Bacon's Rebellion

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The Underground Saga Continues: I-66

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by

Steve Haner
in , , ,

October 2017: Legislators and Prince William County supervisors announce support for an underground transmission line paid for almost in full by other people’s constituents. U.S. Senate nominee Corey Stewart is second from left, Hugo fourth from left.

The saga of expensive underground transmission continues:  Now comes the Dominion Energy Virginia 230-KV line along I-66 which is needed for an Amazon facility and the growing data center industry. The State Corporation Commission has signed off and reports in the order a cost of $170 million or more to build it.

Every step in this process has been heralded by press releases from Delegate Tim Hugo, R-Centreville, who sponsored legislation to order the SCC to approve the underground approach, which then became a major chip in the poker game behind the 2018 Dominion Energy legislation. The power line to serve the data center was first opposed outright, and then the opponents’ push was to bury it. The parties reached an agreement on this route a few months ago.

“Now that the State Corporation Commission has accepted Dominion’s application, western Prince William County residents can be assured that the Haymarket power lines will be buried,” said Del. Tim Hugo, R-Centreville, in  a release Friday. “This community-led effort, which I was proud to contribute to, will ensure the quality of life in western Prince William County is maintained. Last year, I promised to pass legislation to bury the power lines, and working together, we did.”

The SCC estimated the cost of the 5-mile overhead project, which includes a new substation, at $51 million. So, that’s our cost to deliver reliable power in that region to Amazon and others, and $120 million extra is charged to maintain the lustrous beauty of I-66 through three miles of the  route. Much of the route east of Haymarket is lined by subdivisions and 100-foot towers would be hard to miss.

Again, as with the previously-discussed plan to place 4,000 miles of small residential tap lines underground, the cost is paid by all company ratepayers.  It is paid off over a very long period with a comfortable profit margin, thus the final all-in cost is more than twice the initial window sticker.  As seems to be the rule now and not the exception, the General Assembly and Governor overruled the decision made by the commission to go with a lower-cost option. What the SCC “accepted,” to use Hugo’s word, is its reduced circumstances.

Utility transmission improvements should be paid for by ratepayers across the system, but the trade-off is that the regulator should be zealous about demonstrated need and reasonable cost. The idea is to prevent the raw political horse trading on display here.

The neighborhood underground program is paid for with a special rider on everybody’s bills, Rider U, but this Haymarket transmission project will eventually be incorporated in the larger Rider T. The enactment clause in the 2018 bill that ordered the SCC to approve the underground approach also authorized a second “pilot project,” yet unnamed (a card still face down on the table.)

A powerful precedent has been set and those two projects may be followed by more. Large overhead power lines are very unpopular and the path to force them underground has been found. The added cost also adds profit for the utility. This is just another skirmish in the overall battle plan to leave the SCC and anybody else putting consumers first dying in a ditch.

Want more evidence? I commend to your reading a report in the Times-Dispatch that, buried in the recent 200-plus application by Dominion Energy Virginia on its grid enhancement plan, is a request to avoid any cost-benefit analysis of that at all.

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16 responses to “The Underground Saga Continues: I-66”

  1. LarrytheG Avatar
    LarrytheG

    If this becomes a done deal – other folks in other neighborhoods and locations will demand the same benefit and as the locations multiply and costs increase – more and more the cost will be put on all customers.

    The mentality of the folks who want the lines buried seems to be that Dominion is a big, rich company and can “afford” it but the reality is that it’s not Dominion that is going to pay for it – as Steve amply points out.

    That truth does not faze the NIMBY folks though – their first priority is to “protect” their neighborhoods from the viewshed impacts – in any way they can and let the marbles fall where they will and if it is on others – so be it.

    Dominion is fairly consistent about higher costs pretty much across the board. For instance, on the James River Jamestown crossing – they have chosen the least costly way to cross even though it has higher scenic impacts that more expensive routes don’t have.

    However, one-off project costs are different from fundamental changes to the way that powerlines are done and if the new standard becomes to bury them whenever there is opposition to overhead – and those costs are added to everyone’s bills – such costs may well escalate and become significant parts of all customers bills.

    Now, it could well be that this might be what a majority of customers actually do want and are willing to pay extra for – or it could be that like a lot of other things, the folks who want the costly changes and others , everyone chips in to pay for it….

    Then again – if we took a poll of people and ask if Dominion should move all coal ash to lined disposal sites… or close all it’s coal plants, use renewables and upgrade the grid to handle the intermittent nature – I suspect we’d see support for those things also.

    And in a perverse way – as seen in other places, when the price of electricity goes up – people buy and use demand side technology to lower their electric use.

