Author Archives: James A. Bacon

Landfill, Recycle or Close in Place?

Coal ash disposal underway at Dominion’s Possum Point Power Station. Photo credit: Dominion Virginia Power

  • As debate intensifies over how to dispose of coal ash, Dominion Virginia Power says it is following the same approach as many other utilities: closing the coal ash ponds in place.
  • Environmentalists want to hold Dominion to a higher standard set by other utilities in the Atlantic Coastal Plain, where many are recycling and landfilling the ash. 
  • Outside experts say the optimal plan for each power plant depends on its unique circumstances.

Executives at Dominion Virginia Power thought they were being good corporate citizens a year ago by acting quickly to implement Environmental Protection Agency regulations governing the disposal of coal ash. When the EPA published its new rules, the electric utility promptly announced plans to create a long-term storage solution for the containment ponds at its Bremo and Possum Point power stations.

The EPA had enacted the rules in response to the rupture of a Tennessee Valley Authority coal ash pond in 2008 and a spill from a Duke Energy facility in 2014, both of which caused extensive contamination of nearby rivers. The incidents sparked national outrage and stoked demands for measures to prevent another disaster. The fixes that Dominion detailed in its requests for waste-water and solid-waste permits put the company on the fast track to eliminate any chance of a spill from either power plant.

But the power company is not feeling the love. Environmental groups have contested company plans on the grounds that they would not prevent traces of heavy metals from leaching into the groundwater and eventually into rivers and streams. Denouncing Dominion for ravaging the environment, protesters marched on the state capital. Every other day seems to bring another controversial headline.

Rob Richardson, a Dominion spokesman on the coal ash issue, expressed the bewilderment felt by many within the utility. Dominion has been forward-thinking on coal ash, he said. While other companies submitted plans in late November 2016, Dominion unveiled its plans late in 2015. Instead of winning praise and moving expeditiously through the permitting process, the company has been subjected to an endless litany of criticism. Said Richardson: “We’ve been taking a beating.”

Environmentalists have moved beyond the original goal of stabilizing the coal ash. Through lawsuits, press releases and news stories, critics have changed the terms of debate. Dominion may be solving one problem — the threat that breaking levies might send large volumes of slurried coal ash spilling into the James or Potomac rivers — but critics says its plans to consolidate the coal ash in existing, unlined containment pits won’t halt the leaching of heavy metals into the groundwater.

The company did act quickly, but only to take advantage of a loophole in the EPA rule that allowed utilities to close “inactive” ponds with fewer monitoring requirements, says Greg Buppert, a Southern Environmental Law Center (SELC) attorney who has represented the Virginia Chapter of the Sierra Club and local river-keeper organizations in lawsuits against Dominion. The EPA has since eliminated that loophole.

“Dominion is ignoring an emerging industry standard in how utilities are dealing with these ash ponds,” he says. “Throughout the region, utilities are excavating unlined ponds, putting the ash in landfills, and in many cases recycling the coal ash.”

Stung by charges that it isn’t living up to the standard set by other utilities, Dominion recently released data culled from EPA filings. In truth, the company says, its closure practices fall well within the norms of the electric-utility industry. Only a minority of coal ash ponds are being landfilled. Many are being closed in place, as seen in the chart below.

coal_ash_closures

Number of coal ash ponds, by company, that are being closed in place. (Click for more legible image.)

Atlantic Coastal Plain. Image source: Wikipedia

But the chart doesn’t come close to settling the debate. Buppert counters that industry-wide comparisons aren’t relevant. Dominion’s power plants are located in the Atlantic Coastal Plain, a low-lying area where groundwater lies close to the surface. Hydrological conditions are different there than in the Piedmont and mountain regions where many coal plants are located. Utilities in the Carolinas and Georgia have agreed to landfill and recycle their coal ash rather than bury it in pits. Dominion has proposed instead to consolidate its coal ash in unlined pits — one at Bremo and one at Possums Point — and cap them with polyethelene lining and a two-foot layer of dirt. Dominion’s proposal, he argues, does not prevent groundwater from migrating through the pits and picking up leached metals from the ash.

In turn, Dominion argues that comparing its power plants to those of Duke Energy, Santee Cooper, Georgia Power and SG&E (SCANA) on the basis of superficially similar hydrology is flawed thinking. Each power plant is unique. Each site has distinctive topographical and hydrological features. Measures that make sense for one site don’t necessarily make sense for another.

