Despite the continuing impact of the COVID-19 pandemic, including lockdowns, vaccinations, and containment and relief efforts, the 2021 Session of the Virginia General Assembly produced a number of environmental protection initiatives.
Building on the 2020 Virginia Clean Economy Act (VCEA), many of the most recent measures dealt with permitting, siting, and taxation of renewable energy or energy storage systems and regulating the impacts of such facilities while also limiting greenhouse gas emissions.
Water Quality Standards and Natural Gas Pipelines
SB 1311 (McClellan) requires an applicant for a natural gas transmission pipeline greater than 36 inches (inside diameter) to submit in its application a detailed erosion and sediment control plan and stormwater management plan (Plan) subject to Department of Environmental Quality (DEQ) review and approval. Upon receipt of such application, the bill directs DEQ to issue a request for information from the applicant about how the Plan will address activities in or related to upland areas. DEQ must consider such information in developing a draft certification or denial, and in issuing additional notice to the public. SB 1311 also prohibits DEQ and/or the State Water Control Board from expressly waiving certification of a natural gas transmission pipeline of greater than 36 inches inside diameter under § 401 of the federal Clean Water Act and requires a decision on a certification request within a reasonable time pursuant to federal law.
SB 1265 (Deeds) authorizes the DEQ to conduct inspections of the land-disturbing activities related to construction of any natural gas transmission pipeline equal to or greater than 24 inches (inside diameter). Current law authorizes inspection only if such inside diameter is greater than 36 inches. The bill also specifies certain instances that may give rise to inspection and authorizes DEQ to issue a stop work order (SWO) for every work area in Virginia in the event that DEQ finds that such activities are causing, or likely will cause, substantial adverse impacts on water quality on a repeated, frequent and widespread basis.
Power Plant Closures
HB 1834 (Subramanyam)/SB 1247 (Deeds) requires each owner of a large carbon-emitting power plant to provide notice to relevant localities and state agencies about the decision to close the plant within 30 days of making such decision. The bill also requires localities in which such facilities are located, and the planning district commissions in those localities, to conduct public hearings regarding the impending closure within six months of receipt of notice. The bill requires the Division of Energy to maintain a public website listing the facilities subject to the requirements of the bill and anticipated closure dates. As part of a utility’s integrated resource plan, the bill requires utilities to submit a facility retirement study for its carbon-emitting facilities and to disclose the study to relevant localities and state agencies.
Mines and Mining-related Measures
HB 2213 (Guzman) directs the Secretary of Natural Resources, the Secretary of Health and Human Resources, and the Secretary of Commerce and Trade to establish a workgroup to study gold mining in the Commonwealth. The bill requires the study to be conducted in consultation with the Virginia Council on Environmental Justice and appropriate stakeholders including experts in mining, hydrology, toxicology, and other fields; environmental organizations; representatives of potentially affected communities in localities with significant deposits of gold; and residents of Native American communities in such localities. The bill provides that the workgroup shall evaluate the impacts of gold mining on public health, safety, and welfare; evaluate whether existing air and water quality regulations are sufficient to protect air and water quality from the mining and processing of gold; evaluate whether existing bonding, reclamation, closure, and long-term monitoring of sites for such mining or processing are sufficient; and report its findings to the General Assembly by December 1, 2022.
HB 1899 (Hudson)/SB 1252 (McPike) sunsets the Coal Employment and Production Incentive Tax Credit and Coalfield Employment Enhancement Tax Credit after tax year 2021 and prohibits the allocation of such credits on and after January 1, 2022. The bill provides that, if Coal Employment and Production Incentive tax credits were earned prior to January 1, 2022, the credit holder may claim the credits in subsequent tax years pursuant to the applicable carryover requirements of current law. However, such credit holders would be limited to claiming $1 million in carryover credits per taxable year. The bill further directs the Department of Mines, Minerals and Energy to convene a stakeholder process and to report by December 1, 2021, on recommendations for how the Commonwealth can provide economic transition support to the Southwest Virginia coalfield region.
