Tag Archives: Dominion

Why So Long to Decide about Surry-Skiffes?

View of a Dominion transmission line crossing the James in Newport News downstream from the proposed Surry-Skiffes project.

View of a Dominion transmission line crossing the James in Newport News downstream from the proposed Surry-Skiffes project. Photo credit: Daily News.

Tick, tock! The April 15 deadline is fast approaching for when Dominion Virginia Power will have to shut down its Yorktown One and Two coal-fired units, leaving the Virginia Peninsula vulnerable to blackouts. That risk will hang over the region, home to a half million people, for a year-and-a-half or more — for however long it takes to gain regulatory approval for a solution and then build a replacement source of electric power,

The question every Virginian should ask: What is going on inside the U.S. Army Corps of Engineers? What is taking so long to make a decision, either yea or nay? Whatever the final outcome, it’s hard to avoid the conclusion that the regulatory process is badly broken.

Dominion has known for several years that it would have to replace the capacity of the Yorktown units. It conducted an alternatives analysis, and then considered running a transmission line down the spine of the Peninsula before scotching the idea because the line would cross too many wetlands, subdivisions and Indian lands. Then the utility settled on building a 500 kV transmission line across the James River near Jamestown. PJM Interconnection, the organization that runs the multi-state electric grid that includes Virginia, has repeatedly confirmed that that the Surry-Skiffes Creek route selected by Dominion is the most cost effective. Dominion obtained State Corporation Commission approval for the project in 2013 and survived a Virginia Supreme Court challenge.  The Environmental Protection Agency has given Dominion two one-year extensions on the operation of the Yorktown power stations.

The final regulatory hurdle was gaining a permit from the Norfolk office of the Army Corps of Engineers, which has to balance the economic justification of the project against environmental and conservation considerations. By August 2013, when Dominion submitted a revised permit request, the proposal had stirred up intense resistance from citizens and conservation groups on the grounds that the Surry-Skiffes line’s high steel towers would ruin views of a historically sacred stretch of river, which has remained largely unspoiled since English settlers landed at Jamestown.

For three-and-a-half years, the Corps has solicited public input, held public hearings, examined alternative solutions, and considered Dominion proposals — $85 million worth — to mitigate the loss of historical and cultural resources. (See the Corp’s regulatory time-line here.) All this time Dominion has been sounding the warning that after April 15 the Peninsula would be at risk of region-wide blackouts.

For roughly 60 days a year, during periods of peak electric load, the electric lines bringing in power from outside the region would be running at close to peak capacity. The system would be only one unplanned outage of a transmission line away from a crisis. National electric reliability standards require Dominion to maintain enough redundancy in the system to withstand two simultaneous contingencies. Rather than risk a cascading blackout like the one that knocked out electric power for 50 million Americans and Canadians in the infamous 2003 blackout, PJM would order Dominion to “shed load” to eliminate the risk. During hot summer months or cold winter months, controlled blackouts could become a frequent event on the Peninsula.

There is no question that the Army Corps has a hard decision to make with Surry-Skiffes — whether to risk economically disruptive blackouts until a new solution can be found or to mar an irreplaceable historical treasure. But the longer it waits, the longer it puts the region at risk. If it gives the OK tomorrow, it would still take Dominion a year and a half to build the transmission line. If the corps declines to issue the permit, the utility will take even longer to devise an alternative, gain the necessary permits and build whatever needs to be built. Either way, the interminable decision-making process has put the Peninsula economy at risk.

The scandal here is not the necessity of obtaining Army Corps approval. The country needs a mechanism to evaluate the merits of giant infrastructure projects against the harm they might pose to communities. The scandal is the length of time it takes to reach that decision. Three-and-a-half years is way too long. The system is broken. It needs to be fixed.

Peninsula Still Needs Surry-Skiffes Project, Says PJM

View from the Surry nuclear power station of where the proposed Surry-Skiffes transmission line would cross the James River.

View from the Surry nuclear power station of where the proposed Surry-Skiffes transmission line would cross the James River.

PJM Interconnection may have lowered its forecasts for peak electricity load on the Virginia Peninsula, but the regional transmission organization still contends that the proposed Surry-Skiffes Creek high-voltage transmission line is still needed to avoid the risk of blackouts.

“It is PJM’s determination that the current Skiffes Creek 500 kV project remains the most effective and efficient solution to address the identified reliability criteria violations,” wrote Steven R. Herling, PJM vice president-planning, to the Norfolk district commander of the U.S. Army Corps of Engineers earlier this month.