Dominion insists that its approach protects the environment without the huge expense of landfilling the coal ash, which could run up the cost to $3 billion. Furthermore, trucking the coal ash to a landfilled location would take many years to complete, leaving the public little safer from potential spills during the interim than they were before. Indeed, literally thousands of truck trips through residential areas would elevate the risk of traffic accidents while diesel fumes and dust pose a nuisance and health risks.

Who’s right? It gets complicated. Strap on your face mask and buckle your scuba tank for a deep dive into the arcane discipline of coal ash disposal.

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Tommy Norment: W&M’s Man in the State Senate

Sen. Tommy Norment appears with former William & Mary President Gene Nichol.

In this 2007 photo, Sen. Tommy Norment appears with former William & Mary President Gene Nichol. Nichol presented him with the Prentis Award for civic involvement benefiting the college and community. Said Nichol: “Our College—like our community and our Commonwealth—is beyond fortunate to have Tommy Norment in our corner. William and Mary couldn’t ask for a more devoted advocate in Richmond.”

Does Sen. Tommy Norment, R-Williamsburg, have a conflict of interest regarding legislation affecting William & Mary?

Like many Virginia lawmakers, the Senate Majority Leader attended two Virginia institutions of higher education – the Virginia Military Institute and the College of William & Mary school of law. Unlike his colleagues, he is employed by a Virginia university. He works as an adjunct professor at William & Mary, which pays him $60,000 a year. That’s on top of his $50,000-a-year state senator’s salary and earnings from his private law practice with Kaufman & Canoles.

Sen. J. Chapman Petersen, D-Fairfax County, objected when a half-dozen tuition-reform bills he and other senators sponsored were routed from the Senate higher education subcommittee to the Senate Finance Committee, where they have died. Norment is co-chair of the Finance Committee.

“That’s an obvious conflict of interest if you have someone who’s an employee of an institution who is going to sit in judgment on all these tuition bills,” Petersen said, reports Karin Kapsidelis with the Richmond Times-Dispatch.

Norment did not return Kapsidelis’ phone call asking for a response.

Concerns about Norment’s ties to W&M have dogged both the university and him for years. Eight years ago, W&M President Taylor Reveley justified having Norment on the payroll this way:

Before Senator Norment joined us, we had only one full-time Coordinator of Legal Affairs and one part-time Assistant to the Provost for Legal Affairs (focusing on disciplinary matters). We have badly needed more inside legal help.

The work Senator Norment does as a William & Mary employee is substantive and demanding. His employment here is not a Potemkin village. His work involves both teaching and legal advice. His teaching has been extensive and successful. From the beginning of his time at William & Mary, the Senator has provided me with legal counsel. He continues to do so while also now working closely with our Coordinator of Legal Affairs.

Tommy Norment’s compensation reflects his status as an experienced lawyer coming from private practice. It is less than would be expected for someone of his seniority and ability in private practice or the corporate world. It makes sense for a university, however, and is consistent with how we compensate our other lawyers.

No “quid pro quo” was involved in Senator Norment’s and my conversations about the possibility of his joining William & Mary. The Senator did not offer to do anything for William & Mary in return for employment. Nor did I premise the possibility of his employment here on his doing anything for the university in the future.

No quid pro quo was necessary. Norment was an advocate for W&M before he went on the payroll, and he no doubt will continue to be when he leaves. And, to be fair, Norment is not the only powerful senator opposing tuition reform. Sen. Richard L. Saslaw, D-Fairfax, the senate minority leader, supported diverting the reform bills to Senate Finance.

When Petersen asked why a higher-ed bill was assigned to the finance committee, Saslaw responded, “It’s going to Finance when you start messing around with out-of-state numbers.” Presumably he was referring to caps on the number of out-of-state students at UVa and W&M. The General Assembly did not need to “micro-manage” the universities, Saslaw added.

(For details on the bills, see “Virginia Higher Ed Faces Backlash.”)

Bacon’s bottom line: How deep do the ties between a legislator and university have to run before it becomes a objectionable conflict of interest? Let me set the stage by asking some hypothetical questions:

• What if an Altria employee served in the state senate and voted against a higher tobacco tax? Would there be any question at all? It would be universally regarded as a conflict of interest.

• What if a Dominion Virginia Power employee served in the state senate and approved a measure that would increase electric rates? Clearly a conflict of interest. Del. Peter Farrell, R-Henrico, has abstained from voting on Dominion-related legislation on the grounds that his father was CEO of Dominion.

