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Energy Bills to Watch in 2014

GA

By Ivy Main

Guest Blogger Ivy Main has been an advocate for renewable energy with the Sierra Club since 2007. A lawyer by training, she lobbies extensively in the General Assembly for stronger clean energy policies and writes a regular blog, Power for the People VA, about energy policy in Virginia. She was the lead author of the Virginia Chapter’s 2010 report, Power Failure: How Virginia is Losing the Competition for Clean Energy Jobs. Since 2012 she has also served at the national level as a member of the Sierra Club’s Beyond Coal Campaign leadership team.

 

Every year, hundreds of energy bills are fed into Virginia’s sausage-making machine, but little of interest to clean energy advocates makes it out the other end. Utilities and coal companies largely control the outcome, thanks to their generosity in funding legislators’ campaigns, and they do not share our desire for change.

Yet the start of each new Session, like the new year itself, always produces hope and excitement about the possibilities at hand. 2014 is no exception. There are a lot of bills here worth watching, and even rooting for. The list below is not comprehensive, and new bills keep coming in while existing ones get amended faster than I can keep up with, so take this summary only for what it’s worth today.

One point worth noting is that many of the most promising bills come from Republicans. Renewable energy and energy efficiency, once identified with progressives, seem to have gone mainstream in Virginia. Well, why not? In addition to lowering our carbon footprint and helping residents save money, they make business sense and create jobs.

 

How to look up a bill: The links in this article will take you to the summary page for a bill on the website of Virginia’s Legislative Information Service. The bill summary is not guaranteed accurate and does not change even if the bill language changes substantially, so always follow the links to the latest version of the bill to read the text. The summary page also shows what committee the bill has been assigned to; following the links will show you who is on the committee, when it meets, and what other bills have been assigned.

 

Investment tax credit. The bill with the potential to do most for renewable energy in Virginia is HB 910 (Villanueva), which would provide tax credits for renewable energy projects. The top priority this year for the solar industry, the bill would go a long way towards helping renewable energy compete in a state that still shells out millions of dollars every year in coal subsidies. A companion bill from a Senate Republican is also expected but has not been filed as of the time of this posting. The combination would be a powerful statement of support from a party that has not always been a friend to renewable energy.

In a bid to create broad support, HB 910 is not limited to emission-free projects like wind and solar. It would be hugely unfortunate if a few large biomass projects were to gobble up the credits, so we hope the patrons will commit to making any necessary fixes in future years if that happens.

 

Expanding net metering. Three-quarters of utility customers can’t take advantage of solar energy because their property isn’t suitable for solar panels. HB 879 (Yost), HB 906 (Krupicka) and SB 350 (Edwards) would allow customers in multifamily housing to participate in shared renewable energy systems, a limited form of community net metering. The bills would also allow something called “municipal net metering,” under which local governments could build a single renewable energy facility and attribute the energy from it to multiple meters on property owned by the locality. In addition to solar, these projects could include wind, landfill gas or gas from aerobic or anaerobic digesters.

Although these three bills look to be the same right now, I’m told they may be changed so that one House bill deals with multifamily housing and the other with municipal net metering.

 

Defining solar panels as pollution control equipment. SB 418 (Hangar) is primarily a useful workaround to address a tax problem that is holding back solar power purchase agreements. Odd as this sounds, currently third-party-owned solar systems are subject to local tax as manufacturing equipment. In many jurisdictions where solar PPAs have the most potential to help churches, schools, and other non-profits go solar, the tax is so high as to make the projects impossible to finance. Many localities want to help solar but are paralyzed by fear of opening a Pandora’s Box of unintended consequences. To solve the problem, SB 418 would extend to solar panels a tax exemption currently available to landfill gas projects and wood mulching equipment. Beyond helping PPAs, the legislation would also exempt solar equipment from state sales tax, which would make solar systems more affordable to all solar customers.

 

RPS bills. Several bills seek to improve Virginia’s pathetic voluntary renewable portfolio standard law by restricting the kinds of energy or credits that can be used to meet it. None of them would make the RPS mandatory, so they can’t deliver the kind of robust market in renewable energy credits (RECs) that supports the wind and solar industries in other states. For the most part, they aim for small fixes that could cue up stronger bills in future years, and reduce the consumer rip-off that characterizes the current RPS.

Of these, HB 1061 (Surovell) is the solar industry favorite. It would create the beginnings of a solar REC market here even within the framework of the voluntary RPS. This “Made in Virginia” bill would require Dominion Virginia Power to meet a portion of its voluntary target with renewable energy certificates representing distributed generation produced in Virginia, or by contributions to the state’s voluntary solar resource fund, which provides loans for solar projects. The State Corporation Commission would be tasked with the job of creating a system for registering and trading Virginia-based renewable energy certificates (RECs).

HB 881 (Yost) similarly sets up a system of renewable energy certificate registration and tracking at the SCC. It also eliminates the double and triple credits that the RPS currently gives to certain types of energy, only grandfathering in some wind RECs that Appalachian Power had already contracted for.

