On
the surface, the debate over the transmission line
that Dominion wants to build through the Virginia
piedmont is pretty easy to understand. Electric demand is
rising relentlessly in fast-growing Northern
Virginia and if no one does anything about it, Virginia's economic powerhouse
will start suffering supply disruptions by 2011. The
fastest, easiest way to deliver that electricity,
says Dominion, is to build a 250-mile
electric transmission line from western Pennsylvania
to Virginia, 40
miles of which would run through Loudoun, Fauquier
and Prince William counties.
Nobody
likes 125-tall power towers in their back yard, so
local landowners, many of them whom own scenic
estates, are raising a ruckus. Can't blame 'em for
being unhappy, but what can you do? Subjecting two
million northern Virginians to rolling blackouts
would be an economic disaster.
The
Piedmont Environmental Council, which is leading the
opposition to the transmission line, suspects that
the story might not be quite so simple. Has Dominion
considered any alternatives, it asks. How about
conservation? How about alternate routes? How about
running the transmission line underground? But
whenever the PEC probes for information, it hits --
appropriately enough for this rocky hill country
where General Thomas J. Jackson earned his sobriquet
-- a stone wall. (For details, see the op-ed
in the Times Community Newspaper.)
Full
disclosure: The PEC is a major client. It
underwrites Bacon's Rebellion's coverage of
transportation and land use issues. But no one at
PEC has ever asked me to write about the
transmission-line controversy. As I become
increasingly interested in energy issues, I find
myself drawn to the controversy.
I've
written previously about the virtues of
conservation, distributed generation and alternate
fuels (see "Big
Grid"). Borrowing the analytical framework
of the futurist Alvin Toffler, I've blogged about
the need to shift from the big- infrastructure
energy solutions of the industrial era to the
leaner, more flexible solutions of the emerging
knowledge economy (see "The
Tofflers on Energy Policy.")
The
Loudoun transmission-line controversy strikes me as
a watershed case in the evolution from an
industrial-era energy infrastructure to a smarter,
knowledge-wave infrastructure. For the first time in
Virginia history, there's a group, the PEC, with the
intellectual firepower and the resources not merely
to say, "No," to a high-voltage line but
to articulate an alternative vision to long-distance
transmission lines generally.
I don't see Dominion as guys in
black hats -- the company is just trying to do live
up to its responsibilities as best it understands
them. But it's entirely possible, I think, that
decision makers at Virginia's largest power company
are captive to an outmoded, industrial-wave way of
looking at the world. Surely, there must be a way to
supply electricity to the growing economy of
Northern Virginia without running roughshod through the beautiful
Virginia piedmont.
To
dig deeper into the issues, I consulted a man who
knows Virginia's electric power industry intimately
yet is distant enough from the controversy to be
dispassionate: William W. Berry, Dominion's former
CEO. Berry retired from the company in 1992 and
spent a few years serving on corporate boards, doing
consulting work and advocating his passion: electric
deregulation. In 1997, he became chairman of the
board of ISO New England, the not-for-profit group
that oversees wholesale electricity markets and
operation of New England's power transmission
system. Over a nine-year period, Berry helped guide
the evolution of New England's power industry from a
regulated industry into a deregulated one.
I
met Berry at a small office in the west end of
Richmond. He's maintained the office ever since he
retired, he joked -- at least, I think he was
joking -- because his wife doesn't
like him hanging around the house. Wearing a
sweater, the former CEO was relaxed and informal. His
secretary had the day off, so he poured me a cup of
coffee. As we started the interview, he
thoughtfully yielded his desk so I could set up my laptop. Later,
amidst a discussion about electricity pricing, my
battery ran low and I had to plug in an electric
cord. Berry didn't miss a beat: "I ought to
charge you for that!"
