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Clean Economy Act Leads on Renewable Energy

wind turbines and solar arraysAmong the accomplishments of our General Assembly, the Clean Economy Act and Clean Energy and Community Flood Preparedness Act have set a framework to increase momentum in renewable energy development. A lot of the details are in this article from our friends at the Virginia Mercury.

A number of beneficial effects will follow on from these acts and other legislation:

In the solar arena, the two major investor-owned utilities are tasked with constructing significant amounts of new solar generation capacity. As well, the retail PPA pilot cap of 50 MW in Dominion’s territory has been adjusted. Utilities will be under new and significant mandates with respect to energy storage and Virginia is adopting energy efficiency resource standards for these utilities. Off-shore wind projects get a big boost. Plus, there are schedules established for the closure of certain coal and biomass facilities in Virginia.

Importantly, it looks like Virginia is poised to join the Regional Greenhouse Gas Initiative (RGGI), which will facilitate carbon cap and trade. We are closely examining the other effects of energy and business legislation passed in the session and signed into law by the governor. If you have any questions about new or existing laws on energy regulation, development or any business and energy industry issue, please reach out to one of our energy and business lawyers.

C-PACE Expansion On Governor Northam’s Desk

Lost in the excitement and debate about the Virginia Clean Energy Act (we talked about it here), a number of other clean energy and energy efficiency bills have been winding their way through the General Assembly. One bill in particular that has flown under the radar is House Bill 654, which amends the Virginia C-PACE enabling legislation to empower the Department of Mines, Minerals and Energy to develop and administer a statewide program for C-PACE. HB 654 has now passed both the House and Senate and awaits signature by the Governor.

C-PACE, which stands for Commercial Property Assessed Clean Energy, is an innovative lending program now active in over 20 states including parts of Virginia, which provides long-term financing for renewable energy, energy efficiency, and resiliency upgrades for commercial buildings. C-PACE loans are repaid via a special assessment on the property tax bills and can often finance 100% of eligible improvements. For a summary of C-PACE, where its available, and how it works, check out https://pacenation.org/ and https://virginiapace.com/.

C-PACE has been enabled in Virginia since 2009, but because the financing mechanism involves special assessments on property, to date, each local jurisdiction is required to pass enabling ordinances to enable the assessment changes, and then implement the necessary changes to their property tax systems. Currently, eight Virginia jurisdictions have passed enabling legislation and are in various stages of implementation, including some of the largest in the Commonwealth, including Fairfax, Loudon, Richmond, Petersburg and Fredericksburg. (See chart below, courtesy of our friends at the Virginia Pace Authority.)

The change provided by HB 654 will create a state wide program that any jurisdiction can opt into. This will streamline the process, provide a more centralized mechanism for promoting the program, and allow smaller jurisdictions, who may not feel that they have the resources to implement and manage such a program, to avail themselves of the same benefits that larger jurisdictions have gleaned from C-PACE.

Once passed, the Department of Mines, Minerals and Energy will engage a private entity through a competitive selection process to run the program. This is an exciting development for energy efficiency efforts in the Commonwealth, and we are hopeful this legislation will become law. Check back here for more developments on C-PACE and if you are interested in learning more about how you can take advantage of C-PACE where currently available, contact Andy Brownstein or any of our Virginia energy lawyers.

 

Locality Status (as of Dec. 17, 2019) Program Details
Arlington County Active Launched in Jan. 2018, Arlington C-PACE is the first active program in the state. Sustainable Real Estate Solutions is the program administrator.
City of Fredericksburg Active Fredericksburg enabling ordinance passed Dec. 2018. City intends to self-administer program initially, and staff considers the program to be active.
Loudoun County Active Loudoun County and program administrator Virginia PACE Authority (“VPA”) launched program in November, 2019 late 2019.
Fairfax County Active January 2020 Fairfax County selected VPA as its program administrator in November, 2019. Program launch anticipated in early 2020.
City of Petersburg Active January 2020 Ordinance passed on July 3, 2019. City rode Loudoun County’s contract with VPA in August.
City of Richmond Ordinance enacted City Council passed ordinance on November 12, 2019. Program to be launched by mid-2020 per ordinance requirement.
City of Alexandria Ordinance in development Funding to support ordinance/program development approved April, 2019. launch of program anticipated in mid-2020. Anticipated public comment on ordinance in January 2020.
Town of Dumfries Ordinance enacted City Council passed ordinance on December 3, 2019. No further info is available regarding if they are issuing an RFP or riding a contract with another locality.
City of Lynchburg Ordinance enacted City Council passed ordinance on December 10, 2019. No further info is available regarding if they are issuing an RFP or riding a contract with another locality.

