Category Archives: Environment

Prince William Supervisors Demand Coal Ash Studies

Prince William County Board of Supervisors Chair Corey Stewart speaking at the coal ash public hearing.

Four members of the Prince William County board of supervisors appeared at a public hearing last night to express concerns about Dominion Virginia Power’s plan to pursue the “closure in place” option for disposing the coal ash at its Possum Point Power Station.

The Department of Environmental Quality (DEQ) held the hearing as part of its evaluation of Dominion’s request for a solid waste permit. More than a hundred citizens appeared at the hearing at Potomac High School, frequently erupting into jeers and cheers throughout the evening.

Describing the coal ash disposal as “the most important environmental issue facing our county in decades,” Woodbridge Supervisor Frank Principi called upon DEQ to engage in intensive information gathering before issuing a permit. His request, repeated by numerous citizens, echoes legislation backed by Sen. Scott Surovell, D-Mount Vernon, that would require owners of coal ash ponds to assess closure options and demonstrate their long-term safety before DEQ grants a permit.

Specifically, Principi asked the DEQ to release the data for testing water quality at Pond D, where the coal ash is being consolidated and capped with a synthetic liner, and release test results from a surface water sampling plan. Further, he demanded that DEQ conduct an alternatives analysis to see if recycling and landfilling coal ash would be safer.

Principi also said he wants to see documentation of measures to prevent a “catastrophic failure” of Dominion’s cap-in-place proposal. “Nobody here wants to repeat the mistakes of Buffalo Creek, Kingston or Dan River,” he said, citing three notorious examples of coal ash spills.

Board Chairman Corey Stewart, a Republican candidate for governor, appeared midway through the hearing and ramped up the rhetoric. It was unacceptable to leave four million tons of coal ash in place, he said, especially given Dominion’s track record of dealing with the County. “Dominion has been less than honest with Prince William County. Dominion lies. You have to be very skeptical of what they tell you.”

Dominion did not respond to the criticisms leveled against it. Cathy Taylor, Dominion’s senior environmental officer, delivered prepared remarks at the beginning of the hearing that repeated the company’s talking points.

Coal ash has been stored safely at Possum Point since 1948, Taylor said, but new EPA regulations require the company to close the ponds permanently. The company is de-watering the coal ponds now. The company has made proactive improvements to the dewatering process to “make the system better, more effective,” and it is posting water-quality testing results “so neighbors know that Quantico Creek is being protected.”

When the de-watering is complete, the next phase will be consolidating the coal ash from five ponds into the 64-acre Pond D. Under the requested solid waste permit, Dominion would cover the pond with “a high-density polyethelene cap to prevent rainwater or any moisture from coming into contact with the ash; a drainage layer designed to drain water away from the cap; then 24 inches of soil and vegetation.”

The company has already installed a monitoring network of 24 wells around the coal ash ponds, Taylor said. “If groundwater monitoring indicates that further action is needed, then both state and federal requirements mandates that additional measures will be put int place.” Pond D will be inspected on a regular basis to maintain integrity of the cover system, she added, and a professional dam-safety engineer will inspect the facility once a year.

While citizen comments were overwhelmingly opposed to Dominion’s plan, two women opposed the alternative of trucking coal ash to a landfill. Possum Point Road is a narrow, winding, two-lane road not constructed for truck traffic, said Eileen Thrall, who lives on the road. She is worried about congestion and the potential for traffic accidents.

Greg Buppert, an attorney with the Southern Environmental Law Center (SELC), warned that Pond D “will not have two basic features that all modern landfills are required to have in Virginia to protect groundwater: a synthetic liner under the ash and a leachate collection system.”

Recent monitoring shows that heavy metals emanating from coal ash at Pond D are getting into the groundwater, Buppert said. “Will Dominion’s closure plan stop this pollution? The answer is that we don’t know. Dominion is required to demonstrate that groundwater is not in contact with the ash at Possum Point. But the company won’t provide that information until October 2018, at which point the cap-in-place construction could be complete.”

“Is Dominion’s plan the best solution for dealing with the coal as at Possum Point? Again we don’t know,” he said. “DEQ and Dominion should not rush forward to cap ash at Pond D  at Possum Point before assessing the full range of alternatives for dealing with this legacy waste.”

