The clock is ticking toward a March 6 deadline if you are burning with a desire to comment on the latest version of Virginia’s proposed Regional Greenhouse Gas Initiative regulation. Perusing the hundreds of comments from the 2018 round of comments, there may not be much to add.
If you liked the first version, you’ll love this revision. If you hated the first version, you will see this one as worse. It is very much the same, only more so – starting with the new beginning target for carbon dioxide emission from power plants of 28 million tons per year, down from the first proposal’s target of 33 million tons per year.
Other than that, little has changed since Jim Bacon’s 2018 report, but others who understand this better may see other significant changes in the most recent revisions. It does take pages and pages just to note the alterations, and those that seem technical may prove otherwise.
If you are searching the record for easy access to basic information – a list of the plants involved, their current carbon emissions, the steps that would be required to steadily shrink those emissions, an honest discussion of cost – you search in vain. Only a small priesthood understands this holy text.
Virginia’s membership in RGGI is not mandated by federal law. It has been rejected by the General Assembly, with the bills vetoed. Given that it is a one-state solution in the middle of a vigorous regional electricity market, it likely will have only a minor impact on local emissions and make a tiny dent in regional CO2. As proposed, it will hardly be free, and only once implemented as its proponents intend will the real cost emerge.
Make no mistake, brilliant protests notwithstanding, the Air Pollution Control Board will vote in this revised regulation, which fills 35 tightly-packed pages in the most recent Virginia Register of Regulations. Governor (fill in the name) will most certainly sign off and voila, Virginia Saves The Planet. Your electric bill will do down a little or go up a lot, depending on who you believe. The truth is probably in the middle, a noticeable but not crushing increase.
As reported previously, the State Corporation Commission has entered a prediction of $3 billion to $6 billion over ten years of consumer costs on Dominion Energy Virginia, the company that is the main target of this effort. Virginia’s other investor-owned utility, Appalachian Power Company, runs only three natural gas generators in its territory, accounting for less than 200,000 tons of annual CO2 output.
But in a report worth reading from the Virginia Mercury, defenders of the proposal are sticking by their claims of minimal customer costs, mainly because as the regulation now reads, the utilities – not the state – will garner the revenue from the sale and purchase of carbon allocations and are expected to then pass the benefit along to their customers one way or the other, perhaps through the fuel charge.
Those of us who have spent a decade fighting, often with little success, to get Dominion Energy Virginia to fork over money it owes to customers would really like to see something in writing, preferably in the Code of Virginia. That same group of skeptics remembers just over four years ago the State Corporation Commission issued a highly-debatable report on the cost of the pending Clean Power Plan, which Dominion then used to stampede the General Assembly into self-serving anti-consumer legislation.
In its official comments to the 2018 version, Dominion stated that the various covered generating units (involving several owners, not just it and APCo) had emissions of more than 35 million tons of CO2 in 2016. If so, the target of 28 million for 2020 could prove onerous after all. The cap then shrinks 3 percent – 840,000 tons – per year for ten years, getting down below 20 million tons by 2030 and just above 11 million tons by 2040. Last year Dominion put the cost of RGGI compliance at just above $500 million over ten years.
If APCo’s three existing units account for less than 200,000 tons, which plants around Virginia must curtail operation or close entirely to drop output relentlessly by 840,000 tons per year?
Despite their protests that they do not seek us economic harm, the advocates behind this want the gas and coal plants silent, closed, kaput, sayonara, but we ratepayers will remain on the hook for 100 percent of the capital investment. That adds credibility to the SCC estimate, which includes those stranded capital costs and the loss of revenue if those plants cannot sell power out of state.
The argument in the Virginia Mercury piece that costs of RGGI compliance will be minimal rest upon a couple of major assumptions. The first is that the allowances for carbon emission in Virginia will be “free.” The power plant operators will be handed allowances for 28 million tons, and then will enter the carbon auction to sell and buy and there is little or no net cost. The year after that, they get 27.16 million tons in allowances, and the year after that 26.32 million. The revenue continues to flow back to the customers.
But the environmental movement, many state legislators and the Governor (again, pick any of the three names) do not want the proceeds to flow back to ratepayers. They have sought for several years to capture the money for other purposes, as is done in the other northeastern states that belong to RGGI. In fact, the only reason the proposal now calls for the money to flow back and forth to the utilities is the state Constitution prohibits a regulatory agency from creating and spending a tax.
Only the legislature can do that, and to see how read House Bill 2735. It turns Virginia’s proposal into a true carbon tax, with the cash not being used to maintain electricity rates. It failed, but if the Democrats control the legislature, expect a bill like that to pass. The SCC cost estimate, at the high end, assumes that a such real carbon tax comes soon.
For environmentalists to point to the “free” allowances in the pending regulation and argue that will protect us over time is a classic bait and switch. They want the real tax.
Another huge assumption? Virginia Mercury states: “Our nuclear plants, which provide a big chunk of Virginia’s electricity, are already operating at full capacity, and that’s not expected to change.” In 2030? Probably true. In 2040? Very, very doubtful, and expect the same environmentalists to be leading the charge to prevent their new licenses.
As with so many things in this arena, the big decisions are being made while the people who will bear the burden and pay the price are unaware.
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