Bill Text: VA HB436 | 2018 | Regular Session | Prefiled
Bill Title: Electric utilities; mandatory renewable portfolio standard.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-02-13 - Left in Commerce and Labor [HB436 Detail]
Download: Virginia-2018-HB436-Prefiled.html
Be it enacted by the General Assembly of Virginia:
1. That §56-585.2 of the Code of Virginia is amended and reenacted as follows:
§56-585.2. Renewable energy portfolio standard program.
A. As used in this section:
"Qualified
investment" means an expense incurred in the Commonwealth by a
participating utility in conducting, either by itself or in partnership with
institutions of higher education in the Commonwealth or with industrial or
commercial customers that have established renewable energy research and
development programs in the Commonwealth, research and development activities
related to renewable or alternative energy sources, which expense (i) is
designed to enhance the participating utility's understanding of emerging
energy technologies and their potential impact on and value to the utility's system
and customers within the Commonwealth; (ii) promotes economic development
within the Commonwealth; (iii) supplements customer-driven alternative energy
or energy efficiency initiatives; (iv) supplements alternative energy and
energy efficiency initiatives at state or local governmental facilities in the
Commonwealth; or (v) is designed to mitigate the environmental impacts of
renewable energy projects.
"Qualifying renewable source" means an electric generation facility that has as its sole source of power onshore or offshore wind, solar energy, tides, falling water, or geothermal energy. "Qualifying renewable source" does not include a pumped storage facility unless the source of the electric energy used to pump water to its storage area is onshore or offshore wind, solar energy, tides, falling water, or geothermal energy.
"Renewable energy" shall have
the same meaning ascribed to it in§56-576, provided such renewable means electric
energy is (i) generated in the Commonwealth or in the
interconnection region of the regional transmission entity of which the
participating utility is a member, as it may change from time to
time, and purchased by a participating utility
under a power purchase agreement; provided, however, that if such agreement was
executed on or after July 1, 2013, the agreement shall expressly transfer
ownership of renewable attributes, in addition to ownership of the energy, to the
participating utility; (ii) generated by a public utility providing electric
service in the Commonwealth from a facility in which the public utility owns at
least a 49 percent interest and that is located in the Commonwealth, in the
interconnection region of the regional transmission entity of which the
participating utility is a member, or in a control area adjacent to such
interconnection region; or (iii) represented by renewable energy certificates from a qualifying renewable source. "Renewable energy" shall not include
electricity generated from pumped storage, but shall include run-of-river
generation from a combined pumped-storage and run-of-river facility.
"Renewable energy
certificate" means either (i) a
certificate issued by an affiliate of the regional transmission entity of which
the participating utility is a member, as it
may change from time to time, or any successor to such affiliate, and held or
acquired by such utility, that validates the generation of renewable energy by
eligible sources in the interconnection region of the regional transmission
entity or (ii) a certificate issued by the Commission
pursuant to subsection J and held or acquired by a participating utility, that
validates a qualified investment made by the participating utility.
"Total electric energy
sold in the base year" means total electric energy sold to Virginia
jurisdictional retail customers by a participating utility in
calendar year 2007, excluding an amount
equivalent to the average of the annual percentages of the electric energy that
was supplied to such customers from nuclear generating plants for the calendar
years 2004 through 2006.
"Renewable energy portfolio standard program" or "RPS program" means a program conducted by a utility under which the utility is required to achieve the RPS standards in accordance with the requirements of this section.
"RPS standard" means the requirement that the total electric energy sold by a utility in the Commonwealth in a calendar year be from renewable energy sources in accordance with the schedule set forth in subsection D.
"Utility" means an investor-owned incumbent electric utility.
B. Any investor-owned incumbent
electric Each utility may shall, by January 1, 2019, apply to the Commission for approval to
participate in of a renewable energy portfolio standard program, as defined in this section. The Commission shall approve such application if the applicant
demonstrates that it has a reasonable expectation of achieving 12 percent of its base year
electric energy sales from renewable energy sources during calendar year 2022,
and 15 percent of its base year electric energy sales from renewable energy
sources during calendar year 2025, as provided in subsection D the RPS standards in accordance with the
requirements of this section.
C. Each
utility shall adopt and implement a renewable energy portfolio standard program
that has been approved by the Commission. It is in the
public interest for utilities that seek
to have adopt and
implement a renewable energy portfolio standard program pursuant to which the utility is required
to achieve the goals RPS standards
set forth in subsection D, such goals being
referred to herein as "RPS Goals." A utility shall receive
double credit toward meeting the renewable energy portfolio standard for energy
derived from sunlight, from onshore wind, or from facilities in the
Commonwealth fueled primarily by animal waste, and triple credit toward meeting
the renewable energy portfolio standard for energy derived from offshore wind.
