With the coronavirus wreaking havoc on the U.S. economy, there’s considerable discussion underway about steps that can be taken to get business and consumers back on track. Much of that talk involves energy initiatives that the federal government could undertake. But states have important roles to play, too. Among them is Virginia, which just recently became the first southern state to adopt a 100% clean energy standard.
In this edition of Columbia Energy Exchange, host Bill Loveless talks with Anthony Artuso, an executive scholar at the University of Virginia’s Center for Economic and Policy Studies, just weeks after Virginia Gov. Ralph Northam signed the new Virginia Clean Economy Act.
Anthony is part of a team at the UVA center working on clean energy modeling and policy analysis in Virginia. He’s also collaborating with a group of faculty and staff at UVA’s Darden Graduate School of Business on economic and sustainability issues, focusing again on clean energy.
In addition to his work at UVA, Anthony is a member of the advisory board of the 100% Clean Energy Collaborative convened by the Clean Energy States Alliance, a nonprofit coalition of public agencies and organizations working together to advance clean energy. Previously, he did research and consulting for U.S. government agencies, state governments, the World Bank and the UN on issues related to clean energy, environmental policy and sustainable development.
He holds a bachelor’s degree in environmental science from Columbia University, a master’s degree from the Kennedy School of Government at Harvard University, and a PhD in natural resource policy and management at Cornell University.
Bill reached Anthony at his home in Charlottesville, Virginia.
Bill Loveless: Hello and welcome to Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. From Washington, I’m Bill Loveless. With the coronavirus wreaking havoc on the U.S. economy, there is considerable discussion underway about steps that can be taken to get business and consumers back on track. Much of that talk involves energy initiatives that the Federal Government could undertake, but states have important roles to play too, among them is Virginia which just recently became the first southern state to adopt a 100% clean energy standard.
To learn more about this new development, I reached out to Anthony Artuso, an Executive Scholar at the University of Virginia Center for Economic and Policy Studies, who is taking a close look at the New Virginia Clean Economy Act, it’s potential as an economic stimulant, and its comparison to energy polices in other states. In addition to his work at UVA, Anthony is a Member of the Advisory Board of the 100% Clean Energy Collaborative convened by the Clean Energy States Alliance, a nonprofit coalition of policy agencies and organizations working together to advance clean energy. Previously he did research and consulting for U.S. government agencies, state governments, the World Bank, and the UN on issues related to clean energy environmental policy and sustainable development. I reached Anthony at his home in Charlottesville, Virginia.
Here is our conversation, I hope you enjoy it. Anthony Artuso, welcome to Columbia Energy Exchange.
Anthony Artuso: Thank you Bill, it’s a pleasure to be here.
Bill Loveless: Well Anthony, first tell us a little bit about yourself, your career, and what brought you to the work that you’re doing today?
Anthony Artuso: Well, Bill I’ve been involved with clean energy and energy efficiency and climate change issues since very early in my career, just before it was as big and public an issue as it is now. I then went and got involved in other environmental issues, water quality management as well as biodiversity conservation and had a stint in the biotech and pharmaceutical industry as well. But, over the past five years watching the difficulties that we’re all having in getting on top of the problems of climate change, I felt it was time to make my way to back toward this sector and the set of issues and that started with three years I spent with a biotech company in San Diego called Synthetic Genomics that was collaborating with Exxon-Mobil on some algae based biofuels, really exciting fun project that is now going full bore and Exxon has made some commitments to bring that to market, but then I made a decision to step away from that and get more involved in the public policy side of the arena which is where my career had started with Department of Energy and other public policy aspects.
Bill Loveless: Yeah. What goes around, comes around?
Anthony Artuso: It does indeed. I tell a joke to folks that when I was going, when I went back to my doctoral degree, I was thinking about what -- where to focus and climate change was one of the issues, this was in the early 90s. And I decided not to focus on climate change for my doctoral work, because everybody seemed to be working on it and I figured they’ve got that solved. So, I figured now I’d better -- at least pick up an oar, grab an oar and row and see if we can help out in some way.
Bill Loveless: Well, timing is important here in Virginia the -- Governor Ralph Northam, recently signed the Virginia Clean Economy Act, it’s a big measure in terms of state energy policy, very different from what Virginia had here in the past. Anthony, tell us a little bit about that law and what are some of its key provisions.
