Virginia Clean Economy Act Grassroots Call Transcript

On February 20th, 2020, the CCAN Action Fund and the Virginia Sierra Club hosted a grassroots conference call with special guest Delegate Rip Sullivan. Below is an overview and edited transcript of the recording, and the audio of the call can be found here:

Featured speakers:
Delegate Rip Sullivan, 48th District, House Caucus Chair, Vice Chair of Labor and Commerce committee, and chief patron of the VCEA
Bob Shippy, Legislative Chair, Virginia Chapter of the Sierra Club
Harrison Wallace, Virginia Director, CCAN Action Fund
Mike Tidwell, Director, CCAN Action Fund

Rip Sullivan speaks on the bill from 4:52-12:15.

Bob Shippy of the Virginia Sierra Club speaks from 13:10-18:40.

To read more about the bill, please read our blog post: “On the Virginia Clean Economy Act and the Green New Deal Act.” 

For more information, other important pieces to read:
VA Mercury: “Ten things to know about the Clean Economy Act.”
Blue Virginia: “General Assembly Voting Today on the Virginia Clean Economy Act, Which Would Decarbonize Our Power Sector by 2045.”

Harrison Wallace speaks from 19:57-30:25 about energy efficiency and projected energy bill savings. Starting at 22:52, there is a discussion of the RPS. At 26:57, Harrison Wallace speaks to the environmental justice provisions of the bill.

The Question and Answer section begins at 31:00.
31:22 Q: Who Wrote the Bill? Dominion must have written it.

31:51 Sullivan: This bill has been written by a coalition of environmental groups that’s unprecedented in scope and depth. They include: VPLC, SELC, Sierra Club, AEEE, NRDC, LCV, and CCAN. A really deep deep group of stakeholders that have never been in a position to be in one room. Coalition building is really hard but it has gone remarkably well. And these are all people who want to get to the same place. I’m not going to take credit for drafting this bill. Sen McClellan and I are at the top of the pyramid, but there are a lot of people much smarter than I coming up with the technical details. When we presented this bill to Dominion–and it’s not a finished product–the bill was a bill when we said to Dominion here’s where we’re headed. Dominion recognizes that it’s in a new world. It’s not like they’re not an influential force in Richmond any longer… but they know Two years ago when we had 49 members rather than 55, Dominion started to see some cracks in its armor. That vote really was powerful. We called it the power of 49. We were able to win a vote–frankly Dominion has never lost a vote like that. When we passed this out of the House, Dominion had never seen a bill like this past out of House, and they’ve never seen it pass out of the Senate… They came to the table in a much weakened position. And if I can hold my 55, McClellan can hold her 29, we can do things that before the election that we never dreamed of doing.

35:26 Q: Is there any opportunity to include a meaningful fossil fuel moratorium in the VCEA? My communities are never going to approve of a bill that allows more fracked gas buildout. Is this bill a de facto moratorium? Is there a possibility of having a formal moratorium on fossil fuels later?

36:04 Sullivan: I think it is a de facto moratorium. The administration is tasked with doing a review of (break)…that will be two years away. No fossil fuel can be built out in that time (break) The utilities would have to be meeting all their energy efficiency targets, their RPS targets, and they’d have to be able to demonstrate there’s no other way to meet capacity but for new fossil fuel infrastructure, and even then they would have to include the cost benefit analysis of doing that when they know it would be phased out within twenty years. That would make it virtually impossible to justify any new fossil fuel plants.

Shippy: The beauty of the VCEA is that it shifts the market forces in VA. He’s right about the initial couple of years, where there’s an essential moratorium, and what it does is it changes all the economics of VA over the next 30 years. As a practical economic matter, it will no longer be possible to profitable build a fossil fuel plant in VA and the way the market will be shifted by this transformative bill, it will force any profit making entity to look at renewable ways to produce energy rather than fossil fuel ways.

38:45 Question: This bill is changing but he believes the bill is getting better. Can he explain what positive changes are happening now, and are there ways that the bill is not improving?

39:07 Wallace: The main way that the bill is changing in a positive way right now is that we are continuing to see more and more oversight from the SCC getting inserted into the bill, and just in general more ways to make sure that this is the most responsible way to build clean energy. In the house version, there was another actual moratorium enactment clause, and people were meeting their RGGI goals by 2028, and more worker provisions for local workers to be included in new buildouts of new clean energy, especially new offshore wind. Those are some of the ways it’s getting better. I haven’t seen how it’s gotten worse. What we have to watch out for is that Dominion doesn’t like these changes and will try to fight them, so I think making sure there are people standing up in support of them and letting legislators know they have some backup.

40:42 Q: Will the VA General Assembly be able to come back in subsequent years, or in a regulated market is Dominion likely to dominate any imperfections going forward at the expense of ratepayer?

Sullivan:The answer to the latter question is no, the former is yes. The first thing you learn when you come to Rcihmond is that sometimes even the best ideas take a little time to marinate. One of the things that’s been unique about the VCEA is the speed with which we’ve been able to get to this point. I always tell people that this is why God invented next year. We will be back if there are things we don’t get in this bill that we want to work on next year. We can come back next year. There is nothing in the bill that says this is set in stone. I imagine it will continue to get worked on. None of us know what technology will exist five or ten years from now. We will have an annual possibility to come back and tweek or make changes to the bill. When I say it’s imperfect, I am confronted by the fact that we’ll always be able to come back and keep at it. I see one of my roles in this job to be poking and prodding Dominion and APCO and everyone else, pushing and being an agent of change, and keep pushing. We’re not gonna pass this bill and stop. One thing I haven’t heard anyone talk about is that there are actually rules built into this bill that require competition finally coming to VA. A lot of the folks at the table are companies that are dying to come to VA and ignite our solar industry… There are requirements as we move toward renewables that 35% of the power being produced can be produced by people other than Dominion, so we’re gonna have new players coming in to the market, and you can be sure that as they start to be successful they’re going to continue to press to do more and more. The VCEA unleashes market forces that right now are stifled. If we can start to unleash these forces, I think we can do this even faster than 2045. Nothing in the bill says we can’t go faster than 2045.