D. Regarding any Any utility's renewable energy
portfolio standard program, shall require the total
electric energy sold by a the utility to meet the RPS Goals shall
be composed of the following amounts of electric renewable energy or renewable thermal energy equivalent from
renewable energy sources, as adjusted for any sales
volumes lost through operation of the customer choice provisions of subdivision
A 3 or A 4 of §56-577:
RPS Goal I: In
calendar year 2010, 4 percent of total electric energy sold in the base year.
RPS Goal II: For
calendar years 2011 through 2015, inclusive, an average of 4 percent of total
electric energy sold in the base year, and in calendar year 2016, 7 percent of
total electric energy sold in the base year.
RPS Goal III: For
calendar years 2017 through 2021, inclusive, an average of 7 percent of
total electric energy sold in the base year, and in calendar
year 2022, 12 percent of total electric
energy sold in the base year.
RPS Goal IV: For
calendar years 2023 and 2024, inclusive, an average of 12 percent of
total electric energy sold in the base year, and in calendar
year 2025, 15 percent of total electric
energy sold in the base year.
A utility may not apply
renewable energy certificates issued pursuant to subsection J to meet more than
20 percent of the sales requirement for the RPS Goal in any year.
1. Not less than 20 percent of total electric energy sold in calendar year 2019 shall be renewable energy;
2. Not less than 30 percent of total electric energy sold in each of calendar years 2020 and 2021 shall be renewable energy;
3. Not less than 40 percent of total electric energy sold in each of calendar years 2022 and 2023 shall be renewable energy;
4. Not less than 60 percent of total electric energy sold in each of calendar years 2024 and 2025 shall be renewable energy; and
5. Eighty percent of total electric energy sold in 2026 and each calendar year thereafter shall be renewable energy.
A utility may apply renewable energy sales achieved or renewable energy certificates acquired
during the periods covered by any such RPS Goal standard
that are in excess of the sales requirement for that RPS Goal standard
to the sales requirements for any future RPS Goals standards
in the five calendar years after the renewable
energy was generated or the renewable energy
certificates were created, except that a utility shall
be able to apply renewable energy certificates acquired by the utility prior to
January 1, 2014.
E. A utility
participating in such program shall have the right to recover
all incremental costs incurred for the purpose of such
participation in such achieving the requirements of its
program, as accrued against income, through rate adjustment clauses as provided
in subdivisions A 5 and A 6 of §56-585.1, including, but not limited to,
administrative costs, ancillary costs, capacity costs, costs of
energy represented by certificates described in subsection A,
and, in the case of construction of renewable energy generation facilities,
allowance for funds used during construction until such time as an enhanced
rate of return, as determined pursuant to subdivision A 6 of §56-585.1, on
construction work in progress is included in rates, projected construction work
in progress, planning, development and construction costs, life-cycle costs,
and costs of infrastructure associated therewith, plus an enhanced rate of
return, as determined pursuant to subdivision A 6 of §56-585.1. This
subsection shall not apply to qualified investments as provided in subsection K.
All incremental costs of the RPS program shall be allocated to and recovered
from the utility's customer classes based on the demand created by the class
and within the class based on energy used by the individual customer in the
class, except that the incremental costs of the RPS
program shall not be allocated to or recovered from customers that are served
within the large industrial rate classes of the participating utilities and
that are served at primary or transmission voltage.
F. A utility
participating in such program shall apply towards meeting
its RPS Goals standards
any renewable energy from existing renewable energy sources owned by the
participating utility or purchased as allowed by contract at no additional cost
to customers to the extent feasible. A utility
participating in such program shall not apply towards
meeting its RPS Goals renewable energy
certificates attributable to any renewable energy generated at a renewable
energy generation source in operation as of July 1, 2007, that is operated by a
person that is served within a utility's large industrial rate class and that
is served at primary or transmission voltage, except for those persons
providing renewable thermal energy equivalents to the utility.
