FinLogic FinLogic Quantitative Think Tank Center|Virginia Lawmakers Elect Pivotal Utility Regulators To Oversee Energy Transition

An energy regulation expert and FinLogic FinLogic Quantitative Think Tank Centera consumer advocate in Virginia are poised to become pivotal decision makers in shaping the state’s efforts to transition away from fossil fuels.

The Virginia General Assembly unanimously voted for Kelsey Bagot, a lawyer and former advisor at the Federal Energy Regulatory Commission, and Samuel Towell, a veteran of the state’s Attorney General’s office, to fill long-term vacancies at the three-member State Corporation Commission. Both will be in place by April, marking a key step forward for plans to decarbonize Virginia’s electric grid — even as the governor and utilities try to maintain or expand fossil fuel investments. 

“This is probably the most important decision that 99.9 percent of Virginians have no idea was made,” said Michael Town, executive director of the Virginia League of Conservation Voters, a political advocacy group that lobbies for environmental and conservation priorities.

The SCC oversees several industries, including banking and insurance, but it has had a higher profile in recent years regulating the state’s monopoly utilities, Dominion Energy and Appalachian Power Company. The SCC sets company profit margins, reviews customer electricity rates and vets project proposals and long-term planning documents. The SCC’s decisions are binding but can be appealed to the state’s Supreme Court.

In 2020 the state legislature made the commission the lynchpin of its landmark climate law, the Virginia Clean Economy Act. The law requires Dominion Energy and Appalachian Power to phase out all fossil fuels and reach 100 percent renewable energy generation by 2045 and 2050, respectively. Whether that actually happens may depend on decisions by Bagot, Towell and Jehmal Hudson, the other commission member. 

The commissioners “are really at the center of this transition,” said Joel Eisen, law professor and energy regulation expert at the University of Richmond.

Neither Bagot nor Towell agreed to an interview with Inside Climate News. A review of their backgrounds and prior statements offers insight to how they will approach the job, and indicates that the pair are well positioned to address challenges.

Bagot has roughly a decade of experience reviewing energy markets and regulation at the federal level and in the private sector. A graduate of Harvard Law, she worked at private law firms and the FERC on issues including evolving energy systems and what factors should be involved in setting fair energy rates. As a corporate counsel and at FERC, Bagot said she grappled with expanding carbon markets, increased renewable energy demands and navigating a federal agency that could not preempt state regulations.  

Since 2022, she has been senior attorney at NextEra Energy, which operates the utility, Florida Power and Light, and an extensive renewable portfolio. Bagot told lawmakers ahead of her election on Jan. 23 that she plans to be open minded and “tough but fair to everyone.” She also told the Loudoun Times-Mirror newspaper on Jan. 24 that she would recuse herself from cases involving a tentative NextEra Energy plan to build a transmission line in Loudoun County.

Towell has extensive experience in navigating Virginia’s laws and regulations. A University of Virginia law graduate, he was deputy attorney general for civil litigation in Virginia from January 2017 to November 2021 and oversaw consumer protection, civil rights and state insurance and utility regulatory departments. In that job, he was in regular contact with the SCC, including on energy rate cases. He currently is associate general counsel at Smithfield Foods, a meat processing company. 

Towell’s work at times put him at odds at times with Dominion Energy, most notably in 2018 when then-Gov. Ralph Northam signed a law that prevented the SCC from ordering refunds when Dominion overcharged customers, as long as the company was spending above a certain threshold on renewable energy projects and grid modernization. Towell told the Associated Press at the time that the state’s goals for renewable investment could be achieved without lawmakers restricting the SCC’s ability to lower rates.

“Neither candidate is an advocate, and neither is a hack,” Town, from the League of Conservation Voters, said before the legislative approval. Town’s organization is one of the largest environmental nonprofits in the state with a political arm and lobbies for pro-environment policies and political candidates. He said he trusted Bagot and Towell to be fair even if he might disagree with their final decisions. That support was echoed by other environmental and energy proponents, including the Sierra Club and Clean Virginia.

In a statement to Inside Climate News, Gov. Glenn Youngkin, who has noted that Virginia’s energy landscape is at a crossroads, said he was pleased the commission will be operating at full capacity.

A Dominion Energy spokesperson declined comment, saying in a statement that they “do not comment on executive or legislative elections.”

Putting the Clean Economy Act Into Practice

The SCC is bound by laws passed by the legislature. That has led to criticism, at times, that a project’s cost-effectiveness was over-prioritized in its vetting process. State Sen. Scott Surovell, a member of a committee that chose the final candidates, described some prior SCC decisions as “hostile” to renewable energy.

The 2020 Virginia Clean Economy Act adjusted the SCC’s role. The law now requires that SCC members consider a project’s energy efficiency targets, the social cost of carbon, and how a proposed project fits the timeline to decarbonize the grid. The VCEA also sets targets for specific renewable energy technologies. It requires Dominion to construct or purchase 5.2 total gigawatts of offshore wind; about half of this will be achieved from the Coastal Virginia Offshore Wind project, which received its final federal permits earlier this year. The law also requires both Dominion and Appalachian Power Company to pursue 2,700 megawatts and 400 megawatts, respectively, of storage capacity for renewable energy over the next decade.  

“The way [the commission considers those requirements] will have an impact on whether the clean economy act is implemented well or not,” said Will Reisinger, an attorney specializing in energy law and who represents several clients with cases under SCC review.

“This is where the rubber meets the road,” said Cale Jaffe, an environmental law professor at the University of Virginia, noting the SCC will have to review a Dominion Energy plan to build a natural gas plant, to be used for periods of high energy demands, in Chesterfield.

If approved, the gas plant would begin operating in 2027. But under the VCEA, it would have to close in less than 20 years in order to meet the state’s broader renewable goals. That’s a remarkably short lifespan, according to Jaffe, who said similar plants operate for a minimum of 30 years and some for as long as 50. The SCC will have to decide if the project makes economic sense on the shorter timeline, he said.

“We’re very aware our energy system is going through a multibillion-dollar transition” nationally and within the state, said Surovell, the state senator whose committee weighed the qualifications of the candidates.

 A Step Forward for Customers

The commission seats sat empty for nearly two years due to political gridlock driven by partisan disagreement over candidates, moving forward only when Democrats won majorities in both chambers last year.

The selection process provided only one public hearing, fueling concerns that new members would be too friendly to the utility companies. Dominion Energy is one of the largest political donors in the state. According to an analysis from the watchdog group Energy and Policy Institute, all but two lawmakers responsible for selecting the SCC members listed Dominion among their top donors. Critics of Dominion have said for too long it was able to dictate regulatory policy, blocking the SCC’s full oversight.  

Many commission observers, including watchdog groups, said they were pleasantly surprised with Bagot and Towell.

“Consumers are in a better position now to drive the future of energy policy,” said Shelby Green, the researcher at the Energy and Policy Institute who conducted the donor analysis.