On the last day of the General Assembly, legislators took limited action on the state budget and passed new legislation to regulate Dominion Energy.

The 2023 General Assembly adjourned on Saturday with a resolution to meet fiscal obligations for the state, but not with the amended version of the biennium budget.

This year was the short session for the General Assembly, running a total of 46 days and passing a total of nearly 1700 bills. Of the bills not acted on, are two that deal with amending the state biennium budget. Legislators could not agree on the $1 billion difference in spending between the House and Senate versions of the budget bills.

BUDGET

At the core of the impasse is how to use surpluses in state revenue. Governor Glenn Youngkin wants to cut the corporate income tax rate and lower the rate for individual tax payers. Senate Democrats want to see the surplus in state revenue used for public education, mental health, and public safety.

According to the state Department of Taxation, the bill would have a negative impact on the general fund revenues for the state of $428 million in the first year increasing to $1 billion in Fiscal Year 2028.

What the General Assembly did pass was a bill that included a few technical amendments to the budget, specifically language to correct an error in funding calculations. This legislation will compensate local schools for a $201 million funding discrepancy that was identified earlier this year. Other technical amendments addressed adjustments to for Retirement and insurance programs for employees in the Virginia Retirement System.

What remains is for Budget Conferees to determine what the second year of the biennium budget will look like. Included in these negotiations are budget amendments requested by legislators around the state and amendments attached to legislation that was passed this session.

One specific example to Hampton Roads is the merger between Eastern Virginia Medical School and Old Dominion University. The Senate version has $10 million included in the proposed budget for the merger. The House budget included an amendment for $80 million to support the merger. This budget amendment is associated with HB 1840 that permits Old Dominion University to provide medical and health sciences education and related research through the teaching hospitals.

ENERGY

Over the past few weeks you may have seen ads or commercials soliciting public input on legislation to determine rates for Dominion Energy in Virginia. These ads come after weeks of negotiations between Dominion and a coalition of businesses and environmental groups that were in opposition of the legislation initially introduced in January. The protracted negotiations came to a conclusion on Saturday when as one of their last acts legislators nearly unanimously passed regulatory reform.

Final language in the regulatory reform bill will:

• Set the company’s profitability margin for two years, after which time the State Corporation Commission (SCC) will have the authority to set the profit margin.
• Incorporate $350 million into base rates for rate adjustment clauses and extra charges for specific projects.
• Rate reviews will be every two years, currently they are every three years.
• Dominion will have the ability to issue $1.6 billion in bonds to manage fuel costs.
• The legislation also will give the SCC an expanded role in rate regulation.
• Residential customers will have an average of $7 per month savings on their electric bill.

RGGI (Regional Greenhouse Gas Initiative)

One of Youngkin’s firsts announcements as Governor was his plan to have Virginia leave the Regional Greenhouse Gas Initiative (RGGI). The Virginia Department of Environmental Quality is currently accepting public comments on the Air Pollution Control Board’s decision to withdraw. Comments will be accepted through March 31, 2023 and may be submitted online by clicking here.

The RGGI is a cooperative, market-based effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia to cap and reduce CO2 emissions from the power sector.

Contact:
Gretchen Heal
Vice President of Governmental Affairs
gheal@hrchamber.com