Category Archives: Regulation

Why Would Dominion Want a $19 Billion Nuclear Plant?

North Anna Power Station

The Nuclear Regulatory Commission has indicated it will issue a license within the next few days to build a third nuclear reactor at Dominion Energy’s North Anna power station, the Richmond Times-Dispatch reported earlier this week.

Dominion has spent $600 million so far on planning, engineering and developing the 1,450-megawatt facility, which has been widely reported to cost an estimated $19 billion. While acknowledging the huge up-front expense, Dominion has argued that it needs to keep open the option of a third nuclear unit in case federal and state regulators impose strict carbon controls on Virginia’s electric utilities.

Robert Zullo has done a fine job of covering Dominion for the Richmond Times-Dispatch, and I rely upon his reporting to keep up with the energy and environmental issues the company is embroiled in. But I would not frame the North Anna 3 issue as he did:

Given the massive cost of the controversial project, which has been opposed by both consumer and environmental groups and has yet to be approved by the State Corporation Commission, it remains unclear whether the utility will actually build the reactor.

True, consumer and environmental groups do oppose the project, and, true, it is unclear whether the utility will build the reactor. But the driver isn’t the cost, which is horrendous. The driver is what kind of regulatory regime federal and state governments enact to reduce carbon dioxide emissions from Virginia power plants. If regulators choose a “mass-based” approach that caps CO2 emissions on existing power plants and all new generation units built in the future, Dominion argues, the only way to meet electricity demand, maintain federally mandated reliability standards and stay within the CO2 limits is to construct a new nuclear unit, which emits zero carbon.

Dominion is not advocating construction of North Anna 3. It is not recommending construction of North Anna 3. There is no indication that it even wants to build North Anna 3. Rather it is preserving the option should political and regulatory developments leave it no alternative.

The company lays out its logic in its 2017 Integrated Resource Report, a planning document that provides a 15-year look into the future. There is so much political and regulatory uncertainty that Dominion examines eight different scenarios predicated on different schemes for restricting CO2 emissions. Building North Anna 3 appears in only one of the eight options, which the IRP refers to as “Plan H.” Here’s how Dominion describes that plan:

Plan H is a Mass-Based program that limits the total CO2 emissions from both the existing fleet of fossil fuel-fired generating units and all new generation units in the future, but also includes the construction and operation of North Anna 3 in 2030. This Alternative Plan was developed assuming that the Company achieves [Clean Power Plan] compliance through portfolio modifications with no market purchase of CO2 allowances. This Alternative Plan limits the generation of [the Mt. Storm coal-fired power station] to a 40% capacity factor.

Key assumptions include:

  • Retirement of up to four coal-fired units at the Mecklenburg and Clover power stations, totaling 577 megawatts, by 2025.
  • 3,360 megawatts of additional solar capacity;
  • 2,290 MW of additional natural-gas, Combustion Turbine capacity;
  • A 20-year extension of the four existing nuclear units at the North Anna and Surry power stations.
  • Addition of 1,452 of nuclear capacity at North Anna 3.

Dominion acknowledges that the compliance costs of Plan H would be extremely expensive — $14.79 billion over the IRP study period compared to $5.71 billion for the next most expensive alternative and $2.3 billion compared to the least expensive alternative.

The impact of Plan H on residential consumers would be considerable. Dominion estimates that average monthly electric rates for a typical residential customer using 1,000 kilowatt hours per month would increase 29.44% by 2030 and subside to 19.01% higher by 2042. That would be more than five times the increase of the next most costly plan in 2030.

Source: Dominion Energy

A key assumption embedded in Dominion’s projections is that electricity demand will increase by an average of 1.5% annually over the next 15 years. The IRP forecasts a compound annual growth rate of 2.04% for the Virginia economy, based upon data supplied by Moody’s Analytics. Thus, a 1.5% load increase implies continued energy-efficiency gains that reduce the energy intensity of each unit of economic growth.

Virginia’s success in attracting energy-intensive data centers plays into the utility’s Virginia forecast. “The Company has seen significant interest in data centers locating in Virginia because of its proximity to fiber optic networks as well as low-cost, reliable power sources,” the IRP says. (See yesterday’s post, “Building on Virginia’s Data Center Boom.”)