To
decipher how Dominion approaches the Loudoun
transmission line, Berry explains, you have to understand the
company's role
in PJM Interconnection, the most important
organization most Virginians have never heard of. A
Mid-Atlantic counterpart to ISO New
England, PJM manages the competitive wholesale
electricity market in a 11-state region of 51
million people running from Indiana to New Jersey
and down to Virginia and Dominion's territory in
North Carolina.
PJM's
members, some 400 entities, buy and sell electricity
with one another and arrange transmission over each
others' lines. The
arrangement is beneficial because power generators
have more potential buyers of their electricity, and
buyers have more potential suppliers to choose from.
The key to opening up competition is electric
transmission capacity. Limited capacity reduces
opportunities to transfer power between buyers and
sellers over long distances.
Berry
spreads a map of the PJM transmission grid on his
desk. "The low cost power is over here,"
he says, indicating Ohio and other Midwest locations. "The high cost power is over
here," he says, circling New Jersey, eastern
Pennsylvania and northern Delaware. There are
only four major transmission lines linking the
regions. That constrains the volume of cheap energy
in the west that can be delivered to buyers in the
east. "They have a congestion problem,"
Berry says. "They (the eastern utilities) have
to run high-cost power to maintain
reliability."
The
PJM system: Purple demarcates Dominion's territory,
red American Electric Power's, light green Allegheny
Power's.
Electricity demand is increasing faster in Dominion's territory faster than
anywhere else in the PJM system -- about 1.9 percent
annually compared to 1.6 percent for the system as a
whole.
Berry runs his finger around the Washington, D.C.,
metro area, tracing the transmission loop around the
region. A new transmission line connecting the cheap,
surplus generating capacity in the Midwest to Virginia
would do two things. It would help meet the growing demand in Virginia,
he explains, and it would deliver cheaper
electricity to the high-cost zone in the
Jersey-Pennsylvania area.
Here's
the beauty of the Loudoun line from Dominion's point
of view: It would meet the needs of the growing
Virginia market. It also would allow the company to
serve as an intermediary between Ohio and New
Jersey.
What's
unclear to the Piedmont Environmental Council is how
central the electric-trading opportunity is to Dominion's
internal business case for building the transmission line. It's one thing to
use eminent domain to condemn land along the route
in order to prevent rolling blackouts in Northern
Virginia, a legitimate public necessity. It's quite another to use it to reap
electricity trading opportunities outside the state,
a private purpose.
The
power company told the Times Community Newspapers that the
transmission line, in the newspaper's words, "constitutes
the only answer to Northern
Virginia's
long-term electricity demands." So far, the PEC
says, it has
offered little concrete evidence to back up that
assertion.
Berry
is not in a position to confirm or dispute the
claim, but he lists a number of possible
alternatives to building the Loudoun line. The least
attractive option that has been floated is burying the transmission line
underground. It can be done: ISO New
England has an underground in Boston. But the cost
would be prohibitively expensive. Dominion contends it would cost $1.6
billion to run the 40-mile Virginia leg underground
and connect both ends with substations.
There
are other pros and cons to underground lines. An
advantage is that they require less routine
maintenance -- they don't get knocked out by ice
storms, for instance. But when there is a problem,
Berry warns, they're harder to fix. Outdoor lines are more easily accessible and
much easier to repair.
(Since
the original publication of this column, I was
informed of a report, "Evaluation
of Underground Transmission lines in Virginia,"
written by the Joint Legislative Audit and Review
Commission. The conclusion: Underground lines are
four to 10 times more expensive than overhead
lines.)
A
more promising alternative might be to build a power line through
Pennsylvania rather than Virginia. There is no
self-evident reason why the Virginia
route is superior, Berry says. "There may be good reasons
for it, but I don’t know them. ... Someone
should ask [Dominion] the question, why not put the
transmission line farther north?"
