SB998: Offshore wind generation facilities; development of facilities.
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding a section numbered 56-585.1:11 as follows:
§ 56-585.1:11. Development of offshore wind.
A. In order to meet the Commonwealth's clean energy goals, prior to December 31, 2034, the construction or purchase by a public utility of one or more offshore wind generation facilities located off the Commonwealth's Atlantic shoreline or in federal waters and interconnected directly into the Commonwealth, with an aggregate capacity of up to 5,200 megawatts, is in the public interest and the Commission shall so find, provided that no customers of the utility shall be responsible for costs of any such facility in a proportion greater than the utility's share of the facility.
B. 1. Pursuant to subsection A, construction by a Phase II Utility of one or more new utility-owned and utility-operated or construction by a third-party of one or more third-party owned and operated generating facilities utilizing energy derived from offshore wind and located off the Commonwealth's Atlantic shoreline, with an aggregate rated capacity of not less than 2,500 megawatts and not more than 3,000 megawatts, along with electrical transmission or distribution facilities associated therewith for interconnection is in the public interest. In acting upon any request for cost recovery by a Phase II Utility for costs associated with such a facility, the Commission shall determine the reasonableness and prudence of any such costs, provided that such costs shall be presumed to be reasonably and prudently incurred if the Commission determines that (i) the utility has complied with the competitive solicitation and procurement requirements pursuant to subsection D, (ii) the project's projected total levelized cost of energy, including any tax credit, on a cost per megawatt hour basis, inclusive of the costs of transmission and distribution facilities associated with the facility's interconnection, does not exceed 1.4 times the comparable cost, on an unweighted average basis, of a utility-scale solar generating facility as most recently estimated by the U.S. Energy Information Administration in its Annual Energy Outlook at the time of the utility's initial cost recovery request, and (iii) the utility has commenced construction of such facilities for U.S. income taxation purposes prior to January 1, 2024, or has a plan for such facility or facilities to be in service prior to January 1, 2028. The Commission shall disallow costs, or any portion thereof, only if they are otherwise unreasonably and imprudently incurred. In its review, the Commission shall give great weight to the public interest determination in this subsection.
2. Notwithstanding the provisions of § 56-585.1, the Commission shall not grant an enhanced rate of return to a Phase II Utility constructing one or more new utility-owned and utility-operated generating facilities utilizing energy derived from offshore wind and located off the Commonwealth's Atlantic shoreline pursuant to this section.
3. Any such costs proposed for recovery through a rate adjustment clause pursuant to subdivision A 6 of § 56-585.1 shall be allocated to all customers of the utility in the Commonwealth as a non-bypassable charge, regardless of the generation supplier of any such customer, other than (i) low-income residential customers; (ii) commercial and industrial customers, regardless of the generation supplier, with (a) an aggregate load over 100 megawatts and (b) an aggregate load of at least 200 megawatts of renewable energy supply under a long-term contract from facilities located within the Commonwealth prior to January 1, 2024, which directly procure from the utility the electricity and environmental attributes of the facility associated with the lesser of 50 megawatts of nameplate capacity or 15 percent of the commercial or industrial customer's annual peak demand for a contract period of 15 years; and (iii) customers that as of July 1, 2020, have entered into contracts to purchase their energy requirements from competitive service providers pursuant to subdivision A 5 of § 56-577. No electric cooperative customer of the utility shall be assigned, nor shall the utility collect from any such cooperative, any of the costs of such facilities, including electrical transmission or distribution facilities associated therewith for interconnection. The Commission may promulgate such rules, regulations, or other directives necessary to administer the eligibility for this exemption.
4. For purposes of this subsection, "low-income residential customer" includes any residential customer of a Phase II Utility where the customer or a dependent is a recipient of a state or federally funded public assistance program for the indigent and requests exemption from the utility from such charges, and "aggregate load" means the combined electrical load associated with selected nonresidential customer accounts with the same entity name or in the name of affiliated entities under a common parent company.