 

Virginia Senate Kills Bills to Expand Electric Choice for Renewable Energy

The Virginia Senate Commerce & Labor Committee rejected two bills on February 24, 2019 that would have allowed customers of Dominion Virginia Energy and Appalachian Power Company greater access to purchase renewable energy from an entity other than their electric utility. Customers and competitive service providers (CSPs) had lined up to support the bills, which passed the House two weeks ago.

The Senate C&L Committee a few weeks ago rejected similar bills that originated in the Senate, but the House versions passed. As a result, virtually identical bills found themselves back before the same Senate C&L Committee for consideration.

Currently, in Section 56-577 A 5 of the Code permits customers to purchase electricity provided 100% from renewable energy from CSPs but only if the customer’s incumbent utility does not have a 100% renewable energy tariff.  HB 889 would have modified that language to allow CSPs to sell, and customers to buy, renewable energy even if the utility has such a tariff. About two years ago, the State Corporation Commission approved APCo’s 100% renewable energy tariff, so APCo customers who desire a renewable product must purchase it from APCo.  Dominion’s 100% renewable energy tariff is currently pending before the Commission.

HB 889 would also have : (1) shortened from five years to three years the period that a large (+5MW) customer who switches from a utility to a CSP under Section 56-577 A 3  is barred from returning to utility service; and (2) made it easier for customers to aggregate their loads to reach the 5 MW threshold. The Senate Committee voted 8-6 (with one abstention) to pass the bill by indefinitely. It had passed the House 56-44.

Second, HB 868 was basically a scaled-down version of HB 889, addressing only the Section A 5 modifications.  Gov. Ralph Northam had backed HB 868, which passed the House on a 55-44 vote. The Committee voted 10-4 to continue the bill to 2021.

Larger customers such as Target and Costco lobbied for these bills, explaining that they could purchase renewable energy and lower their carbon footprint at a price cheaper than Dominion’s current price which is not a renewable product. Dominion and APCo argued in response that while shopping under Section A 5 might benefit those who shopped, the utilities’ remaining customers would be left to pay the costs that the shopping customers no longer had to pay. During the last two General Assembly sessions, similar bills failed to make it out of committee in each chamber, so the proposals made it farther this year than in prior years.

Progress on Virginia’s Clean Economy Act

The folks at  Virginia Mercury carried a nice summary today about the pending Virginia Clean Economy Act [ht to RichmondBizSense for pointing this out for us], one of Governor Ralph Northam’s signature efforts for this year’s General Assembly. We’re following its progress carefully.

If you want to know more about he Virginia Clean Economy Act or anything about energy issues in Virginia or the mid-Atlantic, simply contact one of our Virginia energy lawyers.

GRACRE Market Review

The Greater Richmond Association for Commercial Real Estate will hold its February Market Review tomorrow, and my partner Jared Burden and I will be there at the Westin Hotel on West Broad in the Reynolds Crossing development tomorrow afternoon starting at 3:30 p.m..

These annual market reviews bring together brokers, agents, commercial landlords and developers to discuss market conditions, possible opportunities and new ventures. If you’re attending, be sure to find us and say hello. We’d like to tell you more about our commercial real estate and mergers and acquisitions practices across Virginia and beyond. If we miss you, just contact me or any of our Virginia real estate lawyers.

Energy Bills to Watch at the Virginia General Assembly This Session

The Virginia Clean Economy Act (HB 1526) would replace Virginia’s voluntary renewable portfolio standard with a mandatory renewable content requirement for electricity sales that will scale up to require 100% of electricity sold in Virginia to come from renewable sources by 2050. A report by the Maryland Delaware Virginia Solar Energy Industries Association and the Center for Urban and Regional Analysis at Virginia Commonwealth University projects that 2,500 MW of new distributed solar energy (which would be authorized under the Act) could result in over 29,000 direct solar jobs in Virginia and $4.3 billion in economic investment. This bill has cleared both the House and Senate Committees and is up to be voted on tomorrow on crossover day.

HB 889 is another energy bill to watch. If passed, customers would be able to purchase renewable energy from a competitive supplier, expanding a limited shopping option under current law if a customer’s utility does not offer a renewable energy option. This legislation would reduce the time that customers shopping for electricity with a completive supplier must wait before returning to utility supply service. There is also a provision in HB 889 to expand consumer protections for retail electricity consumers, including development of a consumer education website, reporting on customer satisfaction, and additional enforcement to address any “unscrupulous activity in making sales to retail customers.”

There are other energy bills under consideration this session. With crossover day tomorrow, we will have a better idea of what legislation will be moving forwards this session.

If you have questions about energy legislation in Virginia or other issues impacting the retail energy and renewable energy industries, please contact Eric Wallace or any of GreeneHurlocker’s Virginia energy attorneys for more information.

Proud to Call Him Counsel!

