Rogue Board

In “Climate of Capitulation,” former Air Board member Vivian Thomson argues unpersuasively that state government favors energy over the environment.

In 2005 Mirant Corporation operated a 482-megawatt coal-fired power plant in Alexandria. The facility was 60 years old, and it was dirty, emitting almost twice the allowed limits of nitrogen oxide (NOx). Due to its proximity to Reagan Washington National Airport, the plant had unusually low smokestacks, which meant that NOx, sulfur dioxide and particulates settled nearby. A Harvard University health study contended that installing Best Available Control technology at Mirant would avoid about 40 deaths, 43 hospital admissions, and 3,000 asthma attacks each year. In August of that year, the Warner administration ordered the plant shut down.

Mirant complied, but within a few weeks, citing an order from the U.S. Department of Energy, it reopened the facility. Conflict between Mirant on the one hand and environmentalists and citizens of Alexandria on the other raged for years. Warner’s successor, Governor Tim Kaine, tried to find a solution acceptable to all, and in 2006 the Department of Environmental Quality (DEQ) negotiated a permit that would reduce the local impact on Alexandrians by increasing the height of the pollution plume and dispersing emissions over a wider area. But the State Air Pollution Control Board, a majority of whose members sided with the opposition, voted 3 to 2 against it. Later, in 2008, the company agreed to merge smokestacks to lift the plume, accept the Board’s sulfur dioxide limits, and invest $34 million to reduce particulate emissions. The Air Board approved that permit, but Mirant’s owner, GenOn, ended up closing the plant before undertaking the improvements.

Vivian E. Thomson, an environmental science professor at the University of Virginia, recounts the Mirant episode in her recently published book, “Climate of Capitulation: An Insider’s Account of State Power in a Coal Nation.” Mirant’s ability to keep the Alexandria plant opened, she argues, was just one of many examples of how the energy lobby exercise power in Virginia and other states at the expense of the environment and citizens’ health.

Officials in the Kaine administration undermined and opposed the Board’s work, she asserts. The General Assembly interfered with Board decisions and enacted a law to expand the board from five to seven members for the purpose of diluting the power of the three activist board members, one of whom was Thomson herself. Resistance to the board’s policing of the environment reflected “cozy relationships” between regulators and businesses and Virginia’s “corrupt” environmental policy-making process, she says.

Vivian E. Thomson

Thomson details three major controversies in which she participated: the Mirant closing, the approval of Dominion Energy’s hybrid energy plant in Wise County, and the regulation of dust from coal trucks. Distressed by the way energy interests evaded her brand of environmental justice, Thomson describes a “climate of capitulation” — a system that shows “favoritism toward private interests and an inclination to maintain the status quo.”

By avoiding inflammatory rhetoric and maintaining a flat, academic style, Thomson strives to come across in the book as a reasoned observer of the political process. She doesn’t insult her opponents, she doesn’t engage in conspiracy theorizing, and she avoids a strident tone. But she never concedes that environmental regulation involves trade-offs with jobs, electric rates or electric reliability. In her analysis, protecting the environment and public health are not merely important goals, but the only goals worth considering.

Indeed, Thomson’s inability to acknowledge any perspective other than her own gives proof to the assessment of Kaine’s secretary of the environment, Preston Bryant, that the State Air Pollution Control Board was indeed a “rogue board.”

The Mirant controversy. Thomson’s blinkered view comes through most clearly in her recitation of the Mirant controversy. She never explains why the Department of Energy (DOE) issued an emergency order to reopen the Mirant plant after the Warner administration shut it down. The facility, as I discovered only by querying the Web, was one of three power plants supplying electricity to Washington, D.C. Pepco, the city’s utility, was planning to shut down one of the other three, the Potomac River Generating Station, for environmental reasons and it needed to upgrade a transmission line and substation feeding electricity to the capital from the outside. To avoid the risk of outages, the D.C. Public Service Commission petitioned federal authorities to keep the Mirant plant open until Pepco managed to complete the improvements. The DOE complied. Thomson deemed none of this background to be worthy of mention. Without it, the early behavior of Mirant and the Kaine administration are all but incomprehensible. 

The controversy persisted after Pepco completed its grid upgrade in July 2007. As Mirant struggled to stay in operation — operating mainly as a peaker plant only during the hottest and coldest days — Mark Rubin, a gubernatorial aide, brainstormed possible solutions to the problem. Eventually, he worked out a settlement, which the Air Board accepted. But in the end, the aging plant was beyond saving as natural gas began displacing coal in the energy marketplace. GenOn shut it down permanently.

Let’s recap. Governor Warner ordered the Mirant plant closed. The federal government ordered it reopened to ensure a reliable supply of electricity to Washington, D.C. through July 2007. The Kaine administration sought a compromise to allow the plant to continue operating beyond that date while also addressing environmental concerns. Protracted negotiations resulted in a deal that the Air Board approved. This is an example of Virginia politicians capitulating to energy interests?

The Hybrid Energy Center controversy. A parallel controversy in Wise County in which the Kaine administration did not accede to the air board’s wishes provides another alleged instance of state government caving in to the energy sector. In this case, the villain was the electric utility now known as Dominion Energy.

