Electric utility regulation; environmental goals. (SB851)

Introduced By

Sen. Jennifer McClellan (D-Richmond) with support from co-patrons Sen. Adam Ebbin (D-Alexandria), and Sen. Barbara Favola (D-Arlington)


Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law


Virginia Clean Economy Act. Establishes a schedule by which Dominion Energy Virginia and American Electric Power are required to retire electric generating units located in the Commonwealth that emit carbon as a by-product of combusting fuel to generate electricity and by which they are required to construct, acquire, or enter into agreements to purchase generating capacity located in the Commonwealth using energy derived from sunlight or onshore wind. The measure replaces the existing voluntary renewable energy portfolio standard program (RPS Program) with a mandatory RPS Program. Under the mandatory RPS Program, Dominion Energy Virginia and American Electric Power are required to produce their electricity from 100 percent renewable sources by 2045 and 2050, respectively. A utility that does not meet its targets is required to pay a specific deficiency payment or purchase renewable energy certificates. The proceeds from the deficiency payments are to be deposited into an account administered by the Department of Mines, Minerals and Energy, which is directed to distribute specific percentages of the moneys to job training and renewable energy programs in historically economically disadvantaged communities, energy efficiency measures, and administrative costs. The measure requires the State Air Pollution Control Board to adopt regulations to reduce the carbon dioxide emissions from certain electricity generating units in the Commonwealth and authorizes the Board to establish, implement, and manage an auction program to sell allowances to carry out the purposes of such regulations and to utilize its existing regulations to reduce carbon dioxide emissions from electric power generating facilities. Among other things, the measure also (i) requires, by 2035, American Electric Power and Dominion Energy Virginia to construct or acquire 400 and 2,700 megawatts of energy storage capacity, respectively; (ii) establishes an energy efficiency standard under which each investor-owned incumbent electric utility is required to achieve incremental annual energy efficiency savings that start in 2022 at 0.5 percent for American Electric Power and 1.25 percent for Dominion Energy Virginia of the average annual energy retail sales by that utility in 2019 and increase those savings annually; (iii) exempts large general service customers from energy savings requirements; (iv) revises the incentive for electric utility energy efficiency programs; (v) provides that if the Commission finds in any triennial review that revenue reductions related to energy efficiency measures or programs approved and deployed since the utility's previous triennial review have caused the utility to earn more than 50 basis points below a fair combined rate of return on its generation and distribution services or, for any test period commencing after December 31, 2012, for Dominion Energy Virginia and after December 31, 2013, for American Electric Power, more than 70 basis points below a fair combined rate of return on its generation and distribution services, the Commission shall order increases to the utility's rates for generation and distribution services necessary to recover such revenue reductions; (vi) establishes requirements regarding the development by Dominion Energy Virginia of qualified offshore wind projects having an aggregate rated capacity of not less than 5,200 megawatts by January 1, 2034, and provides that in constructing any such facility, the utility shall (a) identify options for utilizing local workers; (b) identify the economic development benefits of the project for the Commonwealth, including capital investments and job creation; (c) consult with relevant governmental entities, including the Commonwealth's Chief Workforce Development Officer and the Virginia Economic Development Partnership, on opportunities to advance the Commonwealth's workforce and economic development goals, including furtherance of apprenticeship and other workforce training programs; and (d) give priority to the hiring, apprenticeship, and training of veterans, local workers, and workers from historically economically disadvantaged communities; (vii) requires each utility to include, and the Commission to consider, in any application to construct a new generating facility the social cost of carbon, as determined by the Commission, as a benefit or cost, whichever is appropriate; (viii) removes provisions that authorize nuclear and offshore wind generating facilities to continue to be eligible for an enhanced rate of return on common equity during the construction phase of the facility and the approved first portion of its service life of between 12 and 25 years in the case of a facility utilizing nuclear power and for a service life of between five and 15 years in the case of a facility utilizing energy derived from offshore wind; (ix) removes a provision that declares that planning and development activities for new nuclear generation facilities are in the public interest; (x) increases the limit from 5,000 megawatts to 16,100 megawatts on those solar and onshore wind generation facilities that are declared to be in the public interest and increases the limit from 16 megawatts to 3,000 megawatts on those offshore wind generation facilities that are declared to be in the public interest; (xi) amends the net energy metering program by increasing the maximum capacity of renewable generation facilities of participating nonresidential eligible customer-generators from one to three megawatts, increases the cap on the capacity of generation from facilities from the customer's expected annual energy consumption to 150 percent of such amount for customers in Dominion Energy Virginia's service territory, increases each utility's systemwide cap from one percent of its adjusted Virginia peak-load forecast for the previous year to six percent of such amount, five percent of which is available to all customers and one percent of which is available only to low-income utility customers; (xii) establishes the Percentage of Income Payment Program (PIPP), which caps the monthly electric utility payment of low-income participants at six percent, or, if the participant's home uses electric heat, 10 percent, of the participant's household income, requires the Commission to issue its final order regarding the PIPP by December 31, 2020, and requires the Department of Housing and Community Development and the Department of Social Services to convene a stakeholder group to develop recommendations for implementing the PIPP and to submit the stakeholder recommendations to the Chairs of the House Committee on Labor and Commerce and the Senate Committee on Commerce and Labor by December 1, 2020; (xiii) increases the cap on third party power purchase agreements to 500 megawatts for jurisdictional customers and 500 megawatts for nonjurisdictional customers of Dominion Energy Virginia and to 40 megawatts for customers of American Electric Power; (xiv) requires each investor-owned utility to consult with the Clean Energy Advisory Board in how best to inform low-income customers of opportunities to lower electric bills through access to solar energy; (xv) requires the Department of Mines, Minerals and Energy, in consultation with the Council on Environmental Justice, to prepare a report to the Chairs of the House Committee on Labor and Commerce and the Senate Committee on Commerce and Labor that determines if the implementation of the measure imposes a disproportionate burden on historically economically disadvantaged communities; (xvi) requires the Secretary of Natural Resources and the Secretary of Commerce and Trade, in consultation with the State Corporation Commission and the Council on Environmental Justice and appropriate stakeholders, to report to the General Assembly by January 1, 2022, any recommendations on how to achieve 100 percent carbon-free electric energy generation by 2045 at least cost for ratepayers; and (xvii) provides that it is the policy of the Commonwealth that the State Corporation Commission, Department of Environmental Quality, Department of Mines, Minerals and Energy, Virginia Council on Environmental Justice, and other applicable state agencies, in the development of energy programs, job training programs, and placement of renewable energy facilities, shall consider those facilities and programs being to the benefit of low-income geographic areas and historically economically disadvantaged communities that are located near previously and presently permitted fossil fuel facilities or coal mines. This bill is identical to HB 1526. Read the Bill »


