irginia Gov. Tim Kaine wants to revive the Old Dominion’s economy by making it new again.
      His Renew Virginia initiative taps into the power of alternative energy to create jobs, clear the air and build a sustainable community for the state’s citizens.
      If his plan succeeds, it could become a model for the nation. As the new chairman of the Democratic National Committee, Kaine serves as one of the chief proponents of President Obama’s national economic recovery plan — a big component of which is investment in renewable power.
      Kaine knows it won’t be easy. After all, Virginia built its economy on tobacco and coal over four centuries. But the governor’s also not afraid of a fight. He recently signed a bill banning smoking in Virginia restaurants, just before issuing a regulation halting the construction of any more cul-de-sacs in the state’s neighborhoods.
      Whether it was working as a lawyer in Richmond or with Jesuit missionaries in Honduras, Kaine has not been one to choose the easiest path. When he sat down recently in his office in the state capital to discuss his Renew Virginia initiative, the former mayor of Richmond had the look of a man anxious to see a bold plan take root during his final year in office.
      Key planks of his platform include a Clean Energy Manufacturing Incentive, Biofuels Incentive Grant, Renewable Energy System Income Tax Credits, and a Renewable Energy Equipment Sales Tax Exemption.
      So far, the reaction from economic developers and environmentalists has been largely positive. Liz Povar, director of business development for the Virginia Economic Development Partnership, says, "The creation of Renew Virginia gives Virginia brand visibility and allows us to deliver a more cohesive message to the marketplace. When timed with the current federal emphasis on alternative energy production, the Commonwealth’s visibility is even more enhanced and has resulted in a strong pipeline of new leads."
      Skip Stiles, executive director of Wetlands Watch and a member of the Governor’s Commission on Climate Change, added, "These bills, and the rest of Gov. Kaine’s Renew Virginia initiative, start us moving toward the energy generation technologies of the next century, away from the environmental consequences of this century’s technologies, and will grow new green jobs and businesses in the process. They hit the trifecta of energy, environmental and economic needs we face in Virginia."
      During an interview with Site Selection, the governor talked about his energy plan, how it could pay dividends for his state, and how it could impact his own legacy.

Governor Kaine and members of his Cabinet in early April visited Red Birch Energy, the first and only "closed loop system" delivery system of biodiesel in the United States. Red Birch Energy grows the crop, produces the fuel and sells the fuel all in one location, thereby minimizing transportation cost.

      SITE SELECTION: What forms of alternative energy do you consider to be the most promising in Virginia?
      GOV. TIM KAINE: First, certain kinds of bio-diesel. Old Dominion University has done a lot of research in the conversion of algae to bio-diesel, which accomplishes a couple objectives. Algae is a great consumer of carbon, and it helps with energy security. Secondly, Virginia Tech has done a lot of research in carbon sequestration, making coal cleaner. And thirdly, there is nuclear energy. We consider ourselves to have expertise in nuclear technology. AREVA has always had a Lynchburg presence. The Northrop Grumman shipyard builds nuclear carriers and subs. They are doing a joint venture on the shipyard site to build components for nuclear reactors in the U.S. for the first time in 30 years. Fourthly, work is being done in the wind area. The best places for wind energy in Virginia will be off the coast, and that is a more expensive way to utilize wind. So our best alternative energy strategy is bio-diesel. The south side of Virginia has very favorable conditions for producing various kinds of feedstock. Also, I tried to get a tax credit through for incentivizing solar heating and cooling systems, but I could not get that passed. We have to do more work with solar.
      SS: Access to energy is very important to corporate real estate executives. Since this is your platform to speak to them, why should company executives choose to locate their operations in Virginia?
      KAINE: Virginia has had a tradition of very reliable power and relatively low-cost power. If you look at the rates that Virginia businesses pay for power relative to other states, we compare very well. We utilize native sources; we promote more conservation and efficiency. We have a pretty balanced strategy of accomplishing both our reliability and our low-cost energy goals. We deal with businesses that have significant power needs. This means we must have very reliable power, and Virginia stacks up pretty well when compared to other states.