A
third option is to build new power-generating
capacity right where it's needed -- in New Jersey,
which could benefit from cheaper electricity, and in
Northern Virginia, where demand is growing. That would save
the capital expense of the transmission line, about
$10 million per mile for 250 miles, and the leakage
of electricity along the route. Someone should ask
Dominion if it has examined those alternatives,
Berry says, and what the numbers look like.
There's
another good reason for locating generating
capacity near the source of demand: It reduces risks
inherent in relying upon transmission lines. Simply put: the longer the line, the greater the
risk of disruption, whether by ice storm, hurricane,
tornado or natural catastrophe. For the
stability of the regional power grid, wouldn't it make sense for the Washington metro area to
maintain a portion of its generating capacity within
the region itself instead of importing nearly all of
its electricity from outside?
Other
than an
independent power producer in Alexandria, there is little generating
capacity in northern Virginia. But surely there are other
suitable sites. Even if Dominion
hasn't identified any, that doesn't mean they don't
exist. Has the company even looked? Has it put out a Request for Proposal?
Finally,
Berry says, Dominion could consider the conservation
option -- an idea pushed aggressively by the
Piedmont Environmental Council. New England has a
program called "load response." It wasn't
easy to get up and running, and it still isn't as
big as it could be, but it works pretty well, Berry
says. Under
the load response program, voluntary participants,
usually businesses, hospitals or other large
customers, feed an electric meter into a computer,
which monitors the line all the time and shares the
information with ISO real-time. Everybody knows
exactly what the electric usage is and the current
market price in New England's deregulated market.
"There
are trigger points," Berry explains. "When
prices reach a certain level, people reduce their
load." That enables the local utility to avoid
the cost of running generators that burn high-cost
natural gas to meet spikes in electricity demand.
The program has shaved about 600 megawatts of peak
demand out of the 26,000 megawatt system, he says.
"That's about two or three percent. We'd like
to get that up to 10 percent."
If
Dominion could shave 10 percent off its peak demand,
it could delay building the transmission line by years.
If it also instituted retail
conservation programs like a Potomac Electric Power
Co. pilot project in Washington, D.C., in which
2,250 homes will be equipped with smart meters that
report consumption levels every 15 minutes,
it could stave off the need for new capacity even
longer.
According
to Richmond Federal Reserve Bank's Region
Focus magazine, half the participants will
receive a
"smart thermostat" that can remotely raise or lower the
temperature of an air conditioner or central
heating system during exceptionally cold or hot
days, periods of peak demand when the power
company fires up its most costly generating
capacity. Customers can reset the
temperature to a more comfortable level, but they
will be warned by real-time electricity prices
displayed on the thermostat that doing so will
raise their bill.
As
the PEC has observed, retail consumers could
conserve considerable electricity if they were given
incentives to do so: from ENERGY STAR
refrigerators to compact fluorescent light bulbs,
from tankless water heaters to front-load washing
machines that wring out water before clothes go into
the drier. Why
isn't Dominion aggressively pursuing conservation programs comparable
to Pepco's and ISO New England's?
Setting
up conservation programs in tandem with incremental capacity
such as cogeneration plants, which generate
electricity then sell the waste steam to commercial
customers, might provide a solution that doesn't
require building a $2.5 billion transmission line
that destroys economic value across its 250-mile
length. Who knows. If we can stave off the need for
a transmission line for a decade, solar
energy might become economically competitive. Then
businesses and homeowners will be installing solar
panels on every roof -- obviating the need to ever
build a transmission line.
Instead
of clamming up tight, Dominion should share information
with the public, issue Requests for Proposals and
endeavor to earnestly examine all the options. The
idea of sharing knowledge rather than hoarding it is
a very Toffleresque concept, and it very much goes
against the grain of industrial America. But
Dominion just might find that it works.
--
January 22, 2007
Footnote:
At it turns out, Dominion has put out a
request for bids for new peaking capacity and
demand-side management programs for Northern
Virginia. After publishing this article, I came
across a Nov. 17, 2006, press release that describes
the request here.
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