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Clean energy bank could help funnel $300M to Virginia projects

Speaker Scott chats with Surovell and Herring
Shaban Athuman
VPM News File
Speaker of the House Don Scott Jr., D-Portsmouth, chats with Sen. Scott Surovell, D-Fairfax, and House Majority Leader Charniele Herring, D-Alexandria, during a reconvene session on Wednesday, April 17, 2024 at the Virginia State Capitol in Richmond, Virginia.

Younkin has until May to approve $10M in initial funding.

A bill that would set up a bank to better position the state to receive federal clean energy loans was sent back to Gov. Glenn Youngkin’s desk by legislators.

Senate Majority Leader Scott Surovell (D-Fairfax) sponsored the proposal, which would establish the Virginia Clean Energy Innovation Bank and fund it with $10 million. He’s said during hearings on the bill that it could help funnel more than $300 million in federal loans authorized by the Inflation Reduction Act to the state.

The federal dollars can be used for a range of projects — solar panels on schools, methane capturing on landfills, electric transmission system upgrades, offshore wind, repurposing oil and gas pipelines for hydrogen, nuclear generation projects and more.

Youngkin amended the bill after legislators sent it to him in March, adding a re-enactment clause, essentially asking lawmakers to vote on the measure again in 2025.

“If we do this re-enactment clause, basically Virginia’s $300 million or more is going to go to other states,” Surovell said on April 17, shortly before Senate Democrats — alongside Sen. David Suetterlein (R-Salem) — rejected Youngkin’s amendment.

The state-run bank would help projects seeking federal loans stand out. In a December 2023 meeting of the state Commission on Electric Utility Regulation, Tom Hucker, of the U.S. Department of Energy’s Loan Programs Office, said Congress wanted to limit the availability of taxpayer subsidized loans to only projects that had some state support — or “some skin in the game.”

“The state’s contribution to projects like this can be very low,” Hucker said. “As low as 3% to 5% of a project cost — and we can finance, by law, up to 80% of project cost.”

That’s where the proposed CEIB would come into play. It would operate as a State Energy Financing Institution. Hucker said that Virginia might already have several entities that qualify as SEFIs, including Virginia Housing and Virginia Energy.

Surovell’s proposed bank would be governed by a 12-person board of directors: four citizens appointed by the Senate Rules Committee, four citizens appointed by the speaker of the House of Delegates and one citizen appointed by the governor. The director of the state Department of Energy, the CEO of the Virginia Economic Development Partnership Authority and the state treasurer would fill the remaining seats.

An earlier version of the bill called for five citizen members, all appointed by the governor and also included the CEO of the state Nuclear Innovation Hub as a board member.

Under the bill, qualifying projects include any that would:

  • substantially reduce greenhouse gas emissions; 
  • reduce energy use without diminishing service; 
  • increase the deployment of renewable or noncarbon emitting energy projects, energy storage systems, district heating, smart grid technologies or microgrid systems
  • replace existing fossil-fuel-based technology, such as gas stoves, with an end-use electric technology like induction stoves; 
  • support the development and deployment of electric vehicle charging stations and associated infrastructure, electric buses and electric fleet vehicles; 
  • reduce water use or protect, restore or preserve the quality of the commonwealth's surface waters or those of the Chesapeake Bay;
  • Or incentivize customers to shift demand in response to changes in the price of electricity or when system reliability is not jeopardized.

When asked for comment on the proposal, a Youngkin spokesperson wrote the following to VPM News: “The Governor has until May 17th to act on legislation returned to his desk by the General Assembly.”
Lawmakers will reconvene in May for a special session to hash out the state budget, including the $10 million being proposed to fund the CEIB.

The loan dollars expire in 2026.

Patrick Larsen is VPM News' environment and energy reporter, and fill-in host.
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