      SS: What elements of your Renew Virginia initiative have the greatest potential for a quick return on investment?
      KAINE: It starts with the creation of a more robust renewable portfolio in terms of energy production. You will get more money if you use renewable sources. And that incentivizes more companies to produce renewable power. Having those renewable portfolio standards encourages businesses that produce renewable power. AES is a Virginia company that produces renewable power around the world but not in Virginia. They have a real expertise in this area. We hope to have them producing right here.
      SS: Sustainable development is a big part of the President’s plan. What role do you see alternative energy playing in the White House’s economic recovery efforts?
      KAINE: It is sizable. The creation of a smart grid and better transmission facilities will give energy users real-time tools to adjust their energy consumption. We need better infrastructure investments to make sure we are not wasting electrical energy once it is produced. The President made pretty clear that two issues that are most important are health care and energy. The stimulus plan has key points on both. There are sizable chunks of dollars in the stimulus bill for both, and these are competitive grants.
      SS: Can you cite examples in Virginia of where you were able to convert energy usage over to alternative power?
      KAINE: We have done some things with state vehicles by executive order. I tried to put in a mandate that all diesel sold in the state would have to include bio-diesel, but the legislature would not approve it.
      SS: There has been a lot of debate about coal. Not everyone is on board with the adoption of "clean coal." What role do you see coal playing in meeting America’s future energy needs?
      KAINE: Fifty percent of our nation’s electrical energy is powered off coal. There is not going to be an energy future any time soon without coal. We need to make the coal portion of the pie smaller and cleaner. We can use more natural gas, wind, solar and nuclear. But it is important that the coal portion get cleaner. That is why carbon sequestration is so important. There are those who say that we will never have clean coal. There were those who said that about nitrogen oxide and sulphur dioxide. The technology has dramatically improved. Why? We invested to do that. We put a cap and trade system in place on sulphur dioxide. If American ingenuity can do that, we can do it with carbon too. We just have to be willing to make the investments.
      SS: Any alternative energy plan must be coupled with an energy conservation plan. Can you cite any examples from Virginia?
      KAINE: We just did get a good bill passed — legislation to make sure the utility companies making energy efficiency investments get a return on that investment. We changed the incentives in the regulation of electric power production to provide known rates of return to create some certainty in the marketplace. Also, we have created sales tax holidays for people who purchase energy-efficient appliances.
      SS: On the energy issue, what will be your legacy?
      KAINE: We did not have an energy plan when I became governor. When I ran for governor, I received only one question about energy. We have a statewide energy plan now. We have a statewide greenhouse gas reduction plan. In January 2007, I said it was foolish to do electricity deregulation. I said we needed to re-regulate this industry and we did. Today, we regulate the production and pricing of power different than any other state in the nation. So, the energy thing that I will be most known for, I believe, is putting the brakes on deregulation and doing the right thing for the environment.
      SS: Overall, what will your legacy be? What would you like to be most remembered for as governor of Virginia?
      KAINE: I have a hard time answering that. I had goals for myself as an executive, goals for my interaction with the legislature, and political goals. My executive goals were to deliver high-quality government. Governing Magazine in 2008 said we were the best managed state in America. Forbes said three years in a row we were the best state for business. Education Week said in 2007 that we were the best state for a child to be born and to get an education. That is hard to beat. I’ve had to take $6 billion out of an $80-billion budget without a tax increase and I’ve done it, and people haven’t chased after me in the streets with pitchforks. There is no glory in doing a whole lot of belt-tightening, but I feel we have done it in a very honorable way. We approved $1.5 billion in new construction on college campuses last year. In December of 2007, even Democrats said the economy is very soft and we’re not sure you should be doing this. I said this is exactly the time we should be doing capital projects. We have done mental health reform, foster care reform, pre-kindergarten expansion and conservation expansion. Politically, we have been able to win a lot of races, the most notable of which was that we were able to deliver Virginia in the 2008 Presidential Election.