Prince William County has well-established authority to regulate landfills within its borders, Buppert said. Given the sentiments expressed by county supervisors at the hearing, he said, county intervention is a real possibility.

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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Collaborate to Increase Virginia’s Energy Options

by Joy Loving

Several posts on Bacon’s Rebellion have caught my eye in recent weeks. In one, Jim Bacon noted  that “[m]arket forces are shifting dramatically in favor of clean energy.” He suggested that “clean power advocates need to back entrepreneurial, market-driven solutions.”

In another, he told readers: “Half the Fortune 500 companies have committed to reducing greenhouse gas emissions. … If Virginia wants to attract data centers, warehouses and big box stores, among other types of investment, it needs to provide a broader array of clean-energy options.”

And in a third, he discussed a large obstacle:

In an era of abundant capital and near-zero interest rates, reputable corporations can easily and cheaply borrow the money they need to expand. A much tougher task is finding a skilled workforce…. Addressing the jobs-skills mismatch is arguably the greatest economic challenge facing Virginia today…. Virginia’s colleges, community colleges and universities can do most of the heavy lifting on education and training, but they are not equipped to provide a fast-response, turnkey workforce solution….

Taken together, these three posts tell me that Virginia needs to:

1. Act decisively to bring more clean energy to the Commonwealth;
2. Emphasize workforce development over subsidies and tax breaks so Virginia can support the companies (and employment opportunities) that more green energy will bring to the state;
3. Create the “explicit legal framework” to make the first two things happen.

The 2017 energy outlook suggests that a huge competitor in the green energy arena is and will continue to be China, which has announced big bold plans to assure their leadership in renewable energy (RE) sources. Germany also has made huge strides in increasing their citizens’ access to and use of renewable energy. Both countries have developed sizable solar manufacturing models and many U.S. solar installers buy their products. It’s not a stretch to say that the U.S. is losing out in energy innovation and renewable energy jobs.

Hopefully, the Virginia General Assembly will address some of these issues and enact specific enabling legislation to foster many more large- and mid-size utility-scale clean energy projects. (In 2016 the GA took a bye in this area). If so, Virginia’s RE picture might improve significantly in the next few years.

But such action, however welcome, will not address the fact that many—even most–non corporate Virginians, individuals and small business owners, find it difficult to use RE to produce their electricity. The legislature has not thus far been responsive to the needs and desires of these citizens. Given the likely coming changes for federal energy policy under the Trump administration, Virginians will need to look to their legislators for the means to determine their energy sources.

Accordingly, I have reached the following conclusions:

• Individuals’ energy independence is limited and may be further eroded.
• Virginians may want more energy security than the state’s centralized generation and distribution model now offers.
• Virginia lags other states and other countries in exploring new energy distribution models and energy sources.
• There is great, currently under-exploited, economic potential from clean energy in Virginia.

Virginians must let their legislators know that they want these improvements. A recent survey by Conservatives for Clean Energy concluded, as reported by WVIR-TV, that “two-thirds of conservative voters in Virginia support renewables….” And, Utility Dive recently reported that “Three Republican governors recently strengthened the renewable portfolio standards in their states in a sign that the link between job growth and renewable energy incentives may be trumping traditional partisan affiliations.”

Improving Virginia’s energy policies and increasing Virginians’ energy options will take a concerted effort. It’s not a matter of politics. Solutions can be found if we—energy consumers—demand it. This year may see some momentum in the GA. We can keep that momentum going by telling our elected representatives what we want.

Joy Loving is a Virginian, utility investor, solar producer, and energy consumer.

Converting Coal Mines into Pumped Storage

Is it practicable to convert old coal mines into pumped storage facilities? We may find out.

Is it practicable to convert old coal mines into pumped storage facilities? We may find out.

Perhaps the most intriguing idea in the renewable-energy package promoted by General Assembly Republicans (see previous post) is the idea of converting abandoned coal mines into pumped storage generating units.

Dominion Virginia Power operates a pumped storage facility in Bath County. The facility has two reservoirs. During periods of high demand when the price of electricity is high, Dominion releases water from the upper reservoir into the lower; during periods of low demand when the price is low, the company pumps water back into the upper reservoir.

