Do Utilities and Coal Companies Run Virginia? Hardly.

Statue of Gov. Harry F. Byrd outside the Virginia state capitol building. A “traditionalistic” political culture? Maybe once upon a time, but not anymore.

Vivian Thomson argues that utilities and coal companies dominate Virginia’s energy policy. Her simplistic view ignores the reality that environmentalists wield significant power now.

Vivian E. Thomson has a big beef with state government. The University of Virginia environmental sciences professor contends that the political system in the Old Dominion is rigged in favor of the electric utilities and fossil fuel industries against selfless crusaders, such as herself, fighting for the public interest. She persists in this belief even though the State Air Pollution Control Board, of which she was a member in the early 2000s, prevailed in the two major controversies she describes in her book, “Climate Capitulation: An Insider’s Account of State Power in a Coal Nation.”

In that book, she lists three factors that allow “entrenched business elites” to exercise “undue power” in the making of air pollution policy through legislative and administrative processes:

(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.

Thomson’s view of Virginia’s political economy is widely shared among environmentalists and left-of-center activists and politicians. A friend of mine, a professor of environmental law whose opinion I respect, gave the book fulsome praise. Accordingly, Thomson’s thesis deserves a thoughtful response, and that’s what I will endeavor to provide in this post.

Although Thomson provides nuggets of genuine insight, her analysis of Virginia’s political economy is as one-sided as her chronicle of the regulatory controversies in which she was embroiled. (See my critique of her book in “Rogue Board“). She focuses exclusively on how corporations exercise power and influence in Virginia while ignoring the increasing clout of its opponents, who have won numerous victories in the realm of politics, public opinion and the law. Yes, corporations have clout. But so do their foes. Sometimes Big Business gets its way. Often, it doesn’t.

I will start by addressing Thomson’s comments about the part-time legislature, which have considerable merit, move to the meaningless characterization of Virginia as having a “traditionalist” political culture, and close with a discussion of the role of campaign contributions in Virginia politics.

Asymmetry of information. The disparity in political power issues not just from business campaign donations, Thomson argues, but from an asymmetry in information. Virginia has a part-time citizen legislature, and legislators have tiny staffs. As a practical matter, senators and delegates in the General Assembly are reliant upon the expertise of state employees and outsiders such as lobbyists.

Writes Thomson:

Virginia’s legislature is designed to be a part-time body, with the notion that citizens serving as representatives can remain closely attuned to their constituents’ needs and preferences. … [But] even the most dedicated legislators cannot be independently well informed if they have small staffs, low pay, and short sessions.

Less professionalized legislatures are handicapped when it comes to analysis of complicated technical issues such as those commonly encountered in the environmental and public-health policy arenas. When Virginia’s legislators need information they turn to lobbyists or to the executive branch. Companies take advantage of their ongoing relationships with state civil servants and lawmakers to get deals that favor their interests. Large companies are especially well positioned to push for light-handed regulation, since they can expend considerable resources on attorneys and consultants to fight limits they do not like. …

In the environmental policy arena, power flows to those who can collect and interpret complicated scientific, legal, and economic information. The question is, who will provide legislators that information and how will we know who those sources are?

Thomson makes a valid point. Part-time legislators cannot possibly master the infinite complexities of topics as varied as health care, transportation, state-local governance, fiscal issues, K-12 education, higher education, energy and the environment. As a consequence, Virginia lawmakers do rely heavily upon the expertise offered by state employees and lobbyists, many of whom have long memories and deep knowledge, not only of the pros and cons of issues, but of the long legislative and regulatory histories behind the controversies.

She errs, however, in supposing that only corporations and industry groups play the game. The Virginia Public Access Project (VPAP) database lists 72 organizations employing lobbyists on issues relating to “energy.” Dominion Energy. with five lobbyists, had one of the largest profiles in the General Assembly. But, then, the Southern Environmental Law Center (SELC) also listed five lobbyists.

Perusing the VPAP database, I identified seven other environmental organizations with registered lobbyists addressing energy issues: Appalachian Voices, the Chesapeake Climate Action Network, the Nature Conservancy, the Piedmont Environmental Council, the Sierra Club-Virginia Chapter, the Virginia Conservation Network, and the Virginia League of Conservation Voters.

They were way outnumbered by business lobbyists, but the business lobbyists were a fractured group. The largest number by far represented businesses with an interest in alternate energy sources (wind, solar, biomass, nuclear) or energy efficiency. A significant number represented industrial consumers of energy. Depending on the issue, any of these interest groups might align themselves with the electric utilities one day or the environmentalists the next. 

