Virginia GOP targets clean energy law, but options for rollback are limited

By Mason Adams, Energy News Network

Newly emboldened Virginia Republicans are vowing to roll back the state’s landmark clean energy reforms enacted by Democrats over the last two years.

Virginia voters last week elected Republican businessman Glenn Youngkin as governor and a Republican majority in the House of Delegates, ending two years of unilateral Democratic control during which the state committed to joining a regional cap-and-trade program and achieving 100% carbon-free clean power by 2050.

Those and other provisions in Virginia’s sweeping Clean Economy Act now face political uncertainty, though policy experts predict that much of the 2020 law will be able to withstand a partisan challenge thanks to Democrats’ narrow control of the state Senate. Market forces and staggered regulatory appointments are also likely to moderate any potential whiplash.

“The most significant requirements of the Clean Economy Act are durable because they are in the legislation,” said Cale Jaffe, professor and director of the Environmental Law and Community Engagement Clinic at the University of Virginia School of Law. “There are enough different actors that are either outside of any governor’s control or where a governor’s role is indirect that it seems the broad path is durable. That would be my prediction.”

That doesn’t mean Republicans won’t try. 

Youngkin, who was unavailable for an interview last week, said during the campaign that the law set unachievable targets that threaten the affordability and reliability of electricity in the state. 

“I believe that, in fact, we can tackle bringing down emissions in Virginia without putting forth a plan that not even executives at the utilities believe is doable,” he said during a debate in September. “It’s gonna, in fact, increase Virginians’ bills by up to $1,000 a year. It puts our entire energy grid at risk. All in play for some political purpose. I believe in all energy sources, we can use wind and solar, but we need to preserve our clean natural gas and we can, in fact, have a reliable energy grid.”

Read more: A supply chain is born: Can the U.S. reach 30 GW of offshore wind by 2030?

Top House Republican Del. Todd Gilbert of Shenandoah Valley, who is making a bid to become Speaker of the House, said rolling back the Clean Economy Act will be one of his priorities.

“It’s a so-called green measure that really made life a lot more expensive for everybody by taking away access to fossil fuels and incentivizing things that aren’t proven to be a complete picture of our energy sector,” Gilbert said last week in a news conference. “Things like solar and wind … may complement that but shouldn’t form the core of generating the energy we need to run a large economy like Virginia’s economy. What they did was, by the State Corporation Commission’s estimation, make the average Virginia family pay $800 more a year in energy bills. That’s certainly another area we’d like to revisit because we think that went way too far.”

Those promises worry supporters of the clean energy economy, who expressed concerns that efforts by Virginia Republicans to repeal or slow-walk the state’s commitments could result in a larger chilling effect.

“There’s national implications for this because Virginia was the first state to adopt a legally binding commitment to 100% clean energy,” said Tim Cywinski, of the Virginia chapter of the Sierra Club. “If we went backwards on that, it could signal to other Southern states it’s not attainable. That could be a mortal blow to clean energy advocates everywhere. In terms of climate action, this is the moment we have to hold the line.”

Divided government in Virginia is nothing new. Since 2000, the two chambers of the General Assembly and governor’s office have had a party split every term except from 2012 to 2014, when Republicans unilaterally controlled government but with an extremely narrow margin in the state Senate.

The state elections of 2019, however, gave Democrats their first majorities in both General Assembly chambers since the 1990s. With Democrat Ralph Northam as governor, the party set out on an ambitious course and enacted sweeping legislative changes that spanned Virginia.

The Clean Economy Act of 2020 stands as one of the Democrats’ most significant accomplishments and distinguished Virginia from many of its fellow states in the South. The law, passed with bipartisan support, established a renewable portfolio standard for state electric utilities Dominion Energy and Appalachian Power that required both to develop an increasing share of clean energy that by 2050 would be entirely free of carbon emissions.

Additionally, the law required Virginia to participate in a carbon-trading market as a means of achieving clean energy. That provision set up the state’s participation in the Regional Greenhouse Gas Initiative, a cooperative effort among 11 states to cap and reduce carbon emissions from the power sector. In 2021, Virginia received $43 million from the initiative as the first round of funding that came back from the purchase of carbon allowances by the state’s power plants.

The legislation builds on 2018’s Grid Transformation and Security Act, which created incentives for Dominion and Appalachian to invest in renewable generation, grid modernization, and energy efficiency by directing they use excess profits toward those aims. That legislation was passed by a Republican-majority General Assembly and signed by a Democratic governor.

“The Clean Economy Act is the latest of a multiyear progression in Virginia towards clean energy that started long before Democrats were in control,” said Will Cleveland, staff attorney at the Southern Environmental Law Center. “Support for the Clean Economy Act was bipartisan in both chambers. We’re happy to work with anybody dedicated to the clean energy transition and making sure it’s fair and equitable.”

The result of the two laws has been a flood of renewable energy projects. Dominion plans to acquire 16,000 megawatts of solar by 2035. Appalachian Power, which recently announced operations at its first, 20-megawatt solar farm, anticipates 3,452 MW of solar that will come online by 2050. 

