Archive: 2018 General Assembly Updates

2018

Week Four General Assembly Updates

It’s finally Friday, which means, it is time for another legislative update. This week followed in the footsteps of last week in terms of being very, very busy.

Utility Over-Earnings Bill: HB 1558

Over the weekend, the Governor’s office invited stakeholders to participate in a multi-day convening with the intention of coming to consensus on enough pieces of the legislation to pass it. While VAEEC was not invited to participate in this stakeholder process, I was in contact with the Governor’s staff, Dominion Energy staff and other key stakeholders throughout the week. The stakeholder group met Monday-Wednesday this week and is meeting again today (Friday). I understand, from several stakeholders, that the energy efficiency pieces have broader consensus than some of the other areas of contention. Hopefully today, all of those issues are resolved and new language is drafted in time for the Senate bills to be heard in Senate Commerce and Labor on Monday.

VAEEC shared these talking points with members of the Commerce and Labor committees this week to advocate for stronger commitments to energy efficiency. We had many positive meetings and most legislators seemed to agree that energy efficiency should be a top funding priority if the utilities are ultimately allowed to keep any portion of over-earnings.

On Tuesday, a substitute bill was introduced during the House Commerce and Labor Committee subcommittee #3 meeting by Chairman Kilgore who gave a presentation on the details. In terms of energy efficiency, the only two pieces included in the substitute were a commitment to fund the Energy Share low-income program “at existing levels” and language regarding the cost-benefit tests, which is slightly different language from the Hugo bill we are supporting.

Before voting on a motion to report the bill out of committee, four members of the subcommittee gave brief remarks stating that their votes were procedural in nature only and didn’t reflect their feelings on the bill directly. Meaning, the intent was to keep the bill alive to allow stakeholders more time to develop consensus on some of the most contentious pieces of the legislation. The bill passed out of the subcommittee 7:2 with one Republican and one Democrat voting against the motion.

Substitute versions of these bills will be introduced in Senate Commerce and Labor on Monday and in House Commerce and Labor on Thursday. While we do not currently know what will be included in those substitutes, we will have a clearer understanding after the stakeholder meeting wraps up today.

Other Bill Updates

At this week’s subcommittee hearing, many smaller bills, including Del. Hugo’s HB 1261 on the cost-benefit tests for utility energy efficiency applications, which VAEEC supported, were rolled into the omnibus utility over-earnings bill. Rolling a bill (Bill A) into another bill (Bill B) means that the language from Bill A will be inserted into Bill B and Bill A will not move forward.

Due to timing constraints, the subcommittee chairman decided to split the agenda and will hear some of the bills next Tuesday. That docket will include Del. Sullivan’s (HB 560) Energy Efficiency Revolving Loan Fund bill, which we are supporting.

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

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 Wagner, Saslaw 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.

Week Two General Assembly Updates

Week two of the General Assembly was uneventful, in terms of energy efficiency efforts so this is a very short update. However, the whole building was buzzing in anticipation for the introduction of the bills that will tackle the investor-owned utility over-earnings, which we briefly mentioned in last week’s post.

The house version of the bill was posted to LIS this morning and we anticipate three bills on the Senate side sponsored by Senators Saslaw, Wagner and Newman. We will spend time over the next several days reviewing the bill language and will have a full analysis for you in next week’s update.

Also in last week’s update, we stated our support for HB 1261. The Senate companion was introduced this week for those tracking legislation.

Finally, we briefly mentioned Delegate Keam’s Virginia Open Data Initiative Act (HB 781) last week as well, which, if passed, will increase public awareness of and access to the data created by and available from state agencies. We have since spoken to the patron about this bill and he is very interested in working with us to include energy data from state owned buildings as part of this initiative. If talks continue to progress in a positive way, we will seek endorsement of this bill from our Policy Committee. Stay tuned for more details.

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

In addition to legislative tracking, we also signed on to a letter with some of our members and partners, outlining the profile of a qualified candidate for the open seat on the SCC Commission. The letter was addressed to the House Commerce and Labor committee since this committee is responsible for interviewing potential candidates. While we have spoken to a few of the front runners for this seat, we do not plan to endorse any specific candidates. It is our hope that members of the committee will review our letter and use it as a guide to ask questions of potential candidates. We believe these interviews will take place in early March so we will keep you posted as this progresses as well.

Until next time.

Week One General Assembly Updates

The 2018 General Assembly session kicked off this week and things are (not surprisingly) moving pretty quickly. We will be updating our legislation page each Friday with updates of the week’s activities.