Renewable Energy (Solar) Development
HB 1925 (Kilgore) establishes the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund and Program (Fund Program or Program). The bill provides that no allocation of funds shall be made unless matching federal funds are available. The Program will be administered by the Department of Mines, Minerals and Energy (DMME) for the purpose of awarding grants to renewable energy projects that are located on abandoned coal mine properties or other brownfields. Grants are to be awarded on a basis of $500 per kilowatt of nameplate capacity from renewable energy sources that are located on previously coal-mined lands and $100 per kilowatt of nameplate capacity from renewable energy sources that are located on brownfields. Under the Fund Program, no more than $10 million shall be awarded to any previously coal-mined property and no more than $5 million provided to any single brownfield project. No more than $35 million shall be allocated per year by the Program. Of the $35 million, $20 million shall be reserved for abandoned coal mines. If less than $20 million is distributed to such projects, the remaining funds may be reallocated to brownfield efforts. The bill also provides that DMME shall, in consultation with stakeholders, develop a handbook for renewable energy and energy storage development on eligible properties and requires DMME to submit an annual report to the General Assembly regarding administration of the Program.
HB 2034 (Hurst)/SB 1420 (Edwards) provides that for pilot programs under which an owner or operator of a renewable energy generation facility sells electricity to an eligible customer-generator through a third-party power purchase agreement, both jurisdictional and non-jurisdictional customers ─ including schools, churches, and local governments ─ may participate on a first-come, first-served basis. This brings access to third-party power purchase agreement financing to non-jurisdictional utility customers for renewable clean energy.
SB 1258 (Marsden) provides for solar projects erosion and sediment control plan review. The bill requires any locality that does not operate a regulated municipal separate storm sewer system, and for which the DEQ did not administer a Virginia Stormwater Management Program as of July 1, 2020, to notify the DEQ if it decides to have the department provide the locality with (i) review of a required erosion and sediment control plan and (ii) a recommendation on the plan’s compliance with the requirements of the Erosion and Sediment Control Law and the State Water Control Board’s regulations for any solar project and its associated infrastructure with a rated electrical generation capacity exceeding 5 MW. The bill provides certain procedural steps for the DEQ and the Virginia Erosion and Sediment Control Program authority for a locality to take in reviewing the plan and making recommendations and decisions. The DEQ shall adopt a fee schedule and charge fees for conducting such reviews.
Nutrient Credits: Use by Facility with Certain Stormwater Discharge Permit
HB 1982 (Bulova) authorizes a facility that has been issued a Virginia Pollution Discharge Elimination System (VPDES) permit regulating stormwater discharges to acquire, use, and transfer nutrient credits for compliance with any waste load allocation established as an effluent limitation in its VPDES permit. Current law allows only a facility registered under the Industrial Stormwater General Permit to use nutrient credits for such purpose.
Wetland and Stream Mitigation Banks: Proximity of Impacted Site
HB 1983 (Bulova) provides that when a water protection permit applicant is required to purchase wetland or stream mitigation bank credits but no credits are available (i) in any mitigation provider’s primary service area or (ii) at a cost of less than 200 percent of the price of credits available from a fund dedicated to achieving no net loss of wetland acreage and functions, the applicant may purchase or use credits from a mitigation provider’s secondary service area. The bill also contains requirements with which the permit applicant must comply in order to purchase or use such credits from a secondary service area, including minimum tree canopy requirements.
Defeated Measures Which May Return
Electric Utility Re-Reregulation ─ Notwithstanding the newly-established Triennial Review process commenced for Phase I Incumbent Electric Utilities in 2020 and for Phase II Electric Utilities in 2021, no fewer than five bills to reform electric utility regulation were introduced in the 2021 General Assembly Session by Senator McClellan and Delegates Jones, Ware, Bourne, Helmer, Hudson and Tran. Although these measures failed to garner support, re-regulation and reform efforts will surely return, at least to some degree, next session.
Environmental Justice Inter-Agency Working Group ─ Similarly, HB 2074 (Simonds)/SB 1318 (Hashmi) failed to advance during the 2021 Session. The bills sought to establish the Interagency Environmental Justice Working Group (Working Group) as an advisory council to the Governor. The bill directed each of the Governor’s Secretaries to designate at least one Environmental Justice Coordinator to represent the secretariat as a member of the Working Group. It would have required the Working Group to focus in its first year on the environmental justice of current Virginia air quality monitoring practices and would have expanded the Working Group’s focus in subsequent years by directing state agencies to adopt an agency-specific environmental justice policy requiring evaluation of the environmental justice consequences of any covered agency action. The bill would also have required consideration of the environmental justice consequences or cumulative impacts of the administration of all Virginia regulations, and sought to codify on a state-wide basis public participation plans for the residents of environmental justice communities and fenceline communities potentially affected by a covered agency action. Finally, the bill would have required each local government adopting or reviewing a comprehensive zoning plan to identify certain environmental justice communities, objectives, and policies in considering such a plan. Although the bill passed both chambers, it was scuttled in conference committee, making it possible (if not likely) that at least some of its provisions will resurface in 2022.