But while Democratic gubernatorial candidate Terry McAuliffe called for the acceleration of those plans, Youngkin pushed back and warned about “blackouts and brownouts and an unreliable energy grid” if that were to happen.

“We can do this with common sense,” Youngkin said in a debate. “We should embrace all energy sources. Yes, wind, yes, solar. But we can’t dismantle our reliable, clean, inexpensive natural gas.”

Both Dominion Energy and Appalachian Power are taking cautious stances toward the new state government.

“I can tell you that our view is that energy policy is a bipartisan issue,” wrote Rayhan Daudani of Dominion Energy in an emailed statement. “If there’s one thing everyone agrees on, it’s the critical importance of keeping the lights on. We’re focused on continuing to provide customers reliable, affordable and clean energy. Our reliability is 99.99%, our customers’ rates are more than 15% below the national average, and we are transforming the grid with clean energy and the thousands of green jobs it brings.”

Teresa Hall, a spokesperson for Appalachian Power, responded to questions with a short statement: “The Virginia Clean Economy Act requires Appalachian Power to be carbon-free by 2050. We will continue to abide by the law.”

Lawmakers in both parties have discussed reforming how Virginia regulates utilities. Dominion Energy became a point of contention during the 2021 campaigns — first in Democratic primaries, where candidates challenged one another over accepting campaign contributions from the utility, and later in the general election after Dominion gave $200,000 to a Democratic political action committee that produced fliers that misleadingly appeared to be an attack on Youngkin from his political right.

Dominion Energy is the 10th largest donor in the 2020-21 cycle so far, doling out more than $5 million to groups and candidates from both parties, according to the Virginia Public Access Project. It’s been targeted by a nonprofit known as Clean Virginia, founded by a Charlottesville donor who was the fifth largest donor during the cycle.

That dynamic may be due as much to shape Virginia energy policy as partisan battles, said Jaffe at UVA.

“The politics on Dominion don’t necessarily align D versus R,” Jaffe said. “What I’ve long noticed is that legislators who are outside of Dominion’s service territory are more comfortable raising objections to something the utility wants to do. The line that may be relevant is … about which utility service territory a legislator is representing, and what their constituents feel about their own utility.”

Another open question will be who’s named the new Speaker of the House. Gilbert has staked a claim on the role, as has southwestern Virginia lawmaker Del. Terry Kilgore. Gilbert is considered the harder conservative of the two, but Kilgore is no moderate Republican, either. Representing a southwestern district that remains deeply tied to the coal industry, Kilgore has long served as the chair and then top Republican in the House Labor and Commerce Committee, which oversees energy and utility legislation. 

Republicans hoping to chip away at the Clean Economy Act face significant obstacles, primarily the Democratic majority in the Virginia Senate. There, the Clean Economy Act passed with support not just from the 21 Democrats in the 40-member body, but also a Republican. Repealing or weakening the law would require flipping two of those votes. 

“They had 22 votes for it in the Senate, and the senators haven’t changed,” Jaffe said. 

Republicans will hold the tie-breaking vote with Winsome Sears’ election last week as lieutenant governor. 

Youngkin also will have limited ability to affect the law. The governor appoints members to the seven-member Virginia State Air Pollution Control Board, which votes on Virginia’s membership in the Regional Greenhouse Gas Initiative. However, he’s limited to appointing two members in 2022, a third in 2023 and two more in 2024. His influence on the board will be staggered and play out only over time.

Similarly, the utilities and their renewable portfolios are overseen not by the governor or General Assembly, but by the State Corporation Commission. 

The commission “is completely independent,” said Cleveland of the Southern Environmental Law Center. “It’s a creature of the Virginia constitution. It’s not an agency within the executive branch.”

The General Assembly appoints people to the three-member commission, but to staggered, six-year terms that limit political influence.

Another factor that overrides partisan politics is the influence of the market, which has pushed utilities away from fossil fuels and especially coal throughout the country. For example, Southern Co., the parent company of utilities in conservative Alabama and Georgia, announced last week it would close 55% of its coal fleet by 2030. Similarly, Republican-controlled Texas is one of the fastest-growing states in the country for wind and solar energy development.

“We’re building solar no matter what right now because it’s just so cheap,” said William Shobe, director of UVA’s Center for Economic and Policy Studies. “Offshore wind not so much, but policymakers have decided the economic benefits to the Hampton Roads region outweigh the increased costs of offshore wind.”

Youngkin’s positive references to wind and solar have led to uncertainty about how he’ll approach Dominion’s federally supported plan to build 176 wind turbines about 27 miles off Virginia’s coast, as the project’s cost recently increased to nearly $10 billion.

The next several weeks will be marked by a scramble ahead of the beginning of the General Assembly session, which begins Jan. 12, 2022. 

If the new Republican governor and House majority do fail to effectively reverse the Clean Energy Act, another chance will come in 2023, when all 140 seats in the Virginia Senate and House of Delegates come up for reelection.