The idea is to replicate this process on a smaller scale inside old coal mines. Frankly, I’m having a hard time visualizing how this would work — the underground coal mines I’ve visited follow are as level as the coal seams they follow — but I’ll assume that proponents of the idea know much more about the subject than I do.

One advantage of using coal mines for pumped storage is that they use water already in the mines, and there is no need to dam a river or creek. Further, Terry Kilgore, R-Gate City, who sponsored the bill, envisions using wind or solar power to pump the water. You can’t get any greener than that.

Here’s the topper: Use the abundance of green power to sell big corporations on locating their data centers in Southwest Virginia. One of the Commonwealth of Virginia’s two data centers is located in Lebanon, Va., on the edge of the coalfields, and the Virginia Tobacco Region Revitalization Commission has invested heavily in equipping the region with the broadband access that any data center requires. High bandwidth and clean energy make a winning combination, the thinking goes.

Dominion, which already has a coal plant in Wise County, doesn’t have a specific project in mind, but says it is keenly interested in what Kilgore’s bill would allow, reports the Roanoke Times.

“This is a BIG deal longer-term in the coalfields,” Jack Kennedy, Wise County’s clerk of circuit court and regional technology advocate, told the Times. “It could lead to hundreds of millions in investment, maybe over $1 billion.”

Hope always springs eternal in Virginia’s suffering coalfield region. The idea of converting underground coal mines into pumped storage facilities sounds extremely conceptual, and the economics are far from proven. But you never know. If the idea does work, and if the region could attract a handful of data centers — stranger things have happened, Microsoft located a data center in Mecklenburg County —  it could be a game-changer.

Pro-Solar Tweaks Advance in General Assembly

If big corporate customers start generating their own electricity, who will pay to build and maintain the electric transmission-distribution grid?

If big corporate customers start generating their own electricity, who will pay to build and maintain the electric transmission-distribution grid?

As the General Assembly reaches the mid-point of its session, solar-energy legislation sponsored by Republicans has a very good chance of passing, reports Robert Zullo with the Richmond Times-Dispatch

The proposals emerged from lengthy discussions in a working group of Virginia’s electric utilities, electric cooperatives, and solar industry proponents. While the package is “a mixed bag,” said Will Cleaveland with the Southern Environmental Law Center, he conceded that it “leans slightly to the positive.”

According to Zullo, the package includes bills that:

  • Allows farmers to sell more renewable energy generated on their property to utilities;
  • Establishes a pilot community solar program for subscribing utility customers;
  • Allows streamlined permitting for small-scale renewable energy projects; and
  • Allows utilities to ask the State Corporation Commission for recovery of costs for pumped hydroelectric generation and storage facilities in Virginia’s coalfields. As envisioned, this pump-storage would be coupled with solar energy.

Bacon’s bottom line: Anything that injects more entrepreneurs and competition into the equation is a good thing. However, these bills leave unanswered perhaps the most important issue facing solar energy in the state: legal clarity for power-purchase agreements, specifically for arrangements involving third-party financing. A consortium of Fortune 500 corporations had requested clarification of laws that would make it easier for them to execute deals with third parties in order to generate their own solar energy. Power-purchase agreements are complex legal and financial instruments set up to extract maximum value from federal tax credits.

Many corporations have made a commitment to clean power and would like to derive a bigger percentage of their electricity from renewable energy sources, which in in most parts of Virginia means solar. From their perspective, the ideal law would allow them to generate their own solar electricity and sell surplus power back into the grid at the full retail rate. However, power companies argue that independent solar generators should recoup a lower wholesale rate for the electricity. Electric utilities oppose laws that allow competitors to capture retail market share without compensating the utilities (and their rate payers) for the cost of maintaining the transmission-distribution grid that everyone relies upon when the sun isn’t shining.

Until the General Assembly grapples with the fundamental issue of how to generate solar electricity without undermining the transmission-distribution grid, all the rest is window dressing.

Is Recycling a Practical Solution for Coal Ash?

State Sen. Scott Surovell, D-Mount Vernon, recommends coal ash recycling.

State Sen. Scott Surovell, D-Mount Vernon, recommends coal ash recycling.

