Virginia Gov. Terry McAuliffe (D) has signed off on legislation that temporarily freezes rates for Dominion (NYSE:D) and other investor owned utilities doing business in the state and also fast-tracks plans for dramatic growth of solar energy.
In a statement issued Feb. 24, McAuliffe said Senate Bill 1349 has been one of the most extensively debated measures approved by the 2015 General Assembly, but it ended with a compromise that all parties can live with.
The legislation relaxes some State Corporation Commission (SCC) reviews and oversight over the next few years in exchange for a greater commitment to solar power, energy efficiency and contributions to a utility-funded energy assistance fund for low-income individuals.
“When this bill was introduced, I expressed concerns about several of its provisions,” McAuliffe said. “However, after working with the General Assembly to make several key changes, I have concluded that this legislation represents a net positive benefit to Virginians and to our economy,” said Gov. McAuliffe. “This bill will make a dramatic expansion of Virginia’s renewable energy economy possible, and will lead to lower energy bills for many families who may be struggling to keep up with their energy costs today.”
In advance of the bill being into law, Dominion had already announced plans to develop a number of large-scale solar projects in Virginia that would amount to 400 MW of in-state solar being built by 2020.
The legislation also specifies that the state should sign off on most power plant retirements by electric utilities.
The legislation also affects state integrated resource plans and state efforts to have utilities adapt to federal guidelines for carbon dioxide (CO2) reductions from the electric power sector.
In addition to Dominion, the American Electric Power (NYSE:AEP) Appalachian Power subsidiary is the other significant investor owned utility in Virginia.
The SCC review will be suspended for several “test periods” between January 2015 and December 2019 for Dominion Virginia Power and from January 2014 and December 2017 for Appalachian Power, according to a legislative summary.
“Except for early retirement plans identified in an integrated resource plan filed by September 1, 2014, an electric utility shall not permanently retire an electric power generation facility from service during the Transitional Rate Period without first obtaining the SCC’s approval, which may be granted if the SCC determines that the retirement is reasonable and prudent,” according to the summary.