Category Archives: Regulation

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.

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.

Nonprofit Hospitals, Market Power and Charity Care

Medical campus of VCU hospital, one of the largest providers of charity care in Virginia.

Medical campus of VCU hospital, one of the largest providers of charity care in Virginia.

A new study of California hospitals between 2001 and 2011 has found no evidence that nonprofit hospitals provide more charity care when they gain market power. Nationally, 58% of all non-federal, general hospitals are nonprofit. Nonprofits dominate the health care sector in Virginia as well.

“Economic theory indicates that a balancing of social benefits against harm from market power may be appropriate under the assumption that nonprofits will provider greater social benefits when they have greater market power,” write Cory Caps, Guy David, and Dennis W. Carlton in a study undertaken as part of the National Bureau of Economic Research’s health care initiative.

They conducted the study to see if the theory held up in practice. In the case of California, it didn’t.

The study, “Antitrust Treatment of Nonprofits: Should Hospitals Receive Special Care,” could have implications for the debate over the Certificate of Public Need (COPN) in Virginia. Under the COPN law, the state must give its approval for major capital outlays such as new buildings, expansions and purchases of expensive equipment. The law is widely acknowledged to reduce competition and bolster profits for hospitals, but is justified on the grounds that helping hospitals maintain market share enables them to spend money on uncompensated care.

California is not Virginia, and the authors were exploring the relationship between a hospital’s market power and uncompensated care in the context of antitrust laws, not COPN. So, the findings may not be replicated in the Old Dominion. But insofar as the authors developed a methodology for examining the relationship between market power and uncompensated care, it would be worth conducting the same exercise in Virginia.

Virginia nonprofits receive exemptions from state, local and federal taxes. If it turns out that they aren’t using their revenue “surplus” to provide charity care and cover bad debts any more than their for-profit peers are, Virginians might legitimately ask what public benefits they are using their “surplus” for.

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.

Why the Controversy over Burying Electric Lines?

Dominion says burying electric lines prone to outages will reduce repair costs and restore juice to customers quickly.

Dominion says burying electric lines prone to outages will reduce repair costs and restore juice to customers more rapidly. But will undergrounding programs pay for themselves?

The Senate Commerce and Labor Committee voted unanimously yesterday to approve a bill, SB 1473, that would declare that burying electric lines lines is “in the public interest.” The bill would apply to local distribution lines, or “tap” lines, that have a 10-year average of nine or more unplanned outages per mile. Dominion Virginia Power says it has 4,000 miles of such lines.

About a year and a half ago, the SCC nixed a Dominion plan to bury 526 miles of distribution lines and recoup about $700 million from customers over 40 years on the grounds that the cost-effectiveness was unproven. The commission approved instead a pilot project that would provide an empirical base for evaluating the economics of burying outage-prone electric lines.

It’s not clear from the Richmond Times-Dispatch reporting exactly what effect the law would have on State Corporation Commission (SCC) decision making.

Dominion spokesman David Botkins said that the bill is not intended to circumvent the SCC ruling. “Clearly, it doesn’t do that,” he said. “The SCC retains the ultimate authority as they review and approve and deny every application going forward.”

The company has argued that burying the most vulnerable lines would reduce electric outages and speed recovery from storms and other disruptive events. “What we’re looking to do,” said Alan Bradshaw, director of the underground program, “is eliminate work.”

Bacon’s bottom line: I don’t understand why burying electric lines has become so controversial. The logic seems fairly straightforward. Outages occur with predictable frequency along some 4,000 miles of local distribution lines in Dominion’s system. It costs a predictable amount in manpower, equipment and supplies to restore those electric lines under routine weather conditions, plus an unpredictable amount stemming from major storms. Dominion should be able to put a dollar value on the cost of burying the lines, and it should be able to put a dollar value on the cost of restoring the lines over, say, a 10-year or 20-year period of time. If the cost of burying a given mile of line, amortized over 40 years, exceeds the average annual cost of restoring the power, then it’s a poor deal for ratepayers. Conversely, if the cost of burial is lower than the cost of restoration, ratepayers save money. Go for it!

