joining Virginia with the Regional Greenhouse Gas Initiative’s cap-and-trade carbon market.

Republicans, however, fretted that the new mandates would push captive ratepayers’ bills ever higher, a fear bolstered by estimates from the State Corporation Commission that they could increase average monthly costs by almost $28 by 2030.

McClellan and Sullivan said Dominion’s IRP “underutilizes energy efficiency and underestimates its cost effectiveness,” contributing to an overestimate of the burden on Virginia ratepayers.

“Energy efficiency is also the largest source of jobs in the clean energy sector. By underinvesting in this clean, affordable resource, Dominion is not only needlessly inflating costs, it is shortchanging Virginia’s economy and workers. Rejecting energy efficiency efforts will result in ratepayers getting higher bills without the intended climate or economic development benefits the VCEA intended to achieve,” they wrote.

PHOTO: Dominion Energy’s gas fired Brunswick County power station opened in 2016.

Challenge accepted?

In the wake of the IRP’s unveiling May 1, members of the coalition behind the VCEA reacted to Dominion’s recommendations with dismay.

“In September 2019, Dominion responded to Governor Northam’s 100 percent clean energy by 2050 executive order with a simple statement: ‘Challenge accepted,’” McClellan and Sullivan wrote in their Thursday joint statement. “Dominion was subsequently an active participant in the countless hours of detailed discussions about this bill. It knew all about the benchmarks the VCEA requires. As the legislators who wrote Governor Northam’s goals into law, we urge Dominion to follow through on its previous public commitment — not attempt to run from it.”

Will Cleveland, an attorney with the Southern Environmental Law Center who was closely involved with VCEA negotiations, described the IRP’s conclusions as disappointing.

“The Clean Economy Act at its heart is a climate bill. It’s supposed to be addressing climate change,” he said. “And Dominion’s preferred plan to do that keeps almost 10,000 megawatts of gas generation online through 2045. That is an incredible implementation of a climate bill.”

Harrison Wallace, Virginia director of the Chesapeake Climate Action Network, another party that helped shape the VCEA, said the prospect of needing to import carbon-fueled power decades from now was unlikely.

“Dominion said they could do this,” he said. “They weren’t planning on passing a bill like the Clean Economy Act in October of 2019. The politics changed and they adjusted their business model accordingly, but they said they could do this.”

Dominion did not respond to a list of questions about the IRP and its compatibility with the Clean Economy Act.

In a Tuesday call with investors and at the annual shareholders meeting held Wednesday, however, company leaders also reiterated the need for continued reliance on natural gas, and particularly their ongoing commitment to the controversial Atlantic Coast Pipeline.

“We are going to lead the nation in renewable energy in our Virginia electric service territory,” Dominion CEO, chairman and president Tom Farrell told shareholders May 6, according to a recording provided to the Mercury by a shareholder. “We look forward to embracing that change, but with today’s technology for the foreseeable future, natural gas infrastructure will be necessary to ensure our core mission.”

“Now, if those technologies change, and hopefully they will over the decades to come … then we will be able to transition away from that, from natural gas as a feedstock for electric power,” he added. “But that is not a realistic request for today.”

Farrell also reaffirmed the importance of the Atlantic Coast Pipeline in a first quarter investors’ call May 5, asserting that the $8 billion project will go forward as planned despite the loss of eight permits and increasing doubt from financial analysts.

The revocation of one such permit, from the U.S. Forest Service, is being considered by the U.S. Supreme Court, which is expected to issue a ruling on the case later this spring.

“We remain confident in the successful completion of the project,” Farrell said on the May 5 call. “Customers need this infrastructure now more than ever.”

Dominion’s IRP will now begin regulatory review by the State Corporation Commission, during which case participants and judges will argue the merits of the company’s assumptions and conclusions.


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