First published this morning by the Thomas Jefferson Institute for Public Policy.
Virginia is one of only two states that hold their major legislative elections this odd-numbered year, with the other being New Jersey. In New Jersey, the state’s offshore wind aspirations have become a major political issue, with even Democrats now starting to question the wisdom of the plan.
The Democrats control new Jersey, so it is noteworthy that both leading Democratic legislators, the Speaker of the House and President of the Senate, signed a joint statement expressing concern about “unanswered questions” as the state’s Board of Public Utilities goes full speed ahead on its wind projects. The turnabout is even more dramatic because the same legislators just weeks ago voted to give the private wind developers of the first project a more profitable deal at ratepayer expense. The company was one of those complaining its project was not financially feasible under the original terms.
New Jersey has become a major hotspot for political opposition to offshore wind, in part because the planned projects are often closer to shore and will be more visible from beach homes and tourist areas than the project off Virginia Beach. There is also more focus in that media market on the unexplained spike in whale deaths, now reportedly up to 60 since December of last year.
The same questions of cost and tourism impact remain unanswered in Virginia, but so far there is no sign many candidates are seeking to enter the legislature with promises to reverse course on our $10 billion project, if that is possible at this point. Dominion Energy Virginia intends to build a second wave of turbines, however, and the next few General Assembly sessions will have every opportunity to change the rules for that tranche.
As was strongly recommended before similar elections two years ago, the first and most important priority should be to restore fully the regulatory State Corporation Commission’s authority to decide whether such a project is necessary, reasonable and prudent. The 2023 General Assembly restored some of the SCC’s authority over rates but left intact all the legislative mandates to rapidly build more intermittent wind and solar projects and eliminate reliable fossil fuel generators.
The legal handcuffs on the SCC remain in place because Democrats are the majority in the Virginia Senate and have proudly declared a Blue Wall to fully maintain Virginia’s version of the Green New Deal. When they had full control, they passed the Virginia Clean Economy Act and other bills creating carrot and stick incentives for the wind and solar industry. The utility, earning a profit when it spends more capital on projects, was their willing partner and recruited some Republicans to go along.
Should Senate control change or should Virginia Democrats learn something from their New Jersey compatriots, it would be possible to revisit the VCEA and restore the SCC’s autonomy over what plants to build. Whether or not Virginia builds any more wind or solar projects should be decided in the SCC’s more open process, free from political contributions and free from any of the artificial financial considerations in the law, such as an imaginary social cost of carbon.
It is also the VCEA that imposes the schedule to retire Virginia’s remaining fossil fuel generation plants despite their remaining useful lifespans and places a financial penalty on the utility if it fails to use enough wind and solar power. The penalty will really be paid by customers.
But a complete rewrite of the VCEA would be just the first of several steps needed to restore energy sanity in Virginia. Most of the bills needed have already been attempted, usually passing in the Republican-controlled House only to hit that celebrated Blue Green Wall in the Senate.
The next General Assembly should:
- Provide customers of municipally owned natural gas companies some assurance that their service will continue, even if the voters of the city have decided to kill off those operations as virtue signaling against feared climate change. If the cities want out, they should be made to sell the assets and customer base to public service corporations. Local governments should have no authority to restrict energy choice.
- Restore full customer choice over the purchase of light-duty vehicles. Virginia’s Air Pollution Control Board should repeal the regulation it imposed, on orders from the legislature, to mirror the rules in California. Those rules will soon begin to limit the sale of gasoline and diesel vehicles in the state and will eventually eliminate those choices.
- Repeal the 2020 statute that gave that same Air Board and the Department of Environmental Quality the authority to impose a carbon tax on electricity generators. A lawsuit will probably be underway on the same topic as the new Assembly convenes, but a vote to repeal that provision would moot the legal challenge. If the Assembly wants to tax carbon, propose it like any other tax bill.
- Finally develop the bipartisan will to wean itself from the massive campaign donations from everybody involved in these fights – public service corporations, private wind and solar developers, home repair contractors – who have profited mightily from past Assembly actions.
- Direct the SCC to greatly reduce the level of secrecy in its proceedings, opening more documents and reports to examination.
Virginia’s energy future should be a major issue for most of the coming campaigns. Polling regularly confirms that most voters are not happy with the costs being imposed by Virginia’s mandatory transition away from fossil fuels and are beginning to understand the problems it will cause with energy reliability. They also understand the role energy costs play in causing general inflation throughout the economy.
The incumbents in either party who brought us to this place should be called to account.