• What if the provost of W&M served in the state senate and deep-sixed measures designed to curb tuition increases? Clearly a conflict of interest.

• What if a tenured faculty member of W&M served in the state senate and deep-sixed measures designed to curb tuition increases? Still a conflict of interest.

The whole thing smells fishy to me.

The Legislative Logic of Proton Therapy

Proton therapy delivers precise doses of radiation, resulting in fewer side effects and less damage to surrounding tissues.

Proton therapy delivers precise doses of radiation, resulting in fewer side effects and less damage to surrounding tissues.

I just love it when legislators tell insurance companies whose services they should insure. Lawmakers are obviously so much more qualified to judge the efficacy of different medical treatments — why shouldn’t we trust their judgment?

Pardon my snark. A bill has passed the House of Delegates and moved to the state Senate that would forbid insurance companies from holding proton therapy to a higher standard of clinical evidence than other radiation treatments.

Del. David Yancey, R-Newport News, submitted the bill on behalf of Hampton University (HU), which just happens to have a Proton Therapy Institute. HU complains that the procedure is still treated as experimental despite decades of research, explains Travis Fain with the Daily Press.

To tug at legislators’ heart strings, the bill’s supporters brought in Carolyn Lambert, wife of Benjamin Lambert, who served in the Senate more than 20 years and died in 2014. The Lamberts’ son is fighting prostate cancer now. Speaking in a halting voice, she said, the insurers “have abandoned him.”

Insurance lobbyists counter that they use blind studies to make coverage decisions, and that proton therapy makes the cut in some cases, such as pediatric and skull cancers, but not in others. “The bottom line is we don’t evaluate them differently,” said Doug Gray, executive director of the Virginia Association of Health Plans.

The Senate Commerce and Labor Committee passed the bill on what appeared to be a unanimous voice vote, reports Fain. Sen. John Cosgrove, R-Chesapeake, a motioned “as a cancer survivor” to send the bill to the floor.

Bacon’s bottom line: This illustrates the worst of everything about the way the General Assembly works. Anecdotal information and sentimentality demolish reason and empirical evidence. The legislature is well on its way to passing a law that could well nudge the cost of insurance policies higher. The prostate cancer of Sen. Lambert’s son is a tragedy. What we will never see is the tragedy of the “third man,” the invisible victim for whom the cost of medical insurance will be put just out of reach.

Dominion Fulfills 400-Megawatt Solar Commitment

Dominion solar farm

Dominion solar farm. Photo credit: Dominion.

Dominion is investing more than $800 million in solar projects in Virginia totaling 398 megawatts of generation either completed or under development. The projects bring the company within an eyelash of fulfilling a 2015 promise to bring 400 megawatts of large-scale solar generation facilities into service by 2020.

Furthermore, said Dominion in a press release issued today, 80% of that capacity is being covered by large business and government customers ranging from Amazon Web Services to the Commonwealth of Virginia and the University of Virginia. Most of the development and construction cost of the projects will be borne by customers under contract, not passed on to rate payers.

Legislation enacted in 2015 declared that development in Virginia of up to 50 megawatts of solar projects in the state was “in the public interest.”

“We are well ahead of schedule on the solar expansion and what we have added so far will have a very minimal impact on the price of electricity for the 2.5 million regulated customers we serve in Virginia,” said Paul Koonce, CEO of Power Generation at Dominion Energy. “Our goal is to have a balanced generating portfolio that is highly reliable, cost effective and environmentally responsible. The cost of energy powered by the sun is coming down and we are working hard to develop projects in new and economical ways for our customers.”

Bacon’s bottom line: Most of this information has appeared in previous announcements, which raises the question of why Dominion issued this press release at this particular time. The backdrop is the increasing pushback the utility is experiencing by gubernatorial candidates and lawmakers on a variety of fronts. Most significantly, the 2015 deal that froze the base rates of Dominion and Appalachian Power for six years has been re-opened for scrutiny.

With this press release, Dominion is reminding the public that there was more to that 2015 legislative compromise, crafted in response to the Obama administration’s Clean Power Plan, than the rate freeze. The company also committed $57 million over five years to energy assistance to low-income customers and made the 400-megawatt commitment to solar. Reading between the lines, the press release says, “Hey, guys, we made good on the solar promise.”