The impression one gets from studying the list is that the legislature is open to a cacophony of voices on energy issues which no single company, trade association or environmental group could possibly dominate. No one has a monopoly on information.

Traditionalistic political culture. Thomson draws heavily upon the work of political scientist Daniel Elazar, who posited the existence of three types of political culture in the United States: moralistic, individualistic, and traditionalistic. Moralistic political cultures stress the public good. Individualistic cultures prefer private initiative to public action. And traditionalistic cultures share “an ambivalent attitude toward the marketplace coupled with a paternalistic and elitist conception of the commonwealth.”

While no state matches these ideal types perfectly, Elazar categorizes Virginia as a “traditionalistic” state with no secondary tendencies. A governing elite exerts tight control. Policy inertia reigns, and new programs are initiated only if they serve the elites. Civil servants rarely challenge those in power, and there is no deep devotion to serving the public interest. As Thomson quotes Elazar: “Traditionalistic political cultures tend to be instinctively anti-bureaucratic. Bureaucracy by its very nature interferes with the fine web of informal interpersonal relationships that lies at the root of the political system.”

One could have an entertaining dorm-room bull session debating the extent to which Elazar’s label of “traditionalistic” fairly applies to Virginia’s political system, if not now, then in the past. A strong argument can be made (read the musings of Don Rippert on this blog) that Virginia’s political system is designed to buttress the control of political elites and squelch popular impulses. But a label is no more than a label. It has no predictive value. While certain states may have characteristics in common, each is unique. The existence of particular attitudes and practices in one state does not mean that the same attitudes and practices apply to a different state. Thus, the statement that the political system in State A defers to electric utilities and coal companies tells us nothing about the degree to which the system in State B might defer to utilities and coal companies.

Indeed, after spilling much ink on the idea of traditionalistic political systems, Thomson concedes that very point: “It is not possible to predict what state officials or politicians will or will not do in the air pollution policy arena. Ideas, laws, court decisions, ideology and public pressure can all affect policy makers’ choices, and no model can capture the ways in which these find of factors will interact.” Despite a shared a high susceptibility toward a “climate of capitulation,” for example, North Carolina and Texas have become leading producers electricity generated by solar and wind. And if the coal industry were so powerful in Virginia, one might ask why the Old Dominion generates such a high percentage of its electricity from nuclear power!

In sum, the idea of “traditionalistic” political cultures may be useful as an ideal type for describing the political economies of different states, but to declare that Virginia is a traditionalistic state is of no help in explaining how political forces interact to create public policy outcomes on particular issues.

Campaign donations. Thomson is a subtle enough observer of state-level politics to avoid the grotesque implication, seen so often, that corporations can buy legislators’ votes with campaign donations. She acknowledges that contributors often dole out money to elected officials whose views align with theirs.

However, it’s safe to say that special interest groups would not donate millions of dollars to Virginia political campaigns each year unless they thought they derived some benefit. Most donors will confide to buying “access” to a politician. Money ensures that elected officials will return phone calls and agree to meetings, even if they don’t necessarily change their votes. Thomson goes a step further: She believes that money also can cause subtle shifts in behavior as recipients experience a “bending of perspectives.”

Thomson goes astray in her assumption that there are no countervailing forces in Virginia to the donations of Dominion and the coal industry. While it’s true that energy companies donate large sums to the General Assembly, they are a variegated lot with oft-conflicting agendas. Meanwhile, environmentalists have emerged in recent years as a deep-pocketed money source.

Data source: Virginia Public Access Project. (Note: Dominion donations are broken out here as a sub-set of electric utilities, not in addition to them.)

As can be seen in this chart, environmentalists were not a significant factor twenty years ago in Virginia campaigns. But environmental groups began upping their game in the 2002-03 biennium, and became a dominant player in 2012-13, a gubernatorial election year when West Coast hedge fund manager Tom Steyer contributed $1.8 million, mostly to Terry McAuliffe’s gubernatorial campaign. Note that Steyer has pledged $2 million to Democratic candidate Ralph Northam’s campaign this year, a commitment that does not show up in the chart.

Coal and natural gas are big contributors, but from an environmental policy perspective, they largely work at cross purposes. The two fuels are fierce competitors for electric utility market share. Likewise, the legislative and regulatory goals of alternate energy companies and independent power producers often clash with those of the monopoly utilities.

