Virginia: McDonnell announces 2012 energy policy agenda

As part of his effort to make Virginia the “energy capital of the East Coast,” Gov. Bob McDonnell issued his energy policy agenda for the 2012 General Assembly session on Thursday, including money to develop wind energy off the coast, a fund to begin converting the state’s fleet of vehicles to alternative fuels, and incentives for utilities to invest in renewable energy research.

“Only by aggressively developing all types of energy and removing bureaucratic hurdles to this development will we be able to meet our energy needs and reduce our nation’s dependence upon foreign sources of energy,” McDonnell said.

The governor has included $500,000 in his two-year budget proposal to help the state collect data on the federally designated “wind energy area” off the Virginia coast and make that information available to developers.

He is calling for the creation of an Alternative Vehicle Conversion Fund, which would be help pay for the cost difference between traditional fuel vehicles and alternative fuel vehicles or the conversion of vehicles in the existing fleet to alternative fuel. The money would come from a portion of federal dollars the state receives for congestion mitigation and air quality improvement.

Under another proposal, utilities would receive a renewable energy certificate for investing in research and development of renewable energy. The certificate could be used by a utility company to reach up to 20 percent of its voluntary renewable energy goal.

Beth Kemler, state director for the Chesapeake Climate Action Network, a non-profit organization that promotes alternative energy development to fight climate change, said the renewable energy certificate proposal is really a way for utilities to increase their profits by making it easier for them to meet renewable energy goals. Utilities receive incentive bonuses through the state’s voluntary renewable portfolio standard for meeting their goals.

Kemler pointed out that Dominion Virginia Power is receiving a roughly $76 million performance incentive from rate payers over the next two years while Appalachian Power company will receive approximately $15 million.

“These efforts are clearly aimed at creating extra profits for companies, not creating new jobs or clean energy,” Kemler said.

The governor also wants to let utilities bypass the State Corporation Commission in seeking approval for installing 138 kilovolt electric transmission lines by going to localities instead. The change is needed, McDonnell said, because such lines are often installed for “economic development projects,” and the lengthy process of getting approval from the SCC can “sometimes be a barrier to the success of projects.”

In a related measure, natural gas companies would be allowed to run pipes to economic development projects if the project developers commit to a five-year contract to use natural gas. Currently these utilities are not allowed to invest in infrastructure improvements that cost more than what customers will be paying for natural gas.

“We have worked to identify existing obstacles to the expansion of natural gas and electric services to locations across the commonwealth that need these resources to attract new businesses and jobs,” said McDonnell’s energy policy adviser, Maureen Matsen. “If Virginia can streamline the burdensome and time-consuming approval processes and regulations in a responsible way, it will allow the expansion of services to locations that can attract new business to create jobs and expand our economy.”


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