Bacon’s other bottom line: It’s also apparent — again, reading between the lines — that Dominion management is not persuaded that solar makes economic sense… yet. In other words, its commitment to solar at this point in time is driven by political considerations.

Why do I say that? Because Koonce stresses that the company’s solar investment to date “will have a very minimal impact on the price of electricity.” The implication is that solar would increase the price were it not for the fact that Dominion is building its utility-scale projects by means of long-term contracts with entities willing to pay a premium price for green energy.

The crux of the matter is that solar power is not “dispatchable” — Dominion does not control when it generates solar electricity. It produces electricity only when the sun shines, which does not coincide with periods of peak consumption, and, further, is subject to weather-related interruptions, meaning that electric companies must maintain expensive back-up capacity to fill in.

The vast majority of Dominion’s investment has been in large, utility-scale projects, which are easier to integrate into the high-voltage transmission grid. PJM Interconnection, the regional transmission organization of which Virginia is a part, has said that the region grid could accommodate up to 30% intermittent wind and solar power by redirecting energy flows across a 13-state region.

The dynamics of on-again, off-again production play out differently on the local distribution grid, which lacks the flexibility of the interstate transmission grid. That’s why Dominion has installed 10 experimental, rooftop and other small-scale solar sites around the state: to learn more about how local electric circuits respond to fluctuations in energy output.

Dominion is under tremendous political pressure to accommodate more “distributed generation.” But the economics are very different from utility-scale generation that ties into the transmission grid. Published reports say that the cost of solar could fall to as little as 4 cents per kilowatt hour by 2040. That compares to roughly 11 cents charged by Dominion Virginia Power today. But that still leaves the intermittency issue. While battery storage has been touted as a remedy, battery manufacturers like Tesla are hoping to get the cost down to $100 per kilowatt hour by 2022. There’s still a long way to go before large-scale rooftop deployment is feasible.

Yet in the press release Koonce acknowledged that “the cost of energy powered by the sun is coming down.” So, who knows what the future might bring?

Lefties Confront Stewart. Stewart Wins.

Corey Stewart struggles to be heard.

Corey Stewart struggles to be heard. Photo credit: Washington Post.

Corey Stewart is one of those politicians that you either love or love to hate. He’s a conservative populist who built a state-wide reputation on his pugnacious, in-your-face opposition to illegal immigration. And as the prominent Virginia politician to align himself mostly closely with Donald Trump, he is surely loathed by many.

Whatever you might think about Stewart, though, he’s entitled to speak his views like anyone else.

It’s one thing to denounce him as a bigot and a white supremacist — his enemies are entitled to free speech, too — but quite another to disrupt his campaign appearances. Lefties may think they’re accomplishing something by shutting him down, but it’s probably not what they think — they’re engendering sympathy for a not-very-sympathetic guy.

Stewart visited the Peoples Republic of Charlottesville a couple of days ago to defend the statue of Robert E. Lee, which City Council had previously voted to remove. On social media, he had urged people to “defend Virginia’s heritage,” and likened those who wanted to remove the statue to tyrants and Nazis, according to the Washington Post.

His appearance was met by protesters who drowned out his interviews and conversations with shouts of, “White supremacy has got to go!” Hoisting signs saying, “Ban Bigots,” and “No tolerance for white supremacy,” protesters yelled at him to go back to Prince William County. As he left, they shouted, “Whose town? Our town!”

If anyone has that kind of treatment coming, it’s Stewart: His rhetoric toward illegal immigrants has been harsh and uncompromising. And if Charlottesville lefties want to vent online or hold their own demonstrations, I’m fine with that. But I have to say, Stewart handled the disruption with class.

“Stewart took it in stride, frequently grinning and trying to chat up his detractors,” the Post writes.

Stewart welcomed the protests and the attention they would bring, believing  they would buttress his pitch as a conservative standing up to an intolerant left and “political correctness.”

I’m calling them out for who they are,” Stewart said. “It’s really a symptom of the left and their unwillingness to listen to alternative points of view.”

Score one for Stewart.

Lefties in Charlottesville and elsewhere make much of their desire for “inclusiveness.” But their version of “inclusiveness” and “tolerance” includes only those groups friendly to their point of view. A truly inclusive viewpoint would say, “Sure, we’ll keep the Robert E. Lee statue because many people still revere him as a hero. We’ll build statues for our own heroes and heroines. Our community can tolerate them all because we embrace the diversity of cultures, sub-cultures and viewpoints.”