C. In constructing any such facility contemplated in subsection A, the utility shall (i) identify options for utilizing local workers; (ii) identify the economic development benefits of the project for the Commonwealth, including capital investments and job creation; (iii) 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 (iv) give priority to the hiring of local workers, including workers from historically economically disadvantaged communities. For purposes of this subsection, "historically economically disadvantaged community" means a community a majority of the population of which are people of color or are in a low-income geographic area. Relevant state agencies shall identify historically economically disadvantaged communities utilizing geographic information systems, U.S. Census tract demographic and poverty threshold data for the Commonwealth, and zip code areas.
D. Any project pursuant to subsection A shall (i) be subject to competitive procurement or solicitation for a substantial majority of the services and equipment, exclusive of interconnection costs, associated with the facility's construction; (ii) involve at least one experienced developer; and (iii) demonstrate the economic development benefits within the Commonwealth, including capital investments and job creation. A utility may give appropriate consideration to suppliers and developers that have demonstrated successful experience in offshore wind.
2. That the utility constructing a facility pursuant to § 56-585.1:11 of the Code of Virginia, as created by this act, shall provide the State Corporation Commission (the Commission) with reports on the facility's construction progress, including performance to construction timeline and budget, on no less than a quarterly basis throughout the construction period. The Commission shall retain ongoing authority to review the reasonableness and prudence of any increases in the total projected cost of the facility during its construction period.
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding a section numbered 56-585.1:11 as follows:
§ 56-585.1:11. Development of offshore wind.
A. In order to meet the Commonwealth's clean energy goals, prior to December 31, 2034, the construction or purchase by a public utility of one or more offshore wind generation facilities located off the Commonwealth's Atlantic shoreline or in federal waters and interconnected directly into the Commonwealth, with an aggregate capacity of up to 5,200 megawatts, is in the public interest and the Commission shall so find, provided that no customers of the utility shall be responsible for costs of any such facility in a proportion greater than the utility's share of the facility.
B. 1. Pursuant to subsection A, construction by a Phase II Utility of one or more new utility-owned and utility-operated or construction by a third-party of one or more third-party owned and operated generating facilities utilizing energy derived from offshore wind and located off the Commonwealth's Atlantic shoreline, with an aggregate rated capacity of not less than 2,500 megawatts and not more than 3,000 megawatts, along with electrical transmission or distribution facilities associated therewith for interconnection is in the public interest. In acting upon any request for cost recovery by a Phase II Utility for costs associated with such a facility, the Commission shall determine the reasonableness and prudence of any such costs, provided that such costs shall be presumed to be reasonably and prudently incurred if the Commission determines that (i) the utility has complied with the competitive solicitation and procurement requirements pursuant to subsection D, (ii) the project's projected total levelized cost of energy, including any tax credit, on a cost per megawatt hour basis, inclusive of the costs of transmission and distribution facilities associated with the facility's interconnection, does not exceed 1.4 times the comparable cost, on an unweighted average basis, of a utility-scale solar generating facility as most recently estimated by the U.S. Energy Information Administration in its Annual Energy Outlook at the time of the utility's initial cost recovery request, and (iii) the utility has commenced construction of such facilities for U.S. income taxation purposes prior to January 1, 2024, or has a plan for such facility or facilities to be in service prior to January 1, 2028. The Commission shall disallow costs, or any portion thereof, only if they are otherwise unreasonably and imprudently incurred. In its review, the Commission shall give great weight to the public interest determination in this subsection.
2. Notwithstanding the provisions of § 56-585.1, the Commission shall not grant an enhanced rate of return to a Phase II Utility constructing one or more new utility-owned and utility-operated generating facilities utilizing energy derived from offshore wind and located off the Commonwealth's Atlantic shoreline pursuant to this section.