Anthony Artuso: Okay, so the Virginia Clean Economy Act is a legislative follow on to Governor Northam’s Executive Order that was issued last fall and both the Executive Order and the Clean Economy Act set targets for 100% clean energy from the utility sector. So, electric generation has to be 100% clean energy and the Clean Economy Act went one step further than Governor Northam’s order and set that target for Dominion which is largest utility of the state and supplies about 85% of all the electricity consumed in Virginia. Dominion must have 100% of its electricity generated from clean non-carbon sources by 2045. There are number of interim targets as well, by 2030 Dominion has to be over 40% of electricity from clean energy sources. There’s also set asides for solar, for offshore wind, for battery storage as well. The Act includes a number of provisions for energy efficiency and also for greater access to clean energy and energy efficient improvements for lower and moderate-income households.
Bill Loveless: And there is another utility in there of course, Appalachian Energy. It’s a much smaller utility, their goal as I understand it would be for zero carbon emissions by 2050.
Anthony Artuso: Yes, Appco would be by 2050. Actually Appco is a part of a quite large utility, but within Virginia the amount of electricity they sell in Virginia is relatively small compared to Dominion and because Virginia is not the core focus of -- of the market for that larger utility, there was a little bit more time that was provided for Appco.
Bill Loveless: And there is another piece of -- another legislative aspect that took place here and that is an amendment of another law, an existing law, that enables Virginia to join the so called RGGI, the Regional Greenhouse Gas Initiative that --
Anthony Artuso: That’s right Bill and that’s a very important part of it and it’ll be interesting to see how that develops over time. Virginia has been sort of courting the RGGI compact for a few years. There was previous legislation that authorized Virginia to enter, but the budgeting -- budget authorization for that was never enacted so it was sort of left dangling and this legislature, this general assembly session brought that together, hammered down that last piece. What it will do is create a cap and trade system, so a shrinking amount of carbon emissions from the electric utility sector. Those emission rights have to be purchased by the utility, so it will raise a substantial amount of funding for the state and the legislative act targets that funding at least 50% of that funding for energy efficiency improvements in low- and moderate-income households.
Bill Loveless: Well, Virginia has a relatively small portion of its generation mix that comes from renewable energy as I understand it. I was looking up some figures from the Energy Information Administration at the U.S. Department of Energy and in 2018, natural gas fueled 53% of Virginia’s electricity net generation, nuclear power provided almost 31%, coal 10%, and renewables mostly biomass about 7%.
Anthony Artuso: That’s right, you’ve got your numbers correct yeah, it’s the place to go for that. And depending on – you know, you can look at that those figures as a glass half empty or glass half full. You’re absolutely right in terms of renewable energy, Virginia is behind the curve and this new legislation puts it at the front of the pack if they can execute on it. So, it really was received quite well by the broader community of states that are working on this, we got a lot of recognition. But, Virginia hasn’t invested much in renewable energy sources, it has transitioned quite a bit to gas, lower carbon emitting gas fire generation and the amount of coal fire has reduced and it has a substantial amount of nuclear which of course is a carbon free generating source, but in terms of really pushing wind and solar, Virginia has been behind many of the other states that we’re familiar with, whether California, New York, Massachusetts and other states that move more rapidly, even Texas and Iowa have much larger amounts of wind and solar than Virginia presently.
Bill Loveless: But there are some pretty big goals for renewable energy and this new law, right? The offshore wind and --
Anthony Artuso: Absolutely 100%. Quite honestly the -- well, nuclear is if -- it’s a little ambiguous in the legislation and nuclear is kind of grandfathered in, so it’s not -- there is no designation that the nuclear has to be shut down, but it’s not recognized as a renewable source obviously and all of the rest of the generation by 2050 has to come from renewable sources. So it has very ambitious goals for wind and solar and clean renewable energy sources.
Bill Loveless: Yeah, so I’m -- I’m just reading again some 5200 megawatts of offshore wind generation is declared in the public interest and it also establishes some 16000 megawatts of solar and onshore wind is in the public interest as well. So, there is an expectation there will be a substantial increase in renewables and in fact Virginia, Dominion Energy rather, has a -- has plans in the works for some offshore wind.
