Regulators question decision-making power for fossil fuel plant closures


The State Corporations Commission is asking the General Assembly to consider giving it more power over decisions related to the retirement of fossil fuel power plants, a move some environmental advocates see as n not being an urgent priority.

In an annual report to legislators, the commission outlined what it called its “lack of proactive authority, under current law, to protect the reliability and safety of electric service resulting from directed retirements (Virginia Clean Economy Act) unless there is a demand from the utility.”

The commission further wrote that “an after-the-fact review or finding of harm to the reliability and/or safety of electrical service would leave the commission with few options to protect customers.”

Under Virginia’s Clean Economy Act of 2020, the state’s two largest electric utilities, Dominion Energy and Appalachian Power, must withdraw their fossil fuel power plants by 2045 as part of the legislation’s aim to decarbonise the electricity grid by mid-century.

However, the VCEA allows utilities to ask CSC to keep these plants open longer if they believe closing them could negatively affect reliability. Fossil fuel power plants continue to be used as back-up power sources for emerging renewable energy sources.

“If the General Assembly intends to leave this discretion solely to public services, that is what the current law accomplishes,” the justices wrote. “The General Assembly may wish to consider an update or analysis required from the Commission near and before the closure of the unit.”

While agreeing with a broader need to restore CSC authority, Southern Environmental Law Center attorney Will Cleveland said retirement decisions are not a looming concern because the deadline for the closure of these facilities is not for 23 years.

“There are far more pressing issues,” said Cleveland, which has pushed for major reforms to the state’s electric utility rate review system.

Cleveland also noted that CSC has other tools to oversee utility energy transitions, including reviews of integrated resource plans that Dominion and Appalachian Power must file with regulators every three years.

House Bill 528enacted in 2020, further allows the SCC to set the period for which utilities must reimburse the remaining costs of retired facilities, which ratepayers can continue to pay after they close.

Natural Resources Defense Council Virginia policy director Walton Shepherd said concerns about reliability being affected by fossil fuel plant retirements are a “scare tactic” against the renewable energy movement.

The regional power grid that Virginia is part of, PJM Interconnection, provides reliability oversight, Shepherd added, as does the North American Electric Reliability Council, or NERC.

“It’s just completely hypocritical,” Shepherd said of the SCC’s comments in the report.

Requests for comment from leaders of both houses of the General Assembly were unsuccessful on Friday. Lawmakers are due to vote on a third SCC judge on Wednesday when the legislature convenes in Richmond. The appointment of judges to the SCC has been a subject of discussion within the legislative body since years.

Appalachian Power Company declined to comment. A Dominion spokesman said:As we transition to renewables and meet VCEA requirements, we remain focused on providing reliable service to our customers. We will continue to work with regulators and policy makers to ensure we have the necessary tools. »

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