3 E’s: The Top 3 Climate Action Items for VA Leaders in 2020

Here’s how Virginia’s new climate and clean energy majority can tackle climate change and energy equity right out of the gate.

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Now that fossil-fueled climate deniers and climate obstructionists have lost their seats in Virginia’s capitol, victory for Virginia’s climate action is decisively won. A climate and clean energy majority will very soon run the show in Richmond, and not a moment too soon. In a state already grappling with sea-level rise, extreme weather, and climate-related health impacts across the Commonwealth, they will (and must) lead the way in 2020.

With that fresh climate leadership gaveling into session in January, what are the priority climate items the General Assembly must take right out of the 2020 gate?

Thankfully, the shortlist is an elegant, climate-action triad: the 3 Es of Efficiency, Emissions, and Equity.

First E: Energy efficiency
The 2020 legislature is poised to finally unleash Virginia’s energy efficiency, to directly lower climate-changing smokestack pollution around-the-clock, supercharge a stronger, cleaner economy, and reduce the economic drag of Virginia’s bloated, steadily-increasing household electric bills that are in the Top-10 highest in America (and rising fast);

Second E: Emissions
Richmond can definitively tackle climate change by codifying Governor Northam’s visionary, Dominion-endorsed call for carbon-zero-by-2050, to eliminate all power-plant carbon pollution from Virginia smokestacks and expand an efficient, clean energy economy over the next three decades; and

Third E: Equity
The 2020 legislature must eliminate Virginia’s inequitable, higher-than-average energy burden, by directing Virginia’s RGGI revenue under the DEQ’s now-complete and on-the-books RGGI carbon rule toward energy efficiency investment, to lower not just carbon pollution but also electric bills, particularly for low-income households (rather than, under Virginia's status quo, squander RGGI revenues as an annual cash windfall for Dominion.

By implementing the climate-action Three E’s of Efficiency, Emissions, and Equity, Richmond leadership will single-handedly vault Virginia to a leading climate leadership position among the United States.

The 1st E: Virginia’s First 2020 Climate Action Item Is Energy Efficiency

While Virginia is making, and must continue to make, bold strides in increasing clean renewable energy, past legislatures beholden to electric monopolies and carbon-polluter special interests have let Virginia’s energy efficiency wither on the vine. Those lost decades of mindless inaction on our cheapest energy resource has expensive consequences our pocketbooks feel today: Virginia, and her regulated monopolies, are among the worst energy efficiency performers in the nation. As a predictable result, we Virginians pay among the United States’ Top-10 highest household electric bills, month after month, year after year. If Virginia leaders are serious about a strong, resilient economy, while also directly reducing climate-changing carbon pollution at no net cost, then in 2020 they must finally get Virginia off the energy efficiency sidelines.

It Sounds Good, But What the Heck Is “Energy Efficiency,” Again?

A quick note here on what we mean when we say “energy efficiency,” in the context of lowering electric bills and Virginia’s climate-changing carbon pollution: “energy efficiency” is simply ensuring that we power buildings across our state using the most up-to-date technologies, across all sectors of the economy. It means tuning up our homes, businesses, and multifamily buildings so they -- and our entire economy -- keep humming along while wasting far less energy—and thereby cutting the associated pollution that unnecessary energy demand currently generates from burning fossil fuels. Efficiency means, instead of investing in new, carbon and capital-intensive power plants, or burning costly and wasted fuel at existing fossil plants, we invest instead in: better lighting, better buildings, better insulation, better appliances, and better heating and cooling, all across our economy, in every house, apartment building, office tower, 24-hour convenience store, church, school campus, streetlight, big box store, restaurant, and any and every other place where we consume electricity. 

Add all those technology improvements, at all those places together, and you build a stronger, cheaper, cleaner economy, one that no longer needs to pour billions into burning fossil fuels or, even more needlessly expensive, building new plants that waste even more polluting fuels. And, because efficiency investment is tied so strongly to electric consumption and waste, electric utilities (and their regulators) are in the strongest position to deliver or incentive much of that efficiency technology across their territories.  That's why your electric monopoly likely has a few energy efficiency programs you should tap, like light bulb rebates or home insulation upgrades: investment in those technologies is cheaper than you paying for wasted electricity or, worse, chipping in on a new power plant.

To summarize, energy efficiency is simply long-term investment, not in waste and in new steel-in-the-ground we don't need, but instead in making the entire Virginia economy leaner, cleaner, and cheaper.