Anthony Artuso: They’ve -- well, the offshore wind is well underway, substantial first tranche of that of over 2000 megawatts already underway. And that phrase in the public interest just for those that are listening, it has a technical legal meaning in Virginia, it essentially designates this State Corporation Commission which is the public utility regulatory commission for Virginia, to recognize those sources of power as something that needs to be approved and to not apply some of the normal strictures for review and approval of those energy sources. So, it basically says look, we should assume that these are things that the state wants to do and so it’s a message to the SCC of let’s get these things done.
Bill Loveless: Well, the law does not contain any explicit moratorium on fossil fuel power plants, are we likely to see natural gas in the mix among power plants in Virginia for some years to come?
Anthony Artuso: Well, you are going to -- I mean, they’re still going to be there for some years to come. There is a fairly rapid phase out of any remaining coal fire power plants, I think by 2024 if I recall correctly. But there is a substantial amount of gas that will still be needed while say renewables continue to increase. However the legislation does include some pretty high bars that Dominion would have to meet to build any new plants of any sort that emit carbon emissions, they have to have met all of their renewable energy targets, all of their energy efficiency targets, and have to prove that other demand side management or other types of mechanisms would be more costly than building a new gas power plant. And if you look at Dominion’s new integrated plan that they just submitted to the SCC subsequent to the passage of the legislation, they really backed off any major kind of -- sort of base power gas plants. They do include still some peaking units some gas turbine peaking units in the plan, but in terms of continuing to rely on gas as a baseline type of power source, Dominion has clearly got the message and is taking a little different direction from that.
Bill Loveless: I -- the law relies largely on Virginia’s existing government structure and it’s two major electric utilities, especially Dominion Energy, to achieve these new goals. How -- how does that work or is it -- because there were -- there’s been some level of controversy over that.
Anthony Artuso: Oh certainly, there’s been and some interesting legislative history over that. As you know Bill, many states have moved over the past several decades to deregulate the generation of electric energy. And so, the utilities that remain or the utility structure that remains in many of these deregulated states which is -- about at least the third of the states and much larger amount of the population, is only for distribution of the electricity through the distribution grid and we have independent power producers that are selling power into the wholesale markets. Virginia had experimented with that in the early 2000s and it passed legislation to go in that direction and then backed away from it. The history of it is supposedly that they didn’t see enough competition emerging in the electric generation market and decided to go back to a fully integrated regulated structure and that’s what we have now.
Now, I think there are pros and cons to that kind of structure, it makes it easy in some respects for the State Government and the legislature to set these mandates. It’s, okay Dominion, you’re the main 85% of the power electric, go get it done. We are going to say it’s in the public interest, we are going to put these into the rate base, let’s just make it happen and you have one entity that has that ability all the way through from the generation to delivery of the power. But it does create some challenges in terms of managing the cost of that and ensuring that the entity is moving along fast enough. You don’t have the same competitive market forces that you would have in a deregulated state.
So, I think for Dominion it really is a message that if they don’t stay aligned with these mandates and make the types of changes in the generation mix that is required by legislation, if they fall behind that, if they have problems with that, if that starts to become too expensive in the way that they’re approaching it, I think you could see the legislation revisiting that structure of electric utilities. So, it will be something interesting to watch as to whether Dominion can take this new tack and move along rapidly and cost effectively in meeting these targets.
Bill Loveless: Yeah, and of course Dominion was a very influential entity in this -- in Virginia in recent years, in the state capital and all. That’s changing, many of the Democrats who came into the state legislature over the past year or so had reservations or outright opposition to some of the taking contributions from Dominion and that sort of thing so -- sort of the politics in Virginia has changed quite a bit.
Anthony Artuso: It certainly -- people have said okay, Virginia is a purple state these days and that makes for a different dynamic, a different approach to large corporations like Virginia and regulation and management of them, and there were a number of bills submitted in this legislative session that would have deregulated the electric generating mix. Those were tabled, they didn’t move forward, but that issue was still there and there was a bill that passed actually that would create what's called consumer choice that would allow other independent kind of power producers to offer me here in Charlottesville, Virginia the chance to buy renewable power from another source that would get delivered to my house through Dominion’s wires. That bill passed, but interestingly enough it didn’t go into to effect unless it was ratified again next legislative session.