44:52 Q: Any real change in VA requires a change in monopoly rules in central generation, in other words until we change the electricity grid dominated by Dominion, will we ever have a just and clean system? Do you agree that the system needs to be deregulated? Or do you believe that we can move toward clean affordable energy even with a monopoly like Dominion?

Shippy: You see bills even in this session that take a look at the monopoly and regulatory framework. I think that what the (break), as we’ve weighed this, the conclusion we’ve come to is we have the regulatory framework we have now, let’s optimize it… (break) restore the SCC oversight because that has been neutered. It’s important to have real regulation. I think with many of the provisions like mandating competition especially in the solar space but even in the wind space, that is not something we’ve seen before–I think that’s really worth a try. If that doesn’t work out we can look at the regulatory framework. Let’s make the framework work better for Virginians, vs. trying to undo it, which I don’t think would have a lot of support in the GA today anyway.

47:13 Q: Both the State Corporation Commission and the VA Attorney General have stated that this bill is bad for consumers. What’s your response?

Wallace: They were looking at the Senate bil, so adding the stronger EERS neuters a bit of what the SEC said. $17 a month saved really brings down that number $23 a month by 2027 in increased costs. Also with the SCC they said that RGGI was gonna cost $12/month just last year, now they’ve dropped that down to under 2. Until something happens, what they want to do is say that it’s going to cost too much. That’s their job to warn us against investing into too many new things, even though we have a Climate crisis. The AG estimate on when we’re trying to improve that bill and improve that part of what is happening in the commonwealth around that new wind generation that’s going to be coming off our coast. The bill does have more competitive procurement, and those costs are a worst case scenario. I think it’s gonna be a lot cheaper when those turbines go in the water in a few years and this allows for a competitive process and a cost cap from keeping it from being way overblown. In this bill we also got rid of the basis point adder for wind, which was just an extra bonus that Dominion didn’t need, which can save a billion dollars on those costs. Those are just a few ways that we’re trying to make sure that we’re dealing with that. In the future version of this bill and with you all’s help in pushing for more action to protect ratepayers, will see even more SCC oversight.

49:10 Sullivan: Three things. First, there are a lot of protections in here for low-income Virginians. Second, one of the most important parts of this bill is that we are writing in the code that the SCC as it oversees the transition is now required by the GA to consider the social costs of carbon as it helps shape this program going forward. SCC usually has these blinders on where it just looks at cost to produce, what’s happening to the rates. Thirdly, one of my colleagues asked “what’s the cost of doing nothing?” This existential crisis we’re facing is not to say that we should raise everyone’s rates. There are going to be some costs associated with it. We think it’s gonna be a lot less than some of the naysayers are saying. What’s happening all around the world with the cost of wind coming down, it’s really dramatic. Look at solar– solar now vs ten years ago. We are very mindful of the ratepayer in this bill across the spectrum and especially the lower socioeconomic part of the spectrum. We are confident that in the final analysis this is going to be something that saves people money.

52:06 How does the VA Clean Economy Act affect the Mountain Valley Pipeline and the Atlantic Coast Pipeline for fracked gas? Does the VCEA restrict them or sunset them in any way, or does it grandfather them in, exempting them from regulation?

52:35 Sullivan: No it doesn’t exempt them at all. We are changing the economics of energy in VA and if you can fast forward to 2050. We’re trying to put in place an economy that is not going to need fossil fuels, and would make pipelines uneconomic to build. Frankly I think the economics of those pipelines is disintegrating before Dominion’s eyes.

55:19 Q: The VA grassroots coalition applauds your efforts to negotiate this bill. It includes many great items. However we are concerned about newly added provisions to the engrossed bills that grant millions of dollars of ratepayer subsidies annually to biomass-fired industrial facilities for paper mills owned by westrock and one by international paper. These companies and only these companies can profit by burning biomass under the VCEA’s RPS requirements. What sort of limitations and features are applied to the issue of biomass under this bill

Wallace: We’re shutting down every Dominion biomass plant by 2028. Existing biomass does have a role in the RPS. It is a shrinking one, and one that especially once we get to where RGGI starts covering biomass will just shrink more each year. Again we’re not letting anything new in, there’s nothing coming in from out of state in the RPS. But the stuff that is already in the state as of this year has a small role that is slowly getting constrained by all the other market forces that come into reducing carbon which biomass does produce. The only other thing to add is that it will take us a few years to get to the point to where NY, CA, and other huge leaders on climate are, but as we’re seeing even in Maryland, they’re carving out anything left in their RPS that’s bad. There’s a place to make sure that this stuff goes away. We’re committed to fighting it. We’re making sure in this bill that we’re not incentivizing anything new or anything from out of this state that falls into this category of being a part of our clean energy future.

Shippy: We’re putting these companies out of business. That’s hard to put into legislation. It’s just miraculous that we’ve actually been able to phase out all those companies from doing business in VA over a fairly short number of years despite their lobbying. Yes there’s an allowance for a certain number of years. We have negotiated an end to these businesses in business-friendly VA in the name of clean energy. So I think that piece of the bill is a very good compromise.

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