Cross posted from Ivy Main’s Power for the People VA
This year’s General Assembly session notably failed to produce legislation addressing the widening gap between electricity demand and supply in Virginia. Legislators shied away from measures that would address the growing demand from data centers, but they also couldn’t bring themselves to improve the supply picture by supporting landowners who want to host solar facilities. By the time the session ended, a mere handful of bills had passed that could improve our ability to meet demand.
Still, the initiatives that did pass offered positive steps forward on energy efficiency, distributed generation, interconnection of rooftop solar, energy storage, EV charging and utility planning. In addition, two data center-related bills passed requiring more planning and transparency during the local permitting process and tasking utilities with developing a demand response program to relieve some of the added burden on the grid.
Sadly, however, Republican Gov. Glen Youngkin decided to use his powers of veto and amendment to water down or scuttle the limited (and mostly bipartisan) progress legislators made. The only two data center bills were effectively killed, as were most energy bills – some by veto, others by amendments that made them worse than no action at all.
There’s nothing very subtle going on here. The governor loves data centers and isn’t about to limit their growth, regardless of the consequences to residential ratepayers and communities. He’s also stuck in a rut of attacking the Virginia Clean Economy Act (VCEA), which prioritizes low-cost renewable energy over legacy fossil fuels. He won’t be in office when the chickens come home to roost in the form of an electricity shortfall and skyrocketing rates, but he’s setting up his party to cast blame on the liberal climate agenda.
Data centers
The General Assembly failed to pass legislation that would have shifted responsibility for sourcing clean energy onto the data center operators. The only bill to pass that even makes energy a consideration in the siting of data centers is HB 1601, sponsored by Del. Josh Thomas, D-Gainesville. In addition to site assessment provisions at the permitting stage, it requires the utility serving the facility to describe any new electric generating units, substations and transmission voltage that would be required.
Limited as these provisions are, the governor proposed amendments to further weaken the bill, then added a clause requiring that for the bill to take effect, it has to be passed all over again in 2026. That’s a veto by another name.
SB 1047 from Sen. Danica Roem, D-Manassas, requires utilities to implement demand-response programs for customers with a power demand of more than 25 MW, a way of relieving grid constraints during times of high demand. The governor vetoed the bill, deeming it unnecessary.
The only data center-related bill that did get the governor’s approval is one of questionable utility. HB 2084 from Del. Irene Shin, D-Herndon, merely requires the SCC to use its existing authority during a regular proceeding sometime in the next couple of years to determine whether Dominion and Appalachian Power are using reasonable customer classifications in setting rates, and if not, whether new classifications are reasonable. The SCC seems to be doing this already anyway, but maybe this lets our leaders claim they are doing something to protect residential ratepayers. Plus, they can now call it a bipartisan effort!
Utility reform
With Virginia fixed on a collision course between growing demand for energy from data centers and our leaders’ refusal to support low-cost solar to provide the power, it is more important than ever that our utilities engage in transparent and comprehensive planning through the integrated resource plans (IRPs) filed with the State Corporation Commission. Over the course of last fall, the Commission on Electric Utility Regulation hammered out what I think is truly good legislation to ensure Dominion and APCo present the information the SCC and the public need to be sure our utilities are making the decisions that will improve our energy position and put the needs of ratepayers ahead of corporate profits.
In vetoing SB 1021 from Sen. Scott Surovell, D-Fairfax, and HB 2413 from Del. Candi Mundon King, D-Dumfries, the governor offered this muddled statement: “The State Corporation Commission has the expertise and the authority to make requirements and changes to the integrated resource plan process. The Virginia Clean Economy Act is failing Virginia and those that champion it should stop trying to buttress this failing policy. But rather should be focused on procuring the dependable power needed to meet our growing demand through optimizing for reliability, affordability, and increasingly clean power generation.”
We get it: Johnny One-Note doesn’t like the VCEA. He said that already. But right now, APCo isn’t filing IRPs at all, and the SCC has been so frustrated with Dominion’s filings that it didn’t approve the last one, and demanded a supplement to the most recent one even before it was filed. Clearly the SCC could use a little help here.
Distributed energy sources
Advocates for small-scale solar were more successful this year than their colleagues who focus on utility-scale projects. Bipartisan majorities seemed to agree that if we can’t or won’t site large solar farms, at least we should make it easier to put solar on rooftops and other small sites close to users.
Sadly, however, only one bill survived the governor’s scrutiny relatively unscathed, though it’s an important one for customer-sited solar. HB 2266 from Del. Kathy Tran, D-Springfield, resolves the interconnection dispute that has stalled commercial solar projects in the 250 kW to 3 MW size range, which includes most rooftop solar on schools. Tran’s bill requires the SCC to approve upgrades to the distribution system that utilities say are needed to accommodate grid-connected solar, a safeguard that will prevent the utility from larding on costs. The utility must then spread the costs across all projects that benefit from the expanded capacity.
Youngkin’s proposed amendment rearranges the language a bit and places it into a new section of code, but does not otherwise change it. He then adds a provision in the tax code to make grid upgrades tax-deductible. I would have thought they would be anyway, as business expenses, but it can only be helpful to spell it out.