Some observers argue that Dominion’s forecast overstates demand growth. Most notably, PJM Interconnection, the regional transmission organization of which Dominion is a part, provides a significantly lower growth forecast for the Dominion transmission zone, as seen here:

Source: Dominion Energy

The IRP addresses this forecast discrepancy at length. Dominion says four factors account for the gap in projected demand growth. First, PJM eliminated new data center growth from its forecast. Second, PJM makes assumptions about Distributed Energy Resources (primarily solar) that overestimate how they would perform during critical system conditions. Third, PJM bases its forecast of appliance saturation and efficiencies on Southeast regional data, while Dominion uses historical data from its own service territory. And fourth, Dominion uses a different methodology to account for public sector energy growth, which accounts for 13% of company sales.

Another unknown is the likelihood that a Plan H scenario will materialize.

The Trump administration has expressed a desire to scrap the Clean Power Plan. Even if it succeeds in neutering the CO2 regulations, though, a future administration could reinstate them. Meanwhile, the Virginia environmental lobby is pushing hard for the CO2 caps contemplated in Plan H, and the McAuliffe administration will announce its own plan later this month to combat CO2. Furthermore, several environmental groups have gone on the record in opposition to extending the life of the existing Surry and North Anna nuclear plants. Should Dominion fail to renew those licenses, it would have to make up nearly 3,400 megawatts of capacity elsewhere. Unable to add fossil fuel capacity under a Plan H scenario, it would be limited to renewables or nuclear. An all-renewables approach could create an unstable grid with major reliability issues. That would leave North Anna 3 as the only alternative.

Many possibilities might obviate the necessity of building North Anna 3 under a Plan H scenario. The electricity load might increase at a slower pace than Dominion forecasts. The utility might succeed in extending the life of its existing nuclear units. Battery storage technology might advance to the point where it is feasible store massive amounts of sunlight-generated energy. There is no way to know at this time what will happen. But as the entity responsible for keeping the lights on, now and far into the future, Dominion is taking no chances. Despite the jaw-breaking cost, it is not taking the North Anna 3 option off the table.

The Nightmarish Complexity of Environmental Regs

As far as I’m concerned, the environmental regulatory process governing the proposed Atlantic Coast Pipeline and Mountain Valley Pipeline is incomprehensible. And that’s a bad thing. If only a handful of regulators, industry players and environmentalist activists can navigate the layers of bureaucracy and thicket of rules, the public is the loser.

In the latest hoo-ha, the Department of Environmental Quality (DEQ) has back-tracked on public statements regarding how it will regulate erosion and sediment control of pipeline construction crossing steep mountain slopes.

On April 6, DEQ issued a press release stating that “in addition to utilizing the U.S. Army Corps of Engineers nationwide permit 12 for wetland and stream crossings, DEQ will be requiring individual 401 water quality certifications for each project.” The next day, DEQ issued another press release stating that the department “has provided water quality certification for the U.S. Army Corps of Engineers 2017 Nationwide Permits.”

Got that? Me neither.

Needless to say, that bureaucratese is unintelligible to the normal human being, and even to spokesmen and reporters whose job it is to translate the gobbledygook. In response to inevitable media inquiries asking what the April 16 press release meant, DEQ spokesman Bill Hayden said that DEQ would require certifications for each individual pipeline segment that crossed or affected any waterway. That meant hundreds of certifications. That is what the Richmond Times-Dispatch understood, what the Roanoke Times understood, and what I understood.

But DEQ Director of Operations James Golden is now saying that Hayden had spoken before he had been briefed by “technical” staff members at DEQ. (So explains the Times-Dispatch today.) DEQ will rely upon a U.S. Army Corps of Engineers national permit. Rather than duplicate the Army Corps’ work, Golden told the T-D, the state’s individual certifications will focus on “upland areas” outside the Army Corps’ jurisdiction.

Asked why DEQ took nearly seven weeks before correcting the widely published remarks, Golden conceded that “in hindsight, DEQ should have tried to provide additional clarity.”

DEQ’s statements never added up to environmental groups, and they made an issue of the seeming discrepancy between the April 16 and April 17 press releases. After endeavoring to understand what it all meant, I headlined the resulting post, “A Brain-Frying Foray into the Regulatory Maze.” In what was surely one of the least-read articles in the history of Bacon’s Rebellion, I tried to sort through the difference between 401 certifications and Permit 12, general permits, individual permits, blanket permits and more. (I never got around to explaining 404 permits, which are relevant somehow.)

Despite the fact that I tediously double-checked information in the article before publishing, I still got stuff wrong — or so says David Sligh with the Dominion Pipeline Monitoring Coalition, a former regulator himself. But I found his correction so incomprehensible that I just appended it whole to the post, and let readers figure out what it meant.