So, the issue of how the state will address sort of regulation of utilities is very much still on the table and out there. But, I think Dominion has an opportunity to -- what they did after Governor Northam’s Executive Order they came out with a public statement that basically said challenge accepted. And so, I think the state and the people of the state will be looking and say okay, let’s see if you can deliver on this in the broader view and goals of electric power generation now in a world where climate change is a concern.
Bill Loveless: Yeah, and it should be noted that Dominion had committed to reaching net zero greenhouse gas emissions by 2050 before the governor signed this legislation into law.
Anthony Artuso: Right. I mean, so I think all of the utilities are -- or many of them are moving in that direction on their own and have parallel kind of commitments. If you look at Xcel Energy, they have made some of those commitments and in some cases that has moved the states that they are involved with to ratify that into legislation. And so, the utilities are definitely recognizing there’s a changed world, a changed market out there for this and in terms of their long term value creation for their shareholders, they need to have a cleaner energy mix.
Bill Loveless: All of these provisions and these goals are ones that have been watched closely and they’re the sorts of things that in other states have been implemented previously with an eye towards dealing with climate change. But today Virginia and every other state in the union as well as every country around the world is facing tremendous economic problems, many of these goals in the law, the big ones that we’ve talked about are off in the future a bit, 2045 or 2050. What can a law like this do in the meantime for economic stimulus because economic stimulus is something that’s been -- that’s really the topic of the day.
Anthony Artuso: I think it’s great question Bill and it’s certainly an area I’ve been concerned about, thinking about, and I amongst thousands of others are looking at kind of the economic situation and saying and how is this going to affect the emerging momentum for clean energy, not only in Virginia but nationally and around the world. I think that if we focus back in on Virginia, there is a lot of opportunity to use this as an economic stimulus and there will be a need for that. It will take sort of smart policy and smart planning, but couple things to look at. One, Dominion just issued a 1000-megawatt RFP as the first tranche towards 16,000 megawatts of solar that’s designated in the legislation by, I think 2027 or maybe 2035 in the legislation.
So, they’ve already got a big one out there, they want to have the responses in by September and they want a contract signed by the end of the year, so there would be projects ready to go, to put people to work and put funding into the economy. There’s also was substantial backlog, a substantial queue of smaller solar energy projects that get permitted as under the permit by rule laws in Virginia, so smaller amounts that don’t have to go through some of the same permitting and regulatory process and there is a very large backlog of that that Virginia could also put some policies in place to bring those into construction much more rapidly.
And then, if you look at the legislation as well there is a ton of energy efficiency improvement funding and support and investment that’s embedded in the legislation and funding for that through the RGGI Act that could put people to work that could save money for low and moderate income households that they can then spend in the economy so there’s quite of bit that can be done. Then if you look at from a regional perspective, regional within Virginia, there’s been a lot of a focus on how do we improve situations in rural parts of the state where maybe the economy is a little more depressed than in Northern Virginia and Eastern Virginia. And there’s tremendous opportunity to use clean energy development in Southwest Virginia sort of Brownfield development on some of the coalfields and the like to also increase employment and value creation in those parts of the state.
Bill Loveless: Well, Anthony, those all sound as though they are important considerations from a stimulus standpoint. Are you seeing much interest in the state or among business interests and others in these opportunities?
Anthony Artuso: We’re certainly seeing plenty of interest. In fact, we’re getting calls and fielding calls and some of my colleagues who have family members and friends that are working in the clean energy industry in other states have seen the request for proposals from Dominion and are saying boy, how do we get involved in building this out in Virginia. So, there’s a lot of focus from the industry here in the state and other companies that are in this sector. Obviously, Dominion moved very quickly to get this RFP out so, that’s a positive sign.
There’s plenty of interests from the state on the topic, at present however though the state is very focused on the crisis and dealing with that and taking a lot of a time and attention and so it’s still an uncertainty how the state will respond as it emerges from the crisis and what the fiscal situation is from the state to manage this new initiative on clean energy.
