Governor Amends, Vetoes and Signs Energy, Environment Bills

Some of the larger energy and environment bills from the 2024 session — regarding small modular reactors, preserving tree canopy and testing for “forever chemicals” known as PFAS — met different fates after review by Republican Gov. Glenn Youngkin.

On Monday, the deadline for Youngkin to take action on pending legislation, he proposed amendments to House Bill 1491 from Del. Israel O’Quinn, R-Washington and Senate Bill 454 from Sen. Dave Marsden, D-Fairfax, which would adjust how utilities could recover costs for early development of a small modular reactor, or SMR, from ratepayers. SMRs are an electricity generation source that has yet to be deployed commercially in the United States.

Virginia lawmakers pass competing proposals to encourage small modular reactor development

Also on Monday, Youngkin vetoed two bills that would have enacted a statewide expansion of some localities’ authority to conserve trees during the homebuilding process and require trees be replaced after it.

Earlier in the session, the first-term governor signed a bill that will create a framework for the state to identify PFAS chemicals in drinking water sources. Public concern about PFAS increased following the federal government’s proposals to reduce their health impacts on humans.

Legislators will reconvene on April 17 to take action on any of Youngkin’s amendments or vetoes, which can be overridden with a two-thirds majority, a threshold Democrats can’t meet on their own in both chambers, despite controlling them both.

SMRs

The SMRs legislation was introduced by their patrons as a way for both of Virginia’s largest utilities to get prepared to use the electricity generation source, even before it’s available.

Under the Virginia Clean Economy Act, both Dominion Energy and Appalachian Power Company must decarbonize their grid by mid-century. Youngkin has pointed to SMRs to provide carbon-free, round-the-clock power when renewable sources like solar and wind may not be able to. That thinking has met with concerns about expected electricity demand from data centers and a question over renewable energy’s ability to meet needs.

The bill from Marsden applied to Dominion and allowed the utility to recover from ratepayers the costs associated with readying a site for an SMR, as well as the cost of federal licenses. The legislation went to the governor with a rate adjustment clause to cap the fee tacked on to a typical residential customer’s monthly bill at $1.75.

But Youngkin’s amendments lowered that cap to $1.40. His suggested changes also added language to prevent Dominion from recovering any costs incurred prior to July 1, and allow only 20% of costs incurred after July 1 to be recovered through generation and distribution rates, or base rates, which could undergo more scrutiny by the State Corporation Commission that regulates utilities.

“I think everything the governor did was a-ok,” Marsden said Tuesday. “I think the governor listened to some of the folks that had ratepayer concerns. All I want for nuclear is to get the process started.”

Environmental and ratepayer advocates had opposed the bill because it allowed utilities to recover costs for the technology that hasn’t been used in the U.S. yet, pointing to the recent canceling of a proposed SMRs plant in Idaho.

From the vantage point of Clean Virginia,  a Charlottesville-based group funded by millionaire Michael Bills to counter Dominion’s influence in the General Assembly, the governor’s amendments may be a step in the right direction. But a big change of the bill abandoned a “used and useful” way to allow utilities to recover costs for generation sources that actually become operable and produce electricity.

“If we remove the check on the utility by guaranteeing cost recovery without requiring a product, then expect the utility to exploit the provision,” said Dan Holmes, legislative director for Clean Virginia.

Dominion spokesperson Aaron Ruby said Tuesday it was, “too early to know” what SMRs development costs might amount to.

“The legislation simply gives us the option to seek cost recovery” from the corporation commission, Ruby said. “Doesn’t guarantee it, and we haven’t sought it.”

The bill from O’Quinn was similar to Marsden’s, but applied to Appalachian Power, the state’s second-largest electric utility that serves Southwest Virginia. But O’Quinn’s version didn’t contain any cost recovery caps and didn’t allow for the recovery of federal licensing costs, which can run into millions.

Youngkin proposed a substitute for the bill that included a cap of recovering no more than $25 million annually, and that required the total project development costs recovered through the rate adjustment charge to customers not exceed $125 million.

Also on the energy front, Youngkin signed bills that increase the number of customers who can participate in a shared solar program in Dominion territory, while creating a similar program in Appalachian Power territory.

Tree canopy

Virginia has two statutes regarding tree canopy. One  gives localities in Northern Virginia the option of requiring certain developments maintain a percentage of trees during the development process. The other gives localities within the Chesapeake Bay watershed or ones that have a population density of 75 people or more within a square mile the option to require trees be replaced during the development process.

