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Va. lawmakers fail to override coal tax credit veto; adopt coal ash changes

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Va. lawmakers fail to override coal tax credit veto; adopt coal ash changes

The Virginia House of Representatives on April 5 failed to override Gov. Terry McAuliffe's veto of legislation that would reinstate tax credits to incentivize in-state coal employment and production. The General Assembly, however, adopted the governor's recommendations to halt permitting for coal ash pond closures.

McAuliffe, in his February veto of H.B. 2198, cited a 2012 report from Virginia's Joint Legislative Audit and Review Commission that concluded the credits had not achieved their goal. The governor noted that while coal mine operators and electricity generators claimed more than $637 million in credits from 1988 to 2016, the number of coal miners in the state declined to 2,483 from 11,106. "It would be unwise to spend additional taxpayer dollars on a tax credit that has fallen so short of its intended effectiveness," McAuliffe said.

The governor, who vetoed similar legislation in 2016, also shot down the Senate's bill on coal tax credits.

While the override failed, the Senate and the House voted at the reconvened session to adopt McAuliffe's recommendations on S.B. 1398 tied to coal ash pond closures. McAuliffe proposed several amendments to the bill, including a temporary halt to the state permitting process for closing coal ash impoundments, in order to address "tremendous public concern."

Sen. Scott Surovell, the chief patron of the bill, said previously that he supports the amendments proposed by the governor.

The bill impacts Dominion Virginia Power's closure plans for its coal ash impoundments at four sites in the state to comply with Virginia Department of Environmental Quality regulations and the U.S. EPA's final coal ash rule. Dominion still needs solid waste permits to complete the closure process for its impoundments and the amendments halt the permitting process until at least May 2018.

Specifically, Surovell's bill requires Dominion Virginia Power to evaluate the "clean closure" of its ash impoundments within the Chesapeake Bay watershed. Dominion Virginia Power, known legally as Virginia Electric and Power Co., must assess groundwater or surface water pollution; evaluate the excavation and potential recycling or reuse of coal ash residuals; and evaluate the potential of moving the coal ash to "dry, lined storage in an appropriately permitted and monitored landfill." Dominion also must address any long-term safety risks tied to its proposed closure plan.

The House had substituted language that prohibited the DEQ director from delaying the permitting process until the assessments are reviewed. The governor's amendments reinstate the need for water quality and environmental assessments in the permitting process. These assessments must be complete by Dec. 1.

Dominion Virginia Power is a subsidiary of Dominion Resources Inc. The company has said it is prepared to provide the analysis required by the bill.

"Dominion has already initiated the process of identifying a qualified entity experienced in coal ash solid waste management to conduct individual assessments of the Dominion coal combustion residuals surface impoundments at the Possum Point, Bremo Bluff, Chesterfield and Chesapeake power stations," Dominion Resources Chairman, President and CEO Thomas Farrell II wrote in a April 3 letter to McAuliffe. "We share your commitment to ensuring that management of these facilities is done in an informed and thoughtful manner."

The CEO added that Dominion finds the governor's proposed amendments to be "workable" with the company committed to pursuing the site assessments before pursuing solid waste permits "regardless of the outcome of the legislation."