Will the House put the brakes on the electric school bus bill again?

A school bus in Richmond. 

For the second year running, Senate legislation that would expand an electric school bus program being piloted by Dominion Energy is losing momentum in the House of Delegates.

The bill was abruptly put on hold for the day Tuesday as it came up for a final vote in the House after passing the Senate earlier this month. Small groups of Republicans have consistently opposed the school bus electrification proposals. However, opponents say the current bill is also facing resistance behind the scenes from Democratic delegates unhappy with the vote by a Senate committee Monday to kill a slate of utility reform bills, though none would discuss that dynamic on the record.

Like its 2020 counterpart, Senate Bill 1380 is being patroned by Sen. Louise Lucas, D-Portsmouth. It would allow school districts to partner with Dominion Energy, the state’s largest electric utility, to purchase a total of 1,250 electric school buses without having to pay the higher costs of electrification. In return, Dominion would be allowed to use the bus batteries at other times to help store energy on the grid. 

Supporters, which include Richmond and Albemarle public schools and the Virginia Association of School Superintendents, have touted the dual benefits of the plan to not only help Virginia meet ambitious energy storage targets established by last year’s Virginia Clean Economy Act, but also improve air quality.

Katharine Bond, Dominion vice president of public policy and state affairs, during committee hearings said that the bus batteries would collectively be capable of storing 275 megawatts, a tenth of the target of 2,700 megawatts of storage Virginia has set for Dominion to develop by 2035. 

The utility, citing the U.S. Environmental Protection Agency’s emissions calculator, has estimated that every replacement of a diesel bus with an electric one will eliminate 54,000 pounds of greenhouse gas emissions annually. Conversion could also provide cost savings for districts: Dominion quoted a statistic from Thomas Built Buses that operations and maintenance costs for electric buses can be up to 60 percent less expensive than for their diesel counterparts, and Lucas said that experiences elsewhere had shown districts could save roughly $7,000 per bus annually when fuel cost reductions were also factored in. 

Lucas during one Senate Commerce and Labor hearing described the proposal as a “win-win,” while reminding committee members that the Senate voted for a similar proposal twice in 2020. 

“I’m open to addressing reasonable concerns in the body, but the Senate has a position on the bill that I strongly suggest that we not renegotiate with ourselves,” she said. 

But concerns last year over the proposal’s costs have reappeared this session, mobilizing opposition from several key environmental groups like the Virginia Conservation Network, the Sierra Club’s Virginia chapter and the Southern Environmental Law Center. 

“I’m sure we all support electric buses,” Bob Shippee of Sierra Club Virginia told the House Labor and Commerce Committee Feb. 11. “I don’t think any of us are arguing about the economic and health benefits of electric buses. I think it’s mostly around cost issues and efficiency issues in terms of is this the best way to increase battery storage as the VCEA does dictate?”

School divisions will not bear the increased costs of purchasing electric buses, which Bond said could have a sticker price of $300,000 or more each. Dominion ratepayers will pick up the tab, which the utility has estimated will cost roughly $12 per residential customer per year. 

Under Lucas’ bill, the bus purchases would be found to be in the public interest, and the utilities would be allowed to recoup “all reasonable and prudent program costs” from ratepayers. While Dominion is already allowed to create electric school bus programs — and has already launched a 50-bus pilot that has rolled out 14 buses to Virginia school districts — these provisions would smooth regulatory approvals needed by the utility to recover program costs from customers. 

Christine Noonan of Reed Smith, lobbying on behalf of Dominion, defended the program’s costs as being mandated by the Virginia Clean Economy Act, referring to its 2,700-megawatt energy storage target. 

“An increase in cost to that effect in carrying out the requirements of the VCEA was inevitable, and I think this is an excellent step in that direction that not only benefits the ratepayer but also benefits our schoolchildren and the environment,” she said.

Opponents, though, have questioned whether utility deployment of electric school buses is the most cost-effective path to either meet the utility’s storage targets or pay for electric buses. 

Peter Anderson, Virginia policy director for Appalachian Voices, pointed out that under the current state regulatory structure, Dominion would be entitled to recover not only the costs of the bus program, but also a return on equity for investors. 

“Our concern is we’d be having (rate)payers pay the profit margin on top of the charging infrastructure, whereas these buses and the charging infrastructure could be financed by a more equitable method,” he said. 

Some form of taxation, he suggested, would be an alternate way to fund school bus conversions.

“Raising revenue for electric buses is at least a progressive way to pay for needed investment because taxes are theoretically based on people’s ability to pay,” he wrote in a text message. “Electric bills, by contrast, are not. Everyone has to pay them to keep the lights on, and having Dominion own pieces of this infrastructure and add the cost plus (return on equity) to electric bills is the most inequitable way to pay for them.” 

In the House, several delegates expressed incredulity at environmental groups’ opposition.

“It seems to me that we all know and we accept that as we implement new cleaner energy sources, for example solar and wind, that we know there’s going to be an associated cost that goes with bringing that infrastructure online, and I’m kind of wondering why this is different,” said Del. Stephen Heretick, D-Portsmouth. “It seems to me what we’re hearing from some of the environmental groups is more of a focus on cost with respect to electric buses than we heard with respect to our efforts to bring green renewable energy — solar and wind predominantly — to Virginia. I’m trying to reconcile the positions I’m hearing here.” 

Will Cleveland, an attorney with the Southern Environmental Law Center, said environmental groups have argued vigorously before the State Corporation Commission that regulators should be scrutinizing all renewables costs, including in hearings this fall on Dominion’s long-range Integrated Resource Plan. 

“It has become very clear to us who are trying to decarbonize our power and transportation sectors that we cannot do that successfully if we are not mindful of the costs it entails,” he said. “And when we have a utility structure that does not allow the commission to make sure costs are as low as possible, then we have to push for it here at the General Assembly, which is what we have been doing.”

The House is expected to vote on Lucas’ bill Wednesday. The senator’s office did not return a request for comment about the legislation’s prospects.

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