Virginia lawmakers pass major renewable energy legislation

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RICHMOND, Va. (AP) — The Virginia House and Senate passed sweeping energy legislation Tuesday that would overhaul how Virginia’s utilities generate electricity and, supporters say, move the state from the back of the pack to the forefront of renewable energy policy in the United States.

Critics, though, warned that the legislation, drafted privately by a group that included industry representatives and environmental advocates, strips state regulators of some oversight and leaves ratepayers on the hook for what could be excessive costs.

The measure, called the Clean Economy Act, lays out a plan to get Virginia to 100% renewable generation. The House version would demand that goal be met by 2045 and the Senate’s version sets a deadline of 2050, in line with a goal Democratic Gov. Ralph Northam set in an executive order in September.

Differences between the two versions will have to be worked out before the measure can be sent to Northam, whose administration has been involved in negotiating the bill.

In a floor speech, House sponsor Del. Rip Sullivan called the bill “transformative,” saying it would propel Virginia “into the future and into the top tier of states in terms of climate and energy policy.”

The legislation paves the way for an enormous expansion of solar and offshore wind generation plus battery storage , and sets an energy efficiency standard that utilities must meet. It also includes language that would add Virginia to the Regional Greenhouse Gas Initiative, a carbon cap-and-trade program.

Both the House and Senate versions would effectively block new fossil fuel generation facilities in the short term while state officials study whether a permanent ban should be enacted. The House version contains a provision that says if state officials determine by 2028 that the greenhouse gas reductions are not on target, then there will be a moratorium on the issuance of permits for new fossil fuel-fired generating facilities by 2030.

Bill sponsors said in committee hearings that hundreds of hours of negotiations had gone into crafting the legislation. Participants in those talks included Dominion Energy, influential environmental groups including the Virginia League of Conservation Voters and the Southern Environmental Law Center, plus solar interests and Advanced Energy Economy, a national association of businesses.

The lawmakers carrying the measure have said it will help address climate change by moving Virginia toward a carbon-free future while creating thousands of good-paying jobs at the same time.

The bill clears the way for the development of up to 5,200 megawatts of offshore wind, which is costlier than other forms of renewable energy, by declaring it in the public interest. Dominion currently has a small pilot project underway and has previously announced plans for a 220-turbine project in federal waters.

Advocates have noted that a race is underway among East Coast states jockeying for a spot in a supply chain expected to develop for the nascent offshore wind industry. They say Virginia could reap thousands of new, high-paying manufacturing and construction jobs, a boost to the state’s port, and billions of dollars in private investment while supporting an industry that will help the environment.

But critics are raising concerns about the price tag.

“In this century, we now have technologies to produce electricity that are clean and cheap,” Tom Hadwin, a former utility executive who does consulting work for Virginia environmental groups and reviewed the legislation, wrote in an email. “This bill encourages the ‘clean’ but loses the ‘cheap.’”

Attorney General Mark Herring’s office has cautioned lawmakers that language in the bill expressly eliminates the State Corporation Commission’s role in determining whether “enormous costs” of implementing its plans are reasonable and prudent and therefore can be passed along to customers.

“In our view the legislation will prevent the regulator from being able to work to accomplish the Commonwealth’s clean energy goals in a manner consistent with ratepayer protections,” Senior Assistant Attorney General Meade Browder told a Senate committee considering the bill.

An SCC analysis of one version of the bill found that the typical residential customer would likely see an increase of $23.30 a month between 2027 and 2030. The legislation currently includes provisions intended to protect low-income people from seeing a rate increase.

The Senate sponsor of the bill, Sen. Jennifer McClellan, said she disagreed with the SCC’s analysis, in part because it didn’t consider the “staggering” cost of doing nothing.

“We have got to do something to break our dependence on energy that is destroying our planet. Period,” she said Tuesday. SOURCE

Carbon tax must hit $210 per tonne by 2030 to meet Paris targets, report concludes

The tax remains the most cost-effective tool for fighting climate change, says Ecofiscal Commission

Gas prices are displayed as a motorist prepares to pump gas at a station in North Vancouver on May 10, 2011. A new report says the carbon tax is still the most cost-effective policy tool for fighting climate change. (Jonathan Hayward/THE CANADIAN PRESS)

In its final report, a privately-funded policy group that calls for market-friendly solutions to climate change concludes that Canada needs a carbon price of $210 per tonne of greenhouse gas emission by 2030 to meet its Paris targets — assuming it relies on the carbon tax alone.

That would mean a 40-cent rise in prices at the pump in ten years’ time. When it introduced its carbon pricing plan, the federal government offered rebates to cover the added cost to households.

The federal carbon tax — currently in place in four provinces and soon to be imposed in Alberta, where an equivalent provincial plan is not in place — is set to increase to 50 dollars a tonne by 2022.

The Liberals haven’t said what might happen after that date, even as they’ve promised to meet and exceed their climate targets.

In its report, the Ecofiscal Commission concluded that, even though it’s more visible and politically controversial, the carbon tax remains the most cost-effective approach to fighting climate change.

Subsidies, regulations less cost-effective: report

The commission modelled various policy options — including carbon pricing, steeper regulations and subsidies — and found that a more stringent carbon tax, coupled with rising rebates, would inflict the least amount of economic damage on Canadians.

The fight over whether the Liberals intend to raise the carbon tax became a flashpoint during the recent election campaign, with Andrew Scheer and his Conservatives branding the measure a “job-killing tax” and promising to scrap it if elected.

“We do have options to get to 2030 but some of the options are, frankly, pretty ugly,” said Chris Ragan, economist and chair of the Ecofiscal Commission.

He cited the example of the “very expensive subsidies” that some have pitched as a response to climate change — corporate or industrial subsidies to fund things like carbon-capture systems, or household subsidies to lower the cost of purchasing electric vehicles or green renovations.

Lower profile, higher cost?

Such subsidies would have a lower political profile than a carbon tax. Ragan said they’d also demand personal or corporate tax increases to pay for them.

“The punchline really is, the more hidden your policy choices, the more expensive they are,” he said.

The report’s data show a scenario combining stricter regulations (requiring companies to cut the intensity of their emissions in half, for example) and substantial subsidies for electric vehicle purchases could end up forcing an income tax hike of roughly 1.5 to 2 per cent for Canadians and corporations, depending on the province.

The report also says a scenario relying on regulations and subsidies for industries alone would cost even more — roughly a 4 to 6 per cent spike in income taxes. The commission concluded that a industry-focused regulation-only model would end up depressing Canada’s GDP — and likely would fail to allow Canada to meet its current Paris target of a 30 per cent reduction in emissions below 2005 levels by 2030.

Ragan acknowledged that the modelling system does not take into account companies shifting toward more sustainable methods without government intervention, but said the report offers governments a realistic “menu of choice.”

“The menu items have a price tag,” he said.

Ragan said the carbon tax hike scenario laid out in the Ecofiscal Commission report would not lead to a “dramatic” rise in gasoline prices.

“That still puts prices below where they were in the summer of 2014, before the price of oil fell, and keeps prices well below where they are in France,” he said, adding that the debate over the carbon tax needs to take into account the rebates meant to offset the household effects. SOURCE