But that’s not the Left’s approach. They want to expunge the heroes of their ideological enemies. They want to exclude other points of view from the public realm. Their viewpoint is relentlessly negative. Erecting a statue of a politically correct hero would be a positive action. But if anyone has proposed doing so, the effort hasn’t gained enough steam to be noticed. The Left’s advocacy of diversity applies to race and ethnicity only. It is a pinched and intolerant view that excludes anyone who thinks differently, including dissenting views of blacks, gays and other minorities.

I part ways with Stewart because I think there are ways to justify restrictions on illegal immigration without demonizing millions of people who came to this country not to create mayhem but to better their lives. It is possible to both sympathize with the aspirations of those who want to live here even while saying firmly, sorry, this is a nation of laws, and if you want to live here, you cannot enter and stay in this country illegally. We can deal with the issue in a humane way.

Corey Stewart is not the guy I want to be making the stand against political correctness in Virginia. But he’s the one doing it, and the Left is making him look good by comparison.

Alternate Facts Regarding Virginia Employment

Gallup's Good Jobs Rate for Virginia is 49.2%. Despite sequestration, Virginia employment numbers are robust.

Gallup’s Good Jobs Rate for Virginia is 49.2%. Despite sequestration, Virginia employment numbers are robust. 

Virginia’s economy  may be down in the dumps by Virginia standards, but it still looks buoyant compared to many other states, according to Gallup Organization data based on tracking interviews with nearly 355,000 U.S. adults.

The official state unemployment was 4.1% in December 2016, lower than for 33 other states. But the unemployment rate does not include the under-employed, discouraged workers not looking for jobs, people on disability, or those who have retired early. While four percent has long been regarded as “full employment,” we all know that hundreds of thousands of Virginians who would like to work can’t find full-time jobs.

Gallup compiles what it calls a “Good Jobs” rate which expresses the total number of 18-and-older adults with full-time jobs (more than 30 hours) as a percentage of the adult population. The metric excludes part-time and self-employed time workers. Virginia scores 49.2%, which means that almost half of all adults are working in full-time jobs.

Gallup views the Good Jobs rate as an indicator of economic vitality. It’s important to note, however, that a state with a large population of the elderly and retirees will look worse by this measure. Thus West Virginia, a state with an aging population where only 36.6% of adults are fully employed, fares the worst in the country. Likewise, Florida and Arizona, states with otherwise robust economies, also rank in the bottom 10 states by this measure.

Still, a high Good Jobs rate indicates that a high percentage of the adult population is contributing to economic activity.

Nationally, there are two clusters of very high Good Jobs scores — one in the northern plains states and the other in the two states bordering Washington, D.C.: Virginia and Maryland. Whatever harm sequestration has inflicted upon Virginia’s economy, the employment rate remains high by national standards.

Gallup also compiles an “underemployment” metric, which adds both unemployed people looking for jobs and those working part time but desiring full-time work. This number is expressed as a percentage of the adults in the workforce (not the entire adult population, as with the Good Jobs indicator).

Gallup did not publish the Virginia number for this metric, but in the map reproduced below, the company classified Virginia among the “low” underemployment states, meaning that it scored between 11th and 20th — ahead of Maryland, heh, heh.

Bacon’s bottom line: By both these alternative measures, the Virginia employment picture looks better, relatively speaking, than the official unemployment rate. They may be “alternate facts,” but they’re real facts. The economy is not as vibrant as it should be… but as a working man, I’d rather be in Virginia. (Hat tip: Tim Wise.)

Virginia Is for Lovers, Not Lobbyists

by Christopher Mitchell

Pop quiz: Should the state create or remove barriers to broadband investment in rural Virginia? Trick question. The answer depends very much on who you are – an incumbent telephone company or someone living every day with poor connectivity.

If you happen to be a big telephone company like CenturyLink or Frontier, you have already taken action. You wrote a bill to effectively prevent competition, laundered it through the state telephone lobbying trade organization, and had it sponsored by Del. Byron, R-Forest, in the General Assembly. That was after securing tens of millions of dollars from the federal government to offer an Internet service so slow it isn’t even considered broadband anymore. Government is working pretty well for you.

If you are a business or resident in the year 2017 without high quality Internet access, you should be banging someone’s door down – maybe an elected official, telephone/electric co-op, or your neighbor to organize a solution. You need more investment, not more barriers. Government isn’t working quite as well for you.