Bottom line: I don’t think harshly of Hayden for disseminating inaccurate information. He was probably as confused as I was. (Well, not that confused. But pretty confused.) Where DEQ fell down was in not correcting the inaccuracies when they began circulating in the media. Frankly, the fact that they didn’t do so makes me wonder if DEQ officials above Hayden knew exactly what was going on.

One conclusion seems unavoidable: When the regulatory system is so full of jargon, is so complex and has so many interlocking pieces that career administrators of DEQ can’t communicate the story accurately to the public, something is wrong with the system.

McAuliffe Moves to Cap Utility Carbon Emissions

Governor Terry McAuliffe. Photo credit: Associated Press

Big news yesterday: Governor Terry McAuliffe issued an executive order to cap greenhouse gas emissions from Virginia power plants. Unfortunately, I’m out of town on personal business today, so I don’t have time for anything more than a cursory analysis.

Said McAuliffe in a press release: ““The threat of climate change is real, and we have a shared responsibility to confront it. Once approved, this regulation will reduce carbon dioxide emissions from the Commonwealth’s power plants and give rise to the next generation of energy jobs. As the federal government abdicates its role on this important issue, it is critical for states to fill the void. Beginning today, Virginia will lead the way to cut carbon and lean in on the clean energy future.”

McAuliffe’s press release cited the job-creation benefits that would come from a shift from fossil fuels to solar energy. Last year, as solar production took off in Virginia, the solar industry employed 3,236 workers — twice the number supported by coal. McAuliffe said also invoked sea level rise to justify his move:

Virginia is already experiencing the effects of climate change in its coastal regions due to rising sea levels. The threat from frequent storm surges and flooding could cost the Commonwealth close to $100 billion dollars for residential property alone. The impacts extend far beyond our coast, as half of Virginia’s counties face increased risk of water shortages by 2050 resulting from climate-related weather shifts.

The action now moves to the Department of Environmental Quality, which the governor ordered to write the regulations.

Bacon’s bottom line: McAuliffe’s move will generate headlines and plenty of political heat — Republicans have already announced their opposition to what they call the governor’s executive overreach — but it’s far from clear what practical impact the move will have. Acknowledging that the cost of solar energy has plummeted, Dominion Energy and Appalachian Power already have forecast that they will move heavily toward renewable energy sources over the next 25 years.

The press release spoke of a “cap” on greenhouse gases and new regulations that will “reduce” carbon emissions — not merely reduce carbon intensity (carbon dioxide emitted per kilowatt of energy produced). It is possible to reduce the carbon intensity of the electric generating fleet while allowing total carbon emissions to increase, albeit it at a much slower rate, as the economy grows. If Virginia caps carbon emissions, Dominion and Apco might be required to close additional coal-fired power stations, and it is unlikely that Dominion would build a planned gas-fired power plant in the early 2020s. Cancellation of that facility could undermine the economics of the proposed Atlantic Coast Pipeline, construction of which McAuliffe has said he supports.

Expect trench warfare between utilities, environmentalists and consumer advocates in the DEQ hearings discussing how to implement the carbon caps. Also expect General Assembly Republicans to challenge McAuliffe’s legal authority to implement a cap.

Update: Apco spokesman John Shepelwich submits the following correction: “Appalachian Power no longer operates any coal-fueled power generation in Virginia and has not since 2015. Two of the three units of our Clinch River Plant in Russell County were converted from coal to natural gas; that plant is scheduled to be retired in 2026.”

Please, Norge, Don’t Go NIMBY on Solar Project

Norge residents gather to learn more about a proposed solar farm in their neighborhood. Photo credit: Virginia Gazette.

Report from today’s Virginia Gazette: Members of the Norge community of James City County are “concerned” that a proposed solar farm will impact their neighborhood negatively.

The James City County planning commission approved in April an application to build a solar farm on a 225-acre property on Farmville Lane. The developer, California-based SunPower, said that the lane would have to be widened and trees removed in order for trucks to be able to turn properly.

Residents expressed concerns about traffic and noise said Amanda Beringer, who organized a neighborhood meeting to educate neighbors. “As we did more research and watched the planning commission meeting we realized a lot of people didn’t know about the proposal.”

Bacon’s bottom line: Well, if someone proposed a major construction project near where I lived, I’d want to know more about it, too. So the Norge neighbors can’t be criticized for wanting to learn more about the project. But if concern morphs into opposition, I’ll have “concerns” of my own, but entirely different ones. I’ll be concerned how NIMBYs inevitably arise to block any kind of energy-related project in Virginia, be it electric transmission lines, gas pipelines, wind turbines or even solar farms that hum quietly behind hedges while — outside the construction phase — creating little traffic or human activity of any kind. Some energy projects are intrusive and resistance is understandable. But opposition to solar projects is incomprehensible to me.