Increasing Bills and Increasing Climate Change: The High Cost of Virginia’s Low Efficiency

Virginia’s failure to invest in efficiency, whether by benign neglect or regulated monopoly design, has had a stunning and inequitable effect on our state: not only has pollution in Virginia increased due to our outdated, creaky homes, businesses, and energy technology that are overdue for efficiency upgrades. Just as harmful to our economy and environment, so, too, is Dominion in the middle of a multi-billion, multi-decade building spree of the expensive infrastructure justified by having to power such a leaky, outdated economy: dozens of gas plant units, coal plants in need of subsidies, pipelines, wood-burning power plants, even a multi-billion-dollar, carbon intensive dam project. All of that Virginia investment in continued inefficiency, rather than in efficiency technology, have combined to burst our average state electric bills at the seams: our statewide average bills are the 7th-highest in the nation. Dominion also hopes to tack almost $30 every month to our electric bills in just the next few years. All that economic waste and pollution, while energy use elsewhere in the nation has decreased due to commonsense efficiency.

That inefficient, carbon-intensive drag on Virginia’s economy is perversely inequitable as well: according to the Virginia Poverty Law Center, the “energy burden” on low-income Virginians is higher than most of the nation.

Virginia, It Doesn’t Have to Be this Way (and Soon Won’t)

States that do invest in energy efficiency tell a dramatically different story: Virginia’s fellow RGGI states, for example, that have prioritized energy efficiency to help lower carbon pollution have lower average bills than here in carbon-intensive Virginia. Moreover, their more efficient state economies have grown faster than non-RGGI states.

The economic and climate imperative couldn’t be clearer: 2020’s legislative leaders must get Virginia off the energy efficiency sidelines.

How? Thankfully, it’s simple, with no reinventions of the wheel required.

How Virginia’s Climate Leaders Unleash a Clean, Energy Efficient Economy in 2020

There is a panoply of options for Virginia to finally tap our energy efficiency resources: (1) "decouple" monopoly revenues from bulk electricity sales, so our electric companies don't simply pump out more juice in order to be profitable; (2) require that all available energy efficiency resources are deployed first, before more expensive supply may be built; (3) require a minimum amount of efficiency be deployed every year; and (4) improve the State Corporation Commission's assessment and approval process for efficiency.  And the list goes on.

As just one of these examples, Virginia would be wise to simply do what most states in America already do: require that our electric monopolies, in exchange for their lack of any competition for their customers, protect Virginians’ pocketbooks and our climate by securing a minimum amount of energy efficiency savings each year, particularly for low-income customers.  And if the monopolies fail to deliver those tried-and-true energy efficiency resources to their customers, and simply pump out and sell more unnecessary electricity instead? Disallow the monopolies’ their wish list of more expensive, more profitable “steel in the ground” builds until they do. This “efficiency-first” prioritization is also utilized in a number of states among our nation’s climate leadership.

In short, there is no shortage of already-proven options for Virginia leaders to finally get in on the energy efficiency action.

Efficiency and Renewables: A Match Made in Climate Action Heaven

Increasing Virginia's energy efficiency will not only lower bills and pollution: around-the-clock efficiency improvements boost the carbon-reducing effectiveness of renewable energy like solar and wind. Because conversely, an energy inefficient economy dilutes the carbon-reducing properties of renewables, making their carbon reductions slower, more expensive, and less effective.  Why? Solar and wind reduce carbon pollution by offsetting the more-expensive use of coal and gas plants when renewables produce “free” energy when the sun shines or the wind blows.  In that way, solar and wind indirectly reduce carbon emissions.  If the underlying economy those fossil generators are powering is clunky and wasteful due to a lack of efficiency investment, that much more solar and wind generation is needed to come online to offset that unnecessarily carbon-intensive economy. That watering-down makes those renewables’ carbon mitigation inherently more expensive than is necessary. That larger amount of solar and wind that need to be built in turn take a longer time to build, making those renewable resources’ carbon mitigation slower as well, when we do not have the luxury of time to tackle climate pollution. In sum, that more expensive and slower renewable deployment required to offset the carbon emissions of an inefficient economy make renewables less effective at addressing climate change. Put another way, ramping up energy efficiency means every MW of solar and wind we plow into the system is supplying a “bigger slice” of clean electricity to a smaller overall “pie” of demand.

For Virginia to maximize our significant and ongoing (and very spot on) investment in solar and wind, our leaders must ensure in 2020 that we get our efficiency game together. In the same way we don’t build houses without a foundation, nor can Virginia responsibly embark on long-term climate action without putting a strong foundation of energy efficiency in place in 2020.  Doing so will only make the next two E’s of 2020 climate action items even easier and faster to achieve.

The 2nd E: Virginia’s Second 2020 Climate Action Item Is Emissions Zero by 2050

Virginia’s entry into the RGGI program, finalized by the Virginia DEQ earlier this year and set to begin in 2021, is completed work that will reduce Virginia’s power plant carbon pollution by 30% by 2030.  That carbon reduction trajectory under the RGGI program is a major step on climate action that Virginia already has under her belt.

But the climate crisis already lapping at Virginia’s endangered coast requires far greater long-term carbon pollution reductions. Accordingly, Governor Northam’s excellent roadmap points the way to Virginia’s ultimate climate destination that elegantly continues its existing RGGI requirement: zero power-sector carbon pollution by 2050.

