By Steve Haner
Unfortunately, there is nothing new about the Virginia General Assembly passing an energy development bill which overrides the authority of the State Corporation Commission or usurps its role in planning utility resources.
Where Governor Ralph Northam’s new clean energy transition legislation breaks ground is its immersion into questions of race, poverty and environmental justice. Should it pass and be implemented, the large electric utilities will be charging means tested rates, exempting low income ratepayers from some charges entirely, submitting their construction plans to an environmental justice council and engaging in preferential hiring for at least some construction projects.
Reviewing the list of such instances in House Bill 1526 and Senate Bill 851, detailed below, raises the question of how long it will take for these to become common for all regulated public service companies. If the General Assembly starts down this road, it will not stop here.
In this third installment of our detailed tour of these bills, which should be back up for consideration in committees next week, I am again using the PDF version of the House bill with line numbers, so readers can see for themselves.
It starts on the first page of the bill, line 46, which adds a definition of “Low-Income Geographic Area” to the revised Virginia Community Flood Preparedness Fund in Title 10, and then on line 86 commits no less than 25% of any spending from that fund to those locations. The area must have median income 80 percent or lower of the local median or be a federal qualified opportunity zone.
On line 253, there is a new definition added to Title 56 for “historically economically disadvantaged communities,” discussed briefly in my first dive into these bills. They are defined as either being majority “people of color” or a low-income geographical area. Line 281 follow up with a new definition for “low-income,” as 80 or lower than the state median income or the area median income.
Five pages into the bill there are different definitions for low-income, each applied to different aspects of energy policy.
A hiring preference for the upcoming offshore wind project off Virginia Beach is created on line 714, using the “historically economically disadvantaged communities” definition. The hiring preference repeats on line 1244. On line 729, the same definition appears in directing that the State Corporation Commission “shall ensure that the development of new or expansion of existing, energy resources or facilities does not have a disproportionate adverse impact” on those neighborhoods.
Once the offshore wind is built, most ratepayers will see a new stand-alone charge on their bills but line 1226 promises it will not be charged to “low-income residential customers.” It uses yet another definition, this time linking that status to participation in a “public assistance program for the indigent.”
If the utilities are forced to make deficiency payments because they have failed to meet their new clean energy goals, virtually all of the proceeds will be spent on low-income Virginians. Half must go to job training for residents of those “historically economically disadvantaged communities” and 30% to renewable energy programs in those neighborhoods.
A new definition of “low-income customer” is added to the net metering provisions, again referencing participation in public assistance programs. It is used on line 1703 to exempt them from any stand-by charge the SCC imposes on net metering customers. At least the customers being targeted for bill exemptions seem to be identified in the same way, but it is still a new administrative burden on the utilities.
And then, on Line 1844, the new Percentage of Income Payment Plan is established. Previously discussed on Bacon’s Rebellion, it caps participants’ electric bills at 6% of “household income” if they don’t have electric heat, and 10% if they do. It establishes additional programs for making their residents more energy efficient, with all these costs coming out from a fund using yet another new rate adjustment clause on all customer bills.
When the cost is imposed by raw electricity usage on all customers, about 40% comes the large industrial and commercial customers. Oddly (perhaps an oversight), low-income customers are not exempt from paying into the PIPP Fund on their monthly bills. But once those means tested exemptions are created, expect them to proliferate.
Both electric utilities have internal charitable programs, collecting funds to help low income customers behind on bills. The Department of Social Services runs Virginia’s public program for heating and cooling bill assistance, tax-funded presumably. How PIPP will integrate with those, and how many more families might participate, is still not being discussed. The program in Ohio similar to this covers other utilities beyond electricity.
The bills conclude with a series of directives known in the legislative trade as enactment clauses. Three of them touch on this topic of race, poverty and environmental justice driving energy costs and policy.
Enactment Clause 5 (line 1989) directs the utilities to inform low-income customers about solar opportunities. Clause 6 (line 1992) again seeks to prevent “a disproportionate burden on minority or historically disadvantaged communities.” Clause 8 (line 2009) is hard to decipher, but whatever it does it is doing it for “low-income geographic areas and historically economically disadvantaged communities that are located near previously and presently permitted fossil fuel facilities or coal mines.”
This is too many posts on one bill in too short a period of time, but in this case it comes after a phone call from a very serious reader who wanted to know: Since he lives in a low-income long-time minority neighborhood, but fits neither category himself, might some of these preferences apply to him?
No question the answer is yes, some, and sorting all that out will add significant cost of compliance as Virginia moves down this road. None of the administrative costs added to all customer bills, or itemized program costs moved off low income customers and onto to everyone else, will be paid by the utilities themselves. To get what they want in these bills, they will consent to this new role.
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