3. Any such costs proposed for recovery through a rate adjustment clause pursuant to subdivision A 6 of § 56-585.1 shall be allocated to all customers of the utility in the Commonwealth as a non-bypassable charge, regardless of the generation supplier of any such customer, other than (i) low-income residential customers; (ii) commercial and industrial customers, regardless of the generation supplier, with (a) an aggregate load over 100 megawatts and (b) an aggregate load of at least 200 megawatts of renewable energy supply under a long-term contract from facilities located within the Commonwealth prior to January 1, 2024, which directly procure from the utility the electricity and environmental attributes of the facility associated with the lesser of 50 megawatts of nameplate capacity or 15 percent of the commercial or industrial customer's annual peak demand for a contract period of 15 years; and (iii) customers that as of July 1, 2020, have entered into contracts to purchase their energy requirements from competitive service providers pursuant to subdivision A 5 of § 56-577. No electric cooperative customer of the utility shall be assigned, nor shall the utility collect from any such cooperative, any of the costs of such facilities, including electrical transmission or distribution facilities associated therewith for interconnection. The Commission may promulgate such rules, regulations, or other directives necessary to administer the eligibility for this exemption.
4. For purposes of this subsection, "low-income residential customer" includes any residential customer of a Phase II Utility where the customer or a dependent is a recipient of a state or federally funded public assistance program for the indigent and requests exemption from the utility from such charges, and "aggregate load" means the combined electrical load associated with selected nonresidential customer accounts with the same entity name or in the name of affiliated entities under a common parent company.
C. In constructing any such facility contemplated in subsection A, the utility shall (i) identify options for utilizing local workers; (ii) identify the economic development benefits of the project for the Commonwealth, including capital investments and job creation; (iii) 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 (iv) give priority to the hiring of local workers, including workers from historically economically disadvantaged communities. For purposes of this subsection, "historically economically disadvantaged community" means a community a majority of the population of which are people of color or are in a low-income geographic area. Relevant state agencies shall identify historically economically disadvantaged communities utilizing geographic information systems, U.S. Census tract demographic and poverty threshold data for the Commonwealth, and zip code areas.
D. Any project pursuant to subsection A shall (i) be subject to competitive procurement or solicitation for a substantial majority of the services and equipment, exclusive of interconnection costs, associated with the facility's construction; (ii) involve at least one experienced developer; and (iii) demonstrate the economic development benefits within the Commonwealth, including capital investments and job creation. A utility may give appropriate consideration to suppliers and developers that have demonstrated successful experience in offshore wind.
2. That the utility constructing a facility pursuant to § 56-585.1:11 of the Code of Virginia, as created by this act, shall provide the State Corporation Commission (the Commission) with reports on the facility's construction progress, including performance to construction timeline and budget, on no less than a quarterly basis throughout the construction period. The Commission shall retain ongoing authority to review the reasonableness and prudence of any increases in the total projected cost of the facility during its construction period.
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding a section numbered 56-585.1:11 as follows:
§ 56-585.1:11. Development of offshore wind.
A. In order to meet the Commonwealth's clean energy goals, prior to December 31, 2034, the construction or purchase by a public utility of one or more offshore wind generation facilities located off the Commonwealth's Atlantic shoreline or in federal waters and interconnected directly into the Commonwealth, with an aggregate capacity of up to 5,200 megawatts, is in the public interest and the Commission shall so find, provided that no customers of the utility shall be responsible for costs of any such facility in a proportion greater than the utility's share of the facility.
B. 1. Pursuant to subsection A, construction by a Phase II Utility of one or more new utility-owned and utility-operated generating facilities utilizing energy derived from offshore wind and located off the Commonwealth's Atlantic shoreline, with an aggregate rated capacity of not less than 2,500 megawatts and not more than 3,000 megawatts, along with electrical transmission or distribution facilities associated therewith for interconnection is in the public interest. In acting upon any request for cost recovery by a Phase II Utility for costs associated with such a facility, the Commission shall determine the reasonableness and prudence of any such costs, provided that such costs shall be presumed to be reasonably and prudently incurred if the Commission determines that (i) the utility has complied with the competitive solicitation and procurement requirements pursuant to subsection D, (ii) the project's projected total levelized cost of energy, including any tax credit, on a cost per megawatt hour basis, inclusive of the costs of transmission and distribution facilities associated with the facility's interconnection, does not exceed 1.6 times the comparable cost, on an unweighted average basis, of a conventional simple cycle combustion turbine generating facility as most recently estimated by the U.S. Energy Information Administration in its Annual Energy Outlook at the time of the utility's initial cost recovery request, and (iii) the utility has commenced construction of such facilities for U.S. income taxation purposes prior to January 1, 2024, or has a plan for such facility or facilities to be in service prior to January 1, 2028. The Commission shall disallow costs, or any portion thereof, only if they are otherwise unreasonably and imprudently incurred. In its review, the Commission shall give great weight to the public interest determination in this subsection.
