Week Three General Assembly Updates

Another Friday in January is already upon us, which means, another legislative update! While I may have described week two as “uneventful” in last week’s recap, this week was anything but.

First, here is the list of new bills that VAEEC’s Policy Committee and Board voted to support this week:

  • SB 855 (Sturtevant): the Senate companion to HB 1261, which our Committee and Board voted to support the first week of session
  • SB 696 (Lewis)/ HB 1273 (Bulova/ Helsel): Governor’s bill requiring action for Virginia to join the Regional Greenhouse Gas Initiative (RGGI) to regulate carbon emissions from power plants; the bills include a 30% carve out for energy efficiency programs to be administered by the Department of Mines, Minerals and Energy (DMME) via the Energy SAVES program.
  • SB 894 (Wagner)/ HB 560 (Sullivan): These bills would create the Virginia Energy Efficiency Revolving Fund to provide no interest loans to localities, public schools and public institutions of higher education for energy efficiency projects. Excess state tax revenue would fund the Fund.

Bill Updates:

Two bills that we support have already been reviewed by their respective committees, and unfortunately, both suffered the same fate of not making it out of committee. Delegate Sullivan’s benchmarking bill, HB 204, which VAEEC has supported since the first week of session, was “Passed by Indefinitely” by a vote of 6:2 on the House Counties, Cities and Towns committee on Wednesday. This bill had heavy opposition from property management firms who considered mandatory benchmarking programs to be government overreach. We hope that DMME will continue the stakeholder group that reviewed this legislation late last year, in the hopes of resolving some of the technical questions and issues that arose during those conversations.

Yesterday, the Governor’s RGGI bill, carried by Senator Lewis was “Passed by Indefinitely” on a party line vote on the Senate Agriculture, Conservation and Natural Resources committee. VAEEC was present to state our support for the bill along with several advocates from the environmental, health, faith and renewable energy communities. After the vote, the AP posted a story on the Governor’s disappointment on the vote and his commitment to continue advancing clean energy in the Commonwealth.

All of these bills, and more, can be found on the Virginia Legislative Information System (LIS) website: http://lis.virginia.gov.

 Utility Over-Earning Bills

Last week, I mentioned that the house version of these bills had been introduced and that more on the Senate side were soon to follow. Senators WagnerSaslaw and Newman have each introduced different pieces of the House bill in the Senate.

Here is a summary of what these bills do:

  1. Ends current rate review freeze as of 1.1.18
  2. Moves to triennial rate reviews instead of biennial reviews
  3. Gives Dominion Energy customers an immediate refund of $133 million. This is the estimate the SCC gave in their recent over-earnings report, which includes earnings for 2015 and 2016 but NOT for 2017.
  4. Tax reform due to federal tax code changes: $100M annually in rate reduction for Dominion and a $40M reduction for APCo
  5. $10 million fuel credit back to APCo customers
  6. Commits to 4,000MW of solar, including distributed generation/ rooftop solar
  7. Commits to continued funding for Energy Share/ Low Income Shareholder funded programs at “no less than existing levels.”
  8. Reduces SCC reliance on RIM test for utility EE programs (current draft- not on LIS- uses identical language in the Hugo and Sturtevant bills.)
  9. Allows future over-earnings to be spent on a variety of “electric grid transformation” projects including AMI upgrades, LED lighting conversion, EV charging stations and “customer information platforms”
  10. SCC will need to approve programs
  11. Exemption for all industrials from paying for EE programs (existing code says automatic opt-out for customers who use more than 10 MW and small industrials need to request permission).
  12. Minimum of 25% of future over-earnings to go towards renewable energy and grid transformation projects that facilitate the integration of distributed generation or to enhance or facilitate more energy efficiency. This means that up to 75% could go towards grid hardening or not be spent at all, which would go back to customers in the form of a refund. Note- Over-earnings will NOT be spent on EE programs directly.
  13. States that a market-rate energy efficiency pilot program in Dominion Energy’s service territory is in the public interest.
  14. States that battery storage pilots (capped at 30 MW for Dominion and 10 MW for APCo) are in the public interest

VAEEC has been in several talks with Dominion Energy officials over the last few days to advocate for stronger commitments to energy efficiency. If future utility over-earnings are not going to be refunded to consumers, which VAEEC takes no position on, then energy efficiency programs should be priority as the cheapest resource and the most direct way to benefit a larger number of customers.

Our efforts have already begun to pay off with the inclusion of the Hugo/ Sturtevant language on the cost-benefit tests and a commitment to a market-rate energy efficiency pilot program. However, we want to see actual numbers behind those commitments as we see with other clean energy technology sections of this bill.

We are also working with the company to develop a formal stakeholder review process for future DSM filings similar to what is done in Georgia and Arkansas. These stakeholder groups are convened by the public service commissions in those states and meet regularly to provide input on program design, planning and implementation. These formal gatherings are a great opportunity for more stakeholders to engage with the company and the State Corporation Commission on these programs.

The House version of these bills will be heard next Tuesday in a subcommittee of the House Commerce and Labor committee. We anticipate the Senate versions to be heard in the Senate Commerce and Labor committee on Monday, February 5th.

We will continue to update you as we make progress on advancing energy efficiency policies during the 2018 General Assembly Session.