Any objective reading of the data would conclude that Virginia has a diversity of interests involved in shaping energy policy. Without question Dominion and the coal industry have among the most prominent of those interests, but it would be a mistake to assume without hard information that politicians kowtow to either group. Environmentalists are becoming big players in the money game, and they have demonstrated their prowess at addressing the asymmetry of information by issuing their own reports, studies, press releases and appeals to the media. Additionally, environmentalists have successfully used the courts to advance their agenda. Campaign contributions are only one tool for shaping policy.

As demonstrated in Thomson’s own case studies, and more recently in the controversies swirling around coal ash and carbon dioxide regulation, environmentalists have scored many legislative, regulatory and legal victories. They don’t win all the time, but they win frequently enough to debunk the claim that electric utilities and coal companies run the state.

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20 responses to “Do Utilities and Coal Companies Run Virginia? Hardly.

  1. “Thomson’s view of Virginia’s political economy is widely shared among environmentalists and left-of-center activists and politicians.”

    It would be very interesting to see a poll of all the other lobbyists and lawyers who work on energy issues in the halls of the GAB, representing consumers of all classes, and they are not all environmentalists or left of center activists. No indeedy. You might be shocked, Jimbo. Likewise the people upset over utility line and land use issues are hardly of one political stripe.

    But what really interests me is why this person’s book is of such a concern that they are unleashing you on her for this series of attempted rebuttals – now I’ve got to go find a copy. You may be boosting her sales.

    • Steve, What do you mean by “they are unleashing you on her?” By “they,” do you mean Dominion?

      Dominion has nothing to do with my decision to cover Thomson’s book, which, though I disagree with much of it, raises profound issues about how Virginia works. I perked up and took notice when two of my friends said they had bought her book, and one of them praised it lavishly. Moreover, the book is written in much the same tenor as Jeff Thomas’ book, “Virginia Politics & Government in a New Century.”

  2. there is confusion here between donations to a electoral campaign and money spent on lobbying elected legislators…

    you could expect folks from different political spectrums to donate to individuals running for office who hold views not only environmental but other typical public interest views that span more than just “environmental” , You wouldn’t combine all the business lobbying for a wide range of business activities to be narrowed down …that way …either.

    the phrase: ” environmentalists wield significant power now.” … what power? are we talking about their representation of people who have concerns or that they have gobs of money comparable to the businesses they are competing against?

    Most environmental organizations are not heavily funded.. they basically exist on member donations which are quite modest in comparison to companies who see their influence in the legislature as a dollar and cents proposition where they allocate money from their revenues.. which often are far more than what environmentalists have for legislative lobbying.

    It just seems like a hackneyed view to me.

    More often than not Business interests get what they want unless the environmentalists are effective at getting the issue in front of the public and it is pressure from the public that actually impacts – not just “environmentalists”.

    The coal ash is a good example. If that issue never got in front of the public – it would have been a done deal by now. Ditto with the pipeline… or those powerlines in NoVA… or over the James those folks are _not_ “environmentalists”.. in no way, shape or form.. but they ARE concerned about impacts and they WILL then seek organizations that typically would challenge on impacts… so what is the “power” of the “environmentalists” because they clearly don’t have the financial resources to be an equally strong legislative lobby comparable to business nor do they have the financial resources to go forth in courts except of a limited , targeted basis…

    the “power” of the “environmentalists” are only as strong as the public concern is ..or not… the environmental groups have to choose where to put their limited resources…they cannot rebut any/all of the issues they are concerned about.

    For instance, Arlington and many cities have a significant CSO problem yet the environmental groups are not pushing hard in a big public way against the CSOs… like they are Coal Ash – and truth be known CSOs are as big or bigger a problem……….

    I just think throwing all these issues into one “environmentalist” bucket is a bad as lumping all of what dominion does into a “business” basket

    • The coal ash is a good example. If that issue never got in front of the public – it would have been a done deal by now.

      But the issue did get before the public, the waste-water permits were renegotiated, and the solid-waste permits could be as well. The environmental lobby was highly effective at publicizing its message and exerting public pressure to tighten the permits. That’s so blindingly obvious that I’m astonished I have to point it out to you.

      • I’m pointing out to you that the “environmentalists” are often toothless unless they can convince the wider public of the issue… that’s where the “power” lies .. not in them as a group with enough resources to affect things without the public .. unlike the business side which basically is running it’s own show ..more often than not, behind the scenes.. with lobbying the public knows little or nothing about .. and if they did.. may well not agree with it..