2. Notwithstanding the provisions of § 56-585.1, the Commission shall not grant an enhanced rate of return to a Phase II Utility constructing one or more new utility-owned and utility-operated generating facilities utilizing energy derived from offshore wind and located off the Commonwealth's Atlantic shoreline pursuant to this section.
3. Any such costs proposed for recovery through a rate adjustment clause pursuant to subdivision A 6 of § 56-585.1 shall be allocated to all customers of the utility in the Commonwealth as a non-bypassable charge, regardless of the generation supplier of any such customer, other than (i) low-income residential customers and (ii) commercial and industrial customers, regardless of the generation supplier, with (a) an aggregate load over 100 megawatts and (b) an aggregate load of at least 200 megawatts of renewable energy supply under a long-term contract from facilities located within the Commonwealth prior to January 1, 2024, which directly procure from the utility the electricity and environmental attributes of the facility associated with the lesser of 50 megawatts of nameplate capacity or 15 percent of the commercial or industrial customer's annual peak demand for a contract period of 15 years. No electric cooperative customer of the utility shall be assigned, nor shall the utility collect from any such cooperative, any of the costs of such facilities, including electrical transmission or distribution facilities associated therewith for interconnection. The Commission may promulgate such rules, regulations, or other directives necessary to administer the eligibility for this exemption.
4. For purposes of this subsection, "low-income residential customer" includes any residential customer of a Phase II Utility where the customer or a dependent is a recipient of a state or federally funded public assistance program for the indigent and requests exemption from the utility from such charges, and "aggregate load" means the combined electrical load associated with selected nonresidential customer accounts with the same entity name or in the name of affiliated entities under a common parent company.
C. In constructing any such facility contemplated in subsection A, the utility shall (i) identify options for utilizing local workers; (ii) identify the economic development benefits of the project for the Commonwealth, including capital investments and job creation; (iii) 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 (iv) give priority to the hiring of local workers, including workers from historically economically disadvantaged communities. For purposes of this subsection, "historically economically disadvantaged community" means a community a majority of the population of which are people of color or are in a low-income geographic area. Relevant state agencies shall identify historically economically disadvantaged communities utilizing geographic information systems, U.S. Census tract demographic and poverty threshold data for the Commonwealth, and zip code areas.
D. Any project pursuant to subsection A shall (i) be subject to competitive procurement or solicitation for a substantial majority of the services and equipment, exclusive of interconnection costs, associated with the facility's construction; (ii) involve at least one experienced developer; and (iii) demonstrate the economic development benefits within the Commonwealth, including capital investments and job creation. A utility may give appropriate consideration to suppliers and developers that have demonstrated successful experience in offshore wind.
2. That the utility constructing a facility pursuant to § 56-585.1:11 of the Code of Virginia, as created by this act, shall provide the State Corporation Commission (the Commission) with reports on the facility's construction progress, including performance to construction timeline and budget, on no less than a quarterly basis throughout the construction period. The Commission shall retain ongoing authority to review the reasonableness and prudence of any increases in the total projected cost of the facility during its construction period.
SENATE BILL NO. 998
Be it enacted by the General Assembly of Virginia:
1. That § 56-585.1:4 of the Code of Virginia is amended and reenacted as follows:
§ 56-585.1:4. Development of solar and wind generation capacity in the Commonwealth.
A. Prior to January 1, 2024, (i) the construction or purchase by a public utility of one or more solar or wind generation facilities located in the Commonwealth or off the Commonwealth's Atlantic shoreline, each having a rated capacity of at least one megawatt and having in the aggregate a rated capacity that does not exceed 5,000 megawatts, or (ii) the purchase by a public utility of energy, capacity, and environmental attributes from solar facilities described in clause (i) owned by persons other than a public utility is in the public interest, and the Commission shall so find if required to make a finding regarding whether such construction or purchase is in the public interest.
