Update: Richmond Could Still Close Gas Works

Pending Termination

by Steve Haner

The Senate of Virginia, after long avoiding a vote, has now approved a bill that would require a Virginia local government to try to sell its municipal natural gas utility before simply closing it.  The watered down conference report was all that remained of a more robust bill protecting the natural gas business in Virginia from the climate catastrophe fanatics.

It offers little to no real protection to municipal gas users beyond notifications.

The bill arose out of reports that Richmond City Council had passed a resolution last year expressing intent to get out of the natural gas business.  Its municipal gas works serves 120,000 customers with an exclusive territory that also includes locations in Chesterfield, Henrico and Hanover counties, some of them major industries.

House Bill 1257 in its more expansive form passed the House February 14, during the regular session.  It then hit the anti-fossil fuel wall in a stacked Virginia Senate committee, but a much narrower version was reported out of committee and passed on that chamber’s floor March 7.  The House then insisted on a conference committee seeking to restore deleted parts of the bill.

Before the regular session ended, the House had agreed to a conference report, adopting it March 12 on a 92-0 vote.  The Senate refused to act before session deadline, which normally kills a bill, but since the Assembly remained officially in session none of the pending conference reports died.  The Senate adopted several of them Friday, including this, before taking up Governor Glenn Youngkin’s budget amendments.

Now very simple, the final bill would require that any local government operating a municipal natural gas utility would need to give its customers three years notice of its intent to get out of the business and then seek to sell the assets to another entity.  There is, however, no requirement that the local government actually accomplish that sale – only that it “attempt to negotiate.”

Absent a successful sale by that route, the locality may offer it up for auction.  The word that matters in the sentence is “may.”  The word chosen was not “shall.”  It is conceivable that in the future, Richmond City Council could still maneuver its way to completely shutting down the gas utility, as its resolution clearly envisioned.  It could conduct sham negotiations, reject all offers and then choose not to conduct an auction.  The bill is weak.

Richmond is one of only three local governments that still run their own gas utilities, and is by far the largest.  The situation there is further complicated by a city charter provision that requires a local referendum before the utility is sold (but does not require a vote to close it.)  Presumably plenty of Richmond voters are ready to tell their neighbors to surrender their gas, and would oppose any sale.  Otherwise why would city council vote that way?

The bill goes to Governor Youngkin for his action.  He can sign it, veto it, or offer amendments that would bypass that roadblocked Senate committee and go straight to the Senate floor.

Sponsor Delegate Terry Kilgore, R-Scott, started with a very strong bill, creating and protecting a right to natural gas in Virginia law.  It originally also prohibited local ordinances preventing future hookups to existing gas utilities for new or existing buildings or prohibiting the use of gas appliances, tactics also being employed elsewhere.  Few currently-elected Virginia Democrats dare to go that far, given the state of the issue within that political base.

Right now, of course, we are treated to the amazing spectacle of a climate alarmist President begging the fossil fuel industry to produce more product, but nobody with money to invest is falling for that charade.  At the time of the Richmond City Council action, and some similar moves in Fairfax County, a national movement to crush the use of gas in buildings and industry was gaining steam.  The desire remains strong within the climate catastrophe crowd to kill off gas use entirely, and it will re-emerge eventually.  That tail wags the Democrat dog these days.