Virginia General Assembly split on whether to pursue nuclear power more aggressively

When Republican Gov. Glenn Youngkin unveiled his energy plan this fall that pushed for the development of small modular nuclear reactors in the state within a decade, critics were quick to call the goal overambitious and a distraction from efforts to develop traditional renewable sources like wind and solar.

The push preceded legislation this year from Republicans that sought to establish a pilot program for the development of small modular reactors, classify nuclear energy as a renewable energy source under the Virginia Clean Economy Act, and set up an innovation fund that would include money for research into SMR deployment.

The research fund was the lone survivor of the three legislative efforts, revealing a split in attitudes toward nuclear in Richmond: Virginia’s Republican House of Delegates and governor want to encourage nuclear and SMR use, as do some Democrats. But the majority of Senate Democrats have balked, saying they’d like to see more research into SMRs in particular before throwing their weight behind statewide efforts to develop them.

“We all know that we are progressing towards an emission-free environment,” Del. Kathy Byron, R-Bedford, said while presenting her bill to classify nuclear as a renewable source. “In order to do that and make sure that we have a baseload to be able to supply the energy needs that are out there, we are going to need to ensure that we include nuclear and advanced nuclear technology.”

Some Democrats appear to agree. During the same hearing, Senate Majority Leader Dick Saslaw, D-Fairfax, questioned how Virginia could get to a clean electric grid without nuclear.

But other Democrats worry the costs of investing in nuclear technologies, both new and old, could be too burdensome for ratepayers.

With cost estimates for the only federally approved SMR, the Idaho-based NuScale project, recently rising from $5.3 billion to $9.3 billion, Sen. Scott Surovell, D-Fairfax, proposed a comprehensive change to the pilot program bill to prevent utilities from billing customers for the costs of an SMR until it begins generating electricity.

As for Byron’s bill on renewable sources, Surovell added, “I think Del. Byron might be on the scent of something here, but from my perspective, it’s not exactly ripe yet.”

Despite the failure of the proposals for an SMR pilot and to classify nuclear as a renewable source this session, Dominion Energy is not pulling back on its efforts to develop an SMR, said Todd Flowers, director of business development at Dominion.

“The level of legislation that was introduced, I think shows that nuclear will have its role in future power generation,” Flowers said. “It’s the first time in my lifetime that I’ve ever seen that much interest in legislation associated with nuclear. People’s perceptions are changing.”

In an email, Macaulay Porter, a spokeswoman for Youngkin, called the legislative session “a victory for the Governor’s energy plan.”

“While more work remains to be done to ensure reliable, affordable energy, Governor Youngkin is enthusiastic about the bills to jumpstart nuclear research, workforce training and incorporate all energy technologies that also work toward cleaner energy for Virginia,” Porter said.

Failed: SMR pilot program

Different versions of legislation to create an SMR pilot program would have encouraged the development of the technology at three or five sites around Virginia.

The bill’s patron, Del. Danny Marshall, R-Danville, argued SMRs could provide reliable, round-the-clock, emission-free electricity while costing less than traditional nuclear and offering more flexibility in siting.

Ideally, said Marshall, the program would “make Virginia a leader in the development, manufacturing, construction, and operation of SMR nuclear reactors.”

But the bill foundered over concerns about ratepayer protections.

Surovell, one of the Senate Democrats involved in negotiations on the proposal, raised concerns about how much the bill would have tipped the scales in favor of the State Corporation Commission, the body that oversees electric utilities in the state, approving any SMR project put forward by a utility.

Language in the bill said the SCC “shall” create a pilot program if certain criteria were met.

Dominion lobbyist Bernard McNamee, a former member of the Federal Energy Regulatory Commission, said the legislation would still give the SCC discretion to evaluate whether a particular project is reasonable and prudent

But Surovell said that when legislation includes specific criteria utilities must meet for approval, regulators have typically approved projects so long as those criteria have been met.

“I understand it’s not saying it’s in the public interest,” Surovell said, referencing a legal term that puts pressure on the state to achieve certain policy goals. “But it sort of walks up to the cliff and looks over the edge and does the jump.”

Attempts to reach Republican conferees and McNamee for comment on why the pilot program bill failed were unsuccessful, but Nate Benforado, a senior attorney with the Southern Environmental Law Center who lobbied against the legislation, said cost concerns led to its demise.

“Our biggest concern is just ratepayer impact,” said Benforado. “We’ve seen abandoned projects. We saw it happen in South Carolina with the failed plant down there.”

In South Carolina, plans by utilities South Carolina Electric and Gas and Santee Cooper to expand the V.C. Summer nuclear plant were abandoned after almost 10 years of work and $9 billion in investment. Despite the project’s failure, customers of South Carolina Electric and Gas, which Dominion has since taken over, are still on the hook to pay over $3 billion in costs for the plant over a 20-year period.

Failed: Defining nuclear as renewable energy

Republican legislators said defining nuclear energy as a renewable source would help Virginia utilities ensure they have the baseload power they need to supply customers as they bring more renewable sources onto the grid.

Virginia currently draws about 30% of its energy from Dominion’s North Anna and Surry nuclear plants.

Saslaw, the Senate Labor and Commerce Committee chairman and a longtime Dominion ally, agreed that nuclear use is necessary to Virginia’s renewable transition.

“I don’t think we can get there without nuclear power,” said Saslaw during a committee hearing.

“I agree with you,” said Connor Kish, legislative and political director for the Virginia chapter of the Sierra Club.