    In places where electricity costs more – consumption goes down…across the US and across the Globe…

    So…. does Dominions undying commitment to the lowest cost electricity at the highest profits – outweigh what customers want if they’re willing to pay more, use less, and lower Dominion’s profit rate?

    I suspect you could word this in a way that a referenda on the question might be exciting.

  2. LarrytheG Avatar
    LarrytheG

    Speaking of referenda – I question Virginia’s continued allegiance to it’s “let the leaders decide” top-down Virginia Way of governing.

    Some level of citizen-initiated referenda would better reflect the sentiment of citizens AND empower citizens to go around money/ideology-beholden elected who say one thing to voters and do something else when they vote

    I think the Founding Fathers INTENDED for citizens to have more say and not be essentially held hostage to double-talking elected who are more guided by their own personal philosophies – and influence-able by so-called “free speech” money .

    The process could be “curated”, moderated, to limit and/or put high bars on questions that are essentially illegal and unconstitutional…

    And it probably would fundamentally change the way we do electricity and energy in Virginia to be more in line with what most consumers want and maybe put some brakes on the nanny-state as well as better reflect what “NIMBY” is and is not…

  3. Acbar Avatar
    Acbar

    Undergrounding 101:

    Low voltage service drop to a customer: 220v or so: you can direct-bury the wire in the ground. Obviously, when compared to overhead, underground is more expensive to install and more expensive to maintain if you ever have to dig it up. But, the line ceases to be vulnerable to trees falling in storms and customers like the aesthetic. Common utility practice. Tradeoff rating: expensive but worth it.

    Low voltage distribution lines: below 5 kv or so: More expensive to install; often installed in conduit to protect the wire and so it can be pulled and replaced if necessary. Connections to customers require transformers at ground level which can be unsightly, or in sub-surface vaults which are expensive to build and require ventilation; and adding new customers requires digging things up and new u/g connections (expensive). Some costs may be picked up by developers, reducing cost impact on other customers; utility tariffs often have a provision requiring other developers who tap into such lines within a few years to reimburse part of the initial developer’s contribution. System restoration benefit high following major storms. Common utility practice in newer developments or urban redevelopment zones or other areas where undergrounding is mandated politically. Tradeoff rating: expensive but worth it when planned u/g from the start, hard to retrofit.

    Higher voltage distribution lines: around 13 kv and up. Same issues as lower voltage distribution, but now we’re starting to deal with another big issue: heat gain in the wires. When underground the heat simply accumulates and can cook the insulation and start fires if not carefully dissipated. Transformer and breaker vaults must be large and secure and often require fan ventilation (whereas those overhead on poles are air-cooled). Developers often required to pick up the cost of conduits and transformer vaults. Substantial system restoration benefit during major storms as lots of customers would be affectd by outages. Larger developers may be required to pick up the cost of conduits and transformer vaults. Tradeoff rating: Expensive but can make sense if planning a new development with substantial developer contribution, extremely expensive to retrofit and rarely done without major taxpayer funded contribution.

    Transmission lines (69 kv or 230 kv): Now the heat-gain issue becomes dominant; each wire must be buried inside a pipe filled with oil which must be continuously circulated through the u/g pipe and then through cooling coils placed periodically at the surface. These cooling coil stations are fan cooled and can be noisy. New connections are extremely expensive; however these lines usually run only between substations so changes are infrequent. Storm restoration benefits decline as these lines are usually built overhead in cleared rights-of-way and infrequently damaged by trees or lightning. Tradeoff rating: poor, these lines are place underground rarely and only where there’s no acceptable alternative or the locality pays (heavily) for the aesthetic benefit.

    Extra high voltage lines: 500 kv. Don’t ask. Tradeoff rating: out of the question.

    1. Steve Haner Avatar
      Steve Haner

      Thanks, Acbar. That really explains the marginal cost.

    2. Acbar Avatar
      Acbar

      That’s a summary of normal utility practice. Dominion, however, has arranged to be free of the normal tradeoff concerns. Whatever Dominion chooses to spend on undergrounding, as it stands under the recent law, goes automatically into rate base with ~40 year amortization and a regulated return on the unamortized balance, without any effective VSCC review, so why not underground everything you can come close to rationalizing to keep your benefactors, the politicians, happy (and eventually, your shareholders)? Nice work if you can get it. So long as the total price of electricity remains competitive, most customers love the more resilient grid, with its quicker restoration of service from storm damage, even if it wasn’t cost-effective to build it that way, and politicians love happy customers.

  4. Mom Avatar
    Mom

    This was a 4 1/2 year battle marked by the basest of behaviors by Dominion and Amazon. Make no mistake about it, the tactics used were of the scorched earth variety and in truth, the local interests prevailed by adopting a long game strategy and beating Dominion at its own game.