State Sen. Scott Surovell, D-Mount Vernon, represents homeowners living near Dominion Virginia Power’s Possum Point Power Station, which is in the process of disposing of millions of cubic yards of coal ash accumulated over the years. The coal combustion residue, he told the Senate Committee on Agriculture, Conservation & Natural Resources this afternoon, is a “booming, growing, ongoing problem.”

Dominion proposes consolidating the coal combustion residue from five ponds into one, which it will cap with a synthetic liner and monitor for leakage of potentially toxic heavy metals. But tests have found elevated levels of metals associated in the groundwater around the facility, and Surovell wants better protection for his constituents as well as other Virginians living near other coal ash sites. He has submitted a trio of bills that would require Virginia electric utilities to evaluate the options of coal ash recycling and/or disposing of the material into a synthetically lined landfills with leachate collectors.

Numerous coal ash ponds are scattered around Virginia, and Possum Point is furthest advanced in the regulatory process for closure. “This is new to everyone in the United States,” Surovell said, adding that he wants to make sure Dominion’s remedies don’t “blow up in a hundred years.”

William L. Murray, director of public policy, Dominion Virginia Power.

In response William L. Murray, Dominion’s director of public policy, told the committee that Virginia’s Department for Environmental Quality (DEQ) is staffed with “experienced, apolitical regulators.” Surovell’s proposals, he said, amount to an alternative regulatory regime. “The fundamental premise is that there’s something wrong with our current regulatory structure. We respectfully disagree with that.”

Electric utilities have been storing coal ash for decades in impoundments, mixing the residue with water to keep the particles from blowing away. Responding to highly publicized spills of coal ash into Tennessee and North Carolina rivers, the Environmental Protection Agency (EPA) issued rules in late 2015 requiring electric companies to de-water the coal and safely dispose of the dry material. In Virginia, the DEQ is responsible for issuing waste-water and solid-waste permits tailored to the conditions of each site.

Dominion got off to a quick start but ran into opposition last year from environmental groups and local landowners, who said that its plans to dispose of the coal ash on-site would contaminate local water supplies. Tests around Possum Point have shown elevated levels of metals associated with coal ash, but a Duke University study suggested that trace metals in groundwater also can occur naturally. Although it is it unclear if the coal ash ponds were to blame, Dominion has offered to replace wells for seven homeowners with municipal water.

Electric companies in North Carolina, South Carolina and Georgia recycle, or plan to recycle, large percentages of their coal ash by selling it for use primarily as a cement additive to make concrete. At many sites, they will truck the ash to state-of-the-art landfills with synthetic liners, caps, and leachate collection systems. The Southern Environmental Law Center, which has handled litigation in Virginia and the other states, contends that Virginia should adopt the same practices.

There is considerable commercial demand for coal ash in Virginia, said Surovell. Indeed, there is so much demand that concrete manufacturers are importing the material from China and Poland. It makes no sense to import coal ash when there is plenty available at Dominion’s power stations, he said. Because the ash often requires an intermediate processing step known as beneficiation, recycling the residuals could create jobs in the commonwealth, he said.

One of Surovell’s bills, SB 1383, would require all Virginia electric utilities to “recycle as much of their stored coal ash as is imported into the Commonwealth each year, on a pro rata basis.” The bill would allow the utilities to recover its treatment costs from the taxpayers. Mimicking President Trump, Surovell told the committee, “I think this bill could be huuuge, and create tons and tons of jobs. … I want to make Virginia great again.”

A second bill, SB 1398, would require utilities to assess their closure options — closure in place, recycling, landfilling — and submit their evaluations for review by DEQ and the public. A third, SB 1399, would require “coal combustion by-products be removed for disposal in a permitted landfill meeting federal criteria and that the impoundment site be reclaimed in a manner consistent with federal mine reclamation standards.”

Murray said that Dominion already recycles about 700,000 tons of coal ash a year generated by its coal plants in Mecklenburg, Chesterfield and Virginia City, as well as one it co-owns with the Old Dominion Electric Cooperative in Clover. The material is used in concrete, wallboard and even bowling balls.