Look, people, solar energy is coming. Dominion and Appalachian Power have both announced commitments to massive increases in solar generation over the next 25 years. While some of that solar capacity will be small-scale, distributed rooftop solar panels, most of it will be utility-scale solar farms like the one SunPower wants to build. Leasing land to a  power company is great news for suburban and exurban landowners struggling to make ends meet in farming, and the tax benefits to localities are significant — even after taking into account the 80% discount on property tax assessments.

Local governments across Virginia need to get proactive and update their zoning codes and comprehensive plans to prepare for the upcoming solar bonanza. They need to work out potentially conflicting issues ahead of time. The quicker solar projects sail through the regulatory process, the more that will get built to the benefit of all.

Eco-City Alexandria Kvetches about Accelerated Potomac Cleanup

Nasty! Oronoco Bay in eco-city Alexandria.

Nasty! Oronoco Bay in eco-city Alexandria. Image credit: Greater Greater Washington.

The City of Alexandria bills itself as an “eco-city.” In 2007, it published a “green-ventory” of environmental plans, policies and programs. In 2008, the city adopted an “eco-charter.” Since then, the city has launched initiatives to tackle invasive plants, expand the regional BikeShare program, bolster transit bus service, weatherize apartments of low-income Alexandrians, design LEED-certified city buildings, install energy-efficient lighting fixtures, and replace diesel buses with hybrid-electric buses — all trendy, green priorities.

Meanwhile, the city’s aging combined sewer overflow system dumps an estimated 70 million gallons of raw sewage, waste and rainwater into the Potomac River every time it rains. The city has had years to fix the problem, which it estimates will require $386 million in local funds. Until yesterday, the plan was to pay for the sum through a gradual 500% increase in city sewer fees over the next ten years.

Now city officials are “reeling,” reports the Alexandria Times, after Governor Terry McAuliffe signed into law a bill that will compel the city to accelerate its timetable for fixing the problem by two years to 2025.

“We appreciate the governor’s earlier efforts to substitute a more reasonable deadline, and we remain fully committed to getting all four outfalls in Alexandria done, and to getting them done right,” said Mayor Allison Silberberg in response to the news. “While we are moving full steam ahead, we are very concerned that this legislation requires a deadline engineers have indicated is not feasible.”

Bacon’s bottom line: Yeah, yeah, yeah. If Alexandria really wants to consider itself an “eco-city,” its first priority should be to stop dumping human excrement into the Potomac River. Which would have a greater positive impact? Investing in save-the-world efforts to reduce CO2 emissions, which, might reduce global warming by a hundred-thousandth of a degree over the next 100 years, or stop fouling the river? I’ll hazard a guess that people living downstream would prefer the latter.

Until Alexandria gets its act together and stops polluting the Potomac, maybe it could do the rest of us a favor and spare us the “eco-city” blather.

Rappahannock Water Quality Endangered by Fracking?

Rappahannock River

Rappahannock River. Image credit: American Rivers.

American Rivers has listed the Rappahannock River as the fifth “most endangered” river in the United States. The environmental group claims the river is threatened by industry interest in hydraulic fracturing (fracking) operations in the Taylorsville Basin lying thousands of feet beneath the river. The quality of drinking water of three million people in eastern Virginia are at stake.

The Rappahannock joins company with the Lower Colorado River (the most endangered), which is threatened by excess water consumption; California’s Bear River, which is imperiled by a new dam; the South Fork Skykomish River in Washington, which is jeopardized by a new hydropower project; and six other rivers. These rivers are not necessarily the most polluted. Rather, American Rivers highlights in its “America’s Most Endangered Rivers 2017” report ten rivers whose fates will be affected by the political process in the upcoming year.

The watershed of the Rappahannock, the longest free-flowing river in Virginia, encompasses all or parts of 18 counties, the report notes, and supports thriving agricultural and seafood sectors as well as recreational activity.

American Rivers is concerned that 85,000 acres in five counties along the tidal Rappahannock are leased for oil and gas exploration. Only one of the five counties has enacted a land use ordinance to protect against the impact of fracking. Last year, Governor Terry McAuliffe approved new regulations that would require baseline water testing and monitoring along with the disclosure of any chemicals used in the fracking process. The oil and gas lobby introduced legislation to weaken the regs in the 2017 General Assembly session, but the effort was beaten back. Says American Rivers:

It is clear that the threats that industrial gas development and fracking pose to the rural and agricultural communities along the Rappahannock River are not going away. The first line of defense lies with local government, which has the power to establish local protections to protect the drinking water for millions of citizens.