In 2005 Dominion had proposed building a $1.5 billion “hybrid” energy plant that burned coal, coal waste and waste wood. Dominion and its supporters billed it as a boon to economic development — 800 construction jobs, 75 post-construction jobs, 300 coal mining jobs, and $5 million yearly in new tax revenues for a county with a $44 million budget. As a bonus, the Virginia City Hybrid Energy Center would consume waste coal that was polluting regional streams and rivers. But activist groups protested that the project would perpetuate the environmentally destructive practice of mountaintop removal, generate air pollution that would harm nearby forests, and emit carbon-dioxide that contributed to global warming.

Dominion submitted the first part of its application for air pollution permits in the summer of 2006, and a second part in early 2007. The first governed sulfur dioxide and particulates, the second mercury and other toxics. The status of state and federal regulation of toxics and greenhouse gases was in flux at this time, with widely diverging views on how to deal with the pollution issues. Long story short, the Air Board hewed to interpretations different than those of the General Assembly and the Kaine administration, and took an adversarial view in the proceedings.

Dominion’s permit application proposed emissions of 744 tons of fine particulate matter, 3.7 tons of sulfur dioxide, 1,900 tons of nitrogen oxides, and 72 pounds of mercury per year. In January 2008, DEQ proposed tighter restrictions on particulates and nitrogen oxide — and, a month later, to mercury. But Thomson and her air board allies insisted that the proposed levels did not meet the letter of the Clean Air Act. After two years of hue and cry, lawsuits, and hardball politicking, the air board insisted upon even lower limits to 604 tons of sulfur dioxide and four pounds of mercury plus a reduction in greenhouse gas emissions — and won. Dominion agreed to limits that were, in the company’s words, “the strictest ever written into a permit in the United States.”

Yet, somehow in Thomson’s mind, the fact that Dominion resisted the tighter emissions and the Kaine administration consulted the utility’s views is an example of the energy industry’s pervasive influence over state government.

But, in fact, as evidence from Thomson’s own narrative makes clear, Dominion wasn’t driving the Kaine administration’s support for the project. Kaine and the General Assembly supported the Virginia City facility for political reasons. A 2004 law enacted by the General Assembly at the behest of coalfield legislators had specified that the facility should be built in the coalfield region of the state and burn Virginia coal. To induce Dominion to invest in the region, the law permitted a higher-than-normal return on investment, and to sway the State Corporation Commission to take actions not necessarily in the best interest of rate payers, it declared the plant to be in the “public interest.” The project was conceived and executed as an economic development project for Southwest Virginia, and Southwest Virginia legislators applied continual pressure on the governor.

Citing emails that “since become public” through the Freedom of Information Act, Thomson portrayed Kaine’s staff as becoming “anxious” about the air board’s involvement with the Virginia City deal. Emails suggested that the governor’s inner circle had been conducting conversations “over our heads and behind our backs” — as if discussions between the governor and his staff were subject to the same transparency requirements as public regulatory boards.

As for Dominion itself, she presents little evidence that the governor had been particularly solicitous of the utility. Indeed, one email message she cites suggests the very opposite:

Governor Kaine’s scheduling director indicated that Dominion’s CEO and president, Tom Farrell, and two top Dominion executives, Tom Blue and Eva Teig Hardy wanted to meet with the governor to talk about the Wise facility “and possible legislative initiatives. A counselor to the governor responded, “I would prefer that it not be an in person meeting,”

Got that? The CEO of the biggest utility and politically most powerful company in Virginia couldn’t schedule an in-person meeting with the governor.

In a second example cited by Thomson, Secretary of the Environment Preston Bryant wrote Kaine an email discussing how the controversy was creating “collateral damage” for Dominion. The immediate issue at hand was figuring out how to ensure that John Hanson, a friendly Air Board member who had a conflicting court date in Ohio, could participate in a key meeting.

Dominion has been told of this unfortunate [wrinkle]. Bob Blue [a senior Dominion executive] is not a happy camper. He has asked that every mountain be moved to have Hanson participate by phone from Ohio. This is not realistic. It’d be difficult from a FOIA perspective, from his court case obligations, and it would be awful looking politically. Dave Paylor is likely to reject Bob Blue’s idea.

Kaine tried to get the hearing rescheduled. Thomson and her Air Board allies didn’t budge, even at the risk of excluding one of their compatriots in of the most momentous meetings of the Air Board’s term. Apparently, Paylor overcame his reluctance to have an Air Board member participate from Ohio, and Hanson did end up taking part. Not that it made any difference. The Air Board stuck to its guns, and Dominion was forced to abide with the strictest permit ever issued in the U.S. to that point.

Dominion never challenged the permit in court, Thomson noted. “Company officials plainly knew they could achieve much  more by way of emission reductions than they had indicated to DEQ staffers,” she surmised. Perhaps that’s the explanation for the company’s inaction, perhaps not.