Rural Virginia is not alone. Small towns and farming communities across America are recognizing that they have to take action. The big cable and telephone companies are not going to build the networks rural America needs to retain and attract businesses. The federal government was essential in bringing electricity and basic phone service to everyone. But when it came to broadband, the big telephone companies had a plan to obstruct and prevent and plenty of influence in D.C.

When the Federal Communications Commission set up the Connect America Fund, they began giving billions of dollars to the big telephone companies in return for practically nothing. By 2020, these companies have to deliver a connection doesn’t even qualify as broadband. CenturyLink advertises 1000/1000 Mbps in many urban areas but gets big subsidies to deliver 10/1 Mbps in rural areas. Rural America has been sold out.

If you are a big cable or telephone company, you have a lot of influence in the federal and state capitals. But at the local level, your elected officials are more accountable to you because their decisions have a more immediate impact on their constituents’ lives.

Remember that as the General Assembly considers a bill from the telephone company lobbyists to limit your local governments from building networks. Places like Danville, Martinsville, and the Roanoke Valley have thoroughly upset the big cable and telephone companies by investing in new fiber-optic networks and opening them to any Internet Service Provider that wanted to compete for subscribers.

Danville and Martinsville have been doing this for years, with incredible results. The job gains are remarkable, particularly in areas hard hit by the decline of tobacco and manufacturing. Consider Danville, where the network was started with a loan from the electric utility. The network has made money every year for the community while also enriching the tax base. Existing businesses have become more competitive, new businesses came to town, and the community attracted more foreign direct investment.

They also created something else – a good example for communities that need better access. But the big monopolies are striking back using their strongest asset – lobbying. Virginia is already one of the 20 states that limit local authority to build networks. Now the state could make it even harder or impossible for communities to make these investments.

Consider the shareholders of CenturyLink and Frontier. They demand a good return on their investment. In return for some federal subsidies, they will invest the bare minimum in Virginia’s small towns. They count on the lack of choice in the market (i.e. monopoly power) to protect them from the frustration of local businesses and residents.

Local governments also have to listen to their shareholders – the businesses and residents that demand better Internet access to do business, get a quality education, and even enjoy modern entertainment. Local leaders actually live in these communities, unlike the executives or shareholders from the big companies.

If all of Virginia is to thrive, local governments must be free to invest in the modern infrastructure that their local businesses and residents need. Where existing providers meet that need, the local businesses and residents aren’t going to demand a municipal solution. But that decision should be made locally, not by powerful lobbyists swaying the legislature.

Christopher Mitchell is the Director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance in Minneapolis. He is on Twitter @communitynets.

Replacing Foreman Field: Another Student Rip-Off?

ODU wants to replace Foreman Field. Who pays -- the students or the football fans? Take a guess.

ODU wants to replace Foreman Field. Who pays — the students or the football fans? Take a guess.

Old Dominion University wants to tear down its old football stadium, Foreman Field, and build a $55 million facility in its place. The university says it can pay for the project without raising student fees, traditionally a major source of funding for athletic programs.

If all goes according to plan, reports the Virginian-Pilot, the east and west sides would be demolished immediately after the 2018 season and rebuilt in time for the ODU Monarchs to play Norfolk State in August 2018. ODU requires General Assembly approval for the project, which appears to be forthcoming. “They have come to Richmond and made a good case,” said state Sen. Frank Wagner, R-Virginia Beach. “It’s fiscally prudent. Everything appears to be a go.”

The new 22,000-seat stadium will hold only 2,000 more spectators than Foreman Field, but it would offer better seats and bathrooms. The stadium could be expanded to 30,000 seats if ticket demand calls for it. A second phase would include a $39.5 million tower containing luxury suites, a stadium club, new press facilities and a new scoreboard, but funding sources have not yet been identified.

“I’ve maintained from day one that this is a proposal we can afford. It does not require any new student fees to pay for it,” said ODU President John Broderick. “In this time of well-deserved scrutiny on the cost of higher education, that was an important part of the decision I made on the scope and cost of the project.”

Bacon’s bottom line: The project may be fiscally prudent in that it does not require an increase in fees, which now stand at $3,076 per year. Almost $1,700 of that sum is classified as athletic fees. But two questions arise: First, are students getting good value for their fees; second, is ODU missing an opportunity to lower fees?