Last  year Prince George County amended its zoning ordinance to require hefty setbacks for gas wells, effectively making 91% of the county unavailable for drilling. But Westmoreland, Essex, Caroline, and King and Queen Counties have yet to act.

Here’s the source of concern: Gas companies must drill through the Potomac Aquifer to reach the gas in the Taylorsville Basin, which is reported to contain more than 1 trillion cubic feet of gas, equivalent to two-and-a-half times the volume of gas consumed in Virginia in a year. Fracking injects sand and chemicals under high pressure to fracture the rock sufficiently for oil and gas to flow through it. Although oil and gas companies seal off drill holes where they pass through aquifers, environmentalists claim that potentially toxic chemicals still can leak into the Potomac Aquifer and, from there, eventually into the Rappahannock River.

Bacon’s bottom line: Environmental groups are adamant that fracking represents a danger to the aquifer and water supply. The oil and gas industry is equally insistent that fracking poses minimal risk. Each side cites seemingly authoritative studies. Who knows?

The Taylorsville Basin contains maybe one-fortieth the volume of gas contained in the famed Marcellus Basin, which has transformed energy economics in the United States, but it’s nothing to sneeze at. The gas has an economic value of $2 billion to $4 billion, maybe more, depending upon the current price of natural gas. That represents a lot of economic activity for five economically depressed rural counties.

Admittedly, a billion dollars or so in local payroll and royalties won’t be much consolation if fracking ruins the water supply. But more than 8,000 wells have been hydraulically fractured in Southwest Virginia with no documented instances of surface or groundwater contamination, according to state geologist David Spears.

The McAuliffe administration made a prudent decision, it seems to me, to establish a baseline of data on Potomac Aquifer water quality and to require gas companies to disclose the chemicals they use in fracking. If chemicals used in fracking are not found in the aquifer but suddenly appear after drilling begins, it is not unreasonable to conclude that fracking created the problem. Conversely, if none of the chemicals show up in the aquifer, no harm is likely being done.

Regardless, the American Rivers report signals that the Taylorsville Basin is on the radar screen of national environmental groups. I expect they will pour considerable resources into fighting development of the basin. Linking that fight to the conservation of the treasured Rappahannock River is shrewd public relations.

Will NIMBYs Thwart SolUnesco Solar Plan?

SolUnesco CEO Francis Hodsoll addresses the Albemarle County Board of Supervisors

SolUnesco CEO Francis Hodsoll addresses the Albemarle County Board of Supervisors. Photo credit: Charlottesville Tomorrow.

Not all barriers to solar energy emanate from Richmond. Take Albemarle County, for example. The county zoning code outlaws solar farms, we learn from Charlottesville Tomorrow.

“The current zoning ordinance allows for the transmission and distribution of energy, but not the generation of energy,” said county planner Margaret Maliszewski at Wednesday’s Board of Supervisors meeting.

The issue arose because Reston-based SolUnesco wants to submit an application to develop an 11-megawatt photovoltaic solar energy generation system in southern Albemarle. “Our project is for the wholesale supply of energy that goes onto a wholesale network of transmission and distribution lines and that allows people to buy energy from our project or for a utility to buy energy directly from us,” said SolUnesco CEO Francis Hodsoll.

Albemarle Supervisors directed the planning department to study the issue. But, while the Charlottesville-Albemarle area may be home to many solar-loving greenies, don’t take it for granted that county planners will roll over for SolUnesco.

“As a member of a rural neighborhood, the first thing that comes to mind is protection of the rural areas,” said Phillip Fassieux at the board meeting. “We all love solar power, but at what cost? … “How will residents of Albemarle benefit specifically from turning over part of our rural county to its use? Will we see reductions in electricity rates?”

Everyone loves solar in theory, but opposition frequently surfaces locally when someone proposes building a solar farm near them. Others object to the idea of vast solar farms displacing agricultural uses of the land. SolUnesco’s proposed 11-megawatt solar farm, big enough to supply demand for about 2,000 households, would require between 70 and 80 acres of land. Typically, solar farms include vegetated buffer zones to screen the solar panels from view.

(Another potential objection to solar is that, given the state formula for distributing school aid, a big capital investment in solar could actually hurt a county financially. I’ll deal with that issue in a separate post.)