Thomson offers no evidence to back up her conjecture, however, and she never considers the possibility that Dominion might have concluded that it wasn’t worth fighting the legal battle. After all, the State Corporation Commission would pass along the higher pollution-control costs to the rate payers anyway. Rate payers, not Dominion shareholders, would foot the bill. It never occurs to Thomson to ask how much the stricter permits demanded by the Air Board added to the cost of the project or what impact it they had on rate payers.

The Roda coal-road controversy. In the mid-2000s, nine surface mining operations trucked their coal through the Wise County hamlet of Roda. Numerous homes were located only 10 to 20 feet from the road, and the trucks flung off considerable volumes of dust. The dust was so bad most days that it interfered with the ability of residents to carry out normal lives. Residents could not open windows or take walks on the road. They had to change their furnace filters every month and power wash their front porches. Not surprisingly, they appealed to state government for relief.

The issue came up before the Air Board in 2009 — after it had been expanded from five to seven members and Thomson’s faction had lost its control. The name of David Burnley, Warner’s secretary of natural resources, had been floated for a board appointment, notes Thomson, but DEQ Director David Paylor successfully quashed nomination — on the grounds, Thomson says, that Burnley had opposed efforts to transfer power from the Air Board to the DEQ director. The final result was a board with three environmentally friendly members, three industry-friendly members and a swing vote.

To Thomson’s way of thinking, dust is a form of “particulate,” and particulates are regulated by the Clean Air Act. Monitoring by local environmental groups found that fugitive dust along a four-mile stretch of the road through Roda exceeded Environmental Protection Agency standards by three times. Voluntary measures enacted by two coal companies — washing trucks before they left mine sites, paving mine access roads, sweeping roads clear of dust, adding gravel to access roads — substantially diminished dust levels, and Thomson felt it was the Air Board’s responsibility to act on behalf of the Road residents.

The problem was that the Clean Air Act regulates particulates from boilers, turbines, wood stoves, and internal combustion engines — not dust from trucks, construction sites or other sources. DEQ suggested that the Department of Mines, Minerals and Energy (DMME) would be the logical state agency to regulate the truck-generated dust. Thomson disagreed. In the end, the initiative to empower the Air Board died in a three-three tie vote (with one member absent). That meeting was her last; her term expired at the end of the month.

Thomson’s concern for the poor and elderly residents of Roda is commendable. Her insistence that the DEQ and the Air Board assume responsibility for regulating dust blowing off coal trucks overlooks the obvious question of whether the Clean Air Act authorizes such regulation. Nowhere in her account does she discuss the legal issues involved. And absent such a discussion, it is hard to swallow her proposition that Virginia’s “climate of capitulation” is to blame.

Thomson comes across not merely as someone who doesn’t acknowledge the other side’s point of view, she seems not to understand how anyone could take a view different from her’s without being guided by political or business self interest. Despite the outcomes of the Mirant and Hybrid Energy controversies, she maintains the view that Virginia political and regulatory systems “favor the electric utility and coal industries.” Clearly there was conflict and acrimony between the Air Board and the Kaine administration, but she shows no awareness of how the actions and rhetoric of her Air Board faction might have contributed.

Furthermore, she assumes, with no documentation whatsoever, that the decision to expand the Air Board from five to seven members was motivated by a desire to pack the board with pro-administration members. She discusses none of the institutional history of Virginia’s pollution regulatory system before she arrived on the scene. Having centralized various autonomous pollution-regulation entities under the Department of Environmental Quality in 1992, the General Assembly continued to tweak the system. The measure that aroused her ire was to standardize the size of the citizens boards for water, air and waste pollution at seven members. If there is any evidence that legislators were motivated by a desire to muzzle the rogue board members, she doesn’t present it.

In the second half of “Climate of Capitulation,” Thomson describes where she thinks the putative favoritism arises from:

(1) campaign contributions that, in the energy and natural resources sector, are dominated by one electric utility and coal interests, (2) a reactive part-time legislature that has virtually no independent analytical capacity; and (3) a traditionalistic political culture.

I will deal with those issues in a follow-up post.

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One response to “Rogue Board

  1. I happen to know something about the Mirant plant in Alexandria and you are quite right, Mirant inherited a complicated reliability situation when it bought that plant from Pepco. That coal plant was built after 1939 to supply power to the [then under construction] Pentagon, because the local power supply in the 30s was inadequate. The grid in the downtown DC and Arlington/Alexandria area has grown since then, of course, but the DC area has transmission constraints that could, as recently as the early 2000s, only be satisfied by running generation inside the Beltway to stabilize things. Pepco retained two old generating plants located on Benning Road and at Buzzard Point for this purpose even as it sold off all its more modern units. Pepco also owned the Alexandria plant, and while it sold those units to Mirant, Mirant was required to run them whenever they were needed for reliability reasons or pay a substantial penalty. In fact, the White House and a large portion of downtown’s office district lost power at one point in a brownout situation that would have been much worse without the Alexandria plant, as I recall. Later, when the contractual penalty had expired and Mirant was free to retire the Alexandria units because of the changing economics of coal, as well as the politics of Alexandria’s cleaning up its North End, the federal government did indeed intervene to keep the units running until major transmission improvements could be completed (by both Pepco and Dominion) in 2007 to eliminate the reliability constraints.

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