Let’s examine the economics of ODU football stadiums. As a benefit of paying fees, students get free tickets. What’s the value of those tickets? That’s hard to say exactly. Prices vary by seating, with the best seats costing more. But we can use the $199 price tag for new season tickets as a starting point. We’re not far off by assuming that a student’s annual fees entitles him or her to football tickets worth about $200 — assuming he or she attends every game.

But ODU has nearly 25,000 students. Currently, ODU allocates tickets to roughly 6,500 students, according to the Virginian-Pilot. Let’s assume that ODU bumps up the number of student tickets to 7,500 with the new stadium (allocating half to students, half to season ticket holders). That means fewer than one in three ODU students will have an opportunity to attend any given home game. Effectively, that means the value of “free tickets” to ODU students collectively has a market value of about $70.

When ODU calculates its student fees, how much does it charge students for “free” tickets? Is some portion of the fees allocated to supporting the football team and another portion allocated to paying for the stadium? Alternatively, are students charged a portion for the supporting the football program and the stadium as a package? Or does ODU even break out the numbers that way?

I called ODU’s press office yesterday afternoon and asked for numbers on how the administration plans to pay for the new stadium without increasing student fees. I have not yet heard back, but will report what I find out.

All we know at this point is what Broderick tells us: that no new student fees will be required to pay for the stadium. One of two possibilities seems likely: Either the university has cut expenses (renegotiating a contract, for instance) or it is cutting a program or programs previously funded through student fees. In either case, the opportunity existed for the university to reduce the fees instead of build a $55 million stadium. The university chose to build the stadium.

How much money are we talking about? Let’s say that the stadium will be constructed with bonds. Assuming a 30-year amortization and tax-free interest charges of 4% annually on those bonds, that works out to about $2.8 million a year. That averages about $120 per student.

If these numbers are in the ballpark, ODU students will be paying $120 per year to help finance a stadium and receive a $70 value in the form of  football tickets in return. In other words, ODU students and their parents are subsidizing construction of the stadium to the tune of $50 per year for the benefit of season ticket holders.

Who are those season ticket holders? Many of them are alumni. Some may be Norfolk-area residents who identify with ODU and love a good football game. Whatever the case, football is a great way to extract money from fans.

As the Pilot reported in January, The Old Dominion Athletic Foundation has 3,000 paying members.

Essentially, all 3,000 paying members of the Old Dominion Athletic Foundation – the school’s private athletic fundraising organization – are ranked on a number of factors. They include how much money they’ve donated, how long they’ve had season tickets and how long they’ve been members of ODAF.

Based on this ranking, 1 through 3,000, fans are allowed to choose their new seats. The reallocation of seats, or “re-seating process” as ODU calls it, happens every [four years] four at Foreman Field. …

If fans increase how much they donate, it’s an opportunity to get better seats. And if they don’t, there’s angst because they’ll likely end up sitting a little farther from the action.

ODU last reallocated seats at Foreman Field in 2013, as the school began the transition into the Football Bowl Subdivision. The process proved to be a financial boon, with ODU raking in $1.5 million more in donations in the first quarter of 2013 than it did in 2012. Much of that increase was derived from fans trying to get better seats.

“I suspect that we’ll see an increase in donations this year as well,” athletic director Wood Selig said.

In other words, ODU will over-charge students in the neighborhood of $50 each, for an annual total of $1,250,000, to subsidize a football program that netted the university $1.5 million in alumni/fan donations in just one quarter. That’s what it’s all about, folks. If ODU plays its cards right, a new stadium will raise even bigger donations for administrators to play with. When will students figure out what’s going on?.

 

McAuliffe Reverses, Now Opposes Electric Rate Freeze

Governor Terry McAuliffe

Governor Terry McAuliffe said yesterday that he supports legislation that would cancel the freeze in base electric rates on Dominion Virginia Power and Appalachian Power if President Trump kills the Clean Power Plan. The endorsement came a little late for state Sen. J. Chapman Petersen, D-Fairfax City, whose bill to roll back the freeze was killed in a Senate committee in January in a 12 to 2 vote.

Taxpayers “are entitled to the lowest, most efficient rate that we can deliver to them,” McAuliffe said on the John Fredericks Show, which broadcasts in Hampton Roads, Richmond, Lynchburg, Danville and Franklin. “If Chap Petersen can get me a bill on my desk, I’d sign it. Let me be clear.”

“There’s a better chance of me starting for the Redskins as quarterback,” said Petersen, as quoted by the Richmond Times-Dispatch. “Governor, you’re going to need to send down the legislation.”