        • You’re close, very, very close. The “environmentalists” are by and large toothless without wider public support. The coal ash ponds may be the closest they came to drawing in the public through publicizing their message but I suspect the truth of the matter is just slightly different. It was not the “environmentalists” who drove that bus but rather some local activists that viewed the “environmentalists” as an ally, tool and/or weapon and made use of them, and quite effectively.

          Much the same is happening in some of the power line cases. Look at the lists of responding parties, you won’t find the environmentalists but you will find single issue citizens groups or landowners. Without loud public allies that garner the attention of local and state elected officials, the “environmentalists” can do precious little as they carry little electoral influence. The same can not be said for those with a coal ash pond, proposed pipeline or transmission line in their backyards, they are an electoral block that can not be ignored.

          Dominion’s problem lies in the fact that they can no longer rely on such public outcry to remain as little more than noise at the periphery of the proceedings. Social media, MSM coverage and personal engagment with the hubris of entities like Dominion have changed the landscape and Dominion is having a hard time acclimating to the new dynamic, particularly the impact of social media which has transformed public hearings from events attended only by the more knowledgable to mass meetings with hundred and occassionally thousands of vocal (and often angry) residents (also known as voters).

  3. Gee Jim, Prof. Thomson has really got you hot and bothered. I agree with Steve, why are you so worked up about the idea that Big Energy has a Big Influence in Virginia politic? Did you get a coded message from Dominion Energy’s headquarters? Did the teletype in your basement office clatter to life suddenly in the middle of the night?

    A few other comments. You state,

    “Coal and natural gas are big contributors, but from an environmental policy perspective, they largely work at cross purposes. The two fuels are fierce competitors for electric utility market share. Likewise, the legislative and regulatory goals of alternate energy companies and independent power producers often clash with those of the monopoly utilities.”

    True to some extent but you miss some very big points. Take a peek at VPAP and you will find that in recent years the biggest coal donor has been Alpha Natural Resources out near Bristol. They do provide steam coal and have taken hits from natural gas. But a big part of what they have done involves metallurgical coal which is mostly exported to foreign steel mills. Natural gas has NOTHING to do with this. In fact, the reason ANR bought ailing Massey Energy for a whopping $7.1 billion in 2011 was to grab its holdings of steel-making coal. That play didn’t work out because ANR filed for bankruptcy. Its donations to politicians dropped way off after this, VPAP records show.

    You keep coming up with this hackneyed idea that green groups are impudently putting a lot more money in campaigns as if that is the exclusive right of old-style big companies. And you just can’t stand the idea that an important regulatory body in the state, the air board, can actually have a smart energy expert in a policy-making role. That is somehow anathema. You seem to want a reliable corporate toadie yes vote.

    • Peter, your comment is so loaded with inflammatory language that I hardly know where to begin responding. I’ll limit myself to a couple of points.

      First, I’m not “hot and bothered” by Thomson’s book. I’m responding to her arguments because I take them seriously. She laid our her case in a rational manner, using facts and logic to advance her argument. She did not engage in ad hominem attacks and she did not twist or distort other peoples’ views — unlike some people I could mention. While I disagree with much of her book, I believe it deserves to be taken seriously.

      Second, regarding American Natural Resources’ donations to Virginia political campaigns. Yes, ANR purchased Massey Energy’s coal properties in Kentucky and West Virginia. But Massey owned no mines, metallurgical or otherwise, in Virginia. So, I’m baffled what your observation has to do with anything.

      Third, you made the following statement: “You keep coming up with this hackneyed idea that green groups are impudently putting a lot more money in campaigns as if that is the exclusive right of old-style big companies.”

      Not one word of that sentence can be based upon anything I have ever written or said. I find the statement extraordinary. It tells me that your ideological filters are so powerful that, perhaps without knowing it, you so thoroughly twist and distort the meaning of what I have written that you have no comprehension of what I have written.

  4. Jim,
    Dominion is undergoing a review of wether the coal ash should be left in place or hauled away to a real landfill. Awfully strange they are getting around to this now and only under pressure from the General Assembly. I remember just two years ago they said that leaving the stuff in place was the only option and they had launched a huge campaign to ram the SWCB permits through.

    • You’re making my point!

      Two years ago, Dominion said that leaving the coal ash in place was the only option. Today they’re engaging outside engineers to study alternatives. If Dominion ruled the state, how did that happen? Because the environmental movement comprises a strong countervailing force, and donating money to political candidates is not the only way to move the public policy lever in Virginia.

