Renewable Energy and Energy Storage Take Spotlight in Virginia — Troutman Pepper Expands State Regulatory Practice
Last year was transformative for clean energy in Virginia. During its 2020 session, the General Assembly passed the Virginia Clean Economy Act (VCEA), which became effective on July 1, 2020. Among many other things, the VCEA requires: (1) the gradual retirement of carbon-emitting electric generating units; (2) creates a mandatory renewable portfolio standard for Virginia's two largest investor-owned electric utilities (Utilities); and, (3) directs the Utilities to construct or purchase thousands of megawatts (MW) of solar, onshore wind, offshore wind, and energy storage assets.
The VCEA further required the Virginia State Corporation Commission (Commission) to adopt regulations to facilitate the deployment of 3,100 MW of new utility-owned energy storage assets by 2035. Va. Code § 56-585.5 E 5. After proposing regulations and allowing an opportunity for comment, the Commission recently issued an order adopting final regulations, which became effective on January 1, 2021.
The regulations apply to the Utilities and non-Utilities, but not electric cooperatives. The Utilities must construct or purchase a combined 225 MW of energy storage resources by the end of 2025, an additional combined 1,075 MW by the end of 2030, and an additional combined 1,750 MW by the end of 2035. At least 35% of this capacity needs to be acquired from or owned by another party. To meet these targets, each of the Utilities must sponsor at least one competitive solicitation for energy storage projects per calendar year. The Utilities are further directed to file applications for energy storage programs addressing behind-the-meter incentives, non-wires alternatives, and peak demand reductions.
Any non-Utility seeking to construct and operate an energy storage facility in Virginia with a power rating of 1 MW or greater, either on a standalone or aggregated basis, first needs approval from the Commission. Under the new permitting process, the Commission will evaluate safety, reliability, environmental impacts (including environmental justice), and economic development impacts. Applicants may seek waivers of specific permitting requirements that do not apply to their project.
Finally, the regulations require prospective energy storage aggregators to first obtain a license from the Commission and set forth the requirements for doing so. They also address standards that govern marketing by aggregators to potential customers.
To better support its clients as they adapt to these transformational changes, Troutman Pepper formally expanded its state energy regulatory practice to include Virginia. The firm's Virginia-based team is anchored by Andy Flavin in Richmond, a nearly 14-year veteran of the energy industry. Andy has extensive experience in energy infrastructure siting, retail choice, ratemaking proceedings, and other state energy regulatory matters in Virginia and beyond. He also has a deep background in renewable energy and energy storage, and has advised several developers on compliance with relevant state requirements.
The Virginia-based team joins a nationally recognized state energy regulatory practice known for its expertise in rate-making, financing, fuel-cost recovery, renewable resources, power purchase agreements, and energy infrastructure siting, among others. Our state energy regulatory attorneys have assisted clients with everything from litigating bet-the-company cases to assisting with individual issues within rate cases, preparing witnesses, writing briefs, and handling appeals.
"We are thrilled to add enhanced state regulatory capabilities for our energy clients in Virginia," Energy Practice Group Leader Brandon Marzo said. "Our goal is to provide specific state level services to clients across the country."
"We have a long history of representing energy clients before the Commission, the Virginia Attorney General's Office and other executive agencies, and the Virginia General Assembly through Troutman Pepper Strategies," said Richmond Office Managing Partner Brooks Smith. "Our state energy regulatory attorneys work closely with other groups, including Richmond-based Environmental and Real Estate teams, and nearby Federal Energy Regulatory Commission attorneys, to achieve our clients' goals."
"We are committed to growing our state energy regulatory practice and providing the full spectrum of service to our clients in Virginia and beyond," added Smith.