Dominion Virginia Power, which must obtain a permit from the Corps before it can commence construction, has encountered stiff opposition to the project. Preservationists say the highly visible power line will disrupt views of the James River little changed since the first English settlers arrived more than 400 years ago.

The project was precipitated by federal clean-air regulations that compels Dominion to shut down two of its aging, coal-fired generators at the Yorktown Power Station. Those units are scheduled to go offline next month, eliminating a major source of electric power on the Peninsula. The region is served by multiple transmission lines that can meet electric power demand under routine conditions. But the Peninsula grid lacks the redundancy to meet federal reliability guidelines designed to prevent another cascading blackout like the one that plunged 55 million in the Northeast and Canada into darkness.

Dominion selected the Surry-Skiffes route after examining numerous alternatives. Foes charged that the utility considered only a narrow range of options. Instead of building a 500 kV line across the James, it could have met reliability standards through a combination of measures: upgrade of existing lines, solar power, energy efficiency, demand-response, greater reliance upon the oil-powered Yorktown 3 unit, and/or building a less obtrusive, lower-voltage line across the James. Arguing that the 500 kV line was overkill, they also argued that Dominion forecasts for electricity demand were unrealistically high.

In October 2016, the National Trust for Historic Preservation, which has named the James River as one of the nation’s 11 most endangered historic places, published an alternatives report prepared by Richard D. Tabors, a consultant and former MIT professor. Using Dominion data and the same simulation model as PJM, Tabors outlined four alternatives.

Summary of four alternative scenarios prepared by Tabors Caramanis Rudkevich.

Tabors recommended upgrading existing 115 kV and 230 kV power lines feeding the Peninsula, getting greater use out of the Yorktown No. 3 oil-based generator, dropping load at selected feeders, and building new transmission lines, preferably along existing rights of way. Each scenario, states the report, “is generally less costly and can be implemented in a shorter period of time.”

Since publication of the Tabors report, PJM has backed off its earlier load forecasts. Reports David Ress with the Daily Press:

The latest PJM forecasts … suggest peak load demand during the summer would grow at an annual rate of 4 percent though 2027, to reach a total of 20,501 megawatts.

That’s 1,755 megawatts less than PJM’s forecast a year ago, nearly an 8 percent decline. Last year, Dominion’s summer peak was 19,539 megawatts.

But in Herling’s letter to the Corps, PJM stuck to its guns on the larger point, that the Surry-Skiffes line presented the optimum solution to the Peninsula’s needs. “PJM staff has reviewed the proposed alternatives and found that none of them resolved the identified reliability criteria violations that are being addressed by the Surry-Skiffes 500 kV project,” wrote Herling.

There are multiple, inter-related reliability violations, said the PJM planner.

Solving for a single violation does not address the panoply of reliability violations that are designed to be addressed through the Skiffes Creek project. For example, the continued operation of the Yorktown 3 generator as proposed by Dr. Tabors would not address thermal overload and voltage violations on the 230 kV and 115 kV bulk electric system that were identified by PJM. In addition, Dr. Tabors’ reliance on the Yorktown 3 generator as a solution ignores the significant environmental operating restrictions and limitations on plant operations associated with that plant.

Subsequent studies have re-confirmed the need for the Surry-Skiffes project even considering PJM’s updated load forecasts, Herling wrote.

Has Rate Freeze Benefited Virginia Customers?

There's no evidence that the electricity rate freeze has hurt Virginians.

Rate freeze —

Are the electric power companies ripping off rate payers under the guise of a rate freeze? Some think so. The electric utility industry came under fire during the 2017 General Assembly session when Sen. Chap Petersen, D-Fairfax, submitted a bill to un-do the freeze in base electric rates enacted in the 2015 session. Although his bill never made it through the General Assembly, Petersen has appealed to Governor Terry McAuliffe to implement it as an amendment.

In an op-ed piece published in the Richmond Times-Dispatch this morning Mark Webb, Dominion’s senior vice president for corporate affairs, argued that the freeze is working as designed and is a good deal for rate payers.

Legislators wanted to protect customers from a potential price hike tied to environmental costs. Since then a Dominion residential customer has paid $1,100 less per year for electricity than those in the Mid-Atlantic.

Were the rates frozen after big increases? Not at all. Dominion residential rates are only about 4 percent higher than they were in 2008. Don’t you wish that was the case with your other household expenses?”

Meanwhile, the reliability of service has improved, Webb writes, and industrial rates have declined 16% over the same period. Virginia’s lower electric rates are significantly lower than Maryland’s and Washington, D.C.’s. Maryland residential customers pay 25% higher rates than Dominion customers, while industrial customers pay 49% more. D.C. residents and industrial customers pay an even bigger premium.