VAEEC’s Policy Committee met this week to discuss all of the bills that have been introduced so far and our Board has voted to formally support

  • HB 204: Commercial Benchmarking enabling legislation (Del. Sullivan)
  • HB 1261: Cost-effectiveness tests used in utility proceedings (Del. Hugo)

VAEEC staff, along with a few of our members, participated on the DMME Benchmarking Stakeholder group to build consensus for legislation to give localities the authority to mandate commercial benchmarking programs if they so choose. HB 204 is a result of that work and includes program design requirements such as setting the minimum square footage for commercial buildings at 50,000 square feet and requiring the use of Energy Star Portfolio Manager to collect the energy data. In addition, buildings must have more than three or more utility accounts with no single utility account making up more than 85% of the energy consumption in order to protect customer privacy. Any locality choosing to enact this type of program is also required to benchmark its own buildings that are 10,000 square feet or larger for at least a year prior to program launch. While there may be some flaws with this particular legislation, VAEEC supports the concept of benchmarking in general. You can read more about it here.

The other bill we are officially supporting, HB 1261, states that proposed energy efficiency programs shall be considered within the public interest if the net present value of the benefits exceeds the net present value of the costs as determined by any three of four benefit-cost tests. Current state code only states that an energy efficiency program cannot be rejected based solely on the results of a single cost-benefit test. This bill would be a substantial improvement over current law given the State Corporation Commission’s reliance on the Ratepayer Impact Measure (RIM) test, which is a hard test for most energy efficiency programs to pass.

Investor-owned utilities over-earnings debate

We are tracking the over-earnings debate closely. VAEEC has NO opinion on whether the rate review freeze should be repealed or whether the utilities should be able to keep any portion of their over-earnings. However, if the utilities are able to keep some portion of their over-earnings- both current and future- we are advocating for expanded existing programs and opportunities for more programs. While these bills have not been introduced yet, we will keep you posted as we learn more.

Other bills of interest

  • HB 58: LED use in public outdoor lighting (Bell)- requires the use of LED bulbs in public lighting currently using incandescent lights, which are maintained by state agencies with exemptions
  • HB 560: EE Revolving Fund (Sullivan)- Creates the Virginia Energy Efficiency Revolving Fund to provide no-interest loans to any locality, school division, or public institution of higher education for energy conservation or efficiency projects, funded by 40 percent of the annual revenue over $325M of certain state recordation taxes and other funds given to the Fund.
  • HB 781: Virginia Open Data Initiative Act (Keam)- Increases public awareness of and access to the data created by and available from state agencies and provides for the appointment by the Governor of a Chief Data Officer to maintain the official website of the Commonwealth of Virginia as a dedicated open data website.
  • HB 963: Mandatory EE savings targets (Sullivan)- Requires investor-owned electric utilities, cooperative electric utilities, and investor-owned natural gas distribution utilities to meet incremental annual energy efficiency goals.
  • HB 964: Removing the RIM test (Sullivan)- Removes the RIM test as a test the SCC can use to determine cost-effectiveness of an EE programs
  • HB 965: Prioritizing the TRC test (Sullivan)- An energy efficiency program or measure that meets the Total Resource Cost Test is declared to be in the public interest.

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

Carbon Rule/ Clean Energy Virginia Initiative

Last November, the Virginia Air Pollution Control Board approved Governor McAuliffe’s regulations to limit carbon emissions from Virginia’s electric generating facilities. These regulations will:

  • cap emissions at 33 or 34 million tons
  • reduce carbon emissions 30% between 2020-2030

The state will hold quarterly consignment auctions to determine the cost of the allowances and the money from that auction will be given back to the utilities (not to state), which is a first of its kind in the US.

Five percent of the allowances will be withheld from the consignment auction and will be transferred to the Department of Mines, Minerals and Energy (DMME) to implement energy efficiency programs. DMME plans to hold a separate rulemaking for this piece of the carbon rule later this year. VAEEC will continue providing resources to DMME as they investigate options for program design and implementation.

There is currently an open comment period through April 9th, 2018 and public hearings taking place throughout the Commonwealth in early March on the Clean Energy Virginia Initiative.

VAEEC encourages members to submit comments supporting the energy efficiency carve out and are happy to help you draft comments. DMME will be holding

There are several pieces of legislation both supporting and attempting to prevent this regulation from going to in effect. Due to those efforts, it is unclear, at the moment when this regulation will take effect. We will keep you posted as those pieces of legislation move through the legislature.