VEPCO v. SCC
201172
| Va. | Jul 15, 2021Background
- Constellation NewEnergy contracted (Dec 2019–Feb 2020) to sell "100% Renewable Electricity" to Virginia retail customers and planned to source some supply from a pumped-storage hydroelectric facility.
- Former Code § 56-576 (pre-July 1, 2020) defined "renewable energy" to include energy "derived from ... falling water." Constellation argued pumped storage fits that phrase.
- The General Assembly enacted the Virginia Clean Economy Act (VCEA) in 2020, amending Code § 56-576 effective July 1, 2020, to state that renewable energy "does not include ... electricity generated from pumped storage," except run-of-river hybrids.
- Constellation petitioned the State Corporation Commission (SCC) for declaratory relief that pumped storage qualified as renewable under the former definition and that the 2020 amendment would not bar reliance on pumped-storage supply for existing contracts.
- The SCC ruled that (1) pumped storage fell within the former statutory phrase "derived from ... falling water," and (2) the amended definition would not be applied retroactively to contracts executed before July 1, 2020. VEPCO appealed.
- The Virginia Supreme Court affirmed: it agreed pumped storage met the former definition and that the amendment did not retroactively alter preexisting contractual rights.
Issues
| Issue | Plaintiff's Argument (Constellation) | Defendant's Argument (VEPCO) | Held |
|---|---|---|---|
| Whether electricity from pumped-storage hydroelectric facilities qualified as "renewable energy" under the former Code § 56-576 definition (pre-July 1, 2020). | "Falling water" includes water discharged from an upper to lower reservoir in pumped storage; thus pumped storage is energy derived from falling water and is renewable. | Pumped storage is effectively energy storage (more like a battery) and not the same kind of naturally sourced generation contemplated by "falling water." | Court: Plain language unambiguous; "derived from ... falling water" includes pumped storage. Affirmed SCC. |
| Whether the 2020 amendment excluding pumped storage from the definition of renewable energy applied to contracts executed before July 1, 2020 (i.e., whether the amendment operates retroactively or prospectively). | The amendment should not retroactively alter contractual rights; Constellation may rely on the former definition for pre-amendment contracts through their duration. | The amendment should govern prospectively and thus, from its effective date, preexisting contracts must comply with the new definition. | Court: Absent manifest legislative intent to the contrary, statutes are presumed prospective; amendment did not expressly apply retroactively or displace existing contractual rights. SCC correctly refused retroactive application. |
Key Cases Cited
- Bailey v. Spangler, 289 Va. 353 (2015) (Virginia law disfavors retroactive application of statutes absent manifest legislative intent)
- Gloucester Realty Corp. v. Guthrie, 182 Va. 869 (1944) (rights accrued under former law are governed by original statute unless later statute expresses contrary intent)
- Union Dry Goods Co. v. Georgia Pub. Serv. Corp., 248 U.S. 372 (1919) (state regulatory changes governing future rates apply prospectively to sales after effective date despite existing contracts)
- Energy Resvs. Grp., Inc. v. Kansas Power & Light Co., 459 U.S. 400 (1983) (Contract Clause analysis and framework for assessing impairment of contractual obligations)
- Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (test for determining whether statutory change has retroactive effect)