Dominion’s lower rates have been an economic boon for Northern Virginia, Webb says. “No wonder large electric users such as data centers overwhelmingly locate in Virginia instead of D.C. or Maryland.”

(Webb’s op-ed made no mention of the neighboring state of North Carolina, however, where the average electric rate is lower — 10.29 per kilowatt hour in December 2016 compared to 10.72 cents in Virginia.)

Webb then goes one step further, contending that the General Assembly’s re-regulation of electric power energy in 2008 has worked out well for Virginians, too. “Since Virginia’s landmark legislation reregulated utilities a decade ago,” he writes, “electric rates have been remarkably stable and well below the national and regional averages.”

Bacon’s bottom line: I was curious. What are the numbers? How have electricity rates fared compared to national averages (a) since reregulation and (b) since the rate freeze? I checked data compiled by the U.S. Energy Information Administration for “Average Retail Prices for Electricity” for answers.

Between 2008 and 2016, the average residential rate per kilowatt hour for retail customers nationally increased 11.7%, significantly higher than the 4% rate for Dominion customers that Webb cites. So, Dominion has out-performed the national average since reregulation. But rate-freeze critics have not disputed the fact.

A more pertinent question is what has happened to electricity rates since July 2015 when the freeze went into effect. As critics have noted, base rates cover only ongoing operating costs, not the cost of fuel, which is adjusted through fuel adjustment clauses, or the cost of new capital projects, which is incorporated into the rate structure through rate adjustment clauses. In theory, overall rates can climb higher while base rates stay locked in place.

But that has not happened. Between July 2015 and December 2016 (the most recent month available), the average price of electricity in Virginia decreased 8% to 10.72 cents per kilowatt hour. That compares to a 5.9% decline in electric rates nationally between July 2015 and November 2016, according to the Energy Information Administration.

Out-performing the national average since mid-2015 would seem to buttress Dominion’s case, but it still doesn’t end the argument. Former Attorney General Ken Cuccinelli has argued that the rate freeze locks into place hundreds of millions of dollars in excess profits, with the implication that if Virginia electricity rates would be even lower if they hadn’t been frozen. Webb side-stepped that issue in his op-ed piece, and the EIA numbers don’t address it.

Will “Home Grown” Renewables Spur Virginia’s Economy?

Which creates more jobs? Solar and wind…

Walton Shepherd, a staff attorney for the Natural Resources Defense Council (NRDC), has made an economic-development argument for renewable energy sources over natural gas in Virginia’s energy policy. Sandy Hausman with WVTF Public Radio quotes him as follows:

Renewable energy and energy efficiency are basically homegrown resources. If Virginia wants to produce its own power and not send dollars out of state for things like natural gas that we actually have to import, we can tap those resources right here in Virginia and keep those dollars local.

… or gas-fired power plants?

Shepherd says that Virginia should cut carbon emissions by 30%, and the state should reject any request by Dominion Virginia Power to build any new natural gas burning plants. Using similar logic, environmentalists also have argued that construction of the proposed Atlantic Coast Pipeline and Mountain Valley Pipeline, both of which would transport natural gas, is unnecessary and not in the public interest.

Shepherd raises a point worth examining: Do “home grown” energy sources like solar, wind and energy conservation create more taxable, job-creating economic activity than building pipelines and gas-fired power stations? The answer seems intuitively obvious — wind and sunshine are abundant and free here in the Old Dominion, while natural gas imported from outside the state represents a drain on Virginia’s economy.

But the truth of the matter is far from clear. The point of this post is not to settle the matter — I don’t have the data or analytical tools to do that — merely to warn against making simplistic assumptions.

Cost of capital. First, the cost of fuel is only one part of the cost of generating electricity. Two other inputs are manpower and, most important, capital. Shepherd’s argument (as filtered through Public Radio) does not consider the cost of capital. At present, solar panels and wind turbines are more expensive per unit of electricity generated than the turbines, boilers and pollution-control devices it takes to burn natural gas. Higher costs translate into higher electric rates, which come out of the pockets of businesses and rate payers, which diminishes the money they have to spend in the local economy.

Direct job creation. Once installed, solar, wind and gas facilities require employees to maintain and operate them. A billion-dollar gas power station requires only a few dozen employees to operate. A solar farm requires little more than periodic inspections to ensure everything is working properly and landscapers to keep down the grass. (Wind will be a niche player in Virginia, so I don’t give it much consideration here.) I haven’t seen an objective analysis that compares the employment levels (and payroll) of solar farms vs. gas plants. Either way, the numbers are tiny compared to the capital investment expended.

