UPDATE: April 13, 2020: Gov. Ralph Northam signed the Virginia Clean Economy Act on Monday, setting a goal for 100% clean energy by 2045.
- The Virginia Clean Economy Act, which enjoyed wide support from environmental and clean energy groups, cleared both chambers and was sent to the governor's desk on Friday.
- The package presents a Democratic-led path to ambitious climate goals, and many clean energy advocates are lauding the effort as an example for other states. However, analysis from the State Corporation Commission has the leading utility in the state, Dominion Energy, collecting approximately $50.8 billion more from its customers due to the provisions.
- Advocates for the bill have criticized the state regulators' estimate, saying the calculations don't take into account the benefits of the energy efficiency, renewables, energy storage and other initiatives mandated through the Virginia Clean Economy Act. Dominion did not respond to requests for comment regarding the impacts of the bill.
Spurred by federal inaction and an increasing sense of urgency in addressing the climate challenge, more and more states are enacting ambitious goals.
"This moves Virginia into a leadership position in terms of clean energy across the country," Harry Godfrey, Advanced Energy Economy director, told Utility Dive. "I couldn't name a state for you that has moved further, faster in terms of going from a laggard to a leader on these issues than Virginia has done today."
The legislation has a major energy efficiency component, along with provisions to help electrify transportation and advance the development of renewables, including offshore wind, which Dominion is planning to build out.
The bill's final version replaces the state's voluntary renewable portfolio standards with mandatory utility ownership for solar and and wind generation. Most notably, utilities must own or operate up to 5 GW of offshore wind generation. Dominion would also have to deploy 2.7 GW of energy storage by 2035.
However, the legislative package has some conflicting economic analysis.
According to an analysis released March 3 by 5 Lakes Energy, the Clean Economy Act would reduce bills of average residential customers in Virginia from $122.28 per month in 2020 to $118.87 per month in 2030. The report was requested by Advanced Energy Economy, after deeming the state regulator analysis as incomplete.
SCC's analysis "took very high cost estimate numbers in those regions and they did not consider the other side of the ledger," such as fuel savings and energy consumption reductions, Godfrey told Utility Dive. He said AEE's analysis more thoroughly covered the impacts of the bill.
However, energy savings and other aspects beyond procurement "cannot be quantified," Ken Schrad, director of the SCC's division of information resources, told Utility Dive. Dominion had provided SCC staff with preliminary estimates of capital investment, operations, maintenance, decommissioning and finance costs for the analysis.
The SCC had no financial impact estimate for programs like energy efficiency, which is a large component of the bill. According to AEE's 5 Lakes analysis, the mandated level of energy efficiency can be realized by spending $140 million per year, while still leading to overall savings on customer bills.
But "until a particular program is proposed, it is difficult to project the benefits of the program against those costs," Schrad said.
The bill should reduce customer electricity use 5% from current levels by 2025, and continue reducing usage afterward, according to its final version.
"Even if energy efficiency leads to reduced consumption, the monthly bill still goes up under the [Clean Economy Act] regardless of whether a customer is actually able to lower consumption," Schrad said.
"Dominion Energy Virginia is the largest provider of electricity service in Virginia and, as a result, has the greatest requirements under the provisions of the VCEA," Schrad said.
The state's other investor-owned utility, Appalachian Power Company (APCo), would also face requirements under the bill, although regulators did not quantify those impacts. APCo, a subsidiary of American Electric Power, would have to own 400 MW of storage by 2035, along with other targets.