Unfortunately, that’s it for the good news.
HB 1883 from Del. Katrina Callsen, D-Charlottesville, and SB 1040 from Sen. Schuyler VanValkenburg, D-Richmond, contain several provisions aimed at increasing the amount of distributed solar in Virginia. Among other things, the legislation increases the percentage of Dominion’s renewable portfolio standard (RPS) obligation that must be met with renewable energy certificates (RECs) from behind-the-meter small solar projects, a change that would make rooftop and other distributed solar more profitable for homeowners and businesses.
HB 1883 also increases to 3 MW from 1 MW the size of solar projects that could qualify for this favored category. Additionally, for the first time it would give all residential ratepayers the right to use power purchase agreements (PPAs) to install solar with no money down, and would increase the amount of electricity Dominion would build or buy from solar facilities on previously developed project sites. To give the market a chance to ramp up, Callsen’s bill excuses Dominion from having to meet its REC obligations from Virginia projects for an additional two years, pushing that date from this year to 2027.
Among all those changes, the only one the governor liked is the idea of softening the requirements around REC purchases. His proposed amendment would make all REC compliance voluntary for four years. Effectively, Virginia would have no renewable energy requirements until 2028, undercutting solar development of any size. His preferred version scraps all of the provisions of Callsen’s bill, leaving no provisions to support solar development and replacing them with an open attack on the VCEA.
I checked in with Callsen by email to get her reaction. She responded, “We sent the administration bipartisan legislation that protects ratepayers, gives Virginians more options for solar on our homes and businesses, and saves rural land. Rather than sign HB 1883 into law,” Callsen wrote, “the governor used this opportunity to attack the Clean Economy Act from 2020. Instead of looking at the past, our Administration should look around; we have a developing energy crisis and are reliant on importing energy to meet our needs.”
The governor also offered a destructive amendment to HB 2346 from Del. Phil Hernandez, D-Norfolk, and SB 1100 from Sen. Ghazala Hashmi, D-Richmond, legislation establishing a pilot program in Dominion territory for virtual power plants (VPPs), which aggregate customer solar and storage resources and demand response capabilities. Although VPPs don’t by themselves add electricity on the grid, they allow time-shifting and other efficiencies that make it easier for utilities to meet peak demand without having to build new generation. The payments utilities make to customers for this service can justify customers’ investments in things like solar, battery storage and smart appliances.
Instead of improving on the pilot program, however, the governor’s amendment scraps it and calls for the SCC to convene a proceeding to talk about VPPs. On the plus side, Youngkin suggests that the conversation include Appalachian Power as well as Dominion, and consider allowing the service to be provided by either the utilities or third-party aggregators, the latter being the favored approach of many industry members. Still, the amendment pushes off any hope of a program for at least another year, until the SCC has made its recommendations. Since it would have been feasible to both start a pilot program this year and have the SCC consider parameters for a broader program in the future, it’s hard to see the governor’s amendment as a step forward.
When I asked her for a comment, Hashmi did not mince words, saying it was “incredibly disappointing” that Youngkin chose to offer a substitute instead of signing the legislation.
“This legislation was the result of several months of conversation among a variety of stakeholders, including our utility companies, energy partners, and environmental groups. The Virtual Power Plant has the promise of helping Virginia meet the goals of our increasing energy demands. The Governor’s substitute shows that he is not serious about responding to the growth of Virginia’s energy needs,” Hashmi wrote.
Other solar bills drew outright vetoes, including Mundon King’s HB 2356, establishing an apprenticeship program to help develop a clean energy workforce. The bill requires participants to be paid prevailing wages, a provision that was a certain veto magnet for Youngkin, whose veto statement reads, “This bill will increase the construction costs which will ultimately be passed along to ratepayers, raising costs for consumers.”
Another bill that drew an outright veto was HB 2037 from Del. David Bulova, D-Fairfax. His bill would allow local governments to include in their land development ordinances a requirement that certain non-residential applicants install solar on a portion of a parking lot.
The governor vetoed it because, he said, it would be expensive for developers, and if it weren’t, they would do it without having to be told. (It’s a strange objection. Does he not understand the whole concept of government acting in the public good? Well, maybe not; see the veto.)
Also vetoed was Shin’s HB 2090, changing the rules around multifamily solar. Admittedly I was not crazy about this bill; although it allows solar facilities to be placed on nearby commercial buildings instead of being restricted to the multifamily building itself, it also imports the requirement for minimum bills that has made other shared solar programs in Virginia unworkable for all but the low-income customers who are excused from the minimum bills.
Maybe the trade-off would have opened new opportunities for apartment buildings serving low-income households, which would make it a plus on balance. But among his objections to HB2090, the governor noted that excusing low-income customers from high minimum bills would shift costs onto other customers.
Energy efficiency
The governor vetoed SB 1342 from Sen. Lamont Bagby, D-Richmond, and HB 2744 from Del. Mark Sickles, D-Franconia, that would have pushed Dominion and APCo harder to provide energy efficiency upgrades to low-income homes, setting a target of 30% of qualifying households.