SB 498 (McEachin) makes a number of changes to the voluntary RPS to put it on a stronger footing going forward. It limits a utility’s ability to satisfy the goals with purchases of low-quality RECs like those from old hydroelectric dams and landfill gas, and ensures that most future purchases of energy and RECs will represent high-quality resources like wind and solar. It does not, however, include a carve-out for Virginia distributed generation. A similar bill last year received the blessing of Dominion but died in the face of opposition from the Virginia Alternative and Renewable Energy Association, arguing for the interests of the producers of crappy RECs.

Delegate Alfonso Lopez spent much time and effort over the past year trying to broker a deal between the utilities, environmental groups and renewable energy companies to produce a modest consensus bill. The result, HB 822, would seem to be a testament to how little consensus there is; it includes only a two-year limit on banking RECs for use in future years and the elimination of double credit for energy from animal waste. (I’m guessing the animal waste people weren’t at the table.) It also strengthens existing wording about the RPS serving the public interest, which may help utilities get SCC approval for expenditures to meet the targets.

 

On-bill financing for energy efficiency. Advocates of clean energy say the best way to get homeowners and businesses to weatherize buildings and install efficiency upgrades is to let customers pay the cost through their utility bills, often out of the energy savings they reap. HB 1001 (Yancey) would require electric utilities to offer on-bill financing for energy efficiency measures. The bill would be stronger if it included gas utilities and did not insist on a five-year payback period, which is too short a time for many weatherization measures, but it’s still a great start.

 

Service districts. HB 766 (Bulova) adds energy and water conservation management services to the list of items that can be owned and maintained by local service districts. This adds a new tool for local governments to finance energy efficiency and renewable energy projects, allowing payments to be made via local property tax bills.

 

Virginia Commission on Energy and the Environment. The Virginia Energy Plan is due to be updated in 2014, and boy, does it need it. Anyone who has ever tried to make sense of the plan has probably given it up as a hopeless hodgepodge of contradictory ideas. Anything you like, it’s in there. Anything you don’t like is in there, too, and none of it means anything because the provisions for the most part have no teeth. HB 818 (Lopez) hopes to turn this mishmash into a coherent plan for Virginia’s energy future by creating a new legislative commission to perform a comprehensive review of the energy landscape.

 

Price stability. HB 808 (Lopez) adds consideration of long-term price stability to the factors that utilities and the State Corporation Commission must look at when evaluating a proposed new electric generating facility. This would help to level the field for renewable energy, since fuel prices for fossil fuels are highly volatile and largely unpredictable over the full 30-year design life of a facility, whereas wind and solar are famously price stable.

 

Consideration of the environment. In a case decided last summer (PUE-2012-00128), the State Corporation Commission essentially interpreted the Virginia code to eliminate its own role in protecting the environment when it approves electric generating facilities. HB 363(Kory) beefs up the code just enough to make it clear the SCC still has a job to do even when state agencies have issued all the relevant permits. The bill requires the SCC to consider matters not covered by permits, such as carbon emissions and the overall effect of electric generation facilities on the health and welfare of residents.

 

Dealing with climate change. Hampton Roads is facing a crisis as sea level rise combines with sinking land to swamp low-lying coastal areas with every major storm, a problem predicted to get steadily worse over the course of the century. SJ 3 (Locke) and HJ 16 (Stolle) establish a Recurrent Flooding Planning Committee to examine ways to respond. It’s a good bill, but really, it’s weird to address recurrent flooding with no mention of what’s causing it. Dealing with recurrent flooding in Hampton Roads without talking about climate change is like addressing the obesity epidemic without mentioning diet and exercise. Why kid ourselves?

 

Carbon Dioxide Emission Control Plan. Speaking of kidding ourselves, SB 615 (Carrico) would establish a commission with the job of limiting carbon emissions without limiting the sources of those emissions. Indeed, the bill would be more accurately titled the Carbon Pollution Continuance Plan. It’s too bad to see legislators fighting to keep coal plants running full-tilt when we have better, cleaner, and cheaper options—ones that don’t put us on a course to make “recurrent flooding” a daily occurrence.

 

Fracking public landsHB 915 provides that no permit or lease for oil and gas exploration or drilling on public lands can prohibit the use of fracturing. Really? Why would you prevent a state agency and the Governor from determining the scope of a permit? If the agencies are doing their job protecting public lands (I know, a big if), surely this prohibition ought to make it less likely, not more likely, that permits would be issued. That makes this bill a bad idea no matter whose side you’re on.

 

Attempts to nullify federal law. Two bills from Bob Marshall, HB 140 (multi-state coal compact) and HB 155 (interstate offshore energy compact) would replace existing federal laws and regulations with state control. Only the first bill is blatantly unconstitutional. The second, an attempt to supplant federal authority over waters beyond three miles out from shore, wouldn’t take effect without “consent” of Congress, so it might be merely a total waste of everyone’s time and an affront to our good sense. Delegate Marshall evidently regards the Constitution as a mistake. The rest of us can only be embarrassed for his constituents.

 

About the Author

Corrina Beall is the Legislative Coordinator for the Virginia Chapter of the Sierra Club.