Bacon’s bottom line: Call me a Neanderthal, but I support private property rights. I see no justification for Albemarle County — or any county — to impose zoning restrictions prohibiting solar farms. If a property owner decides that installing solar panels represents a use of land preferable to agriculture or timber, that should be his decision to make. Counties have no business intervening unless the land use creates a nuisance to neighbors. Unlike wind turbines, solar panels create no noise, are easily hidden from view, and don’t harm wildlife. NIMBYs need to get a life.

And one more thing… The SolUnesco pitch to landowners asserts that its 25-year leases will generate above-market returns for landowners with an inflation escalator. The company assumes all costs and risks associated with developing the project — the landowner just collects checks for 25 years.

Rural Virginia is hurting. It has few resources of value in the knowledge economy. One thing it does have is land. Solar energy represents a rare opportunity for Virginia’s rural economy. There are many complex issues surrounding the integration of solar into the electric grid that need to be resolved before we see widespread deployment, but land use should not be one of them.

The Right Way to Test for Coal Ash Contaminants

A North Carolina riverkeeper inspects testing samples of coal ash taken from the Dan River.

A North Carolina riverkeeper inspects testing samples of coal ash taken from the Dan River. Photo credit: WRAL.

So, it looks like the there will be a pause in the solid-waste permitting process for Virginia coal ash. Governor Terry McAuliffe had submitted an amendment to legislation that, if approved, would require Dominion Virginia Power to compile more information on contamination around its coal ash sites and study alternative closure methods before the state issues the permits. Now Dominion has decided to go along, which means political opposition to the idea could evaporate.

“We concur that it is a prudent course of action to seek and consider an evaluation of the assessments on the appropriate closure methods based on the individual features of each site before seeking necessary solid-waste permits,” wrote Dominion CEO Thomas F. Farrell II. “Dominion finds the proposed amendments to Senate Bill 1398 to be workable, and is committed to completing the site assessments before pursuing solid waste permits regardless of the outcome of the legislation.”

McAuliffe’s amendment would restore key provisions to a bill co-sponsored by Sens. Scott A. Surovell-D-Fairfax, and Amanda F. Chase, R-Chesterfield, whose legislative districts include Dominion’s Possum Point Power Station and Chesterfield Power Station, each of which has millions of tons of coal ash to dispose of. (See the Richmond Times-Dispatch story here.)

Dominion had originally opposed the testing and study provisions, which were stripped out by the House of Delegates. But if the power company drops its opposition to McAuliffe’s amendment, as Farrell’s letter indicates, Surovell and Chase likely will get their way.

According to the bill summary, HB 1398 will require owners of coal ash ponds (1) to identify water pollution emanating from the ponds and address corrective measures, and (2) evaluate the feasibility of “clean closure.” Clean closure would entail removing the coal ash from ponds where it has been stored to lined landfills. Dominion has estimated that the cost of landfilling could amount to $3 billion, but environmental groups have argued that the cost would be much lower if the utility recycled the material as an additive to cement and other products.

Bacon’s bottom line: Pausing the permitting process to get a better handle on what’s happening at the coal ash ponds is a good idea. Frankly, despite considerable testing by both Dominion, environmental groups and even Duke University, little can be said with certainty about the process at each of Dominion’s four sites by which groundwater migrates through the coal ash and contaminates either well water or nearby rivers and streams.

Any testing regime must be rigorous enough to provide definitive answers. The last thing we need is set of ambiguous results that Dominion and environmental groups try to spin to their advantage in another contest of P.R. and political clout. Any credible testing program should recruit outside experts, perhaps from Duke or perhaps from a Virginia university, who can identify the questions to be answered and what protocols will provide definitive answers.

Dominion has conducted tests on its property and found little evidence of contamination at Possum Point, Chesterfield and the Bremo Power Station, but a federal judge recently used Dominion data to conclude that coal ash its closed Chesapeake plant was contaminating groundwater. Testing by riverkeeper groups of groundwater and surface waters just outside of Dominion property show elevated levels of heavy metals which, at sufficient concentrations, can be toxic to aquatic life and human health. Additionally, Duke University has conducted extensive testing in North Carolina and Virginia using “forensic tracers” that have found elevated levels of heavy metals in groundwater near Bremo and Chesapeake. But other Duke tests have found that elevated levels of the carcinogen hexavalent chromium, also associated with coal ash, is endemic in piedmont groundwater and in many cases cannot be attributed to the coal combustion residue.

