The West Virginia Senate overwhelmingly passed a bill Tuesday that would establish a reclamation bonding program for wind and solar facilities in the state.
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.
Supporters of SB 492 say its intent 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.
“It’s an in-case, worst-case scenario bill,” Sen. Eric Tarr, R-Putnam, said speaking in support of the bill on the Senate floor.
Unlike the state’s coal reclamation bonding program, which is based on a certain dollar amount per acre, SB 492 would require the 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.
SB 492 will now come before the House of Delegates after the Senate passed it in a 30-4 vote. Only Democrats Stephen Baldwin of Greenbrier County, the minority leader; Bill Ihlenfeld of Ohio County; Mike Romano of Harrison County; and Mike Woelfel of Cabell County, the minority whip, voted against the legislation.
The bill’s lead sponsor, Sen. Randy Smith, R-Tucker, said the bill guards against the potential for future abandonment of wind and solar facilities adversely impacting West Virginia, arguing the state should learn from its plethora of abandoned strip mines and gas wells.
“It’s just responsibility,” Smith said. “I can’t believe that anybody would be against putting something in place to make sure that we don’t relive our past sins.”
Romano and Woelfel contended the bill was an unneeded deterrent to solar and wind development in West Virginia, and an ill-advised way to signal support for the struggling coal industry.
“Putting unnecessary hurdles in front of wind and solar generation moves West Virginia backwards in the eyes of the world,” Romano said.
Per the bill, owners of wind or solar facilities who started operations before July 1 would have to submit a plan for decommissioning the facility to the Department of Environmental Protection, including the scope of work to be completed and cost estimates for completion, as well as a decommissioning bond by July 1, 2022.
The bill gives the department the power to assess an administrative penalty of up to $10,000 for failure to submit a decommissioning bond and an additional penalty of up to $500 per day for each day a wind or solar facility fails to submit the bond afterward.
Most existing wind and solar projects already have decommissioning bond agreements in place, but they would be subject to state environmental regulator review under the proposed bill.
Evan Vaughan, deputy director of the Mid-Atlantic Renewable Energy Coalition that represents utility-scale wind and solar developers, including some that do business in West Virginia, voiced concerns with the bill during the Energy, Industry and Mining Committee meeting at which the committee advanced the legislation last week.
Vaughan told the committee the bill risked duplicating county-level agreements already approved by the state Public Service Commission. He added the bill would subject solar and wind developers to unwelcome uncertainty stemming from the new requirement of Department of Environmental Protection approval.
Vaughan said after Senate passage of the bill Tuesday that his coalition fears the bill’s $150,000 bond minimum would make financing wind and solar projects in the state more difficult.
“We are afraid that this bill would create uncertainty that would make it more difficult to finance projects in the state because there’s an arbitrary $150,000 [bond amount] number and very few guardrails in the legislation as to how bond value would be determined,” Vaughan said. “We are concerned about finance entities that would be bankrolling projects in the state see[ing] a big question mark with this bill with regard to what bond costs would be for a project.”
Jason Wandling, Department of Environmental Protection general counsel, told the Energy, Industry and Mining Committee last week that the department doesn’t want its bond oversight to be cost-prohibitive.
A department 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.
Bedington Energy Facility, LLC, a Delaware subsidiary of Colorado-based Torch Clean Energy, plans to invest $100 million to build a 100-megawatt solar facility on 750 acres at the former Dupont Potomac River Works explosives manufacturing facility in Berkeley County. A 90-megawatt solar farm in Raleigh County is expected to be operational in late 2022 or 2023, according to the project website.
Construction has started on the Black Rock Wind project, a 115-megawatt wind farm spanning Grant and Mineral counties expected to start commercial operations late this year and increase the state’s wind power by 15%.
Annual nationwide energy consumption from renewable sources exceeded coal consumption for the first time in more than 130 years in 2019, according to U.S. Energy Information Administration data.
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