Bacon's Rebellion

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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