This morning was the hearing on SB 852, which is my bill to link renewable energy credits (or “REC’s”) to projects that actually create jobs in Virginia.
I wrote about this a few weeks ago … essentially, Virginia’s 2007 utility structuring bill created financial incentives for our utilities to use renewable energy (wind, solar, etc). This “carrot” approach was done in place of a mandatory RPS, which would require those purchases. Regardless, once the law passed and the incentives created, nearly all those REC’s were purchased from out-of-state facilities, rather than creating facilities in Virginia.
There are a lot of reasons for this fact, including local zoning disputes, and I’m not criticizing the utilities for their actions. They are maximizing investor return within applicable state law. However, the ratepayer is left with a higher electric bill, without any commensurate gain in our renewable industry. It was purely an arbitrage, buying a REC on the open market and then using it to achieve a “bonus” paid by the customers.
In my opinion, we should be using the law to create jobs. That’s why I introduced SB 852, which only gave a REC to Virginia-based projects, whether a solar farm in Southside or an off-shore wind facility in Virginia Beach. Again, this is about “incentives,” not mandates.
Unfortunately, my proposal got steamrollered by SB 1339 — the utilities’ agreed solution — which essentially wipes away the “REC” system altogether and reverts to the traditional cost-based system. That bill was “recommended” by the subcommittee on utility restructuring this morning, while mine was defeated.
I’m still trying to figure out the details (it’s a long bill and has a lot of moving parts), but essentially the bonus system is gone under SB 1339. There are positives and negatives to this — it does eliminate the arbitrage system. However, it also takes away any chance to develop a renewable industry in Virginia.