On Saturday, March 12, the Virginia General Assembly (GA) adjourned its 2022 legislative session. Left unfinished were the Commonwealth’s biannual budget and a set of judicial appointments, necessitating a Special Session in the weeks ahead. Nonetheless, adjournment sine die at the end of the always frantic 60-day session marked the end of substantive legislative action. While the main focus was defense of the advanced energy progress made over the past two years, which was mostly successful, a couple of small but meaningful wins added to the total. And there was plenty of drama along the way.

Election Shuffles the Deck

Virginia’s off-off-year election in 2021 upset the apple cart in Richmond. Riding a wave of voter dissatisfaction about continued COVID restrictions, rising inflation, and suddenly hot-button education issues, Republican businessman Glenn Youngkin beat Democratic former Gov. Terry McAuliffe to become Governor. Youngkin’s coattails likewise helped flip the House of Delegates, unseating seven incumbent Democrats and giving Republicans narrow control of the lower chamber (52-48). These GOP victories ended two years of unified Democratic control in Richmond, though a Democratic majority remains in the Senate, whose members did not face voters last fall.

Energy issues were, at most, secondary during the campaign. McAuliffe gave full support to the Virginia Clean Economy Act (VCEA) while Youngkin expressed concerns about cost and reliability but still said he supported the development of wind and solar. However, soon after the election Youngkin took two actions that polarized energy and environmental politics in Richmond.

First, in December the Governor-elect announced his intent to withdraw the Commonwealth from the Regional Greenhouse Gas Initiative (RGGI). As Virginia joined RGGI with express legislative authorization, the Governor’s ability to unilaterally withdraw the state was (and remains) hotly contested. Second, Youngkin announced that he would name former EPA Administrator Andrew Wheeler as his Secretary of Natural and Historic Resources. Nomination of the former Trump Cabinet member provoked an outcry from Virginia progressives and Senate Democrats, who blocked his confirmation, sparking a partisan tit-for-tat that continues to roil the General Assembly.

Playing Defense

In the wake of November’s election, incoming Republican leadership in the House signaled that the energy and environmental policies enacted during the prior two years were in their crosshairs. True to their word, House and Senate Republicans filed over a dozen bills to undo the VCEA, “Clean Cars” standards, and RGGI authorization. Some legislation, such as HB 118 from Del. Freitas, and SB 695, from Sen. Stuart, sought the wholesale repeal of the VCEA and Clean Cars, respectively. Other legislation, such as HB 74 from Del. Ware and HB 1267 from Del. Wilt, took a more surgical approach. Ware’s bill attempted to exempt heavy industrial consumers from the VCEA’s non-bypassable costs, while Wilt’s would delay implementation of Clean Cars by five years, to 2030.

While the House passed many of these bills on largely party-line votes, all were stopped in the Senate. Of the 13 bills that Virginia AEE formally opposed during this session, 10 – 77% – were defeated outright, blocked by a Senate firewall that Virginia AEE worked hard to fortify in advance of, and during, session.

Two of the bills Virginia AEE formally opposed were softened, if not wholly neutralized, through the amendment process. Supported by both the agribusiness council and a segment of the conservation community, HB 206 deemed that any solar project that impacted more than 10 acres of prime farmland or 50 acres of forestland would be considered an “adverse impact” and require a mitigation plan. As proposed, the bill posed a substantial threat to Virginia’s burgeoning utility-scale solar industry, injecting significant regulatory uncertainty. After extensive, and contentious, stakeholder negotiations, the bill was amended – grandfathering the majority of projects in development by December 31, 2024, and putting guardrails around the mitigation requirements for future projects through a carefully constructed regulatory advisory panel.

An even bigger turnaround came with HB 1204, which as originally proposed would have frozen the Renewable Portfolio Standard (RPS) for five years and cut out distributed generation from the RPS. After discussions with the patron, the bill was revised to instead encourage Virginia utilities to prioritize in-state Renewable Energy Certificates for RPS compliance.