If concrete manufacturers are importing coal ash from overseas, why isn’t Dominion recycling all of its coal combustion residue? The circumstances vary from location to location. The problem at Possum Point, said Murray, is that the company would have to truck literally thousands of loads of the material along a residential road, creating issues with congestion, noise and diesel exhaust. It doesn’t take much imagination to think that Surovell’s constituents would object to that solution.

Keep the Politicians Honest, Too

Dominion Virginia Power is coming under fire from all sides as it tries to balance reliability, cost and sustainability.

Dominion Virginia Power is coming under fire from all sides as it tries to balance reliability, cost and sustainability.

“Keep the big boys honest,” was the campaign tag-line of populist “Howlin” Henry Howell when he very nearly won his bid for the governorship in 1973. By “big boys,” he was referring to executives of VEPCO, a predecessor company to Dominion Virginia Power. Four decades later, it appears that Howell’s rhetoric is coming back in style.

As the Associated Press summarizes:

Two out of four GOP primary contestants are openly hostile to Dominion and want to ban the company from making campaign donations. An insurgent Democrat is indicating he’ll make the company’s broad political influence a significant campaign talking point. …

“Somebody has to drag these vampires into the sunlight,” said GOP candidate Denver Riggleman, a distillery owner who battled Dominion over eminent domain issues. Riggleman had a Capitol news conference Tuesday to pledge support for longshot legislation that would prohibit regulated monopolies from making campaign contributions. …

Republican Corey Stewart, a one-time Trump campaign chairman in Virginia, said if elected he would support the ban on donations from regulated monopolies as well and would look at other areas to curb the company’s political influence. “They have virtually every member of the General Assembly in their pocket,” Stewart said. …

On the Democratic side, former Congressman Tom Perriello is also making Dominion’s influence a campaign issue. “Tom believes our political system has become too rigged in favor of big corporations and special interests and that Virginians suffer when the very politicians charged with regulating monopolies accept campaign contributions from them,” his spokesman Ian Sams said.

Is Dominion worried? Spokesman David Botkins sounds confident the company can weather the latest storm: “Our 2.5 million customers tell us they are very, very happy with their low rates, superb reliability, cleaner air, and an energy independent Virginia.”

Bacon’s bottom line: Bashing the electric company is a time-honored tradition in the United States, and Virginia is no exception. Dominion Virginia Power is in politicians’ cross-hairs for multiple reasons. Environmentalists say the company is moving too slowly in adopting renewable fuels, and they say it should spend more to clean up its coal ash ponds. On the flip side, electric customers charge that a freeze in base rates negotiated a year ago locks in excess profits. Then landowners in the path of the proposed Atlantic Coast Pipeline, a project managed by parent company Dominion, as well as proposed new electric transmission lines, are up in arms. Meanwhile, there’s no denying that Dominion enjoys enormous clout in the General Assembly and the McAuliffe administration. It should surprise no one that Dominion has become a target of populist wrath.

As the debate unfolds, however, voters should bear in mind that Dominion, like Appalachian Power Co. and Virginia’s electric co-ops, must strike a balance between three broad goals: keeping rates low, keeping the lights on, and transitioning to cleaner fuels. Accomplishing all three requires trade-offs, making it impossible to fully satisfy all constituencies. If you add a fourth goal — promoting economic development — the tradeoffs become even more complex.

Dominion’s No. 1 priority is keeping the lights on. Let’s face it, nothing enrages people more than going without electricity for more than an hour or two. But ensuring reliability does not come free. By burying vulnerable distribution lines underground, for instance, the company can reduce the number and length of outages due to storms. That costs hundreds of millions of dollars, driving rates higher. How much are electricity customers willing to pay for an additional increment of reliability?

Similarly, the company could move more aggressively to embrace solar and wind power, but the intermittent nature of renewable energy sources threatens the stability of local distribution circuits. Before integrating renewables on a large scale, Dominion is proceeding with a series of small pilot projects to test the impact on local distribution lines. If you value reliability, you’re probably happy with the approach. If your top priority is combating climate change, you’re probably not.