The positive element to go back to your earlier question Bill, the positive element for Virginia is this integrated structure of the utility, vertically integrated structure for Dominion. So, unlike many of the other clean energy states, Virginia’s legislation if you look at it, does not involve that much by the way of financial incentives that the state is paying toward clean energy development.
It’s basically a mandate to the utilities, get this done, make it happen. Now that doesn’t mean it’s free. I’m still going to be paying for some of that through my rates and to the degree that there’s some capital investment early on that requires a little bit of rate increase or something, that will happen. But if the state of Virginia likely is and will be constrained fiscally that won’t necessarily slow down any of the clean energy development here in Virginia and not significantly.
Bill Loveless: And that’s an important point to make, because in some places, subsidies from the government, state or federal, are an important element of promoting clean energy.
Anthony Artuso: It’s a big part of it. The federal support of the 30% tax credit now it’s I think 26% this year, it’s declining over the next several years, to solar, that will still be there, but many of the states have topped that up with state tax incentives, income tax incentives and other subsidies for solar and energy efficiency in other renewables. Virginia has done less of that, it has committed to less of that so, the plan they have in place to the degree that the utilities can execute with that and we can maintain political support for it, I think could fare well even in the sort of post COVID world.
Bill Loveless: Yeah. Have you seen any indications from anyone say on the Dominion side or on the business side that maybe given circumstances today they may need to put off working on some of these clean energy initiatives?
Anthony Artuso: I haven’t seen it yet. I will say I got a call from one of the major national environmental groups after the legislation passed and I was recently appointed to the Advisory Board of the 100% Clean Energy Collaborative of the Clean Energy States Alliance. So, it’s an alliance of all 15 states that have these 100% clean energy goals in legislation. And so, they asked me to be on the Advisory Board and that was announced and there was some publicity about that and so, one of the major national environmental groups, their Virginia rep that’s working on the clean energy stuff here in Virginia called me and said we’re really worried that the governor is not going to sign the legislation.
And we’re hearing that there is a lot of lobbying in that regard to remove certain provisions or to go slow on it and table it for now. And I hadn’t heard or seen evidence of that and it turned out that didn’t happen, the governor followed through. There were some very minor modifications, just clarifications in the legislation so, so far, the support is there.
But clearly, it’s going to be incumbent upon Dominion and Appco and the State Corporation Commission, that is the regulator of these utilities, to get the job done as cost effectively as possible. We can’t be squandering money; we can’t be throwing it around at any kind of project that looks or smells clean or appears to be clean. It needs to be a very well structured plan that is the most cost effective pathway to getting those targets, otherwise it could undermine the political support for this, particularly if we’re in a slow economic or in a recession so, the job is not yet done, good planning, good policy, good management is still going to be needed from all parties.
Bill Loveless: For ratepayers, is it likely to be that costly? I know Dominion has indicated it could cause rates to increase somewhat, but others say no that’s not the case in fact, rates could go down with these new initiatives so, what do you see?
Anthony Artuso: It's a complicated question Bill, on the one hand it is no question, wind and solar and battery storage, the cost of those continue to decline rapidly and are now less expensive than other types of fossil fuel generated power so, in that regard it’s good news, good timing, good moment to be making this initiative and this push and it won’t be nearly as costly as it might have been ten or fifteen years ago.
At the same time that if you look at the comparison of wind and solar versus a brand new gas- fired power plant, they’re roughly equivalent in cost, in a levelized cost of energy, kilowatt hour, life of those facilities. But Dominion has just recently finished building out quite a bit of gas-fired generation in the state. So, if, to just use a kind of thought experiment, if all of the sudden, Dominion decided to shut all that gas-fired generation down and was able to build enough wind and solar to replace it this year, there would be a cost involved, because you’ve already got that embedded capital cost there that Dominion is going to continue to recover from its rates.
And so, there is going to be a need for kind of a slow ramp to retire the -- all your gas-fired generation in an appropriate way and if it’s done in a sensible sequential way and also really managing energy efficiency and demand side flexibility, to reduce the peaks and the need for new peaking power generating units, I think it can be done with very little increase in rates, but that still needs to be analyzed. One of the things my team is doing, new group I’m working with at University of Virginia is modeling that those pathways to clean energy future.
