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2021 SPECIAL SESSION I

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Senate Committee on Commerce and Labor
Subcommittee Energy

Spruill (Chair), Norment, Newman, Lucas, Marsden

Clerk: Hobie Lehman
Staff: Marvi Ali, Thomas Stevens
Date of Meeting: February 12, 2021
Time and Place: Upon Adj. of the Senate/Public Can Register on GA website
https://virginia-senate.granicus.com/ViewPublisher.php?view_id=3

H.B. 1907

Patron: Sullivan

Electric utilities; advanced renewable energy buyers. Provides that certain accelerated renewable energy buyers that are customers of Dominion Energy Virginia and had subscribed to, as of March 1, 2020, a voluntary companion experimental tariff offering for the purchase of renewable attributes from renewable energy facilities that requires a renewable facilities agreement and the purchase of a minimum of 2,000 renewable attributes annually is exempt from the allocation of the net costs related to procurement of new solar or onshore wind generation capacity, energy, or environmental attributes, or energy storage facilities, by Dominion Energy Virginia. The exemption is based on the amount of Renewable Energy Certificates associated with the customer's renewable facilities agreements associated with the tariff offering in proportion to the customer's total electric energy consumption, on an annual basis.

A BILL to amend and reenact § 56-585.5 of the Code of Virginia, relating to electric utilities; Renewable Energy Certificates; contracts with accelerated renewable energy buyers; exemption from certain costs.

21100988D

H.B. 1914

Patron: Helmer

Electric utilities; period costs. Provides that in a triennial review proceeding, certain utility generation and distribution costs that are not proposed for recovery under various cost recovery mechanisms, at the State Corporation Commission's discretion, may be attributed to the test periods under review and deemed fully recovered or, if the utility has earned below a certain threshold, may be deferred for recovery over future periods. Under current law, such attribution is required unless the utility has earned below a certain threshold, in which case deferred recovery of the costs is required. The bill also eliminates provisions that limit any rate reduction ordered by the State Corporation Commission in the first triennial review of Dominion Energy Virginia after January 1, 2021, to $50 million in annual revenues and provides that in any triennial review, regardless of whether the Commission has ordered bill credits, the utility earned above its authorized rate of return during the test period under review, or the utility has made a request regarding any customer credit reinvestment offsets, the Commission may order any rate reduction it deems necessary and appropriate unless it finds that the resulting rates will not provide the utility with the opportunity to (i) fully recover its costs of providing its services and (ii) earn not less than a fair combined rate of return on its generation and distribution services. The provisions of the bill apply to the first triennial review of Dominion Energy Virginia conducted after January 1, 2021. This bill incorporates HB 1835.

A BILL to amend and reenact § 56-585.1 of the Code of Virginia, relating to electric utilities; triennial review; period costs; rate reductions.

21104073D

H.B. 1925

Patron: Kilgore


Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program; handbook. Establishes the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program (the Fund and Program). The bill provides that no allocation of funds shall be made to the Fund or Program unless federal funds are available to cover the cost of such allocation. The Fund and Program shall be administered by the Department of Mines, Minerals and Energy for the purpose of awarding grants to renewable energy projects that are located on brownfields or previously coal mined lands, both defined in the bill. Grants are to be awarded on a basis of $500 per kilowatt of nameplate capacity from renewable energy sources that are located on previously coal mined lands and $100 per kilowatt of nameplate capacity from renewable energy sources that are located on brownfields.

No more than $10 million shall be awarded to any previously coal mined lands project and no more than $5 million to any single brownfield project. No more than $35 million shall be allocated per year by the grant program. Of the $35 million, $20 million shall be reserved for previously coal mined lands projects. If less than $20 million is distributed to such projects, the remaining funds may be reallocated to brownfield projects. The bill also provides that the Department shall, in consultation with stakeholders, develop a handbook for renewable energy and energy storage development on brownfields and previously coal mined lands. Finally, the bill requires the Department to submit an annual report regarding administration of the Fund and Program to the General Assembly. However, the annual report shall not be required if the Fund and Program are not funded.

A BILL to amend the Code of Virginia by adding in Title 67 a chapter numbered 18, consisting of a section numbered 67-1800, relating to Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program; handbook.