Nevertheless, a majority of Democrats on the committee voted to kill the bill.

Nuclear is “simply not renewable,” said Sen. Creigh Deeds, D-Charlottesville.

Kish said classifying nuclear as a renewable source that would count toward the utilities’ annual goals under the Virginia Clean Economy Act would diminish their incentive to invest in traditional renewable sources like wind and solar.

In addition to setting retirement dates for fossil fuel plants, the VCEA mandates that utilities source an increasing percentage of their energy from renewables every year, a set of mandatory targets known as the renewable portfolio standard, or RPS.

“I think that you’re seeing the growth of the offshore wind industry, and you’re also seeing the growth of the solar industry because the RPS allows that market to grow and solidifies their ability to grow their businesses and to make those investments,” said Kish.

Conversely, Brett Vassey, CEO of the Virginia Manufacturers Association, supported the bill, noting advancements in fuel generation are underway and could give rise to domestic and local economic opportunities.

“The entire supply chain is American made and in Virginia,” Vassey said.

Democrats were also wary of a provision in the bill that would have labeled hydrogen a renewable energy source.

Hydrogen energy is generated through electrolysis but can be produced using a range of energy sources, including wind, solar and natural gas.

That variability in hydrogen sources led to opposition from Kim Jemaine, policy director for Advanced Energy United, an association representing the renewable energy industry.

“While green or clean hydrogen may be [renewable], the production of forms can create substantial emissions,” Jemaine said during a hearing.“This legislation doesn’t qualify for hydrogen at all. It uses that term broadly, which we think is problematic.”

A proposed amendment to the bill from Sen. Steve Newman, R-Bedford that would have prevented hydrogen produced from coal or natural gas from being classified as renewable failed to overcome Democrats’ worries.

Passed: A power innovation fund

The lone nuclear bill to survive the session was legislation to establish a new energy research and development fund.

Youngkin announced the idea for the fund in October after unveiling his energy plan. He initially proposed $10 million in startup funding, with half going toward the development of an SMR in Southwest Virginia.

Del. Israel O’Quinn, R-Bristol, and Sen. Jill Vogel, R-Fauquier, carried the bills to create the fund, which they described as a way to draw on federal dollars to create a competitive grant program that would incentivize the development of innovative technology. The legislation would have the Department of Energy set up a program with the Virginia Nuclear Energy Consortium that would “fund nuclear energy workforce development programming and … assist with site selection for future small modular reactor projects in Virginia.”

“It supports energy innovation, and hopefully the establishment of the subsequent supply chain and will attract these cutting-edge assets to the ground,” said O’Quinn.

Although Sen. Chap Petersen, D-Fairfax, questioned the use of taxpayer dollars to encourage industry development when investor-owned utilities are billion-dollar companies, the measure received bipartisan support.

Vogel argued other states like North Carolina have similar efforts to develop the industry underway.

The proposal “will ensure that there is meaningful and significant contributions to the commonwealth in terms of the large-scale number of future nuclear energy jobs as well as the overall betterment of our community,” testified Lane Carasik, an assistant professor in Virginia Commonwealth University’s Department of Mechanical and Nuclear Engineering.

Dominion SMR plans

The failure of the pilot program legislation doesn’t mean Dominion won’t be able to pursue the addition of a small modular reactor to its energy portfolio. Current law allows the utility to apply for approval of one from the SCC, as well as from the federal Nuclear Energy Regulatory Commission and local officials.

The utility mentioned the potential use of an SMR for the first time in its most recent integrated resource plan, a guidance document that outlines the utility’s future plans. Flowers said the next plan would include further details on potential costs, locations, and vendors.

“We’re evaluating sitting, we’re evaluating technologies, we’re certainly working on timelines,” Flowers said. “It’s reasonable to expect that that first SMR could be operational in the state in the early 2030s.”

While costs could be high, Flowers said Dominion wouldn’t support any plan that requires the company to hold customers harmless for SMR construction costs.

“These facilities will take time to develop and construct, and if you put in certain constraints that don’t balance the risks associated with that, it’s just going to make it really difficult for the company to deploy SMRs when all 100% of the risk is put on the company,” Flowers. “I think there’s got to be a balance in how that’s deployed, and that’s up for the SCC to determine.”

Potential sites could include current Dominion plants, which have existing infrastructure, as well as former coal-powered facilities, which could make the company eligible for incentives in the Inflation Reduction Act. Greenfield sites, or land that hasn’t been developed, are also under consideration.

“I do expect that initially, our first site will be greenfield. It will be on a site that is co-located with nuclear, at an industrial site, or in the coalfield region,” Flowers said.

Dominion has pointed to numerous benefits SMRs could produce: Their smaller size compared to traditional nuclear plants means they use about one-third less fuel and generate less waste. Tax incentives in the Inflation Reduction Act for carbon-free generation will help reduce costs, Flowers said and can allow increased use of solar and wind by helping maintain reliability.

“The deployment of nuclear enables the further deployment of other renewable generation,” Flowers said. “Without a carbon-free resource that can really fill in the gaps when those resources aren’t generating, it’s going to be difficult to really further the penetration of other resources like solar and wind.”

And although they are smaller than traditional nuclear plants, advocates say SMRs can still produce a lot of power. In an October interview with the Mercury, Rex Geveden, president and CEO of BWX Technologies, said an SMR could power all of Roanoke, a city with a population of about 100,000.

“The idea behind small modular reactors is to take those large plants and literally shrink them down,” Geveden said then.