In 2015 The General Assembly passed a bill freezing base electric rates, which McAuliffe signed, after the Obama administration had rolled out the Clean Power Plan requiring Virginia’s electric utilities to significantly reduce CO2 emissions. The State Corporation Commission staff had estimated that the legislation could push electric rates 20% higher. With a stated goal of providing rate stability in uncertain times, the legislation locked base rates in place for six years.

Environmentalists were critical of the bill from the beginning, arguing that the Clean Power would increase rates only marginally. Then industrial customers contended that Dominion had been overcharging customers before the law went into effect, and the law locked in rates at excessively high levels. Moreover, they charged, the electric companies weren’t even taking on a major risk: If the Clean Power Plan had forced them to retire coal plants and build new generating facilities, they would have been able to pass on the cost through a Rate Adjustment Clause, which wasn’t affected.

Dominion has argued that the law also provided for annual, instead of biennial, review of power companies’ Integrated Resource Plans, making the planning process more transparent. As part of the legislative compromise, the company also upped its financial commitment to its Energy Share energy-efficiency plan for low-income homeowners.

Furthermore, Bill Murray, Dominion’s managing director of public policy, said last week, the company has taken $296 million in write-offs for the past two years for expenses relating to the closure of its coal ash ponds. The freeze prevents the company from recovering those costs. “Those are costs we are absorbing.”

Bacon’s bottom line: McAuliffe’s support for reversing the freeze is a day late and a dollar short. As a practical matter, Petersen’s bill cannot be resurrected. Reversing the freeze without understanding the emerging regulatory context may not make sense anyway. The Trump administration has made clear its intention to kill the Clean Power Plan. We Virginians need a clearer idea of what kind of energy policy we want going forward. Simply rolling back the freeze doesn’t inform that debate.

Solar power is the potential game changer. The cost of generating solar energy continues to decline, and so does the cost of battery storage, which will help offset the intermittent nature of solar generation. No one disagrees with those propositions, but many questions remain open. How rapidly are solar prices declining? When will solar become economically competitive with natural gas in Virginia? That depends in large measure what happens to natural gas prices. Will they rise from currently low levels, and, if so, by how much?

Another big question is how much solar can Dominion, Appalachian Power and Virgina’s electric co-ops absorb without undermining the reliability of the electric grid. A related set of questions revolves around how much retail competition regulators should allow, how to guarantee the integrity of the grid if electric utilities lose market to independent solar operators, and how rate payers will be impacted if utilities experience a decrease in consumption.

One more pressing matter: What’s the role of nuclear in a post-Clean Power Plan world? While it still may make economic sense to renew the licenses for Dominion’s existing nuclear power plants, building a third unit at North Anna guesstimated to be $18 billion probably does not. Dominion wanted to maintain that option as an insurance policy, at a cost of hundreds of millions of dollars in engineering and permitting expenses, to protect against the most onerous of the Clean Power Plan regulatory scenarios. In a Trump presidency, that scenario looks highly unlikely. Should Dominion scrap North Anna 3?

If Virginians want to unfreeze the freeze, we need to recognize that no regulatory action takes place in a vacuum. Rather than dealing with each of these issues piece-meal we should settle them in a comprehensive way.

Who Would Have Guessed It? Virginians Want Lower College Tuitions.

Graphic source: VCU. (Click for larger, more legible image.)

One more result from VCU’s Commonwealth Education Poll… The pollsters asked an interesting question. If a public university has funds donated by alumni or philanthropists — we’re talking private money here, not public — should the institution use it to reduce tuition & fees, expand facilities or hire more faculty? Hands-down winner: make college more affordable.

Four out of five parents of a Virginia college student said they wanted reduced tuition & fees. Although VCU asked a different question than Partners 4 Affordable Excellence did in its recent poll, the results are consistent.

Higher ed affordability may not be the biggest issue in the minds of the electorate — Virginians are more concerned about jobs and K-12 — but it is potent nonetheless. Consider that parents of college students and prospective college students tend to be better educated and earn higher incomes, which means they tend to vote in greater numbers than the average Virginian. That’s a powerful voting bloc. Gubernatorial candidates would do well to target this demographic.

My main fear is that politicians will advocate simplistic solutions that will wreak havoc on Virginia’s higher ed system, which, for all its flaws, does a pretty good job. I see higher-ed reform as akin to brain surgery — highly invasive but requiring a delicate hand.