General Assembly Fills SCC Vacancies but Doubles Down on Bad Energy Laws

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The General Assembly has now filled the two open seats at the State Corporation Commission (SCC), ending two years of gridlock. Unfortunately, the same legislators, on both sides of the aisle, are still working overtime to dictate and micromanage the state’s energy policy, reducing the discretion and authority of the independent, non-partisan regulators. Samuel T. Towell, elected to the SCC last week, fits the expected mold for such positions.  His legal career has been inside and outside the Virginia government, with his term as the civil litigation deputy under Attorney General Mark Herring (D) as the highlight of his resume.  In that role he supervised the consumer counsel functions under Herring, participating in SCC matters. Since then, he has been working for Smithfield Foods. Breaking the mold is Kelsey Bagot, only a decade out of Harvard Law and with no real Virginia-specific experience. She spent much of her career so far at the Federal Energy Regulatory Commission (FERC), working part of that time for former SCC Chairman Mark Christie.  Christie’s expressed enthusiasm for her qualifications makes her about as close to a bipartisan choice as was possible. They join current Commissioner Jehmal Hudson, also a veteran of FERC, who has been serving by himself for more than a year. Towell and Hudson, less than 20 years out of law school, and the younger Bagot form a trio that could be in office together for decades. That had to be on the minds of the legislators (all Democrats) who made these choices. Fully qualified and engaged judges are still bound to follow the law. Virginia’s headlong rush into an economically foolish war on fossil fuels is being directed by the bills flowing from the General Assembly, not rogue judges. If the last two sessions controlled by Democrats, 2020 and 2021, were a two-alarm EV battery fire, the 2024 session could be the equivalent of the Maui apocalypse. Throw a dart at the list of bills dealing with the public utilities and you are likely to hit something that impedes generation or transportation of coal or natural gas or promotes or even mandates expansion of solar and wind developments. February 13 is the deadline for bills to pass in their houses of introduction, and at that point we’ll have a better idea of what is advancing toward the governor. House Bill 638 and Senate Bill 230 both amend the 2020 Virginia Clean Economy Act to accelerate the retirements of fossil fuel generation and to greatly expand top-down energy efficiency requirements. The law currently gives the SCC multiple paths to evaluating the cost-benefit ratios used to measure efficiency efforts, but these bills would mandate a single standard. They strip out, for example, the ratepayer impact test which can reject a program based solely on its high cost to customers. Both also require the SCC to fully enforce the aspirational green energy goals the earlier Democratic majorities enshrined in law. As you can read for yourself, they require reaching no electricity from fossil fuels on a schedule more aggressive than the VCEA. The policy also reaches into transportation and building construction policies, agriculture and industry, to remove fossil fuel use. The revitalized SCC could become the Clean Energy Policy Police. The solar and wind projects already mandated in that VCEA are often subject to major opposition from neighboring landowners, who sometimes succeed in getting local governments to deny permits. House Bill 636 and Senate Bill 567 fix that by empowering the SCC to override that local authority and approve them anyway. The shortage of charging facilities is one reason electric vehicles sales aren’t as high as some hoped. House Bill 118 will give the utilities the job of building more and let them charge all their customers for the capital costs, with profit of course. Then the utilities would create lower rates for those engaged in such vehicle charging, shifting costs to the scofflaws still using gasoline. House Bill 524 is clearly aimed at interfering with existing plans to expand natural gas service into the Hampton Roads region and would greatly complicate any other similar project in the future.  If not under construction by July 1, the Hampton Roads project would face an entirely new round of expensive and time-consuming reviews. The Southside Virginia expansion serving Hampton Roads is also targeted by Senate Bill 486, prohibiting its current plan to expand the compressor station in that region. That change would also force the project into a redesign and then a new time-consuming battle for permits. Permitting would be eased, however, for a small modular nuclear facility in Southwest Virginia under House Bill 741. It extends the fast track “permit by rule” open to small renewable projects to a nuclear plant which would be much larger, but still too small to be considered a major energy asset.  Such a stand-alone plant will never be built (a connected series of SMRs is more likely) but the law is still a bad idea. Senate Bill 591 would greatly expand the ability of customers to escape from the monopoly power companies and use a third-party supplier, if that supplier claims it provides “renewable energy”.  It gives choice to residential and larger industrial customers, but there is another big benefit in the bill for industrial customers. The 2007 revisions to the state’s electricity regulations allowed those large industrials to leave the monopoly suppliers, but if they did so they would have to give five years notice to come back. That effectively prevented departures. This bill reduces that from five years to six months. Another bill makes the notice only 90 days. A key small consumer protection element of the 2007 compromise would die. The impact of allowing customers to leave for competitive suppliers is that the overhead costs of those who remain with the monopoly will rise.  The more customers who leave, the larger the load they no longer take from the utility, the more those costs go up for everybody else. For this bill, and for so many others, it seems the authors are looking for ways to make the energy in your home or business more expensive.  Actually, just delete “it seems.”
Stephen D. Haner

About Stephen D. Haner

Stephen D. Haner is Senior Fellow for State and Local Tax Policy at the Thomas Jefferson Institute for Public Policy. He may be reached at [email protected].
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