Complicating any analysis is the fact that trace levels of heavy metals and carcinogens are frequently found in groundwater and surface water as the result of natural processes. Levels vary depending upon local geology. The existence of trace elements of heavy metals in groundwater near coal ash ponds is not in itself proof that the heavy metals came from the coal ash. The trace elements could be ubiquitous in the area, but no one knows unless tests are conducted some distance from the power plants. Ideally, any testing regime for Dominion’s coal ash ponds should adjust for background levels of contaminants.

Another complication is ascertaining the movement of groundwater. For example, the water from several wells near Possum Point have shown elevated levels of heavy metals. It is easy to deduce from the proximity of the wells to coal ash ponds that the contaminants come from the ponds. But to demonstrate the point conclusively, one must show that the groundwater migrates from the coal ash ponds toward the wells, and not in some other direction. To make that proof, it is necessary to conduct extensive sampling and create detailed maps that mark the geographic scope and elevation (in feet above sea level) of the underground water and determine the direction of the water flow. Only if it can be documented that underground water is migrating from the coal ash pond toward the wells can one reasonably conclude that the coal ash is to blame for elevated levels of well-water contaminants. If the water is migrating away from the wells, the well-water contaminants probably have another source.

Adding another layer of complexity to the analysis is estimating how much contamination the groundwater picks up while migrating through coal ash. Dominion maintains that its coal ash pits do not come into contact with the water table; the deepest part of the ponds have a higher elevation than the underground water table. However, using Dominion’s own maps, the Southern Environmental Law Center (SELC) contends that the bottom reaches of the coal ash ponds at Bremo and Chesterfield intersect with the water table. If the SELC is right, groundwater that migrates through a portion of the coal ash could pick up contaminants along the way.

The question then arises, how long must the water be in contact with the coal ash in order to pick up trace metals? That is a function of the chemistry of the coal ash, how tightly or loosely the metals are bound to inert materials, and the speed of water migration, which depends upon the permeability of the clays and rocks. If the groundwater comes into contact with only a small percentage of the coal ash for a short time, the leeching of heavy metals could well be minimal.

If it can be demonstrated that measurable levels of metals leach into the groundwater, another question must be answered: What volume of contaminants, and how rapidly, does the groundwater feed into surrounding rivers and streams? While U.S. District Court Judge John A. Gibney Jr. found that Dominion’s Chesapeake Coal ash ponds did contaminate the groundwater and that the groundwater did reach the Elizabeth River in violation of the Clean Water Act, he also found no damages because the contaminants were so diluted by the massive water volume of the river that aquatic and human health were unaffected. Continue reading

Fix the Broken Regulatory Process

There must be a better way for federal agencies to review infrastructure mega-projects.

A few days ago, I asked why, after three-and-a-half years, the U.S. Army Corps of Engineers has yet to give a yea or nay on Dominion Virginia Power’s permit request for the Surry-Skiffes Creek transmission line. The issue I’m raising isn’t what the Army Corps decides but how long it takes to reach a decision. Because of the interminable time spent pondering the permit application, citizens and businesses on the Virginia Peninsula will be at risk of blackouts this year and next, if not longer.

Today, the Richmond Times-Dispatch highlights the frustrations expressed by Diane Leopold, CEO of Dominion Transmission (DT), sister company of Dominion Virginia Power and managing partner of the proposed $5 billion Atlantic Coast Pipeline (ACP).

“To make these beneficial investments we need certainty from federal agencies. Not a rubber stamp, but a rational path forward with clear processes, reasonable schedules and reasonable decisions,” said Leopold in testimony to the U.S. Senate Committee on Energy and Natural Resources.

The pipeline requires more than 18 major federal permits and authorizations from the Federal Energy Regulatory Commission, the U.S. Army Corps of Engineers, the National Parks Service, the U.S. Forest Service, the Environmental Protection Agency and the U.S. Fish and Wildlife Service. The most visible hang-up at the moment, as judged by Robert Zullo’s article in the T-D, appears to be with the Forest Service.

Dominion says it will use state-of-the-art technology and best practices that will minimize the risk of landslides and erosion on steep mountain slopes. But environmentalists claim that Dominion is under-estimating the landslide risk, and it appears that the Forest Service shares their concerns. Dominion is convinced that it’s right, and its foes are equally persuaded that they’re right. The debate will never be settled by having one side back down.

Why does this have to be so hard?

