Virginia groups struck a deal on biomass plants. Amendments from Youngkin are more controversial.

As the General Assembly prepares to reconvene Wednesday to vote on bill amendments recommended by Republican Gov. Glenn Youngkin, legislation that would allow the continued use of biomass to generate electricity is firing up some last-minute debate.

That legislation, House Bill 2026 from Del. Israel O’Quinn, R-Bristol, and Sen. Lynwood Lewis, D-Accomack, would get rid of retirement dates for biomass facilities outlined in the Virginia Clean Economy Act, which seeks to decarbonize the electric grid by 2050.

Biomass is the term used for wood products and waste burned to produce electricity. In Virginia, only “woody” products have historically been burned to generate electricity, although a 2022 law now allows biowaste to be turned into natural gas.

Today, four power plants operated by Dominion Energy in Virginia burn biomass to produce electricity. Under the Virginia Clean Economy Act, three of them must close by 2028. Appalachian Power Company doesn’t have any biomass facilities operating in Virginia. Northern Virginia Electric Cooperative operates an additional plant in Halifax County that isn’t subject to the 2028 closure date.

The Virginia Forestry Association initially pushed for the removal of the retirement dates for the remaining plants to allow the continued burning of biomass, which the industry says provides an outlet for waste.

“Biomass is an important outlet for our sawmills,” said Corey Connors, executive director of the Virginia Forestry Association, at a January hearing. “It allows us to do good forest management in the forest with wood that would otherwise be considered waste wood.”

A Dec. 6 report from the Virginia Department of Forestry reached a similar conclusion, stating: “Utilizing forest residuals for energy can also prevent this material from being burned on-site in the forest in preparation for reforestation.”

While initially wary of the legislation because of the possibility it could encourage clear-cutting of forests that sequester carbon, environmental groups backed off their opposition this winter following an agreement with the forestry industry to set up a work group to study the future of biomass in the state. The final bill that passed the General Assembly also got rid of a provision that would have classified electricity from NOVEC’s Halifax biomass plant as renewable.

Southern Environmental Law Center Senior Attorney Will Cleveland said the bill that passed the General Assembly earlier this year “will not increase biomass generation in Virginia.”

“When you’re negotiating a bill with somebody, and they make some concessions based on your concerns, you can’t really continue to oppose the bill,” he said.

But Republican Governor Glenn Youngkin’s amendments, which restore the provision classifying the Halifax plant’s electricity as renewable as well as make broader changes to state energy policy that environmental groups say would slow Virginia’s transition to renewables, have revived their opposition.

“Generally speaking, there will be efforts to oppose those amendments,” said Cleveland.

Some of those efforts come from the forestry and agriculture industries, which on March 7 sent Youngkin a letter opposing changes to the legislation.

“This legislation went through a lengthy negotiating process with stakeholders from the environmental community,” wrote the Virginia Forestry Association, Virginia Loggers Association, Virginia Agribusiness Council, Virginia Forest Product Association, and Virginia Farm Bureau. “As a part of that agreement, which led to the bill’s passage with overwhelming support, our coalition members have agreed to oppose any further amendment to the language as passed by the General Assembly.”

Biomass bill

The bill that passed the General Assembly unanimously this session would do three things.

First, it would remove from the Virginia Clean Economy Act language that states Dominion and Appalachian Power must retire all biomass plants not co-fired with coal by the end of 2028. For Dominion, that includes plants in Altavista, Hopewell, and Southampton but excludes the Virginia City Hybrid Energy Center that co-fires biomass with coal.

Second, the bill would allow biomass to be classified as renewable if it meets specific definitions of forest-related materials like mill residues, agriculture-related materials like orchard trees, and solid “woody waste” like landscape trimmings. That classification would make industrial facilities, including the WestRock paper mill in Covington and the International Paper mill in Franklin, eligible to sell credits for the electricity they produce from those types of biomass for their own use.

Lastly, it would create a workgroup under the Department of Forestry to study the carbon footprint of biomass electricity generation.

Connors called the final legislation a “thoughtful agreement balancing the concerns expressed by the parties involved.”