Meanwhile, the company has been restructuring its transmission grid in response to federal clear air mandates — first to reduce emissions of mercury and other toxic minerals, and more recently to reduce emissions of carbon dioxide. Meeting those goals has required a massive shift from coal to natural gas and renewables. That entails not only building new power plants in new locations and importing electricity via wholesale markets from outside the state, it requires erecting new transmission lines to handle the re-routed electricity flows. Landowners understandably don’t like looking at electric transmission lines. But you can’t stick with the old electric grid and also have clean energy.

That’s not to say things can’t be done differently. Arguably, Dominion Virginia Power cut a sweet deal for itself when the legislatures froze its base rate. Arguably, the company could be more cooperative in allowing homeowners and small businesses to work with third-party providers of clean energy sources. Arguably, Virginia’s eminent domain laws could treat landowners more justly. Arguably, the system could be tweaked in many ways. But it always comes back to setting priorities and making tradeoffs. There is no way to satisfy everyone.

Let’s hope Virginia’s candidates for higher office keep that simple truth in mind as we enter the campaign silly season.

Clash over Rate Freeze Shifts to Va. Supreme Court

Earlier this week, the Virginia Senate shut down a bid by Sen. Chap Peterson, D-Fairfax, to revoke the rate freeze on Dominion Virginia Power’s and Appalachian Power’s electricity rates. But the battle over electric rates is far from over. The contest now moves to the Virginia Supreme Court.

Today is the deadline for foes to submit legal briefs in a case filed by the Old Dominion Committee for Fair Utility Rates. The case challenges a 2015 law that was enacted shortly after the Environmental Protection Agency (EPA) announced details of its Clean Power Plan for cutting carbon dioxide emissions in the electric power industry. State Corporation Commission staff had estimated that the new regulations could cost Dominion rate payers between $5.5 billion to $6 billion, but no one knew for sure, so lawmakers cobbled together a bill that would freeze base rates through 2019.

Proponents said the idea was for Dominion to absorb the risk for higher costs stemming from the regulation in exchange for rate stability. But critics say it was a cover for Dominion and Apco to lock in excessive rates.

Critics have become even more vocal now as Donald Trump prepares to enter the White House. The president-elected has pledged to kill the Clean Power Plan. If he succeeds, the justification for the rate freeze will disappear.

Ken Cuccinelli, a former Republican attorney general, contends that Dominion and Apco took advantage of the agitation over the Clean Power Plan to get a law enacted that guaranteed excessive rates for years without providing any real protection to rate payers. Working with another former AG, Andrew Miller, he argues that the law is constitutionally dubious because the General Assembly usurped the role of the State Corporation Commission to set electric rates.

Dominion responds that state Constitution clearly states that the SCC power to set rates is subject to “such criteria and other requirements” as set by law. Company lawyers have cited six instances in the past two decades in which the General Assembly either capped electricity rates or defined how rates would be set, all without constitutional challenges. Furthermore, says company spokesman David Botkins, consumers have not been harmed. The average monthly residential bill in January 2017 is 3.6% lower than it was two years ago when the law was enacted.

There are four categories of electric rates in Virginia, Cuccinelli explains. One is the “base” rate, which covers most operating costs and accounts for about half the electric bill. A second is a fuel-adjustment clause, which adjusts charges for coal, natural gas, and nuclear fuel as prices move up and down. A third is a seldomly invoked emergency clause to reimburse electric companies for clean-up costs associated with storms, hurricanes and natural disasters. And the fourth is a rate-adjustment clause (RAC), which allows power companies to recover costs associated with new construction and other major capital expenditures, such as those required to comply with new federal regulations.

In a scenario in which Dominion was forced to shut down its Chesterfield coal-fired plant, denied licenses to extend the life of its nuclear plants and required to replace the capacity with solar, Dominion could recover the cost of multibillion-dollar capital expenditures through a Rate Adjustment Clause.

A second reason the 2015 rate-freeze law was bogus, says Cuccinelli, is that the Clean Power Plan was not scheduled to go into effect until 2022 — when the rate freeze expires. “The costs don’t even hit during the time addressed in the bill.”

Botkins responds that the rate freeze has protected rate payers against a variety of costs that would have been charged to them otherwise. The company ate tens of millions of dollars in clean-up costs from Hurricane Matthew, the ninth most costly storm in the company’s history. Citing another instance, he says, when 250,000 customers in Central Virginia lost power in a windstorm, “We worked around the clock. We absorbed those costs.”