Instead of a time-consuming bureaucratic battle, why not just specify the desired erosion-and-sediment-control outcomes and require the pipeline to meet them? A reasonable approach would entail careful monitoring of land crossed by the pipeline to detect landslides and other forms of erosion — a cost that ACP would have to absorb. All monitoring data would be made available to the public so government agencies and environmental groups could inspect them to ensure the pipeline was fulfilling its responsibilities. ACP would be required to pay the full cost of restoring mountain slopes and compensate nearby landowners or water authorities for any damages. Perhaps ACP would be required to maintain insurance or post a bond sufficient to guarantee the damages are covered.

There should be one debate over the standards appropriate to steep mountain slopes, and those standards should apply to everyone who wants to build an interstate pipeline in comparable terrain. The purpose of regulation should not be to prescribe how pipelines do their jobs but to ensure that they achieve the desired outcomes. Finally, the review process should not require months and months of review. It should take no more than a week or two to ascertain that the pipeline applicant has the financial wherewithal to live up to its commitments.

Wouldn’t such an arrangement work better for everyone?

A Prosecution or Persecution of Pawn Brokers?

Pawn brokers under the gun. Fredericksburg’s All-Star Pawn & Gold does a good business in pawned guns.

The Virginia Attorney General’s office has extracted settlements from two Fredericksburg-area pawnbrokers for allegedly charging illegal interest and fees. Spotsylvania Pawnking LLC and Stafford-based All-Star Pawn & Gold will provide more than $62,000 in refunds to more than 1,000 customers to resolve the allegations.

The two pawn shops also paid the Attorney General’s office a total of $12,600 reimbursement for expenses, costs and attorney’s fees.

“In recent years we have seen a rash of pawnbrokers around Virginia skirting laws and overcharging consumers,” said Attorney General Mark Herring in a press release about the settlement. “If you’re considering using a pawn shop or other small dollar loan lender, you should always closely review the terms and know your rights before signing anything that might result in even more money coming out of your pocket.”

The press release provided no details about what the pawn shops charged in interest and fees. But in a previous press release, Herring accused B&B Pawnbrokers, Inc., also of Fredericksburg, of “predatory lending.” B&B, Herring charged, had made automobile title loans without a license, charged an illegal 10% monthly “processing fee” on all pawnbroker loans, and exceeded state limits on allowable interest rates and other charges.

The settlements are part of a larger initiative in which the AG’s office has partnered with the federal Consumer Financial Protection Bureau to enforce state and federal consumer finance statutes.

Bacon’s bottom line: Let me be 100% clear about one thing up front. Pawn shops, like any other business, should not cheat their customers. They must obey their contractual commitments, and they must obey the law. If they break either, they pay the price. Very simple.

That said, I’m always a little suspicious about campaigns against “predatory” lenders. The crusade against pawn shops reminds me of the crackdown on payday lenders motivated by a misguided effort to help the poor. In the case of payday lenders, the real offense typically is not cheating customers but lending money on terms that offend the consciences of do-gooders and social justice warriors. Is that what’s happening here with Virginia’s pawn shop prosecutions? I don’t know. I’m just raising the question.

The fact that Pawnking and All Star Pawn & Gold settled the case does not inspire confidence. Maybe they’re guilty as charged — or maybe they didn’t want to fight prosecutors with deep pockets.

Pawnking’s settlement provides a restitution averaging $67.29 per client, and so does All Star’s. Yup, exactly the same amount. That makes it sound like a cookie-cutter restitution. One must ask, is there any relationship between the restitution offered and the alleged harm done? According to the press release, customers who received loans between Sept. 13, 2014, and Nov. 12, 2015, can contact the companies directly. Why isn’t the AG’s office dispensing the checks? Does the AG’s office even know the identities of the presumed victims?

Pawn shops fill an important function in the economy. Most poor people do not have checking accounts, and those who do are required to maintain minimum balances and are punished for overdrafts. For the most part, they live in a cash-only society. When they run short, they don’t have savings accounts or credit cards to fall back on. Here’s the sales pitch on the All Star website:

If you’ve found yourself needing some quick cash recently and if you’ve been turned down for a personal loan, consider heading to All-Star Pawn & Gold.

All-Star Pawn & Gold offers collateral-based loans, meaning the loan is secured by something of value. You bring in something you own, and if we are interested, we will offer you the loan. The pawnbroker, All-Star Pawn & Gold, then keeps your item until you repay the loan.

You will receive a pawn ticket. Don’t lose this! Not only is it the receipt for your loan, but it also summarizes the terms of your pawn loan: fees, expiration date, description of your item, etc. …

If you don’t return to make payments on your pawn loan All-Star Pawn & Gold keeps your item. There are no other consequences: no collection action and no [effect] on your credit report.

Continue reading