Indirect job creation. Solar farms and gas plants also have indirect, spin-off effects. For instance, corporations dedicated to green energy policies want to buy renewable energy. A case in point is Amazon Web Services, which has committed to run its Northern Virginia data centers on solar. The availability of green energy makes such companies more willing to invest in Virginia, although it is difficult to say how critical the criteria is in their location decisions.

On the other side of the argument, gas backers say that new gas-fired power stations will support construction of the Atlantic Coast Pipeline, which in turn will supply gas to industrial customers along the pipeline route and allow communities to compete for energy-intensive manufacturing prospects for the first time.

Energy efficiency. Greenies such as Shepherd tout the advantages of energy efficiency. Whether weatherizing the houses of the poor or installing state-of-the-art controls for office HVAC systems, investments in energy efficiency can create jobs and build businesses. (My wife used to work for a company that makes a software platform for building automation systems. That Henrico-based firm employs a lot of  highly paid engineers.) Energy conservation programs come in many forms — from upgrading heat pumps to replacing old, energy-hogging refrigerators — and each one offers a different payback. On one extreme, the market-driven building automation business offers demonstrable savings and requires no government support. On the other hand, programs that eke out marginal improvements in appliance efficiency typically require subsidies from taxpayers or rate payers.

Subsidized conservation programs may create local jobs, but if the same sum of money were invested elsewhere, they might create just as many jobs, perhaps more. Americans normally trust the free market to allocate capital the most efficiently. When government policy overrides market dynamics via subsidies, it’s much harder to make the case that job creation will be maximized. Continue reading

No Simple Answers on the Electricity Rate Freeze

Muddy water -- still waiting for an impartial analysis of the rate freeze issue.

Murky waters — Virginia still waiting for an impartial analysis of the electricity rate freeze.

Former Attorney General Ken Cuccinelli joined state Sen. J. Chapman Petersen, D-Fairfax City, down at the General Assembly yesterday to put pressure on Governor Terry McAuliffe to resurrect Petersen’s bill that would roll back a rate freeze on Dominion Virginia Power and Appalachian Power.

Petersen summarized the argument in a nutshell: “In reality, it was a refund freeze.” The 2015 legislation, enacted in response to the Obama administration’s announcement of the Clean Power Plan, he artgued, locked in place excess profits that amounted in 2015 to $300 million for Dominion and $36 million for Apco. With the election of President Trump, it appears that the Clean Power Plan is a dead letter, and the justification for the rate freeze no longer exists.

According to Robert Zullo’s reporting in the Richmond Times-Dispatch, Dominion responded that the rate freeze has worked for consumers. Electricity rates are lower now than they were two years ago. Reversing the 2015 legislative deal also would un-do provisions that provided $57 million on weatherization programs for veterans and poor people, and a commitment to renewable energy that has produced nearly $1 billion in new solar energy projects.

Petersen’s bill was defeated in the Senate, but it could be revived if McAuliffe sends it back for reconsideration. The Governor has told him that he would do so if, in Petersen’s words, the senator came back to him with a plan to change the outcome from the previous bill. Describing himself as David fighting Goliath, Petersen said “I’ve done everything I could do.”

Bacon’s bottom line: It’s hard for the public to know who has the stronger case. Bits and pieces of information are floating around — each side citing the facts that supports its outcome — but no one has assembled them in a coherent format. Here are some of the key elements.

  • Refund of excess profits. Cuccinelli cites a State Corporation Commission staff finding that Dominion earned $300 million in excess profits before the freeze was enacted. In the absence of a freeze, the commission might have ruled that Dominion had to provide a refund. (Ditto for Apco which is said to have had $36 million in excess profits.) But Dominion and Apco undoubtedly would have disputed the numbers, and there is no way to know what the three commissioners would have decided.
  • Excess profits going forward. If Dominion and Apco had been charging too much before 2015, it is possible that they have been charging too much since then. Again, there is no way to know because under the terms of the legislative deal, the SCC suspended its biennial rate reviews until 2020.
  • Costs of coal ash clean-up. Dominion has said that it has eaten nearly $300 million in expenses relating to the clean-up of coal ash, an issue that was not widely known or discussed during the 2015 legislative session. There are more clean-up costs to come, and if environmentalists are successful in pressing demands to recycle and landfill the ash instead of disposing of it on site, the tab could run into the billions of dollars.
  • Clean Power Plan risk. In 2015 it was not clear how much it would cost Virginia utilities to live up to the CO2 reduction mandates in the Clean Power Plan. The SCC staff said the new rules could push electric rates 20% higher, although no one could say for sure because no one knew which of four main regulatory options Virginia would pursue. Environmentalists were pushing hard for the option that would have delivered the biggest CO2 cutbacks and also would have caused the most dramatic restructuring of power production and the electric grid. It’s not clear how big those costs would be, how much Dominion and Apco would have absorbed, or how much they could have deferred until after the rate freeze. Cuccinelli and Petersen assert that many of those costs could have been passed along to rate payers by means of Fuel Adjustment Clauses, which were not frozen, and, therefore, the utilities really weren’t taking  on any meaningful risk.

