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Virginia lawmakers pass bills phasing out coal generation

Virginia lawmakers have passed bills that would require 100% of the state's electricity be produced by renewable resources by 2050 and essentially phases out coal-fired generation by the end of 2030.

The Virginia House of Delegates voted 52-47 on Feb. 11 to pass House Bill 1526, also known as the Virginia Clean Economy Act. The Virginia Senate voted 21-19 to pass similar legislation known as Senate Bill 851.

The legislation would replace the state's voluntary renewable portfolio standard with mandatory annual benchmarks that would eventually require electricity suppliers to produce 100% of their electricity from renewable sources.

It also requires the state's investor-owned utilities — Dominion Energy Virginia and Appalachian Power Co. — to "retire all generating units principally fueled by oil with a rated capacity in excess of 500 [MW] and all coal-fired electric generating units operating in the Commonwealth" by Dec. 31, 2024. The bill provides an exception for coal plants co-owned with a cooperative utility and for Dominion Energy Virginia's 624-MW Virginia City Hybrid Energy Center, which co-fires with biomass.

All biomass facilities that do not co-fire with coal must be shut down by the end of 2028. Dominion Energy Inc. subsidiary Dominion Energy Virginia, known legally as Virginia Electric and Power Co., would be required to shut down the Virginia City Hybrid Energy Center by Dec. 31, 2030, "unless such facility can demonstrate at least 83[%] reduction in carbon emissions through capture and sequestration."

The Virginia City plant, in Wise County, Va., in the southwestern corner of the state, began operating in 2012.

By Dec. 31, 2045, Dominion Energy Virginia and Appalachian Power, a subsidiary of American Electric Power Co. Inc., must "retire all other electric generating units located in the Commonwealth that emit carbon," but may petition state regulators for relief over grid reliability or security concerns.

Each year, the utilities must issue a request for proposals for solar and wind generation.

The measure also would adopt a target for energy storage deployment of 3,100 MW by the end of 2035, with Dominion Energy Virginia tasked with constructing or acquiring 2,700 MW of energy storage capacity.

The legislation includes energy efficiency benchmarks requiring Dominion Energy Virginia and Appalachian Power to achieve incremental annual savings starting at 0.25% in 2022 based on 2019 retail sales. The benchmark would increase to 1% in 2025 for Appalachian Power and 2.5% in 2025 for Dominion Energy Virginia still based on "the average annual energy jurisdictional retail sales by that utility in 2019."

The renewable energy portfolio standard program outlined in the bill would require the utilities to procure renewable energy certificates tied to eligible sources, primarily solar, wind and hydro facilities located in Virginia or the PJM Interconnection market. The RPS program requirements will equate to the percentage of the total electric energy sold in the previous calendar year, starting at 6% in 2021 for Appalachian Power and 14% in 2021 for Dominion Energy Virginia.

Appalachian Power must procure 100% of its electricity from renewable resources by 2050, while Dominion Energy Virginia must hit that benchmark by 2045.

Under the legislation, "the construction or purchase" of offshore wind facilities up to 5,200 MW off the Virginia shoreline by Dec. 31, 2024, is in the public interest.

Dominion Energy Virginia in September 2019 announced plans to build the "largest offshore wind project" in the U.S. off the coast of Virginia Beach in three phases of 880 MW each. If approved, the first phase of the $8 billion project would be completed in 2024, with the final phases expected to come online in 2025 and 2026.

The passage of the bill comes as Dominion earlier on Feb. 11 announced a new target of achieving net-zero carbon dioxide and methane emissions by 2050 for both its power generation and natural gas operations.

"Over the long term, achieving these goals will require supportive legislative and regulatory policies and broader investments across the economy," Dominion Energy Chairman, President and CEO Thomas Farrell II said on the company's fourth-quarter 2019 earnings call.

The Chesapeake Climate Action Network Action Fund applauded the lawmakers' vote on the Virginia Clean Economy Act.

"The Virginia Clean Economy Act is historic," Harrison Wallace, Virginia director of the CCAN Action Fund, said in a written statement. "It will have a transformational effect on Virginia's energy economy and the larger national climate movement. The bill codifies a roadmap to a 100% carbon-free electricity grid that also ends in-state fossil fuel generation in Virginia."