Clean Economy Act would bring changes to Virginia’s electric utilities 

Appalachian Power Co. plans to shut down its Clinch River power plant in 2026, eliminating its last source of fossil fuel-based generation in Virginia.

Yet the utility currently gets nearly 80% of its electricity from coal and natural gas-fed power plants in other states – largely sparing it from parts of a proposed Virginia law that would require a conversion to all renewable energy, critics say.

The Virginia Clean Economy Act, which is moving forward in the General Assembly, would require Appalachian and Dominion Energy to get 100% of their electricity from renewable sources by 2050. But it only applies to the utilities’ generation sources in Virginia, according to state officials. The possibility of higher bills for customers has also raised concerns.

While the act would not force Appalachian to shut down any of its facilities in Virginia – the closure of the Clinch River plant was already in the works – it lays out a series of benchmarks the utilities must meet.

Appalachian Power must obtain 600 megawatts of solar or wind energy sources in Virginia by 2023. The goal is to require more carbon-free investments in Virginia in order to reduce energy imports from out of state, according to state officials.

The proposed law requires that whatever the demand for power by Virginia customers is by 2050, Appalachian must have enough renewable energy resources to meet that level, company spokeswoman Teresa Hall said.

Once electricity enters the power grid, it’s impossible to determine whether it was produced from burning a lump of coal or from a renewable source such as a wind turbine or a solar panel.

So while Appalachian might continue to use coal and natural gas at power plants outside Virginia, the Clean Economy Act would require it to demonstrate – at least on paper – that it has enough alternative sources to power all of its Virginia customers.

Appalachian’s plan to close the Clinch River plant dates to 2016, when the Russell County facility was converted from a coal-burning power plant to one fueled by natural gas, Hall said.

While the closure is listed in the utility’s integrated resource plan, a 15-year planning document approved last month by the State Corporation Commission, “plans are always subject to revision given evolving conditions,” Hall wrote in an email. The Clinch River plant currently has 39 employees.

The plant opened in 1958. At the time, The Roanoke Times described it as “the greatest single industrial development in Southwest Virginia’s history.”

Tougher environmental regulations have since forced the closure of older plants. Appalachian shut down its coal-burning Glen Lyn plant in Giles County in 2015, nearly a century after it began generating electricity.

In recent years, Appalachian has said it is working to transition its power portfolio to include more renewable energy.

While the Clean Economy Act would advance those goals – pushing utilities to invest more heavily in wind and solar power and energy-efficiency programs – it would not affect Appalachian’s use of coal and natural gas plants in West Virginia and Ohio.

Of the approximately 8,700 megawatts of electricity the utility generates to serve customers in Virginia, West Virginia and Tennessee, about 60% comes from coal-burning power plants in three West Virginia towns: Winfield, Moundsville and New Haven. Another 19% is generated by natural gas plants: Clinch River and two others in West Virginia and Ohio.

Appalachian was involved in discussions about the Clean Economy Act – along with Dominion officials, environmental advocates and members of Gov. Ralph Northam’s administration – and is committed to achieving its mandates, Hall said.

Because the bills are still working their way through the legislative process, she declined to elaborate on how Appalachian will meet the goals. But development of wind and solar energy is likely, she said.

About 7% of the utility’s electricity comes from wind farms in West Virginia, Indiana and Illinois. Hydroelectric generation, which includes facilities at Smith Mountain, Claytor and Leesville lakes, accounts for 11%.

More than 1,000 of the utility’s 530,000 customers in Virginia have solar panels installed at their homes or businesses, but the output is too small to be counted as part of the generation mix.

Appalachian plans to purchase solar power from a 15-megawatt plant in Campbell County that is scheduled to be completed later this year, and it has issued requests for proposals for up to 200 megawatts from solar farms that it would own.

The mountainous terrain of Southwest Virginia complicates efforts to find sites for large-scale solar farms. But there are opportunities in the state, Hall said, as well as in the region served by PJM, an independent transmission organization that serves Virginia and 12 other states.

