Bills approved in Virginia’s recently concluded 2021 legislative session will tighten vehicle emission standards, promote electric vehicles and streamline permitting for energy storage projects. Lawmakers also created a program for developing renewable energy on brownfields and former coal mines and ordered an inventory of the state’s greenhouse gas emissions.

Much of the legislation signed by Gov. Ralph Northam (D) builds on last year’s landmark Virginia Clean Economy Act, which set a goal of net-zero GHG by 2045 in all sectors. (See Va. 1st Southern State with 100% Clean Energy Target.)

Focus on Vehicle Emissions

Vehicle emissions, the source of almost half of the state’s GHG emissions, were the focus of several bills, including HB 1965, which invokes the federal Clean Air Act’s provision allowing states to adopt California emission standards, which are more rigorous than those imposed by the federal government.

The bill requires the Air Pollution Control Board to implement a low-emissions and zero-emissions vehicle program for motor vehicles with a model year of 2025 and later. According to the Sierra Club, the bill makes Virginia one of 14 states to adopt clean car standards, which require a certain proportion of new vehicle sales be zero-emission or plug-in electric vehicles.

“This bill will ensure that Virginians don’t have to travel out of the state to purchase electric vehicles,” said Rebekah Whilden of the Sierra Club’s Clean Transportation for All campaign.

The powerful Virginia Auto Dealers Association praised the bill when it was winding its way through the legislature. “VADA and its dealer members are fully supportive of efforts to increase electric vehicles sales, and we must move forward in a smart and effective manner to set up Virginia for success,” CEO Don Hall said in a memo to lawmakers.

A second bill requires the State Corporation Commission to submit a report to the General Assembly by May 1, 2022, recommending proposals on how electric utility programs can speed up adoption of EVs (HB 2282).

The law directs the SCC to identify areas where utility or other public investment can complement private efforts to deploy charging infrastructure, with an emphasis on low-income, minority and rural communities. The report must determine whether transportation electrification can reduce customer rates, assist in grid management, use increased generation from renewable energy resources and reduce fueling costs.

The state also will provide EV rebates to Virginians in households living below 300% of the federal poverty line ($26,500 for a family of four) — if it can find the funding (HB 1979).

Qualified residents who purchase or lease new EVs of $55,000 or less will be eligible for a $2,500 rebate and a $2,000 “enhanced rebate.” Purchasers of used EVs of $25,000 or less will be eligible for the $2,500 rebate and an additional $500 enhanced rebate. The rebates will begin Jan. 1, 2022, and expire Jan. 1, 2027. The sticker price is expected to be $13 million in fiscal 2022, rising to almost $70 million in FY 2026.

But the legislation does not include a funding source.

The governor also signed HB 2118, a law that will provide grants on a competitive basis to replace diesel school buses with electric ones. But like the EV rebate law, the bill includes no funding source. The Department of Environmental Quality will be tasked with creating the program “as federal or other nongeneral funding becomes available.”

Some rural school districts question the usefulness of electric buses in mountainous regions with long trips. (See Rural Virginia School Districts Skeptical of Electric Buses.)

Clean Energy Policy

In SB 1284, the legislature replaced its existing energy policy with the Commonwealth Clean Energy Policy, which calls for addressing climate change, environmental justice and prioritizing economic competitiveness and workforce development.

The policy provides guidance to state agencies and political subdivisions in taking discretionary action on energy issues.

“This bill doesn’t have a lot in the form of teeth, but what it does … is it sets out a number of goals and policy statements related to clean, renewable energy and greenhouse emissions,” Williams Mullen attorney Patrick Cushing said during a legislative briefing last week. If Democrats remain in power, the policy will be a good roadmap for renewable energy policies for the next several years, he added.

Renewables on Brownfields, Former Mines

HB 1925 would create a grant program to locate renewable energy projects on brownfields or coal-mined lands, but the program is dependent on federal funds. The law is a “shell that’s been put in place. It’s not going to receive any state funding,” Cushing said. “It’s there to accept federal funding if it comes down.”

If federal funds become available, funding would be limited to $35 million annually, with grants of $500/kW of nameplate capacity on former mines and $100/kW on brownfields. The law also limits funding to $10 million for a single project on any previously coal-mined land and $5 million for any single brownfield project. Additionally, the law directs the Department of Mines, Minerals and Energy (DMME) to work with stakeholders to develop a handbook for renewable energy and storage development on such projects. (A separate bill which Northam is expected to sign, HB 1855, would change the name of the department to the Department of Energy, effective Oct. 1.)

Northam proposed changes to HB 1899/SB 1252, which would end the Coal Employment and Production Incentive Tax Credit and Coalfield Employment Enhancement Tax Credit after tax year 2021. As written, the bills direct DMME to work with stakeholders to produce a report by Dec. 1 on how the state can provide economic transition support to the coalfield region. Northam said the anticipated savings should be dedicated to the University of Virginia’s College at Wise in Southwest Virginia to expand course offerings in data science, computer science and renewable energy.

GHG Accounting

Also approved during the session was a bill directing the DEQ to start a comprehensive accounting of greenhouse gas emissions, which the state is required to do as a member of the Regional Greenhouse Gas Initiative (SB 1282).

Prior to the signing, Virginia had a hodgepodge of a system for measuring greenhouse emissions, said Lena Lewis, energy and climate policy manager of The Nature Conservancy’s Virginia chapter. Under a more detailed DEQ inventory, she said, emissions such as hydrofluorocarbons (HFCs), will be measured more accurately. HFCs are powerful manmade GHGs that build up in the atmosphere and persist for 15 to 29 years. They are used mainly in refrigeration, air conditioning, insulating foams and aerosol propellants.

It requires the inventory be published and included in an annual report to the State Air Pollution Control Board.

Before Northam’s signature, state officials had few avenues to measure data on carbon and methane emissions from power plants and other large sources of air pollution, mainly state and federal air permits. Officials also depend on widely accepted models to estimate emissions linked to farming and transportation. What DEQ officials did not have was comprehensive data from smaller industrial polluters and infrastructure that relies on natural gas and oil instead of electricity.

An impetus for the bill was an ad hoc work group created in 2019 to develop a framework for limiting methane leakage from natural gas infrastructure. The group found current efforts to measure the leakage are not accurate.

“If we can count emissions levels, we can improve climate outcomes, but we won’t know if we don’t have reliable data,” Lewis said.

Testifying before lawmakers, Chris Bast, DEQ deputy director, said having additional data is key to fighting carbon emissions. “Good policy requires good data, and this legislation gives us the ability to get the data we need to craft good policy going forward.”

Nate Benforado, an attorney with the Southern Environmental Law Center, described the law as “smart, common sense.”

Energy Storage

The legislature also expanded the state’s “permit by rule” policy by amending the definition of “small renewable energy projects” to include storage and hybrid solar-storage facilities (HB 2148). Permit by rule allows solar facilities of 150 MW or less to construct and operate the project through an expedited DEQ permitting process, rather than obtaining approval from the SCC. The DEQ is required to implement the law by Jan. 1, 2022.