    As to the costs and lifespan of the buried transmission line, the dirty truth is that Dominion did not want to publicly acknowledge just how overstated their cost projections for the hybrid line were, based on outdated technology, practices and material costs.

    Don’t look to the James River crossing as an exemplar, look to the Rappahanock crossing as an exemplar and how Dominion’s numbers were debunked by third party experts. The only difference between the Rappahanock case and the Haymarket case was the Hearing Examiner. In the Haymarket case, the Hearing Examiner was publicly and extraordinarily biased, thin-skinned and vindictive. If any had bothered to read through the thousands of pages in the case, that would become most apparent. In his view all numbers by Dominion and assertions by their “experts”, particularly Mark Gill, were gospel and any assertions by the SCC staff, third party experts or citizens were summarily dismissed or denigrated. The same can not be said about the Rappahanock proceedings.

    As to the cost being borne by the ratepayers, that is the result of Dominion and the Hearing Examiner refusing to admit that the costs should have been borne by Amazon under the line extension policy as nearly all of the capacity of the transmission line is to be sucked up by Amazon’s data centers. Similarly, I would wager a weeks pay that when the project is completed, the actual cost will actually be roughly 50% of Dominion’s estimate. Don’t take it, it is a sucker’s bet, historic numbers and current technology costs are on my side.

    Mr. Haner, you are right about one thing, a powerful precedent has been set, more importantly, the handbook on how to successfully fight Dominion on their own terms has now been written. The lessons learned in this fight are already being applied elsewhere in the Commonwealth.

    When this fight began more than four years ago, those who initiated it were ridiculed and the endeavor referred to as a Quixotic quest. What Dominion, state employees and elected officials failed to take into account was the demographics of the region this project crossed. They assumed that the western part of Prince William County was filled with housewives and bumpkins incapable of waging total war.

    What they ran into was a highly educated community wherein you couldn’t swing a dead cat without hitting an SESer, engineer, lawyer, MBA, CEO, contractor, seasoned activist, general, chemist, etc. Those elements were brought together under a common banner, volunteered their time, money, connections and knowledge with singular mission goal. One shouldn’t be surprised at the outcome given the experience many had garnered in the never ending land use wars of Prince William County or the vast professional experience many have as a result of the bureaucratic wars waged in DC.

    Rest assured, we in Prince William never doubted the outcome or our ultimate victory, it was merely a matter of playing the game to its conclusion, throwing sand in the gears at every opportunity and engaging in guerilla and social media tactics that Dominion had never faced nor was equipped to deal with.

    1. Acbar Avatar
      Acbar

      Mom, you’d bet, “when the project is completed, the actual cost will actually be roughly 50% of Dominion’s estimate.” Let’s remember to compare notes in a few years when it is all built, “plant-in-service.” I expect DOM will spend every penny authorized and then some, mainly because regulated earnings on their rate base is their game today. They will find a way to maximize their earnings by maximizing this incremental addition to their rate base even if it could have been done for less.

  5. TomH Avatar
    TomH

    Acbar has it right. Lines running at transmission voltage are rarely placed underground, primarily because it costs 3 to 10 times more to put transmission lines underground than it does to have them overhead. The high heat build-up results in underground transmission lines having half of the service life of equivalent overhead lines. Maintenance costs are much higher and when there is a problem it takes much longer and is much more expensive to fix than an overhead line.

    As far as aesthetics go – during the construction period, it will be a mess. The entire right-of-way will have a trench running down it, with huge dirt piles all along the right-of-way. This will occur for six months or more, rather than just the few days it takes to erect a transmission tower. Lots of truck traffic for construction vehicles. Erosion and sedimentation will affect neighboring properties after rain storms.

    A permanent road will be required for maintenance access and concrete access ports will be all along the corridor.

    This is a huge ratepayer subsidy to benefit a few customers and to gain a political bargaining chip. The subsidy will be much greater than the amount associated with net metering but we haven’t heard a peep from those who criticized that.

    This is a major revenue and profit gain for the utility. The stream of profits from a utility project is two times the original investment. Less when converted to a net present value amount.

    Undergrounding distribution lines has many of these same issues: high cost, shorter service life, high maintenance costs and long repair times. Proper tree trimming, replacing wood poles with steel or concrete poles, or reinforcing them with guy wires can often be nearly as effective in reducing storm damage and costs much less.

    Undergrounding distribution lines is about getting another profit source and the cost-savings that will go directly to shareholders. The storm damage cost recovery is fixed in the base rates, as is the assumption for tree trimming. Customers will continue to pay rates based on these assumptions until the base rates are reviewed. Any savings from avoiding tree trimming or reducing storm recovery expenses will all go to the shareholders in the meantime. When you hear Dominion say that some of these projects will result in savings, that might be correct. But just for them, not for their customers.