The 2015 law also provided for a $57 million infusion into Dominion’s statewide weatherization program for low-income Virginians. And it committed the company to build 400 megawatts of solar power, which it is in the process of fulfilling, Botkins said. Just last week the company announced that it had completed work on three solar facilities in Virginia capable of producing 56 megawatts of electricity.

Addressing Cuccinelli’s argument that the costs of the Clean Power Plan wouldn’t hit rate payers until 2022, Botkins said that was unlikely. “You have to prepare for these things in advance. You can’t flip a switch and start complying.”

Cuccinelli is not impressed by the miscellaneous costs that Dominion has covered. SCC staff had determined before the rate freeze that the company was generating excess profits. The rate freeze cemented those profits into place for seven years. Paying for big storms that cost $100 million every ten years is a small risk compared to locking in a billion dollars in excess profits, he says. “Short of Noah’s flood, there will not be costs absorbed by utilities to offset the massive profits locked in” by the 2015 law.

Attorney General Mark Herring says the law is constitutional, says Botkins. “Virginia has an energy plan, and it’s working well. Low rates, superior reliability, and cleaner air than ever before — all to the benefit of our customers.  With all the regulatory uncertainty still swirling in Washington, now is not the time for political grandstanding at the expense of Virginia’s energy future.”

Justification for Electricity Rate Freeze Melting?

If the Trump administration repeals the Clean Power Plan, what justification is there for an electricity rate freeze in Virginia?

If the Trump administration repeals the Clean Power Plan, what justification is there for an electricity rate freeze in Virginia?

Is it time to reverse the rate freeze on electricity rates in Virginia? If President-elect Donald Trump revokes the Obama administration’s Clean Power Plan, Sen. Chap Peterson, D-Fairfax, author of SB 1095, thinks it would be.

Two years ago, no one knew what to make of the Clean Power Plan, an Environmental Protection Agency initiative that compelled electric utilities to reduce emissions of carbon-dioxide in the cause of fighting Global Warming. No one in the 2014 General Assembly session knew what the final regulations would look like or which of four broad regulatory options the Commonwealth of Virginia might adopt. If the plan required Dominion Virginia Power and Appalachian Power to close coal-fired power plants and replace generating capacity with gas, solar or nuclear, the utilities warned that rates could spike higher. On the other hand, the plan might not survive legal challenge.

At the time, it made sense to many legislators to freeze base electric rates until the dust settled. Since then, Trump has declared his skepticism of Global Warming, promised to roll back regulations hurting the coal industry, and nominated a new EPA chief who, as attorney general of Oklahoma, had filed suit to block the Clean Power Plan. However, it is not clear how quickly the plan, was implemented under a novel reading of the Clean Air Act after extensive administrative proceedings, could be repealed.

Peterson says it is time for a second look at the freeze. “You really can’t say, ‘Oh we have a federal government that’s trying to put coal out of business, so we need to give power plants a financial break.’ Sorry, that narrative doesn’t work anymore,” the Associated Press quotes him as saying.

Large industrial customers say the freeze could cost Dominion customers $2.4 billion in unnecessary payments by 2022, when the freeze expires, and Appalachian Power customers another $300 million. But Thomas Wohlfarth, a Dominion senior vice president, said those estimates are based on overly optimistic projections about the true cost of providing electricity.

Moreover, Wohlfarth said, Trump can’t just dispense with carbon regulations with the stroke of a pen. “We’re not of the opinion that carbon regulation is going to go away.”

Update: Well, well, this blog post had the shortest relevance of just about anything I’ve ever published on Bacon’s Rebellion. When I checked Richmond Sunlight a couple of hours ago, the bill was still alive. Now I have been informed that the bill died in the Senate Commerce and Labor Committee on a 12 to 2 vote.

Update: Peterson is vowing that “the fight isn’t over to stop excessive profits for regulated utilities.” In what may be the most quotable quote so far this session, he said: “If you use electricity in Virginia, you should want this bill. If you live in a teepee, you probably don’t care.”