      • The changes are coming not because the “environmentalists” went toe-to-toe with DOminion behind the scenes at the SCC and Virginia legislature but because they took the issue public – and once the public got a look at it -they weighed in. If the public had not been alerted.. DOminion would have prevailed.. without a whimper…

        the “environmental movement” is not what changes legislators minds -if anything – they legislators use environmental positions to calibrate where the rest of the public is … it’s only when the public itself sees what environmentalists are saying – and agrees with it – and the larger public is what sways legislators – and the regulatory agencies..

        you attribute way more power to “environmentalists” than they actually have… their resources are tiny… and consists mostly of memberships.. not some huge source of revenue coming from some business profits..

        Even then… organizations like the Sierra Club are split into a C3 – tax-deductible entity – that restricts how it’s resources can be used.. and non-tax-deductible money than can be used for partisan purposes. You combine the two as if all donations are tax-deductible and can be used for political purposes when that’s not the case.

        • You attribute way more power to “environmentalists” than they actually have… their resources are tiny… and consist mostly of memberships.

          That’s just plan wrong, and I’m going to prove it in a future article. They get a lot of foundation money. And Tom Steyer money.

  5. Well, Jim, like Peter I have long assumed a direct link between this blog and your prominent sponsor, although I doubt there is a teletype (that’s old school)…..but if you say they didn’t hand you the book and say go at it, I accept that.

    You start with a straw man – a question about whether the coal and energy interests “run Virginia?” No, of course not. The real question is, does a level playing field exist either in the halls of the GAB, on the Third Floor, or in front of the State Corporation Commission and the Supreme Court of Virginia? Are consumer points of view represented or even sought? Is it more or less level than it was before the 2007 re-reg statute, and its myriad amendments in the past decade – and then its total suspension by the Assembly on dubious grounds? Does their political influence overwhelm most if not all opposition?

    • No, I don’t start with a straw man. I start with the thesis of Thomson’s book that electric utilities, coal companies, and “entrenched business elites” exercise “undue influence” over public policy in Virginia. Of course, those groups are powerful. But there are strong countervailing forces at work, and they don’t always get their way.

      Of the three examples Thomson uses to make her case, she and her allies won the battle and the power companies lost. The coal-ash example that Peter cited above is still being contested; whatever the final result, Dominion will be much stricter permits than it asked for. Meanwhile, there’s the battle over the Atlantic Coast Pipeline. ACP will likely gain federal approval. The main resistance to the pipeline is occurring at the state level. If the project gets DEQ approval, I’m betting, it will only be after pipeline companies are forced to make significant concessions to tighten erosion and sediment control standards.

      • Oh, I missed the part about “entrenched business elites.” Much broader group. That’s hitting a little closer to home. If you count all of them, then sure! I need to get the book.

  6. Actually Massey did own reserves and mines in Virginia. I visited one in Red Ash back around 2002.

  7. re: Strawman

    ” Do Utilities and Coal Companies Run Virginia? Hardly.”

    well geeze… that sure sounds like one…

    “undue influence”.. Now THAT’s a premise that I bet if you asked most Virginians… you’d get …outvoted… no?

    Just take the issue of 3rd party solar… or the “rate freeze”…. if you were to plainly and clearly state the facts and asked Virginians what they feel about it… what would they say?

    and would you need Virginian’s to hear what the “environmentalists” think ?

    more and more conflation here as we go along… “public interest” is not necessarily “environmentalism”… yet sometimes it seems there are no voices for public interest in Virginia except for those pesky “enviros”.

    “Power to the People” .. which you cite here in BR… is it an “environmental” group or is it a “public interest” group?

  8. Well Jim, you made me buy the e-book. You are leaving out a tremendous amount of stuff like her comparisons with several other states. Virginia doesn’t look so good when you add it all up. More later.

  9. This was a massive rip-off requested by Dominion and approved by our version of the Gambino crime family – The Imperial Clown Show in Richmond. While some of Virginia’s few non-corrupt politicians and former politicians (e.g. Chap Petersen and Ken Cuccinelli) are fighting this outrage, the majority (including Terry McAuliffe) are pushing this fraud forward as they hastily shove Dominion money into their pockets.

    http://southeastenergynews.com/2017/01/18/constitutional-challenge-over-utility-rates-in-virginia-begins-this-week/

  10. Another Thursday gone by and no opinion on the constitutional challenge to the 2015 rate “freeze” statute (the refund freeze statute in reality). Ten new opinions up but not that. Hmmm. New term starts Tuesday. Will there be no opinion? How would that fit with her thesis?

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