Environmental groups, Dominion, business advocates seek deal on renewable energy, carbon emissions
February 1, 2020

Legislation to boost renewable energy production in the state and force electric utilities to wind down carbon emissions is working its way through the General Assembly, and precarious negotiations between environmental groups and the state’s utilities continued into the weekend.

The bill, introduced by Sen. Jennifer McClellan, D-Richmond, would set renewable energy production targets for electric utilities like Dominion Energy to meet, with a final target of 100% by 2050.

The bill also would make more room for solar energy projects not operated by the utilities, and call on the utilities to boost energy-efficiency programs to reduce the amount of electricity the state consumes.

McClellan said the bill is meant to address the threat of carbon emissions and climate change. She said the measure presents a framework to end the state’s reliance on fossil fuels “in a way that does not cause electric rates to go through the roof.”

“We’re trying to strike that balance,” she said in an interview, adding: “But I think there’s a societal cost of not doing this, if we continue to do nothing.”

The energy subcommittee of the Senate Commerce and Labor committee voted down McClellan’s bill on Thursday, because the bill lacked its final language. A coalition of environmental groups, monopoly utilities and business advocates hopes to hash out a deal by Sunday, before McClellan’s bill comes before the full Senate Commerce and Labor Committee on Monday. (In the Senate, unlike the House, subcommittees can make recommendations but cannot kill bills.)

Representatives of Dominion, the Virginia League of Conservation Voters and others said they were hopeful a deal would emerge. Among the key concerns is how quickly utilities should be asked to meet renewable energy and energy-efficiency targets, and how much to widen the door for the solar industry.

“We are working to find a consensus,” said Dominion Energy spokesman Jeremy Slayton.

“All stakeholders are still at the table,” said Michael Town, executive director of the Virginia League of Conservation Voters. “Everyone is working in good faith to get to yes. That’s very encouraging, and the public and lawmakers should be encouraged by that dynamic, which is new.”

A group of large employers in the state, including IKEA, Nestlé and Kaiser Permanente, sent a letter to lawmakers late Friday urging them to support the key tenets of the bill.

“Creating a cleaner electricity grid in Virginia will help us meet our sustainability goals, while attracting new investment, encouraging innovation, and saving ratepayers money,” they wrote.

Environmental protection and climate change advocacy have become key bullets in Democrats’ agenda in Virginia and across the country, as activists warn of a “crisis” and denounce moves by the Trump administration to roll back Obama-era environmental protection rules.

Whether human-triggered climate change is happening is an issue that continues to divide the parties in Virginia. How to approach it legislatively may well divide Democrats, with some concerned about tying utilities to unachievable goals and seeing power bills skyrocket.

Some policies have consensus. Democrats have vowed to move ahead with the state’s first cap on carbon emissions — blocked by Republicans last year — which would limit emissions from power plants and some industrial facilities that burn fossil fuels.

Energy producers like Dominion Energy would be pushed into an emissions trading program with nine nearby states called the Regional Greenhouse Gas Initiative, or RGGI, where they could trade emission reductions for cashable credits, or pay to go above the emissions cap.

McClellan’s bill would codify some of the goals Gov. Ralph Northam laid out in an executive order last summer, which called for Virginia’s electric grid to be solely dependent on carbon-free energy sources by 2050.

The Northam administration, however, is yet to back the legislation and is not a part of the negotiations. A representative of the Northam administration told a subcommittee Thursday that the administration is “encouraged by the conversations among stakeholders.”

“We are reserving taking a position until after the bill is amended,” said Deputy Secretary of Commerce and Trade Angela Navarro.

The legislation has a House companion sponsored by Del. Rip Sullivan, D-Fairfax. Sullivan’s bill has not been heard by a House committee.

McClellan’s bill would take Northam’s executive order further by setting annual renewable energy production targets for the state’s utilities. As introduced, the bill would call for 14% of the total energy Dominion sells to come from renewable sources. That grows to 51% by 2033.

A key sticking point is how fast to call on Dominion to meet these targets, McClellan and others said.

“I think everyone is OK with 100% by 2050, but what’s the glide path to that?” McClellan said in an interview.

Slayton said 6% of the energy Dominion sold customers as of 2018 came from renewables. He said the figure reflects companywide sales, not just Virginia.

“That being said, we have accepted the governor’s challenge to have 30% of our generation come from renewables by 2030,” Slayton added.

Dominion declined to comment further for this story, but McClellan said she has heard concerns from Dominion that the utility won’t have enough time to deploy its projects on renewables to meet the early targets.

A massive offshore wind project Dominion is pitching to lawmakers and regulators is slated to start generating electricity in 2024, with completion in 2026.

Opening up the door to more distributed solar — generation by entities outside of Dominion — would help toward the state’s goal.

Dominion has long been wary of legislators lifting a state-imposed cap on how much of the total energy on its grid can come from such projects. Right now, that cap is at 1%.

When McClellan, Sullivan and Del. Jennifer Carroll Foy, D-Prince William, unveiled the legislation at a news conference in December, it had support from a broad coalition of more than two dozen groups. They called for raising the cap to 10% to send a strong signal to the solar industry that it should invest in the state. People familiar with the negotiations said that number could end up being lower.

McClellan said she hopes consensus will yield a bill that positions Virginia as a leader in renewable energy, and said broader support from the Senate may depend on consensus, given the bill’s fate in subcommittee.

She said the bill she originally filed would be “the boldest step Virginia has ever taken” on the issue. Short of that, she said, “I’ll ask myself, is where we have consensus better than the status quo?”

In front of members of a Senate subcommittee, she said that wherever a consensus could not be reached, she would have tough calls to make.

A spokesman for the Sierra Club, one of the parties negotiating the deal, said: “Our main priority is ensuring state leaders pass the kind of strong climate legislation voters demanded in November.”

“This session represents an opportunity for Democrats to prove they are worthy of the majority by making sure Dominion does not get to dictate the terms of climate action,” Tim Cywinski said.

Town, with the Virginia League of Conservation Voters, said he hoped a strong bill would emerge over the weekend but did not reject the possibility of coming back to the issue next year if consensus can’t be reached.

“Every year that we delay, the urgency to act is going to grow. We don’t have time to wait, so we want to reach an agreement,” he said. “If we don’t, the need for a stronger agreement next year will be greater.”