Many of the concerns environmentalists have about biomass center on its carbon impacts, as well as air and water quality issues linked to wood pellet facilities.

According to a study from the SELC, the harvesting of hardwood for the production of wood pellets used in biomass electricity generation is likely contributing to overall declines in the ability of trees to sequester carbon in a region containing three pellet mills along the Virginia-North Carolina border.

“When you are burning wood to generate electricity, generally speaking, you can’t replant trees at a fast enough rate to make that energy truly carbon neutral,” Cleveland argued.

Governor’s amendments

Despite compromise between environmental and forestry groups, Youngkin is recommending amendments to the bill that would resurrect Republican proposals defeated by Senate Democrats during the session.

One amendment would alter the schedule for when carbon-emitting plants need to close by requiring utilities to petition the State Corporation Commission for their closure and have regulators conduct a grid reliability analysis. Another would define hydrogen and nuclear as renewable sources of energy.

Advocates for the amendments say they will ensure grid reliability.

“The Governor believes strongly that the SCC should have the final say in whether a utility retires a facility because maintaining our grid reliability is of utmost importance,” said Youngkin spokeswoman Macaulay Porter. “This view is shared by PJM, Virginia’s regional transmission organization, who has warned of the risks posed by accelerating generation retirements without proper regulatory oversight”

But critics say the VCEA already allows the State Corporation Commission to intervene in any decision that threatens reliability. Furthermore, they argue alternative electricity generation sources like hydrogen haven’t been proven to be viable yet.

A more technical but still controversial change would allow the Halifax biomass plant operated by Northern Virginia Electric Cooperative to qualify as renewable and sell credits for the electricity it produces.

The Halifax biomass plant’s 49.9-megawatt generation capacity is capable of providing enough energy to power the equivalent of 16,000 homes, the co-op’s website states.

The facility only uses waste wood products, primarily in the form of wood chips, and doesn’t accept clear-cut, whole logs, said NOVEC President and CEO David E. Schleicher.

When the Virginia Clean Economy Act was crafted, Virginia’s 13 electric cooperatives — member-owned electricity providers that supply power primarily to rural parts of the state — were not required to comply with the law’s renewable portfolio standards, the timelines for how much of a utility’s electricity must come from renewable sources like solar and wind.

To meet those standards, Dominion and Appalachian Power are required to obtain renewable energy certificates, or RECs linked to energy being produced by renewable sources.

The VCEA, however, prohibits the utilities from counting toward their renewable goals any energy from biomass plants that were operating in Virginia as of 2020 and supply most of their power to the grid.

Youngkin’s amendment would let a “waste-wood” biomass plant operated by a utility other than Dominion and Appalachian Power “that also has online at least 148 megawatts of resources producing renewable energy” count toward the large utilities’ renewable portfolio targets.

No other electric cooperatives in Virginia operate waste-wood biomass plants.

Porter said that “currently, NOVEC is the only utility that is unable to sell RECs generated by renewable energy.”

“This amendment gives them parity with other utilities and increases the number of RECs in the marketplace to help lower prices, thereby lowering the cost of REC purchases that are passed on to ratepayers,” she said in an email.

Schleicher said the amendment “will support jobs and economic development in Southside, strengthen the REC market in the Commonwealth, and increase the use of renewable energy – all laudable objectives that we hope will win bipartisan support.”

But environmental groups said they are concerned NOVEC would be able to benefit from selling the RECs from the Halifax biomass plant to Dominion and Appalachian Power without being required to follow the renewable portfolio standard commitments outlined in state code.

“I don’t see any reason why Dominion customers and Appalachian customers, who have seen their costs go up in recent years, should be required to underwrite NOVEC’s investment decisions that have turned out to not be very good from an economic standpoint,” Cleveland said. “It doesn’t do well in the markets unless it gets a subsidy.”

Dominion declined to comment on this story. Appalachian Power, which said it is neutral on the topic, said the policy would only affect its customers if the utility chooses to purchase RECs from NOVEC.

“Depending on price, the RECs could be cheaper than investing in solar and wind,” Appalachian spokeswoman Teresa Hall said in an email.

by Charlie Paullin,
Virginia Mercury

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