So doing sophisticated grid sector modeling, economic analysis to see what are the passive, what is the mix of wind and solar and battery storage and even longer term clean hydrogen and other things on the grid to get this done in the most cost effective way that minimizes any increase in rates.
Bill Loveless: And one thing you need, you can take into consideration is the social cost of carbon, right that was written into the legislation. Explain that term for those who may not understand it, Anthony and what -- how does it factor into the considerations here?
Anthony Artuso: Well, carbon emissions are in economic parlance are kind of a classic example of an externality. If Dominion produces electricity and I turn on my lights and buy electricity from them, we have a market transaction on paying for the electricity. But the carbon emissions flowed up into the atmosphere and they contribute to global warming and the cost of that is not embedded in that market transaction, without some form of government regulation. It’s a cost that is contributing to stronger hurricanes and droughts and extreme weather events and sea level rise and other things that are associated with climate change.
And so, the social cost of carbon is the calculation of those future costs that are resulting from carbon emissions and the global warming that that's generating, very complicated set of calculations, lots of uncertainties around that, but there’s clearly a cost that we’re already seeing in the climate change that is happening and this legislation does say that that needs to now be taken into account in thinking about what’s the best generating source to put on the grid.
And in fact the RGGI, Regional Greenhouse Gas Initiative that we discussed earlier Bill, is designed exactly to do that, to create a kind of market for that externality, to recognize it has a cost, to set up a cap on the amount of carbon emission that come--can come from the electric grid and to reduce that gradually overtime so, you’re essentially taking the externality and internalizing it into the cost of generating electric power.
Bill Loveless: Yeah, and was that a controversial consideration at all for legislators or others when this law was being--going through the legislature?
Anthony Artuso: Well, as I said there had been several efforts in the past to have Virginia join the RGGI compact and those had been sort of pushed aside and tabled, and other things so, it has been controversial. It’s a --I mean climate change is one of the huge challenges of our age, as you’re well aware of Bill, and there’s a lot of points of view about this. On the one hand, the social cost of carbon is a cost that accrues to the world as a whole. So, in that sense, we’re taking account of the cost of the future generations and outside of Virginia.
And so, you could have a debate as to whether, Virginia needs to take that into account in its own planning, but if nobody takes it into account then we’re all going to bear that cost. And so, from a kind of ethical point of view you can look at it and say we need to take account of the pollution that were causing, the cost that we’re pushing onto other parts of the world and future generations and plan accordingly and come up with a strategy that taking account of those full costs is the least cost approach for society as a whole and we’re relying on other states and other countries to do the same.
And we’re seeing momentum toward that as more and more states adopt these provisions, these clean energy targets and other countries are signing onboard and that’s what we need to get ahead of this problem.
Bill Loveless: How is Virginia compared to other states with these sorts of goals these days Anthony, you’re working on that advisory committee among a coalition of various states right now. We see some states like New York have big master plans that are relatively recent, California of course has had a cap and trade system in place. How does Virginia stack up even acknowledging it’s new, it's a new undertaking here in Virginia, but how does—how does Virginia stack up in comparison to those other states?
Antony Artuso: Well, I think on paper in terms of the legislation it stacks up well, there are some other states that have even more ambitious targets or earlier timelines for hitting a 100%, but it’s only a few and maybe by five or five years or more something like that. So, in that regard Virginia has really set the bar pretty high and is right in there with the leaders across the country.
But as you mentioned earlier in terms of the numbers of where Virginia is on percentage of clean energy, renewable energy in the mix, they’re way behind many of the other states like California and New York and Iowa and Texas, and others. The other area where Virginia is behind, partly because of the approach they’ve had with regulation of a single utility that’s the major player in the state and that’s fully responsible all the way from generation to delivery of electricity.
There isn’t nearly the same governmental infrastructure in Virginia as you would see in California and New York and Massachusetts for managing clean energy programs, developing these policies, working closely with their utility regulatory commissions, designing competitive bidding processes in New York, and the state runs those competitive bidding processes, not the utility.
New York has just set up a whole new major clean energy facility siting authority to streamline permitting of these types of solar farms that are going to be needed, utility scale solar, to the degree that Virginia may have ¬¬an Achilles' heel or something that we need to watch in achieving these targets, is whether the siting of these solar, utility scale solar facilities, which take up acres and acres of land, how is that going to go with the local governments and counties. There is an interplaying and role that local governments have to play in that and state is starting to turn its attention to how do we make sure that permitting process is smooth and efficient.
