The West Virginia Senate Energy, Industry and Mining Committee signed off on establishing a wind and solar reclamation bonding program Wednesday via a bill identical to one already advanced in the House of Delegates.
Senate Bill 492 would establish a minimum bond value of $150,000 and exempt facilities with capacities less than 0.5 megawatts, meaning smaller solar energy producers and those with solar panels on their roofs would be excluded from the reach of the bill.
The bill was referred to the Senate Finance Committee.
The intent of SB 492 is to add a mechanism for the state to reclaim abandoned wind and solar facilities, the same concept behind the state’s coal, oil and gas reclamation programs.
But unlike the state’s coal reclamation bonding program, which is based on a certain dollar amount per acre, Senate Bill 492 would require the state Department of Environmental Protection to determine bond amounts for wind and solar facilities based on predicted costs to potentially reclaim the facility. Operators would be required to submit a reclamation plan to the department.
Owners of wind or solar facilities that started operations before July 1 must submit a plan for decommissioning the facility to the DEP, including the scope of work to be completed and cost estimates for completion, as well as a decommissioning bond by July 1, 2022.
Most existing wind and solar projects already have decommissioning agreements with local county governments, but they would be subject to DEP review under the proposed bill.
Evan Vaughan, deputy director of the Mid-Atlantic Renewable Energy Coalition representing utility-scale wind and solar developers, expressed concern with the bill, saying it was “unworkable for the industry the way it’s constructed.”
Vaughan said it could discourage investment in the state, risking duplicating county-level agreements already approved by the state Public Service Commission.
Jason Wandling, general counsel for the DEP, told the committee that wind and solar projects approved by the Public Service Commission and counties already have decommissioning agreements in place, an observation Vaughan later echoed.
“We don’t want to be cost-prohibitive,” Wandling said. “The bill would allow us to review [the agreements] for sufficiency. But if they look fine, they’re fine then.”
“We’re just trying to protect the interests of our landowners and counties in the state … [and] ourselves from bad players down the road,” said Sen. Randy Smith, R-Tucker, chair of the committee and lead sponsor of the bill.
Sen. Rupie Phillips, R-Logan, vice chair of the committee and fellow bill sponsor, asked Vaughan whether the $150,000 minimum bond would deter wind and solar producers from coming to West Virginia.
“It’s less about the $150,000 specifically and more about the sort of vague authority that DEP would have under this to basically determine decommissioning costs in an ad hoc manner,“ Vaughan replied.
FirstEnergy representative Sammy Gray told the committee the 0.5-megawatt total used as the cutoff point for exempting facilities from the bill is enough to power about 165 homes.
A DEP fiscal note accompanying the bill cautions its implementation would require the department to incur additional personnel costs to complete bonding requirement responsibilities, and that deposits of penalties and interest income are not expected to be at a self-sustaining level for several years.
The House Energy and Manufacturing Committee advanced its version of the same bill, House Bill 2342, to the House Judiciary Committee earlier this month.
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