Bill Has Passed


01/08/2020Prefiled and ordered printed; offered 01/08/20 20105040D
01/08/2020Referred to Committee on Commerce and Labor
01/21/2020Impact statement from SCC (SB851)
01/23/2020Assigned C&L sub: Energy
02/09/2020Reported from Commerce and Labor with substitute (12-Y 3-N) (see vote tally)
02/09/2020Incorporates SB532 (Edwards)
02/09/2020Incorporates SB876 (Marsden)
02/09/2020Committee substitute printed 20107977D-S1
02/09/2020Substitute bill reprinted 20107977D-S1
02/10/2020Constitutional reading dispensed (39-Y 0-N) (see vote tally)
02/11/2020Read second time
02/11/2020Reading of substitute waived
02/11/2020Committee substitute agreed to 20107977D-S1
02/11/2020Engrossed by Senate - committee substitute SB851S1
02/11/2020Constitutional reading dispensed (40-Y 0-N) (see vote tally)
02/11/2020Passed Senate (21-Y 19-N) (see vote tally)
02/18/2020Placed on Calendar
02/18/2020Read first time
02/18/2020Referred to Committee on Labor and Commerce
02/20/2020Impact statement from SCC (SB851S1)
02/25/2020House committee, floor amendments and substitutes offered
02/25/2020Reported from Labor and Commerce with substitute (13-Y 9-N) (see vote tally)
02/25/2020Committee substitute printed 20109076D-H1
02/27/2020Read second time
02/28/2020Read third time
02/28/2020Passed by temporarily
02/28/2020Committee substitute agreed to 20109076D-H1
02/28/2020Pending question ordered
02/28/2020Passed by for the day
03/02/2020Passed by for the day
03/03/2020Committee substitute reconsidered 20107977D-S1
03/03/2020Passed by for the day
03/03/2020Motion to reconsider pass by for the day agreed to
03/03/2020Committee substitute reconsidered 20109076D-H1
03/04/2020Impact statement from SCC (SB851H1)
03/04/2020Passed by for the day
03/05/2020Read third time
03/05/2020Passed by temporarily
03/05/2020Floor substitute printed 20109629D-H2 (Sullivan)
03/05/2020Committee substitute rejected 20109076D-H1
03/05/2020Substitute by Delegate Sullivan agreed to 20109629D-H2
03/05/2020Motion to pass by floor amenments offered by Delegate Rasoul rejected (38-Y 58-N)
03/05/2020VOTE: Pass By REJECTED (38-Y 58-N) (see vote tally)
03/05/2020Amendments by Delegate Rasoul agreed to (50-Y 45-N)
03/05/2020VOTE: Adoption (50-Y 45-N) (see vote tally)
03/05/2020Amendments by Delegate Rasoul reconsidered
03/05/2020VOTE: Reconsider (49-Y 48-N) (see vote tally)
03/05/2020Amendments by Delegate Rasoul rejected (39-Y 54-N 1-A)
03/05/2020VOTE: REJECTED #2 (39-Y 54-N 1-A) (see vote tally)
03/05/2020Pending question ordered
03/05/2020Engrossed by House - floor substitute SB851H2
03/05/2020Passed House with substitute (51-Y 45-N 1-A)
03/05/2020VOTE: Passage (51-Y 45-N 1-A) (see vote tally)
03/05/2020House substitute agreed to by Senate (22-Y 17-N) (see vote tally)
03/05/2020Title replaced 20109629D-H2
03/06/2020Impact statement from SCC (SB851H2)
03/18/2020Bill text as passed Senate and House (SB851ER)
03/18/2020Signed by President
03/19/2020Signed by Speaker
03/20/2020Impact statement from SCC (SB851ER)
03/20/2020Enrolled Bill Communicated to Governor on March 20, 2020
03/20/2020G Governor's Action Deadline 11:59 p.m., April 11, 2020
04/11/2020G Approved by Governor-Chapter 1194 (effective 7/1/20)
04/11/2020G Acts of Assembly Chapter text (CHAP1194)


GRID Alternatives, tracking this bill in Photosynthesis, notes:

GRID Alternatives supports the Virginia Clean Economy Act