That’s a smart, doable trajectory, as that carbon reduction glidepath essentially continues Virginia’s existing 2030 trajectory, under RGGI, through the following two decades. Codifying Governor Northam’s goal simply requires in the 2030-2040 decade a similar ~35% reduction. Then, a similar ~35% reduction through the following decade, by 2050, when many of our grandchildren will be adults, and already coping with a significantly more hostile environment.

Assuming leaders establish the "First E" foundation of carbon-reducing, economy-boosting energy efficiency, and given that renewable and battery storage prices continue to fall, the Governor’s 2050 goal of zero-carbon emissions is eminently-achievable for Virginia’s climate leadership to enact in statute. Similar to doubling down on efficiency, doing so would also vault Virginia into the top tier of climate leadership among the United States.

In a demonstration of the achievability of zero-carbon-emissions-by-2050, even Virginia’s largest carbon polluter, Dominion, has accelerated its own stated 80%-by-2050 carbon reduction goal by accepting the Governor’s more impactful 100% carbon-emissions-zero climate marker. Indeed, our regulated monopolies can (and should) thrive and be rewarded for embracing the elimination of their carbon pollution. Thriving with energy efficiency and renewable investment would wean Dominion, in the process, from their wasteful, economy-sapping overreliance on unneeded, carbon intensive mega-projects.

In setting out an unambiguous statutory 2050 guidepost of zero-carbon pollution from Virginia power plants over the next three decades, the legislature must also establish an inter-governmental task force to ensure we do so at the lowest-possible cost. That expert group should be charged with identifying the least-cost, most job-boosting way to reach a carbon-free energy future by 2050. That expert process must include an assessment of the maximum and least-cost deployment of carbon and cost-reducing energy efficiency, demand response, and battery storage. Just as essential, the task force must also ensure frontline and low-income communities have equitable opportunities to participate in the economic and environmental benefits of Virginia’s clean, carbon-free future.

And that necessary focus on long-term equity brings us to the last, most immediate opportunity Virginia’s climate leaders must seize in 2020.

The 3rd E: Virginia’s Second 2020 Climate Action Item Is Equity

Virginia’s third, relatively modest, but still crucial climate priority in 2020 is maximizing the equity and effectiveness of Virginia’s forthcoming participation in RGGI. Under the DEQ's final RGGI rule, Virginia will participate in the RGGI auction starting in 2021. Virginia leaders must ensure that the revenues from Virginia’s RGGI participation—in 2021 and every year thereafter—are equitable and largely flow to benefit low-income citizens, rather than to carbon polluters under Virginia’s current RGGI arrangement.

Currently, Virginia’s finalized RGGI rule will allow Virginia’s power-sector carbon polluters—the largest of which is Dominion—to pocket the RGGI allowance revenues. Shocking, yes, but true. (Specifically, under Virginia’s current RGGI regulation, the DEQ returns carbon allowance revenue to Dominion after the RGGI auction is conducted, and Dominion then collects the dollar value of the allowances when they sell that carbon-based power in the wholesale power market, a significant net cash gain for Dominion.)

Allowing Dominion to pocket RGGI allowance revenue is not only an expensive, unjustified windfall for one of the most profitable monopolies in the nation. That arrangement is an unthinkable missed opportunity to increase equity in Virginia: legislative leadership can instead ensure via statute that we seize the opportunity to reinvest the carbon allowance revenues in energy efficiency, particularly for low-income customers.

The success of the RGGI program thus far in Virginia’s sister RGGI states is based on those states’ direction of carbon revenues toward reinvestment in energy efficiency. That efficiency investment not only further reduces carbon pollution; it also significantly boosts the economic activity in those states.  That efficiency reinvestment model has made RGGI a net economic boon in Virginia’s sister RGGI states, generating billions in economic activity over the course of the decade-running program.

Leaders in Richmond must ensure that Virginia’s RGGI participation taps those same opportunities.

To do so, Virginia must prescribe by statute that, rather than let polluters keep RGGI allowance proceeds, we allocate those RGGI revenues to energy efficiency, with a particular emphasis on equity by directing a majority of revenue to low-income efficiency and resiliency programs.

Time for Richmond to Seize this Climate Action Moment with the Three E’s of Efficiency, Emissions, and Equity

These three climate action items—first, jumpstarting energy efficiency to supercharge the economy; second, lower smokestack emissions to zero by codifying Governor Northam’s goal in a smart, job-creating way; and third,  ensuring we direct forthcoming RGGI allowance revenue to efficiency and equity and people rather than polluters—comprise the concise climate triptych that Richmond’s climate leadership must seize in January.  

In doing so, Virginia leadership will vault the Commonwealth from the back of America's climate action pack up to the very front, all while ensuring a stronger, more equitable economy for all.

About the Authors

Walton Shepherd

Virginia Policy Director, Climate & Clean Energy Program

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