A bill from Del. Betsy Carr, D-Richmond, would’ve expanded the Northern Virginia-based conservation abilities to the rest of the state, while a bill from Del. Patrick Hope, D-Arlington, would’ve also expanded the replacement abilities statewide. Both were vetoed by Youngkin.

Environmental groups had pushed for the statewide conservation and replacement powers because of the benefits trees provide to the environment, such as reducing sediment erosion and pollution runoff and mitigating heat islands.

“I feel like it was a tremendous missed opportunity,” said Ann Jurczyk, Virginia director of advocacy and outreach with the Chesapeake Bay Foundation, one of the major backers of the bills. “We can’t put our hand in the sand and can’t act like climate change isn’t happening all around us.”

Carr’s bill on conserving trees didn’t have the support of the Home Builders Association of Virginia because the group felt it could throttle the amount of housing in a development by limiting the amount of land homes can be built on, thereby increasing housing costs. Hope’s bill on the replacement of trees did have consensus.

Bills to preserve trees during home building awaiting action from governor

“There needs to be some ability to work with the locality and be less rigid,” said Andrew Clark, vice president of government relations with the Home Builders Association of Virginia, in a previous interview with the Mercury.

Still, Youngkin vetoed both, while noting that the the Department of Forestry states 60% of the state is already within the Bay watershed, despite that limitation not being a requirement of the current conservation law.

“Virginia’s current law on tree canopy ordinances strikes a balance between the ability of a locality to hinder residential and commercial development with increased costs and the ability of a locality to preserve tree canopy,” Youngkin wrote in his veto memo for both Carr’s and Hope’s proposals.

Hope said he couldn’t “even put into words how disappointed he was,” in the governor’s actions that came “out of the blue.”

“We spent an inordinate amount of time working with all parties to reach consensus,” Hope said. “To learn this bill was vetoed after all the time and effort put into getting stakeholders, who normally do not agree, to agree and fully support, was really disappointing.”

Youngkin did sign two other proposals regarding tree canopy, one from Del. Rip Sullivan, D-Fairfax, that reduces the amount of trees a developer may need to replace if a locality can review plans prior to finalizing designs, as well as the creation of urban tree forestry plan under the Department of Forestry. Sullivan’s bill was the result of a previous stakeholder group reaching common ground.

“I’m just hoping whatever comes out of [the new plan] we’ll be able to execute on those recommendations,” Jurczyk said.

PFAS

Following the U.S. Environmental Protection Agency proposing rules to limit how much PFAS are in drinking water, Virginia has taken some steps to determine how prevalent they are in the state.

Dubbed “forever chemicals” because of their long-lasting chemistry bonds that can take up to a millennia to degrade, PFAS are used in several products ranging from cookware to clothing to firefighting foam.

Legislation this year from Del. Sam Rasoul, D-Roanoke, and Sen. Jeremy McPike, D-Prince William, created a system for public water treatment facilities to self-report excessive levels of PFAS to the Virginia Department of Health.

If facilities found “significant” amounts of PFAS in their water sources, they’d be required to report those discharges to DEQ. DEQ would then identify potential regulatory action to enact if needed, with the goal of protecting public health.

“This is a major start for something that is going to impact us for decades,” McPike said in a phone interview. “Getting the data collection moving was really the most important point.”

Rasoul added, “In Virginia we are starting to understand the threat of PFAS and are putting together mechanisms, like the establishment of the PFAS Expert Advisory Committee, for the state to be able to do more to protect drinking water going forward.”

Youngkin’s administration had backed the proposal during the legislation process, along with Virginia Municipal Drinking Water Association, despite initial concerns from environmental groups who wanted more mandated reporting from users and manufacturers of PFAS to identify their introduction into the environment directly at the source.

“Important, complex legislation best gets done with reasonable compromise by and support of various stakeholders,” Chris Pomeroy, an attorney and lobbyist for the VMDWA said Tuesday.

The environmental groups, except for the Southern Environmental Law Center, came around to support the bill because of its tiered system of finding the chemicals amid questions of DEQ’s capacity for testing.

SELC Staff Attorney Carroll Courtenay still maintained that earlier versions of bills that identified the chemicals further upstream were preferred.

“It’s good that DEQ will be taking steps to track down certain sources of PFAS that are affecting our communities’ drinking water,” said Courtenay, “But we can’t stop there. We need to be leveraging all available tools to stop PFAS pollution at its source.”

This article was updated with comments from Del. Sam Rasoul, D-Roanoke.

by Charlie Paullin, Virginia Mercury

Virginia Mercury is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Samantha Willis for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.