He also vetoed SB 777 from Sen. Mamie Locke, D-Hampton, and HB 1935from Del. Destiny LeVere Bolling, D-Richmond, which would have established a task force to address the needs of low-income customers for weatherization and efficiency upgrades. The governor said it isn’t needed.
If you notice a pattern here when it comes to helping low-income households with their energy burden, you are not alone.
Reached on maternity leave, LeVere Bolling had this to say: “Across our Commonwealth, high utility bills are forcing Virginians to choose between essentials like groceries and medication and keeping their home at a safe temperature during hot summers and cold winters. Virginia has the 10th least affordable residential energy bills in the country. Over 75% of Virginia households have an energy burden higher than the 6% affordability threshold.” She added that the governor’s veto represents a “missed opportunity to address the pressing energy needs of Virginia’s most vulnerable communities.”
Electric vehicles
The governor offered a substitute for a bill intended to support electric vehicle charging. As passed by the General Assembly, Shin’s HB 2087requires Dominion and APCo to file detailed plans to “accelerate transportation electrification,” including for rural areas and economically disadvantaged communities. It also allows the utilities to file proposed tariffs with the SCC to supply the distribution infrastructure necessary for EV charging stations.
The utilities are also authorized to develop their own fast-charging stations, but only at a distance from privately-owned charging stations, with the SCC determining the proper distance. This provision responds to the request of gas station chains like Sheetz that say they want to expand their EV charging options, but don’t want to face unfair competition from utilities that can rate-base their investments.
The governor’s amendment would prohibit Dominion and APCo from owning EV charging stations at all; in addition, it would allow retail providers of EV charging stations to buy electricity from any competitive service provider. However, the amendment repeals the section of code that allows the utilities to recover costs of investments in transportation electrification.
According to Steve Banashek, EV legislative lead with the Virginia Sierra Club, that “negates the purpose of the enrolled bill.” The amendment, he told me in an email, “removes the requirement for utilities to file for tariffs to support implementation of EV charging and to plan for transportation electrification growth via the IRP process, which is critical for speeding up the transition to electric transportation.”
As for the prohibition on the utilities owning charging stations, Banashek noted that there are areas of the state where private businesses aren’t likely to do it, including in those economically disadvantaged and rural communities. If we don’t want these areas left behind, either the utilities have to step up, or the state does.
Apparently, however, Youngkin doesn’t intend for the state to do it either. Along with his amendments to Shin’s bill, the governor also vetoed HB 1791 from Sullivan, creating a fund to support EV charging in rural areas of the state.
Energy storage
The need for more energy storage seems like it would be one area of bipartisan consensus. Batteries and other forms of energy storage are critical to filling in the generation gaps for low-cost, intermittent forms of energy like wind and solar.
But storage is also required to make full use of baseload sources like nuclear that either can’t be ramped down at times when there is a surplus of energy being produced, or where doing so makes it harder to recover the cost of building the generation. (The already-high projected cost of electricity from small modular nuclear reactors becomes even higher if you assume they don’t run when the power isn’t needed.)
Sullivan’s HB 2537 increases the energy storage targets for Dominion and APCo, and includes new targets for long-duration energy storage. Unfortunately, Youngkin’s substitute language repeals the entire section of code that includes Virginia’s renewable portfolio standard as well as even the existing storage targets. It’s another bit of anti-VCEA flag-waving that won’t help anyone.
Just in case you thought Youngkin might be adhering to conservative free market principles with some kind of consistency, I note that he signed HB 2540 and SB 1207 from two Republicans, Del. Danny Marshall of Danville and Sen. Tammy Brankley Mulchi of Clarksville, which provides a $60 million grant to a manufacturer of lithium-ion battery separators.
I asked Sullivan for a comment on the governor’s action on his bill. He replied, “The Governor’s ridiculous ‘recommendation’ on HB 2537 was disappointing, but hardly surprising. This was not an amendment; he deleted everything – everything – having to do with energy storage, and turned it into a one-sentence bill which would repeal the entire Clean Economy Act.”
Moreover, wrote Sullivan, “HB 2537 was the most closely and extensively negotiated bill among stakeholders that I’ve been involved with since the VCEA. It had broad support – including from Dominion – and should have easily fit into the Governor’s ‘all of the above’ energy strategy and his economic development goals, since it would have brought all sorts of business, jobs, and companies to the Commonwealth.”
Sullivan concluded, “Needless to say, we cannot agree to the amendment. We’ll easily pass this bill next session, and I suspect Governor Spanberger will sign it.”
Sullivan may be right that it will take a new administration before Virginia gets serious about meeting its energy challenges – if it does even then – but this session needn’t have ended in a partisan stalemate and near-zero progress. Most of the bills the governor vetoed or gutted were passed with the help of Republicans, making Youngkin’s actions less of a rebuke to Democrats than to the members of his own party who were simply trying to do their job. The results, sadly, are bad for everyone.
This article originally appeared in the Virginia Mercury on April 1, 2025. The General Assembly reconvenes today for the Veto Session.
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