A participating utility shall be
required to fulfill any remaining deficit needed to
fulfill its achieve the
RPS Goals standards
from new renewable energy supplies
at reasonable cost and in a prudent manner to be determined by the Commission at the time of approval of any application made pursuant to subsection
B. A participating utility may sell
renewable energy certificates produced at its own generation facilities located
in the Commonwealth or, if located outside the Commonwealth, owned by such
utility and in operation as of January 1, 2010, or renewable energy
certificates acquired as part of a purchase power agreement, to another entity
and purchase lower cost renewable energy certificates and the net difference in
price between the renewable energy certificates shall be credited to customers. Utilities participating in such
program shall collectively, either through the
installation of new generating facilities, through retrofit of existing
facilities or through purchases of electricity from new facilities located in
Virginia, use or cause to be used no more than a total of 1.5 million tons per
year of green wood chips, bark, sawdust, a tree or any portion of a tree which
is used or can be used for lumber and pulp manufacturing by facilities located
in Virginia, towards meeting RPS goals , excluding
such fuel used at electric generating facilities using wood as fuel prior to
January 1, 2007. A utility with an approved application shall be allocated a
portion of the 1.5 million tons per year in proportion to its share of the
total electric energy sold in the base year, as defined in
subsection A, for all utilities participating in the RPS
program. A utility may use in meeting RPS goals , without
limitation, the following sustainable biomass and biomass based waste to energy
resources: mill residue, except wood chips, sawdust and bark; pre-commercial
soft wood thinning; slash; logging and construction debris; brush; yard waste;
shipping crates; dunnage; non-merchantable waste paper; landscape or
right-of-way tree trimmings; agricultural and vineyard materials; grain;
legumes; sugar; and gas produced from the anaerobic decomposition of animal
waste.
G. The Commission shall promulgate
such rules and regulations as may be necessary to implement the provisions of
this section including a requirement that participants utilities verify whether the
RPS goals standards
are met in accordance with this section.
H. Each
investor-owned incumbent electric utility shall report to
the Commission annually by November 1 identifying:
1. The utility's efforts, if any,
to meet the RPS Goals standards,
specifically identifying:
a. A list of
all states The localities in the
Commonwealth where the purchased or owned renewable energy
was generated, specifying the number of megawatt hours or
renewable energy certificates originating from each state facility
in the locality;
b. A list of the decades years in which the purchased
or owned renewable energy generating units were placed in service, specifying
the number of megawatt hours or renewable energy
certificates originating from those units; and
c. A list of fuel the types of
qualifying renewable sources used to generate the purchased
or owned renewable energy, specifying the number of megawatt hours or renewable energy certificates
originating from each fuel type;
2. The utility's overall generation of renewable
energy electricity from qualifying
renewable sources; and
3. Advances in renewable generation technology that affect activities described in subdivisions 1 and 2.
I. The Commission shall post on
its website the reports submitted by each
investor-owned incumbent electric utility pursuant to
subsection H.
J. The
Commission shall issue to a participating utility a number of renewable energy
certificates for qualified investments, upon request by a participating utility,
if it finds that an expense satisfies the conditions set forth in this section
for a qualified investment, as follows:
1. By March 31 of each year,
the participating utility shall provide an analysis, as reasonably determined
by a qualified independent broker, of the average for the preceding year of the
publicly available prices for Tier 1 renewable energy certificates and Tier 2
renewable energy certificates, validating the generation of renewable energy by
eligible sources, that were issued in the interconnection region of the
regional transmission entity of which the participating utility is a member;
2. In the same annual
analysis provided to the Commission, the participating utility shall divide the
amount of the participating utility's qualified investments in the applicable
period by the average price determined pursuant to subdivision 1;
3. The number of renewable
energy certificates to be issued to the participating utility shall equal the
product obtained pursuant to subdivision 2; and
4. The Commission shall
review and validate the analysis provided by the participating utility within
90 days of submittal of its analysis to the Commission. If no corrections are
made by the Commission, then the analysis shall be deemed correct and the
renewable energy certificates shall be deemed issued to the participating
utility.
Each renewable energy
certificate issued to a participating utility pursuant to this subsection shall
represent the equivalent of one megawatt hour of renewable energy sales achieved
when applied to an RPS Goal.
K. Qualified investments
shall constitute reasonable and prudent operating expenses of a participating
utility. Notwithstanding subsection E, a participating utility shall not be
authorized to recover the costs associated with qualified investments through
rate adjustment clauses as provided in subdivisions A 5 and A 6 of §56-585.1.
In any proceeding conducted pursuant to §56-585.1 or other provision of this
title in which a participating utility seeks recovery of its qualified
investments as an operating expense, the participating utility shall not be
authorized to earn a return on its qualified investments.
L. A participating utility
shall not be eligible for a research and development tax credit pursuant to §58.1-439.12:08
or 58.1-439.12:11 with regard to any expense
incurred or investment made by the participating utility that constitutes a
qualified investment pursuant to this section A utility that fails to achieve an RPS standard established
for any year shall
pay into the Renewable Electricity Production Grant Fund established
pursuant to §67-902 a
compliance fee of 10 cents for each kilowatt-hour of electric
energy by which the utility fails to achieve an RPS
standard.