by Ken Sandler
Having written last fall about the prospects for Virginia’s political leaders to make the Commonwealth a leader in clean energy, here’s my wrap-up of how things went in the recently concluded General Assembly session – though their most consequential decision, the fate of data center tax breaks, remains to be resolved in a follow-up special session, with no clear end in sight. (For a more detailed summary of the session and her own well-informed takes, see my compatriot Ivy Main’s latest blog post.)
Fossil fuel-friendly former Virginia Governor Glenn Youngkin left office on January 17th, replaced by clean-energy-conscious Governor Abigail Spanberger. The General Assembly, with a much larger Democratic House of Delegates majority, convened a few days earlier on January 14th. The super-quick session adjourned two months later on March 14th.
How to judge this legislature’s work depends on the question of how to adjust one’s expectations when circumstances quickly change. Navigating politics these days is a bit like driving on the Capital Beltway – you have to be ready to switch from cruising to slamming on the brakes and back to inching along or cruising, as the situation merits.
So, environmental activists, with high hopes and four years of pent-up demand, came to this session expecting to accelerate from 0 to 60 mph. A political system built more for caution and conservatism than cruising showed it could get off the dime and move forward, but…not at any great speed.
To sum up the work of this session, I divide it into a few buckets: “Eat Your Spinach” Energy Policies, Neat but Not Huge Stuff, and The Elephants in the Room.
“Eat Your Spinach” Energy Policies
It was gratifying to hear some of my favorite sources of clean energy news and commentary praising a number of steps Virginia took this year. Most of this praise was for the sorts of policies that take an energy nerd to love.
Start with grid utilization. The reasons why electric bills are going through the roof may be complicated, but a majority of the costs derive from the need to upgrade our out-of-date electric grid. A great deal of the grid is built to handle peak loads that may represent only 1-2% of the hours of the year. A range of new technologies and approaches to make better use of that infrastructure – like reconductoring and virtual power plants – can provide tremendous and often much more cost-effective ways to meet the emerging energy challenges of our age, from ballooning data center-driven demand to the greater complexities and opportunities of distributed energy resources.
So, Virginia’s new law requiring the Commonwealth’s two big utilities to evaluate and report on how they’re utilizing the grid, and for their regulators, the State Corporation Commission (SCC) to review this information and establish new utilization standards based on them, was labelled “historic” by the Utilize Coalition’s Ian Magruder and led Jigar Shah and Arnab Pal of Deploy Action to comment that “while Governor Spanberger leads, other governors should take notes, rather than make bold promises on rates without confronting the math of the grid.”
The energy nerd adoration for Virginia continued in regard to the state’s aggressive new energy storage mandates – another critical tool for better grid utilization, with former Energy Secretary Jennifer Granholm proclaiming Virginia “the new heavyweight” on the topic. Energy storage is indeed a critical issue for the evolution of our electricity system, as battery prices plummet and storage becomes one of the quickest and most affordable ways to add desperately needed energy capacity.
The legislature also pulled the Commonwealth back into the Regional Greenhouse Gas Initiative (RGGI), the northeast states’ carbon trading alliance, putting more pressure on state utilities to cut GHG emissions while bringing back a source of funding for energy efficiency and resilience.
It’s worth noting how these and other decidedly unsexy but important infrastructural and administrative energy system improvements made their way through the legislative meat grinder. Most of them went through a bipartisan, bicameral workgroup called the Commission on Electric Utility Reform, about to be renamed the Virginia Energy Commission. Considering what a whirlwind the General Assembly session is, a group like this allows time for research, vetting and the working out of differences to get bills on such complex issues in good shape before they hit the floor.
Neat but Not Huge Stuff
On solar and other clean energy issues, the new Democratic trifecta broke the logjam of the Youngkin years, often reintroducing previously failed or vetoed bills. While there weren’t any gamechangers here, that’s not to disregard some worthy legislation.
Most of the new laws build on the signature clean energy achievement of the last Democratic state trifecta, the 2020 Virginia Clean Economy Act (VCEA). One overriding strategic goal this session was to start to shift the dynamics of a state in which rural areas have been bearing the brunt of the VCEA’s goal of 100% renewables-based electricity generation into one in which urban and suburban areas play a bigger part in solar deployment. Hence this session yielded new laws to:
- Legalize plug-in “balcony solar” systems ideal for apartment dwellers.