This leaves only one bill, among the 13 Virginia AEE opposed, that will reach the Governor’s desk largely unchanged. HB 657 transfers substantial regulatory and permitting authority from the Air and Water Pollution Control Boards to the Department of Environmental Quality (DEQ). This legislation arose out of a permit denial by the Air Pollution Control Board for the Mountain Valley Pipeline late last year. Although the bill doesn’t directly impact the advanced energy industry, there is concern that it may give the Administration greater leeway in the future to undo regulations, such as Clean Cars and RGGI, that the Boards had a hand in approving.

Incremental Progress

Unlike the prior two years, the ’22 legislative session did not produce landmark energy and transportation policy. Indeed, a number of ambitious bills to do things like establish a Virginia Green Bank, for instance, failed to pass. That’s not to say, however, the session was without its wins.

Transportation electrification continued to make headway, building on the significant success of Clean Cars in 2021, with several bills. Chief among these: SB 575, which was supported by a broad cross-section of industry, environmental advocates, and conservative allies. This “fleet optimization” legislation requires that, before purchasing a new light- or medium-duty vehicle (14,000 lbs or less), operators of Virginia state fleets conduct a total cost of ownership (TCO) analysis, comparing EVs and internal combustion engine (ICE) vehicles. If the EV would cost less under the TCO analysis, the agency is required to buy it. It is our hope that this smart procurement legislation will help speed the electrification of the state fleet, and diffuse that knowledge to county and local fleet operators as well. Lawmakers likewise passed anti-ICEing legislation (HB 450 / SB 278), imposing penalties on non-EVs parked in spaces reserved for charging, and appear poised to include at least a small sum ($5 million to $10 million) in the state budget to help finance EV charging infrastructure in rural areas.

Distributed solar likewise made progress, with a handful of bills that built on prior wins. Republicans and Democrats alike in the General Assembly support school construction and efficiency enhancements, so SB 13, which allows roof replacements to be part of energy performance contracts for public schools, passed with broad bipartisan support. Although not a “solar” bill per se, aging roofs have been a significant barrier to schools going solar throughout Virginia. In a similar vein, the GA also passed HB 396, which expands a pilot program for municipal net metering, allowing more city and county governments to go solar and aggregate their accounts.

Risks and Hopes in Budget and Appointments

Although lawmakers wrapped up much of their substantive work by March 12, they left Richmond without addressing two important items: the Commonwealth’s biannual budget and a set of judicial appointments.

Reports suggest Senate Democrats, House Republicans, and Governor Youngkin remain some distance apart on the budget, with the Governor and House members proposing more substantial cuts to the state income and grocery taxes. The advanced energy industry does not have significant equities in the budget, aside from a small allocation for EV charging infrastructure (see above). Nonetheless, AEE continues to monitor these negotiations closely as the Governor and Republican lawmakers might attempt to unwind Virginia’s participation in RGGI through budgetary line amendments. All indications suggest Senate Democrats would resist any such attempt.

We likewise remain closely attuned to the intel reports regarding judicial appointments. As noted above, the decision of Senate Democrats not to confirm Andrew Wheeler has provoked a tit-for-tat battle between House and Senate lawmakers. Caught in the crossfire: SCC Judge Angela Navarro, who was appointed by then Governor Ralph Northam to complete the unexpired term of Mark Christie, who was appointed to the Federal Energy Regulatory Commission in January of last year. When Navarro’s term expired on February 1, House Republicans opted not to reconfirm Navarro in retaliation for Wheeler (who nonetheless joined the administration by becoming an advisor to Youngkin). To date, the SCC seat remains vacant, along with a number of seats on the state Supreme and Appellate courts. The latest reports suggest an agreement between the House and Senate, addressing both the budget and appointments, remains possible, and Navarro’s name remains in the mix.

Never a dull day in the Old Dominion!

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