21102691D

H.B. 1965

Patron: Bagby

State Air Pollution Control Board; low-emissions and zero-emissions vehicle program. Directs the State Air Pollution Control Board to implement a low-emissions and zero-emissions vehicle program for motor vehicles with a model year of 2025 and later. Regulations adopted by the Board to implement the program are exempt from the Administrative Process Act and shall not become effective prior to January 1, 2024. The bill also authorizes the State Corporation Commission to exclude sales related to such vehicles from certain energy efficiency calculations.

A BILL to amend and reenact § 10.1-1307 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 10.1-1307.04, relating to the State Air Pollution Control Board; low-emissions and zero-emissions vehicle standards.

21101651D

H.B. 1984

Patron: Hudson

Electric utilities; triennial review; rates of return. Provides that the State Corporation Commission, in any triennial review proceeding, including the first triennial review proceeding conducted after January 1, 2021, for Dominion Energy Virginia, may use any methodology it finds consistent with the public interest to determine fair rates of return on common equity for the utility's generation and distribution services. In any such triennial review, regardless of whether the utility earned above or below its authorized rate of return during the test period under review, the Commission also may order any increases or decreases to the utility's rates for generation and distribution that it deems necessary and appropriate, as long as the resulting rates provide the utility with the opportunity to (i) fully recover its costs of providing its services and (ii) earn an authorized rate of return.

A BILL to authorize the State Corporation Commission, in triennial review proceedings for a Phase II Utility, to determine fair rates of return on common equity for the utility's generation and distribution services and to order increases or decreases to the utility's rates for generation and distribution.

21101313D

H.B. 1994

Patron: Murphy

Small agricultural generators; definition. Expands the definition of small agricultural generator to include any business operating a small agricultural generating facility that has been granted a manufacturer license as a distillery, limited distillery, brewery, limited brewery, winery, or farm winery. Under current law, small agricultural generators include only those businesses operating a small agricultural generating facility as part of an agricultural business. This bill incorporates HB 2215.

A BILL to amend and reenact § 56-594.2 of the Code of Virginia, relating to small agricultural generators; definition.

21103203D

H.B. 2048

Patron: Bourne


Electric utility regulation; purchasing from competitive suppliers. Authorizes individual retail customers of electric energy to purchase electric energy provided 100 percent from renewable energy from any licensed competitive supplier of electric energy, including any incumbent electric utility. Currently, such customers may purchase electric power from such suppliers, other than an incumbent electric utility that is not the incumbent electric utility serving the exclusive territory in which the customer is located, only if their incumbent electric utility does not offer an approved tariff for electric energy provided 100 percent from renewable energy. The measure also provides that a cooperative utility customer eligible to take service under a tariff for electric energy provided 100 percent from renewable energy is prohibited from purchasing electric energy provided 100 percent from renewable energy from a licensed supplier, except such customer is authorized to continue purchasing renewable energy pursuant to the terms of a power purchase agreement in effect on the date the cooperative serving it filed with the Commission such tariff for electric energy provided 100 percent from renewable energy for the duration of such agreement.

The measure requires that, within three months after the enactment of this act or within three months after beginning to offer a 100 percent renewable energy product to residential customers, whichever is later, licensed competitive suppliers that offers 100 percent renewable energy to residential customers in the service territory of Dominion Energy Virginia or Appalachian Power, to submit a proposal to the State Corporation Commission for consideration and approval to offer discounted service to low-income customers. The measure requires such proposal to include a 100 percent renewable product to be offered to a minimum number of low-income customers at a rate ten percent lower than the incumbent electric utility’s standard residential rate for non-renewable supply service for a minimum initial term of twelve months.

A BILL to amend and reenact § 56-577 of the Code of Virginia, relating to electric utility regulation; purchasing from competitive suppliers.

21101268D

H.B. 2049

Patron: Bourne

Electric utilities; customer credit reinvestment offsets. Eliminates customer credit reinvestment offsets under which a utility is allowed, upon request, to reduce or eliminate amounts of overearnings that otherwise would be required to be credited to customers by applying a customer credit reinvestment offset for expenses on new solar and wind generation facilities and electric distribution grid transformation projects.

A BILL to amend and reenact § 56-585.1 of the Code of Virginia, relating to electric utilities; customer credit reinvestment offsets.