- Allow localities to require that large parking lots install solar canopies over parking spaces.
- Establish a state green bank to bolster funding of clean energy projects.
- Require the SCC to expand state energy efficiency programs to benefit lower income residents.
- Enhance VCEA requirements to accelerate renewables deployment.
- Form a Distributed Energy Task Force to develop a state strategy based on more decentralized generation.
- Make it harder for localities to ban solar projects.
For those of us monitoring the various bills as they evolved, it was an often-frustrating experience of seeing good legislation get steadily watered down in the face of industry demands. Most Democratic members of the General Assembly went along with leadership demands to stay in line, even as their own bills got diminished.
As an example, a bill to require data centers to establish demand flexibility programs (HB284) was amended to make it a voluntary program initiated by the utilities rather than by SCC, and then, once the SCC established such a standard, utilities would only be expected to make their “best, reasonable efforts” to meet it. Further, data centers would be allowed to meet the standard by somehow helping other power customers and partners to reduce their demand rather than the data centers’. That may be a good deal if the data centers end up funding demand flexibility elsewhere in the system, but…well, we’ll see.
Meanwhile, some of the greatest hurdles to clean energy expansion, like utility Dominion Energy charging rapacious fees for solar interconnection, remained unaddressed. And a good bill to streamline residential solar permitting got punted to next year’s session.
The Elephants in the Room
Why, as a fellow environmental advocate told me, do bills going through the General Assembly mostly get worse in the process, not better? Here we must turn our gaze to the elephants in the room.
The first elephant is obvious to anyone who’s observed Virginia politics for any length of time – our massive electric utility, Dominion Energy, which has given $54 million in political contributions across the state since 1996 – despite the sketchy ethics of a regulated monopoly chartered in the public interest massively funding those who choose and direct its regulators.
Even as the clean energy lobby has grown strong enough in Virginia to notch a few victories against Dominion – most notably the VCEA – the utility retains the clout to either kill or seriously weaken most bills it doesn’t like. And while Dominion seems to be recognizing the need to experiment with some of the “eat your spinach” legislation I cited above, it remains keenly focused on making sure its regulators don’t gain more power than they now have.
The second elephant is a newer political power player in Virginia, but no less a behemoth: The Data Center Coalition. This lobby for an industry in a state with a quarter of the world’s data centers made its voice heard this year, shooting down nearly two-thirds of the bills intended to regulate them and rendering the survivors as harmless as possible.
Bills to give local governments more zoning power over them mostly failed, other than to require data center developers to evaluate noise impacts. Legislation to limit air emissions from their diesel generators was limited to keeping new generators to a higher US EPA regulatory standard. Bills to require data centers to bear greater costs or responsibilities for their massive energy infrastructure impacts largely fizzled.
And yet…somehow at the end of the session, like a meteor out of the sky, Senate President Pro Tempore Louise Lucas announced that the Senate budget would be cutting off the data center tax exemption that, at last count, is draining nearly $2 billion from the state coffers. This defiance of some of the world’s most powerful corporations represents an admirable display of courage from Sen. Lucas – even as this huge issue remains under negotiation with a House of Delegates and Governor much more reluctant to go there.
As such political courage is in short supply in a political system that runs on money, the final elephant in the room is Virginia’s shameful lack of campaign finance laws, which amplifies the interests of wealthy lobbies over the needs of the populace. A 2022 analysis by the Coalition for Integrity ranked Virginia a dismal 43rd of 50 states in campaign finance regulation – and little, if anything, has changed since then. Indeed, when another fearless State Senator, Danica Roem, tried to limit the power of public utilities to make political donations, she got all but shouted down by a parade of lobbyists and the politicians who love them.
Still, as the clean energy industry grows, it will be harder for it to be squashed by those who make so much money off the gaseous remains of dinosaurs. That’s what makes it so important right now to stand up for the cleaner, smarter ways of the future, so that before long, we can finally escape our dirty fossilized past.
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