Both sides make plausible arguments. Indeed, one might say that both sides are right…. as far as they go. What we have yet to see, however, is an impartial analysis that clearly explains all the costs, benefits and risks.

Corey Stewart Defines Himself through the Fights He Picks

Corey Stewart (left) appeared last week with Jason Kessler, a conservative blogger-activist, after Kessler petitioned to remove the vice mayor of Charlottesville, Wes Bellamy, from office.

Corey Stewart (left) appeared last week with Jason Kessler, a conservative blogger-activist, after Kessler petitioned to remove the vice mayor of Charlottesville, Wes Bellamy, from office. Photo credit: Richmond Times-Dispatch.

I met Corey Stewart, Republican candidate for governor, for the first time last night and interviewed him outside a public hearing about coal ash disposal. The Prince William County board chairman came across as a genial guy. But he’s not one to run away from a fight. Indeed, he’s more likely to be the first one to charge into the fray.

With Ed Gillespie as the perceived front-runner in the Republican race, Stewart evidently has decided that the best way to get attention and define himself as a tribune of the people is to pick the right fights. That strategy certainly was on display last night when he lambasted Dominion Virginia Power to the cheers of many in the audience for its closure-in-place proposal for dealing with coal ash at its Possum Point Power Station.

“Dominion has been less than honest with Prince William County,” Stewart said. Then, referring to a series of local controversies over the impact of coal ash on surface and ground water, he said, “Dominion lies. You have to be very skeptical of what they tell you.”

I wasn’t paying attention to Virginia politics in 1973 when Democratic candidate Henry Howell took on Dominion’s predecessor company, vowing to “keep the big boys honest.” But I can’t imagine that he was any more blunt in his denunciation. The issue back then was electric rates, not the environment, but Howell nearly rode the slogan to victory.

Stewart is best known for his hard line approach to illegal immigration. His campaign website boasts that under his leadership, Prince William County turned over 7,500 criminal illegal aliens for deportation. He says he will work “side-by-side with the Trump administration” to oppose amnesty and sanctuary cities in Virginia.

Along similar lines, he has aligned himself with a far-right group in Charlottesville to protest, among other things, City Council’s decision to remove a statue of Robert E. Lee from the public square. Mobbed last week by counter-protesters who drowned out his words, Stewart reportedly handled himself with aplomb. But his views seem pitched to the same kind of disaffected white working- and middle-class voters who voted for Donald Trump, for whom he acted as Virginia campaign chairman. Just wait until next week, he told me. He’ll be back in Charlottesville.

Stewart also joined conservative activist-blogger Jason Kessler in calling for the removal of Charlottesville Vice Mayor Wes Bellamy from office. Bellamy had posted misogynistic, homophobic and anti-white comments on Twitter before his election to Charlottesville City Council in 2015.

I asked Stewart to elaborate upon his view of Dominion. He said it’s wrong for a monopoly utility to insert itself so deeply into the political and regulatory process. “This is what happens when every member of the General Assembly is taking thousands of dollars from Dominion. DEQ (the Department of Environmental Quality) rubber-stamps every thing Dominion wants.”

If he becomes governor, Stewart said, “Heads are going to roll” — starting with the chief of DEQ, David Paylor. Then, alluding to Denver Riggleman, one of his three Republican rivals for the governorship who also has campaigned against Dominion, he quipped, “I’ll put Riggleman in there.”

Prince William Supervisors Demand Coal Ash Studies

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Landfill, Recycle or Close in Place?

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

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

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

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

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

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

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

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

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

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

coal_ash_closures

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

Atlantic Coastal Plain. Image source: Wikipedia

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

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

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

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

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Dominion Fulfills 400-Megawatt Solar Commitment

Dominion solar farm

Dominion solar farm. Photo credit: Dominion.

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

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

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

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

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

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

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

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

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

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

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

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

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

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.