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With dozens of Fortune 500 companies looking to run their facilities on renewable energy, Virginia has a golden opportunity to ensure that these investments — and the jobs that come with them — are being made in the Old Dominion State.
In late February, a Nestlé USA executive met with Governor McAuliffe’s ‘Executive Order 57 Workgroup’ to call for greater access to renewable energy and energy efficiency for large energy users. Nestlé has long-running manufacturing facilities in Danville and King William and recently announced it is relocating its headquarters from California to Arlington, Virginia. The ‘EO 57 Workgroup’ is exploring ways the Commonwealth can reduce carbon pollution and utilize clean energy in the electricity sector.
Unfortunately, businesses are currently unable to access cost-competitive clean energy in Virginia. In November 2016, eighteen major businesses—including Nestlé, Microsoft, Walmart, Equinix, and IKEA—asked state lawmakers for more cost-effective options for sourcing renewable energy. Companies wishing to procure clean energy through third-party financing, cost-competitive renewable energy tariffs, direct arrangements, or community solar have a difficult time doing so because of wide-ranging barriers.
The General Assembly, State Corporation Commission and Governor’s office all have key roles to play in removing these barriers so that forward-looking companies like Nestlé can procure as much renewable energy they’d like.
Nestlé has set ambitious clean energy goals because of the cost savings and stability these low-carbon energy resources provide; fossil fuels, by contrast, are prone to volatile price swings. Nestlé has committed to sourcing 100 percent of its global electricity use from renewable energy. For a company with operations in 85 countries grossing over $92 billion in sales, this will be no easy feat. However, the company is already achieving 100 percent renewable energy use in the U.K. and Ireland, while Nestlé Mexico is meeting 80 percent of its electricity need with wind power. We would expect that the company plans to move in the same direction with its U.S. operations, which includes 87 factories spanning 47 U.S. states.
Utilities like Dominion Resources should be taking notice, too. Virginia is a key data center hub in the U.S., and many of the companies building those data centers—LinkedIn, Akamai, and Salesforce among them—want to use green energy to power them.
Virginia also has a major opportunity to reap cost-savings benefits from greater investments in energy efficiency. According to Ceres’ Benchmarking Utility Clean Energy Deployment: 2016 report, Virginia’s largest electric utility, Dominion Resources, ranks dead last among 30 of the largest U.S. electric utilities in annual incremental energy efficiency investments. Energy efficiency is low-hanging fruit, and utilities in other states are investing in solutions that provide major cost savings to consumers and businesses.
Governor McAuliffe has demonstrated strong leadership by setting an eight percent renewable energy target for state agencies and by issuing Executive Order 57, which directs a workgroup to issue carbon reduction recommendations to the Governor by May 31st. The key question is what will come out of the E0 57 workgroup. Environmental advocates have proposed to cap and reduce carbon emissions by a rate of 2 percent annually. This proposal appears to be well within the bounds of existing executive authority and would provide policy certainty for businesses and investors who are looking to increase clean energy.
It is encouraging that the General Assembly appears to be open to broadening access to renewable energy—the formation of the ‘Rubin Workgroup’ being one such positive sign. The Assembly recently passed a bill (SB 1393) that would launch a utility-administered community solar-like program for smaller-scale electricity customers. While this program wouldn’t be viable for large corporate energy purchasers, it shows that lawmakers are willing to come to the table to try to identify solutions.
Virginia is moving in the right direction, but the Commonwealth can still make far greater progress to spur clean energy. Doing so will benefit both the Commonwealth’s business community and its economy.
Brianna Esteves is a senior associate on the state policy team at Ceres.