If we want to delve a little deeper, we also could assign a “cost” to electrical customers for going without electricity. That cost is trivial if the outage lasts only an hour or two, but it could mount exponentially if the disruption lasts for days, food is ruined, work (for those who work at home) is disrupted, and families seek shelter in motels or the homes of family and friends. I don’t know how to calculate such a number, and I don’t know if the SCC took such intangible costs into account when ruling on Dominion’s tap line-burial request. If there is a reasonable way to assign a cost, it should be included.

Dominion now has more than a year of experience under the pilot project — experience that includes the massive outages caused by Hurricane Matthew. Surely we have enough data to make the requisite calculations to devise a cost-effective solution.

State Oversight of Physicians Needs Tightening

State officials are lax when it comes to disciplining doctors for infractions of the law.

State officials are lax when it comes to disciplining doctors for infractions of the law.

by Victoria Nicholls

State Sen. Diobhan S. Dunnavant, R-Henrico, a Henrico County physician, broke federal health privacy laws when she sent a political solicitation to her patients during her 2015 campaign, the Richmond Times-Dispatch reported two weeks ago. And what were the consequences? Nothing.

The first-term senator won’t face fines or penalties, according to a letter from the U.S. Department of Health and Human Services’ civil rights office. And that should concern every Virginian and American.

In the Times-Dispatch article, Dunnavant stated that her campaign solicitation letter was approved by a medical practice board and lawyers. Really? Did she chastise her lawyers for malpractice? Did any of her advisers suggest that she consult the Health Insurance Portability and Accountability Act (HIPAA) specialists first? No? Why not?

Patients should be alarmed that Dunnavant was willing to transfer their data to a political campaign without their permission. If a nurse or admin had done the same, would the public agree that it was of no consequence for them to mine patients’ info for volunteer help and votes? What if another doctor or nurse used patients’ data for political purposes? Would they get the same hand-spanking?

“For me, it’s really all about the fact that none of my patients were harmed,” said Dunnavant.

What does Dunnavant have to say about her patients’ loss of data? What about their loss of privacy, which she was obligated by law and public/social agreement to protect? What about the loss of trust in the system? What other “enterprises” do doctors conduct on the side that we, the patients, are sacrificing our privacy for?

Authorities said Dunnavant, when aware of the potential privacy violation, moved quickly to “mitigate the damage” by deleting the protected data from a campaign computer.”

I’d like to know who else might have that data now. Was it backed up? If so, where? Who had access to it? Who else saw it? Did they sign confidentiality agreements? Are they even bound by HIPAA laws? No they aren’t. This is what makes this a huge, huge issue. Most people do not realize how much their personal data is sold on the market.

The system in Virginia isn’t willing to hold physicians accountable. In July 2016, I SENT Virginia physician-legislators including Dunnavant and Del. John O’Bannon, R-Henrico, information that a convicted Tennessee pill-mill doctor was working in a hospital in Virginia. Federal law mandates that convicted drug traffickers be jailed pending sentencing. No response. I asked the Virginia Department of Health Professions how either (a) he got a license or (b) the State Medical Board missed the fact that he had no license.

Still no response.

Victoria Nicholls describes herself as a concerned Virginia citizen living in Chesapeake.

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.”

Should Lawmakers Cap College Tuition Increases?

Now for something totally different — the first poll in the 14-year history of Bacon’s Rebellion!

I would say that I offer this poll in response to popular demand, but that would be misleading. No one but Bacon’s Rebellion‘s skeptic-in-chief, Larry Gross, AKA LarrytheG, has been agitating for polls. Moreover, I know that I will catch unmitigated grief for biasing the results by the way I frame the poll questions, thus creating another set of headaches for myself! But I plunge ahead in the conviction that polls will increase reader engagement. Indeed, I would go one step further and invite readers to compose their own poll questions and responses. I will happily consider them.

Accordingly, I have concocted the following in response to Larry’s challenge in a comment on the previous blog post to address the following topic:

[Total_Soft_Poll id=”2″]

It goes without saying, please vote only once. If I find evidence of cheating, I will have to search for a poll that restricts voters to those who register with the blog, which makes it more laborious for readers to participate, and it means I’ll be spending more time on technology/administrative tasks at which I am incompetent and less time writing blog posts for all the world to enjoy.

Update: I encourage you to elaborate upon the reasons for your vote in the comments section.

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.