Update: Yikes, the updates are flowing fast and furious. The rate freeze “has provided direct benefits to low-income seniors and military veterans through the expansion of Energy Share, and saved customers millions of dollars in costs while keeping Dominion’s rates well below the national average, which are lower now than before SB 1349 was passed,” said Dominion spokesman David Botkins.

“The broader issue of uncertainty around how EPA will regulate carbon is increasing, given the current Clean Power Plan may be replaced with an alternative that would then be subject to a new round of challenges,” Botkins said.

Norfolk Naval’s Investment in “Energy Security”

How can a North Carolina solar farm contribute to energy security and resiliency of the Norfolk Naval Station?

How can a North Carolina solar farm contribute to energy security and resiliency of the Norfolk Naval Station? GAO has the same questions I do. Photo credit: Virginian-Pilot.

Let me set the scene for this post. A year ago I wrote about Naval Station Norfolk’s deal to purchase enough solar electricity through Dominion Virginia Power to meet 6% of its electricity needs over the next ten years. The transaction advanced the U.S. Navy’s goal of deriving at least 50% of shore-based energy from alternative sources by 2020. The terms of the deal were murky, however, and I could not elicit from the Navy what it was paying for the electricity other than a vague statement that the tariff was “consistent with the current rate structure.”

The Navy justifies the move to renewable energy nationally on the grounds that it “promotes more secure and resilient installation operations.” However, the solar farm is not located on the Naval base. Developed by a third party enterprise, Invenergy, and acquired by Dominion in order to fulfill the Navy’s needs, the 20-megawatt facility lies far to the south in Morgans Corner, N.C.

How did buying solar energy from North Carolina, as opposed to building the facility on the base itself, promote the security and resiliency of Naval Station Norfolk? If Dominion’s electric grid went down in a hurricane, cyber-attack, act of war, or whatever, the solar electricity generated at Morgans Corner could not miraculously leap over 30 or 40 miles of swamp and farmland to Norfolk. The Navy’s non-responsive response to my question: “Signing long-term contracts for renewable energy helps to increase the DON’s energy security by providing long-term cost stability and diversifying our resources.”

The Navy roped Dominion and Invenergy into the deal because it needed private-sector partners to utilize the state and federal tax credits that would bring down the cost of the project to the Navy (even though it transferred costs to the treasuries of the United States and North Carolina.) It seemed obvious to me that the deal was designed to meet the Obama administration’s renewable energy goals, not to create a secure energy source for the Navy base — at least not secure in any military sense.

Nothing came of my article. No one else seemed to care.

Then, in September 2016, the federal Government Accounting Office (GAO), published a study, “DOD Renewable Energy Projects,” of which I have only now become aware. That report examined 17 Department of Defense renewable-energy projects. Unfortunately, Naval Station Norfolk was not one of them. But I am not the only one, it turns out, who wonders if the renewable projects contribute anything to military base energy security.

While some of the renewable projects advanced DoD’s energy goals, states the report, “project documentation was not always clear about how each  project was expected to … advance the department’s energy security objective or estimate the value of energy security provided.”

We found that only 2 of the projects were specifically designed to provide power to the installations in the event of a disruption to the commercial grid without additional investments. DOD officials told us that they believed all 17 of the projects in our sample provided an energy security benefit because the officials defined energy security broadly to encompass the diversification of fuel sources, among other things.

Dominion is a secure and reliable provider of electricity under normal circumstances, so DoD clearly was looking for something more. Arguably, the solar deal allows the naval station to lock in stable rates for the next 25 years or so (however long the solar panels last). But that’s budgetary security — not the kind of security that would allow the naval station to continue functioning in a national emergency when the grid goes down.

In theory, a solar facility feeding into a microgrid could seal itself off from the troubles in the larger grid. But only two military facilities appeared to have followed that path. One likely reason is that solar panels take up a lot of room. To supply Naval Station Norfolk would require thousands of panels on hundreds of acres of land, and the naval base does not have hundreds of acres available. By necessity, utility-scale solar projects are located in the boonies — away from military facilities.

Bacon’s bottom line: Relying upon solar energy to create a secure electricity supply for a military base is, except in rare cases, a hopeless task. That’s not to say that the policy was a bad one. One can come up with all sorts of reasons to install more solar capacity. They just aren’t the reasons the U.S. Navy gave us.