B. Prior to January 1, 2024, (i) the construction or purchase by a public utility of one or more solar or wind generation facilities located in the Commonwealth or off the Commonwealth's Atlantic shoreline, each having a rated capacity of less than one megawatt, including rooftop solar installations with a capacity of not less than 50 kilowatts, and having in the aggregate a rated capacity that does not exceed 500 megawatts, or (ii) the purchase by a public utility of energy, capacity, and environmental attributes from solar facilities described in clause (i) owned by persons other than a public utility is in the public interest, and the Commission shall so find if required to make a finding regarding whether such construction or purchase is in the public interest.
C. The aggregate cap of 5,000 megawatts of rated capacity described in clause (i) of subsection A and the aggregate cap of 500 megawatts of rated capacity described in clause (i) of subsection B are separate and independent from each other. The capacity of facilities in subsection B shall not be counted in determining the capacity of facilities in subsection A, and the capacity of facilities in subsection A shall not be counted in determining the capacity of facilities in subsection B.
D. Twenty-five percent of the solar generation capacity placed in service on or after July 1, 2018, located in the Commonwealth, and found to be in the public interest pursuant to subsection A or B shall be from the purchase by a public utility of energy, capacity, and environmental attributes from solar facilities owned by persons other than a public utility. The remainder shall be construction or purchase by a public utility of one or more solar generation facilities located in the Commonwealth. All of the solar generation capacity located in the Commonwealth and found to be in the public interest pursuant to subsection A or B shall be subject to competitive procurement, provided that a public utility may select solar generation capacity without regard to whether such selection satisfies price criteria if the selection of the solar generating capacity materially advances non-price criteria, including favoring geographic distribution of generating capacity, areas of higher employment, or regional economic development, if such non-price solar generating capacity selected does not exceed 25 percent of the utility's solar generating capacity.
E. Construction, purchasing, or leasing activities for a test or demonstration project for a new utility-owned and utility-operated generating facility or facilities utilizing energy derived from offshore wind with an aggregate capacity of not more than 16 megawatts are in the public interest. Construction by a Phase II Utility, as defined in subdivision A 1 of § 56-585.1, of one or more new utility-owned and utility-operated generating facilities utilizing energy derived from offshore wind and located off the Commonwealth's Atlantic shoreline, with an aggregate rated capacity of not less than 2,500 megawatts and not more than 3,000 megawatts, along with electrical transmission or distribution facilities associated therewith, is deemed needed in order to meet the Commonwealth's clean energy and carbon reduction goals. The costs of any such facilities, including the costs of electrical transmission or distribution facilities associated therewith, are deemed to be reasonably and prudently incurred and, notwithstanding any other provision of this title, including subsections C and D of § 56-585.1, shall be approved for recovery by the Commission, provided that the utility (i) has commenced construction of such facilities for U.S. income taxation purposes prior to January 1, 2024, or has a plan for such facility or facilities to be in service prior to January 1, 2028, and (ii) demonstrates to the Commission that it has utilized reasonable efforts to competitively solicit the majority of services and equipment associated with any such facility's construction, giving appropriate consideration to suppliers that have demonstrated successful experience on an offshore wind test or demonstration project off the Commonwealth's Atlantic shoreline. Any such costs shall be allocated to all customers of the utility in the Commonwealth as a non-bypassable charge, irrespective of the generation supplier of any such customer. In constructing any such facility, the utility shall (a) identify options for utilizing local workers; (b) consult with the Commonwealth's Chief Workforce Development Officer on opportunities to advance the Commonwealth's workforce goals, including furtherance of apprenticeship and other workforce training programs to develop the local workforce; and (c) give priority to the hiring of local workers.
F. A utility may elect to petition the Commission, outside of a triennial review proceeding conducted pursuant to § 56-585.1, at any time for a prudency determination with respect to the construction or purchase by the utility of one or more solar or wind generation facilities located in the Commonwealth or off the Commonwealth's Atlantic Shoreline or the purchase by the utility of energy, capacity, and environmental attributes from solar or wind facilities owned by persons other than the utility. The Commission's final order regarding any such petition shall be entered by the Commission not more than three months after the date of the filing of such petition.