21102818D

H.B. 2160

Patron: Tran


Electric utilities; fair rate of return; customer bill credits. Provides that the State Corporation Commission may, in any triennial review, establish a range above or below the authorized rate of return such that if the combined rate of return on common equity earned by the generation and distribution services is within that range, such combined return is not to be considered either excessive or insufficient, respectively. The bill provides that during a triennial review period, if a utility's earned return on its generation and distribution services falls below that range due to certain costs, the Commission is required to authorize deferred recovery for such costs. Additionally, if during a triennial review period, if a utility's earned return on its generation and distribution services falls below that range due to revenue reductions related to energy efficiency measures or other programs, the Commission is required to order an increase to the utility's rates. The bill requires that the Commission direct 100 percent of the amount that a utility earns over its fair rate of return to customers' bills. Under current law, the Commission is required to direct 70 percent of any earnings that were more than a certain percentage above the utility's fair rate of return to customers' bills. The bill provides that if, during a triennial review period, a utility has earned above its fair combined rate of return, the Commission is required to order reductions to the utility's rates it finds appropriate. Under current law, the Commission is only required to order reductions to the utility's rates if the utility earned more than a certain percentage above its fair combined rate of return. The provisions of the bill apply to all triennial reviews, including the first triennial review of Dominion Energy Virginia conducted after January 1, 2021.

A BILL to amend and reenact § 56-585.1 of the Code of Virginia, relating to electric utilities; triennial review; fair rate of return; customer bill credits.

21102815D

H.B. 2200

Patron: Jones


Electric utilities; triennial review. Makes various changes to procedures under which the State Corporation Commission reviews the earnings and sets the rates of investor-owned incumbent electric utilities. The bill requires the Commission, in determining a fair rate of return on common equity for an investor-owned utility, to consider the average of either (i) the returns on common equity reported to the Securities and Exchange Commission for the three most recent annual periods for which such data is available by not less than a majority of a selected peer group of the utility or (ii) the authorized returns on common equity that are set by the applicable regulatory commissions for the same selected peer group. Under current law, the Commission is required to set such return not lower than either such average.

The bill provides that in a triennial review proceeding, certain utility generation and distribution costs that are not proposed for recovery under various cost recovery mechanisms, at the Commission's discretion, may be attributed to the test periods under review and deemed fully recovered or, if the utility has earned below a certain threshold, may be deferred for recovery over future periods. Under current law, such attribution is required unless the utility has earned below a certain threshold, in which case deferred recovery of the costs is required. The bill requires the Commission to direct that 100 percent of the amount of a utility's earnings above a certain threshold be credited to customers' bills. Under current law, the Commission is required to direct that 70 percent of such overearnings be credited to customers' bills.

The bill provides that if revenue reductions related to energy efficiency measures or other programs cause a utility to earn below a certain threshold, or if for reasons other than revenue reductions the utility earns below a certain threshold, the Commission may order increases to the utility's rates for generation and distribution services necessary to recover such revenue reductions. Under current law, the Commission is required to order such an increase. The bill eliminates provisions that limit any rate reduction ordered by the Commission in the first triennial review of Dominion Energy Virginia after January 1, 2021, to $50 million in annual revenues. The bill provides that the Commission may determine that certain capital investment amounts by a utility may offset any customer bill credit amounts. Under current law, such the Commission is required to determine that such investments offset customer bill credit amounts. The bill provides that in any triennial review the Commission may order any rate increase or decrease to a utility's rates for generation and distribution services it deems necessary and appropriate, so long as the resulting rates provide the utility with the opportunity to fully recover its costs and earn an authorized rate of return on its generation and distribution services. The provisions of the bill apply to all triennial reviews, including the first triennial review of Dominion Energy Virginia conducted after January 1, 2021. This bill incorporates HB 2057.

A BILL to amend and reenact § 56-585.1 of the Code of Virginia, relating to electric utilities; triennial review.