    We need to restore the utility compact in Virginia. It will be better for the utilities in the long-run too.

    1. Mom Avatar
      Mom

      You are so wrong on some many levels given present technology and site specific details that a dissertation on you failed assertions would take half an hour to write, at least.

  6. TBill Avatar
    TBill

    I see, said the blind man. Extremely interesting discussion above.

    We rejoice with the successful concerned citizens of PW having won a big argument over City Hall. At the same time we have to ponder if the NIMBY side was morally correct, or simply politcally over-powering. I do not have the answer because I am not as good with high-power line siting policy as I am with landfills and coal fired power plants.

    The saga also seems to explain some of the “secret” logic behind the recent Dominion-sponsored 2018 Energy Legislation. Our elected officials wanted it so they could use rate-payer money to smooth over community disputes about where/how to site new high power lines and other projects such as renewables power generation and welcoming new data centers to the region.

    It would be good to compare notes with California and other places, how they handle situations like this? But I am not sure there is any direct comparison to the data center explosion happening in that part of NoVA.

    1. Acbar Avatar
      Acbar

      Yes to the secret logic. But remember, it only works for DOM to encourage such profligate ratebasing as long as its retail rates are competitive — competitive with other electric companies seeking to attract the likes of those data centers; and competitive with other sources of energy like n.g. seeking to attract other institutional and industrial customers to Virginia. DOM is rapidly using up the price advantage conferred by the accumulated wise decisions and cost efficiencies of past leadership of Virginia Power. This is an exhaustable legacy.

  7. djrippert Avatar
    djrippert

    This is one of the very, very few times I have seen a NoVa-based member of our state legislature actually do something that benefits his constituents. We need more legislators like Tim Hugo from NoVa and fewer of the usual sell-outs. And yes, I am looking at you Kathleen Murphy.

    Amazon wanted to reduce the property values of area residents by demanding that Dominion build an unsightly airborne power transmission line. This line would not benefit those in the community it would benefit one of the biggest companies on Earth. However, it would certainly lower the property values of those within sight of the transmission line. Needless to say our supposedly conservative state government could give a rat’s ass about the taking of private property through the lowering of property values to primarily benefit a single company, namely Amazon. And equally needless to say our heroic state government wasn’t going to pin the tail on the donkey of the puppet masters in Dominion nor tug on the cape of Sir Jeffrey of Bezos. No, no, no – screw the property owners was the tried and true first response. However, as Mom relates, these property owners were a bit different. Many had honed their bureaucratic fighting skills in the major leagues of the professional swamp in DC, not the bush league bog of Richmond. Their strength forced our never vigilant state government into its second favorite approach on these issues – screw everybody in Virginia (but not Uncle Dominion or Aunt Bezos).

    2019 needs to be a reckoning year in Richmond. Out with the old, in with new. And yes, I am looking at you Dick Saslaw.

  8. LarrytheG Avatar
    LarrytheG

    Interesting commentary. When/If we get to the point where what Dominion says is needed to provide reliable power is doubted and questioned… it’s a “trust” issue and I have to say , whether it’s a pipeline or power lines over the James, or North Anna 3 – there’s a lot of doubt out there on what Dom says they “need”.

    And that now seems to include when a new company wants to locate where more power is needed – i.e. data centers… I get the impression that PW folks would just as soon see Amazon and others like it – get out of dodge and go somewhere else… regardless of whether the amount of electricity said to be needed is correct or not. But I’m really confused on this because isn’t this the same issue as when Amazon wanted to build solar and Dom apparently did not want it initially and so it got built on the Eastern Shore by a REC? Or have I got things confused?

    Oh and thanks Acbar for the 101… In some respects , what Dom says if the lowest cost prudent way to do something if citizens reject their plan – like in this case – how is it different than say powerlines over the James or for that matter a solar farm itself near populated areas… I get the impression that people don’t want any of this infrastructure near where they can see it – but they want the stuff it provides! Cell Towers are another good example. People want the service – don’t want the towers!

    1. Mom Avatar
      Mom

      Actually, PWC residents are fine with Amazon and others building data centers so long as they build them in areas with sufficient infrastructure. In this case, Amazon purchased a cheap parcel of land with limited electrical capacity and expected everyone else to pay for the real and tangential costs of the transmission line to service the project.

      The circumstance were enabled by the Economic Development Department stooges, poor land use planning and inadequate zoning text in PWC, of which two factors were subsequently corrected by the residents of PWC, residents not elected officials as the residents drafted the corrections and exerted extreme pressure on local officials to accept them.

      As to trusting Dominion’s assertions or cost projections, never, they are usually inflated by a factor of from 3-10X for those plans they oppose. That happened in this case and the Rappahannock case, resulting in Dominion backtracking when hired experts with actual construction experience refuted their numbers.

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