So, there is kind of--the infrastructure and institutional infrastructure that will need to get built up in Virginia to execute on this efficiently.
Bill Loveless: With the dominant role that Dominion and Appalachian Power have in this whole scenario, is there much room for others to come in and get a part -- a piece of the business in terms of providing solar power let’s say throughout the state?
Anthony Artuso: Well, it depends there are--there is, it depends on what ways you maybe have in mind Bill, but one that the new Virginia Clean Energy Act or Clean Economy Act does raise the amount of power that Virginia -- that Dominion and Appco need to purchase through power utility scale solar array and then selling the power to Dominion.
So, it increases that amount, I think it could be increased further, but it’s a start and I think it will advance beyond that so, that’s one way that other’s can in jump and participate. There’s also an increasing amount that Dominion has to acquire, and Appco, through competitive bidding so, you have, sort of the solar developers doing the project work and then, they would then essentially sell the project to or Dominion would take ownership of the solar project for generation so, there is a substantial amount of private sector involvement and investment.
But I think there’s more that could be done and more that we will see particularly in terms of demand side management and some of the new technologies of smart grid. There’s a lot of startup companies and technologies available to integrate those technologies into the grid, enable two way charging of electric vehicles and the like. We’re at the starting point of that and I think you’ll see more experimentation and more legislation and regulation on that in coming years.
Bill Loveless: Anthony, before we go there is one other aspect of this law that I want to ask you about and that is from what I’ve read those explaining the law and the state government and all say that it reflects environmental justice concepts consistent with the Green New Deal. What do they mean by that, what effect does that have?
Anthony Artuso: Well, I think, one, I would differ with that characterization. The legislation and the governor’s order that preceded it, executive order, has a strong focus on environmental justice, and so, what is environmental justice, what does it mean? Well, it’s kind of a blanket term, it can mean different things to different people, but it has few things that we know for sure, if you look where low-income minority neighborhoods are located, they’re often located next to polluting facilities. If you’re rich, you’re not going to stay there for that long.
And so, it just the nature of sort of the economic divides in our country. And so, there’s environmental hazards that those communities have felt from fossil fuel generation, from coal plants and other generating facilities. So, that’s one area where cleaning up the grid will help those communities, but at the same time those communities have difficulty paying for energy and the like and so, there’s an effort in the legislation to reduce their energy costs through energy efficiency improvements and also to limit, there is a cap in the legislation of six percent of low-income households income can go towards their electric bill. If it rises above that they need to receive some relief.
And if their heating is from electricity in the household the cap is 10%, because there’s obviously some extra cost spent on electric heating as supposed to gas, but that cap exists there as well. So there is an effort to reduce the cost of that, provide greater access to solar power for low-income households and multifamily households and the like, clean up the neighborhoods where many of these communities are located, and have cleaner sources of generation, and to limit any economic effect that rising rates to the degree they happen might have on low-income households.
So, there is real focus on environmental justice. At the same time, it would be not quite correct to characterize the new Virginia Clean Energy Act as following fully along the broad outlines of the Green New Deal that was put out at the national level, which included quite a bit of funding for public jobs programs and other things, to install energy efficiency improvements. So, there’s a broader kind of vision and strategy in that Green New Deal that really isn’t core to the legislation that’s been passed in Virginia.
Bill Loveless: Well there’s quite a bit to watch here in Virginia, it’s certainly a new day when it comes to energy policy in the Old Dominion and as we’ve discussed it certainly could play a part in some of the considerations these days over economic stimulus in the state. Anthony Artuso, thank for joining us on Columbia Energy Exchange.
Anthony Artuso: Thank you for having me Bill, I enjoyed it. Thanks very much.
Bill Loveless: For more on Columbia Energy Exchange and the Center on Global Energy Policy, find us on the web at energypolicy.columbia.edu and on social media @ColumbiaUEnergy. And if you have a minute give us a rating on your favorite podcast platform. For Columbia Energy Exchange, I’m Bill Loveless, we’ll be back again next week with another conversation and in the meantime, please stay safe.