21104266D

H.B. 2282

Patron: Sullivan


State Corporation Commission; transportation electrification; utility recovery of certain costs; report. Directs the State Corporation Commission (Commission) to report on policy proposals to accelerate transportation electrification in the Commonwealth. The bill requires the Commission to submit, no later than May 1, 2022, a report to the General Assembly recommending policy proposals that could govern public electric utility programs to accelerate widespread transportation electrification in the Commonwealth. The bill requires the Commission to utilize a public process, facilitated by a third party with expertise in transportation electrification, in which the Commission, the Department of Environmental Quality, the Department of Mines, Minerals and Energy, the Department of Transportation, and appropriate stakeholders participate. The bill requires that the Commission, in developing its policy recommendations, evaluate (i) areas where utility or other public investment may best complement private efforts to effectively deploy charging infrastructure, with particular focus on low-income, minority, and rural communities; (ii) how smart growth policies can complement and enhance the Commonwealth's transportation electrification goals; (iii) how utility programs, investments, or incentives to customers or third parties to facilitate the deployment of charging infrastructure and related upgrades can support or enhance (a) statewide transportation electrification, including electrification of public transit; (b) the electrification of medium-duty and heavy-duty vehicles, school buses, vehicles at ports and airports, personal vehicles, and vehicle fleets; (c) increased access to electric transportation and improved air quality in low-income and medium-income communities; (d) achievement of existing energy storage targets; (e) improvements to the distribution grid or to specific sites necessary to accommodate charging infrastructure; and (f) customer education and outreach programs that increase awareness of such programs and the benefits of transportation electrification. The bill requires that the report also address whether and how transportation electrification can, under current law, (a) reduce total ratepayer rates and costs; (b) assist in grid management and more efficient use of the grid, in a manner that does not increase peak demand, through time-of-use rates, managed charging programs, vehicle-to-grid programs, or other alternative rate designs; (c) utilize increased generation from renewable energy resources; and (d) reduce fueling costs for vehicles. The bill requires that, to the extent that the Commission and stakeholders conclude that transportation electrification cannot currently deliver these benefits, the report include public policy recommendations.

Additionally, the bill requires, beginning July 1, 2021, that any approved costs of any investor-owned electric utility associated with investment in transportation electrification be recovered only through the utility's rates for generation and distribution, prohibits recovery of such costs through a rate adjustment clause, and provides that such costs are not eligible for a customer credit reinvestment offset.

A BILL to direct the State Corporation Commission to recommend policy proposals to accelerate transportation electrification in the Commonwealth; report.

21102349D

H.B. 2330

Patron: Kory

Electric utilities; Percentage of Income Payment Program. Requires the Department of Social Services (the Department), in consultation with, as it deems necessary, the Department of Housing and Community Development, to adopt rules or establish guidelines for the adoption, implementation, and general administration of the Percentage of Income Payment Program (PIPP) and the Percentage of Income Payment Fund (Fund). The bill requires the PIPP to commence no later than March 1, 2022.The bill establishes the Fund for the purposes of implementing and administering the PIPP and related programs. The bill requires Dominion Energy Virginia and American Electric Power to cooperate with the requests of the Department and the State Corporation Commission (the Commission) in the implementation and administration of the PIPP. The Commission is required to promulgate any rules necessary to ensure that funds collected from each utility's universal service fee are directed to the Fund. The bill requires the Commission to initiate proceedings to provide for an annual true-up of the universal service fee within 60 days of the commencement of the PIPP and on an annual or semiannual basis thereafter. The bill provides that the PIPP may utilize existing energy efficiency or related programs approved by the Commission. The bill authorizes the Department to determine what deficiencies exist in existing and available federal, state, local, or nonprofit programs to meet energy reduction obligations and to (i) make recommendations to the Commission or the utilities regarding such deficiency analysis and (ii) develop programs to address such deficiencies.

The bill authorizes the Department to develop and implement non-utility energy efficiency programs and other programs for the reduction of energy use for eligible participants in the PIPP, provided that the Department engage in a stakeholder process and undertake a cost-benefit analysis in the development of any such programs. The bill requires that the Commission to make adjustments to the universal service fee as necessary to provide adequate funding for such programs. Additionally, the bill requires the Commission to initiate any proceedings to establish new energy efficiency or low-income programs proposed by a utility as necessary to provide service to PIPP participants over a timeframe to be determined by the Commission. The bill requires the Commission to issue an order providing for the non-bypassable universal service fee as soon as practicable following the bill's effective date.

A BILL to amend and reenact §§ 56-576 and 56-585.6 of the Code of Virginia, relating to electric utilities; Percentage of Income Payment Program.

21103641D