March 18, 2021

Virginia Series: Introduction for Energy Users to the State’s Evolving Regulatory Landscape

Shannon Weigel, Head of Policy

Virginia energy landscape

 

This is the first installment in our Virginia Series that will illuminate the opportunities and challenges for energy users wanting to reduce their energy costs and meet their sustainability goals. This initial post introduces key policies and stakeholders that we will examine further in upcoming posts. Be sure to check back and follow along, or click here to check out other posts in the series.

 


The energy landscape in Virginia is complex and has evolved rapidly during the past two years, following a historic government shift. Since taking office in 2018, Governor Ralph Northam has influenced Virginia’s energy policy, working to transition the state away from fossil fuels toward clean energy, with significant investments in renewable energy and energy efficiency. He was able to achieve these policy objectives when the Democrats flipped both chambers of the General Assembly in the 2019 election. The General Assembly of Virginia is a bicameral body comprising a 100-member House of Delegates and a 40-member State Senate. The Senate consists of 21 Democrats and 19 Republicans, and the House of Delegates consists of 55 Democrats and 45 Republicans. With a Democratic state government trifecta, the General Assembly made quick work of advancing progressive energy policies and passed the landmark Virginia Clean Economy Act (VCEA) in April 2020.

The VCEA lays the groundwork for achieving zero carbon emissions by 2050, setting binding annual targets for the investor-owned utilities, Dominion Energy and Appalachian Power Co., to decarbonize their generation supply. Specifically, the law requires the utilities to cover 100% of their retail power sales with renewable generation by 2045 for Dominion and 2050 for Appalachian Power Co.

 

Learn more about the VCEA

 

Now, a year later, the state is in the throes of implementing this sweeping law. The Virginia State Corporation Commission (SCC) plays a central role in transitioning the state to clean energy as directed by the VCEA. This regulatory agency, comprising three commissioners, regulates the investor-owned utilities and electric cooperatives, with some exceptions. The SCC oversees electric rates and also the construction of renewable projects and energy efficiency products. Commissioners are elected by the General Assembly to serve a six-year term. Two progressive commissioners – Angela Navarro and Jehmal Hudson – were recently appointed to the SCC and will be responsible for the implementation and enforcement of the VCEA.

The SCC is an important governing entity because Virginia is primarily a regulated-power market. In 2007, the General Assembly passed the Re-Regulation Act, which removed the option for most retail customers to buy energy from competitive service providers. A competitive service provider is a company, other than the incumbent utility, that is licensed by the SCC to provide service to large commercial retail customers.

In our next post, my colleagues Tim Hogan, Joe Sestak and I will give an overview of electricity regulation in Virginia and outline the ways energy buyers may mitigate increasing energy costs. If you’d like to learn more, sign up for our mailing list, and someone from our team will be in touch.

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