It was not the most reported part of Governor Glenn Youngkin’s State of the Commonwealth Address on January 13, but for the first time in four years the Republican took direct aim at the renewable energy mandates his predecessor adopted. He labeled them a “quagmire.”
“The Virginia Clean Economy Act, passed in 2020, simply is not working,’ he said, referring to Democrat Governor Ralph Northam’s 2020 legislation to eventually end the use of all hydrocarbon fuels by Virginia utilities. He continued:
“It is driving up rates, driving down reliability, and constricting our economic growth. 2020 forecasts assumed very little power demand growth because leadership planned for very little economic growth and very little job growth” Those assumptions are out the window now with the data center industry driving unprecedent demand for electricity. Because of that:
“We must stop decommissioning our baseload generation, build more natural gas generation, lots of it, build small modular reactors and, yes, finish the projects currently underway.” His declaration that existing hydrocarbon plants should not be closed, and that we need even more of them, completely reverses Northam’s law.
As important as it was for Governor Youngkin to express those thoughts, before the day was out one of his appointed agency heads was putting his words into action. Glenn Davis, a former legislator who now is director of the Department of Energy, testified to a Virginia Senate committee in favor of a bill that would have greatly weakened VCEA.
Senate Bill 902 would have eliminated a key enforcement provision within the law, the imposition of fines on Dominion Energy Virginia or Appalachian Power Company if they fail to achieve the wind and solar energy targets in the VCEA. All but one Democrat on that committee voted to kill it, of course, but Davis’s advocacy for it on behalf of Youngkin was a welcome sea change.
During his testimony, Davis revealed that Dominion had told him fines for noncompliance, called “deficiency payments” in the statute, were imminent. At $45 for every megawatt of green energy not produced or every renewable energy certificate not purchased, he said the total fine could reach $450 million. The utility would proceed to collect that from its ratepayers. Frankly, whether Dominion pays a fine or pays for renewable energy certificates (RECs) from some outside company, ratepayers are spending money for nothing.
A subsequent examination of records at the State Corporation Commission did not turn up a prediction from Dominion about what specific amount the deficiency payments would cost. But the utility has told the regulators that it may owe fines this year in some amount. More details on the deficiency payment issue can be found here. The bottom line is, despite the building program underway for new solar and wind facilities, the VCEA renewable targets cannot and will not be met with utility-owned or utility-leased generation. It must buy outside RECs or pay fines or some combination of both.
One reason for their failure to meet targets is the poor performance of Dominion’s existing solar facilities, how seldom they actually operate and generate power (and RECs of their own.) This chart was buried in a Dominion filing. Only a few times have the facilities operated even 25% of the time, and many do not reach or barely exceed 20% of the time. Yet the VCEA demands miles and miles of new solar.
This session legislators have entered a stunning number of energy issue bills, probably as many proposals as the three previous sessions combined. Along with the traditional bills dealing with utility regulation and mandates for various non-carbon emitting sources, potential regulation of the growing data center industry is addressed in a host of proposals. Democrats in particular are appalled that the data center explosion makes it even more obvious hydrocarbon energy must stay.
The extra deep flood of bills does not change the political equation. Based on action in the first week of the short session, Democrats remain unified in their attachment to the VCEA. They will likely reject all of the proposed changes to it, along with new versions of previous efforts to remove Virginia from the California electric vehicle mandate regime or to prevent local bans on the use of natural gas.
There are two other major bills seeking to amend the VCEA. Senate Bill 1160 from Senator Mark Obenshain, R-Harrisonburg, would replace the current renewable portfolio standard in the VCEA with a focus on “emissions intensity,” getting more energy from plants that burn hydrocarbons. But it wouldn’t end their use, and it wouldn’t continue the favorable treatment VCEA provides to wind, solar and battery projects. It has a House companion, House Bill 2552.
Senate Bill 1077 from Senator Mark Peake, R-Lynchburg, is a more direct repeal of large sections of the VCEA. For good measure it also repeals the statutory provisions related to the Regional Greenhouse Gas Initiative and creates incentives for nuclear power. House Bill 2185 is similar.
For their part, Democrats have different priorities. Still pending are proposals to make it easier for solar developers to get the land use permits they need and overcome local opposition, discussed earlier. They include House Bill 2126 and Senate Bill 1190. Many who are otherwise inclined to support individual rights to develop property view those bills as an overreach by state government.
The greatest overreach of all, however, is a pending proposal to impose massive retroactive cash fines on every major company that made or distributed hydrocarbon fuels in Virginia, covering a 30-year time span ending in 2024. See House Bill 2233 or Senate Bill 1123. As detailed here, New York State has already passed this. The money would then be spent by the state through an “Extreme Weather Fund” to pay for flood control, storm damage repairs, and even cash grants to individuals. Inevitably, those costs would also be borne by future fuel customers.
But the stalemate in Richmond should hold both ways. As Democrats have the votes in the chamber to defeat legislation that rejects the climate catastrophe narrative, likewise a Republican governor has the veto power to stop bills that make things worse.

Steve Haner is a Senior Fellow for Environment and Energy Policy. He can be reached at Steve@thomasjeffersoninst.org.