Eric Wallace has been promoted to Counsel at our firm starting this January. Eric has been with us since his third year of law school at the University of Richmond and has developed a sophisticated understanding and practice of regulatory law in the mid-Atlantic, which is a hub of our firm.

With a practice focused on energy law, energy regulation, and commercial transactions, Eric represents clients in the energy and renewable energy industries on licensing, technology acquisition, investment, business development, sales and other commercial matters.

Eric’s depth of knowledge and unfailing energy for his clients has helped make our firm stronger and more successful each year since he joined us, and we are proud to recognize his skills and dedication with this new status in our firm.

If you want to know more, just contact Eric or any of our energy lawyers.

Takeaways from the Energy Bar Conference

Creighton Boggs and I were part of a skills session on drafting and negotiating Power Purchase Agreements at the Energy Bar Association 2019 Mid-year Energy Forum last Wednesday, October 16, at the Renaissance Downtown Hotel in Washington, DC. This two-day conference of lawyers and law professionals was a discussion of a wide range of issues from climate change to utility operations and legal topics.

On the second day, along with the other panelists, we joined in an interactive approach to training lawyers how to negotiate a distributed energy power purchase agreement (PPA). During the first part of the session we role-played as attorneys and clients to set the stage for a PPA negotiation, including a discussion of transactional terms and an overview of fundamental motivations behind the PPA instrument, such as the customer’s ability to avoid capital commitments and the developers ability to qualify for preferred tax treatment. The panel then walked through a term sheet with the audience using a Q&A approach to go through the key provisions of the PPA from the perspective of a developer and a customer, and, finally, focused on a few key PPA terms, comparing customer-friendly provisions to developer-friendly ones to provide participants with the background necessary to negotiate a distributed energy PPA.

This turned out to be a great session, with plenty of audience engagement and participation. We noted the increasing presence of junior attorneys in the panels over the two days, indicating that this part of the law is a good gateway for young practitioners looking to have a career path to a growing industry practice. If you are interested in more on the sessions, you can try looking for #EBA19EnergyForum in your favorite social channels.

As always, should you have any questions about energy regulation, energy resource development or other legal matters, you can call any of our energy lawyers to chat.

 

Covering PPAs for the Energy Bar

My partner Eric Hurlocker is helping lead a skills session on drafting and negotiating Power Purchase Agreements at the Energy Bar Association 2019 Mid-year Energy Forum this Wednesday, October 16, at the Renaissance Downtown Hotel in Washington, DC. Accompanying him on the panel is our law clerk (and pending associate) Creighton-Elizabeth Boggs. This panel is at 11:00 a.m. The full conference began today, the 15th, and goes through Wednesday evening.

Along with the other panelists, they will participate in an interactive approach to training lawyers how to negotiate a distributed energy power purchase agreement (PPA). During the first part of the session experienced practitioners will role-play as attorneys and clients to set the stage for a PPA negotiation, including a discussion of transactional terms and an overview of fundamental motivations behind the PPA instrument, such as the customer’s ability to avoid capital commitments and the developers ability to qualify for preferred tax treatment. The panel will then walk through a term sheet with the audience using a Q&A approach to go through the key provisions of the PPA from the perspective of a developer and a customer. Finally, the panel will focus on a few key PPA terms, comparing customer-friendly provisions to developer-friendly ones to provide participants with the background necessary to negotiate a distributed energy PPA.

If you’re at the meeting, please find us and say hello. If you can’t make it, follow along by looking for #EBA19EnergyForum in your favorite social channels.

As always, should you have any questions about energy regulation, energy resource development or other legal matters, you can call any of our energy lawyers to chat.

Solar Focus Spreads the Good News

Join us and MDV-SEIA at the annual Solar Focus Conference in Baltimore, Maryland on November 20th – 21st, a major effort of our Maryland-District of Columbia-Virginia chapter of the Solar Energy Industry Association (MDV-SEIA). It will celebrate the latest solar policy achievements, and focus on how the solar industry can continue its recent policy successes and commercial growth.

Solar Focus brings together solar professionals and industry leaders from across the country to share ideas, build partnerships, and envision the future of solar power. In addition to panels, there will be a Women in Solar Breakfast, job fair, and many more networking opportunities. GreeneHurlocker continues to be a sponsor for this important and influential industry event, and we’ll be hooking you up to the free wifi!

Eric Hurlocker at his desk

I will be on site to join in the usual spirited discussions about how to promote and grow the role of solar energy in our lives and our businesses.I hope you can join me at the final panel of the conference where I will be speaking on Case Studies in the Utility-Scale Industry.

Look me up when you’re at the Hilton, I’ll be out in the halls and would love to talk with you about the things on your mind and what your company is looking forward to in the next year. If you want more information about MDV-SEIA or to talk about renewable energy development just give me a call, or talk to any of our solar energy and utility lawyers.