Southwest Virginia legislators worry that the Clean Economy Act will pummel the already economically distressed region, where there are few coal jobs left.

Del. Terry Kilgore, R-Scott, is skeptical that the region will benefit from the promise of lots of clean energy jobs, despite the legislation encouraging investment and hiring workers from poorer communities.

“We’re not saying there aren’t green jobs, but we’re concerned there aren’t enough to replace the fossil fuel jobs we’ve lost,” Kilgore said.

Under the bill, Dominion Energy’s Virginia City Hybrid Energy Center in Wise County would have to shut down by Dec. 31, 2030, unless it can demonstrate an 83% reduction in carbon emissions. The coal- and biomass-fired plant began operating in 2012.

Dominion spokesman Rayhan Daudani said the plant was designed to be carbon-capture compatible, “recognizing that the technology was going to be part of addressing climate change.”

Kilgore and others in the Southwest delegation worry that technology won’t be available in time, requiring the plant to shutter.

“That facility provides critical service to our customers,” Daudani said. “We would hope the General Assembly will understand the vital role it plays for Southwest Virginia.”

Critics of the Clean Economy Act say it lessens oversight from regulatory agencies such as the SCC and could lead to higher rates for customers.

“There are a lot of problems with the act,” said Irene Leech, a consumer affairs professor at Virginia Tech who has followed the utility for years. “It still leaves our utilities in charge of the decision-making.

“The agreements that are in this thing are so bad that I really don’t see it as a step forward. I see it again as a mess, where we’re still doing too little of the right things.”

An SCC analysis of one version of the bill found that the typical residential customer would see an increase of about $23 a month between 2027 and 2030.

Hall said it’s too soon to talk about how the proposed legislation might affect customer bills.

“This stands to be the worst deal ever for Virginia ratepayers,” said Del. Sam Rasoul, D-Roanoke, who voted against the bill.

On the floor of the Senate, Majority Leader Dick Saslaw, D-Fairfax, dismissed complaints about the costs.

“We knew when we embarked on this a year or two ago that it wasn’t going to be free,” he said. “Can it be done for free? No, it can’t. It can’t. And yes, I feel bad for the people in Southwest Virginia, but contrary to what the president tries to tell these people, coal is not coming back.”

Environmental groups praised the legislation for being the most aggressive policy plan the General Assembly has ever advanced to tackle the climate crisis.

“This legislation will grow our economy, protect public health and improve Virginians’ lives,” Michael Town, executive director of the Virginia League of Conservation Voters, said in a statement.

Much of the discussion of the bills in Richmond has focused on Dominion, which as Virginia’s largest utility is often criticized for having an outsized influence on state legislation.

Appalachian does not contribute as heavily to political campaigns or make other efforts to wield power, Leech said.

“It’s just been easier for Appalachian to follow along,” she said. With the Clean Economy Act, “I think that probably worked to their benefit.”

Dominion has already set out to achieve net-zero carbon emissions across its 18-state footprint by 2050. Among the projects to get it toward that goal is a massive offshore wind site off the coast of Virginia Beach.

Currently, its fuel mix is made up of 40% zero-carbon nuclear and 40% natural gas, while the rest is from coal, renewables, biomass and other fuel sources. The company is waiting for final legislation before it determines how it may have to adapt in Virginia.

“What we’re talking about as company across 18 states dovetails nice with what’s being discussed in Virginia,” Daudani said.

Some say Dominion and Appalachian should be moving faster to renewable energy, in light of the growing climate change crisis.

But that’s often hard for large, investor-owned utilities, said Cale Jaffe, a professor of law at the University of Virginia and director of the law school’s Environmental and Regulatory Law Clinic.

“I sort of analogize them to those huge container ships you might see out in the ocean,” Jaffe said. “They’re doing a lot, they’re carrying a lot, and as a result they’re very slow to turn. They take a lot of real estate to circle around and go in another direction.”

The Associated Press contributed information to this report.