Category Archives: Disaster planning

New Film Documents Horrors of Coal Mining

blood on the moutain posterBy Peter Galuszka

Several years in the making, “Blood on the Mountain” has finally premiered in New York City. The documentary examines the cycle of exploitation of people and environment by West Virginia’s coal industry highlighting Massey Energy, a coal firm that was based in Richmond.

The final cut of the film was released publicly May 26 at Anthology Film Archives as part of the “Workers Unite! Film Festival” funded in part by the Fund for Creative Communities, the Manhattan Community Arts Fund and the New York State Council of the Arts.

Directed by Mari-Lynn Evans and Jordan Freeman, the film shows that how for more than a century, coal companies and politicians kept coal workers laboring in unsafe conditions that killed thousands while ravaging the state’s mountain environment.

As Bruce Stanley, a lawyer from Mingo County, W.Va. who is interviewed in the film and has fought Donald L. Blankenship, the notorious former head of Massey Energy, says, there isn’t a “War on Coal,” it is a “war waged by coal on West Virginia.”

When hundreds of striking workers protested onerous and deadly working conditions in the early 1920s, they were met with machine guns and combat aircraft in a war that West Virginia officials kept out of history books. They didn’t teach it when I was in grade school there in the 1960s. I learned about the war in the 1990s.

The cycle of coal mine deaths,environmental disaster and regional poverty continues to this day. In 2010, safety cutbacks at a Massey Energy mine led to the deaths of 29 miners in the worst such disaster in 40 years. Mountains in Central Appalachia, including southwest Virginia, continue to be ravaged by extreme strip mining.

As Jeff Biggers said in a review of the movie in the Huffington Post:

“Thanks to its historical perspective, Blood on the Mountains keeps hope alive in the coalfields — and in the more defining mountains, the mountain state vs. the “extraction state” — and reminds viewers of the inspiring continuum of the extraordinary Blair Mountain miners’ uprising in 1921, the victory of Miners for Democracy leader Arnold Miller as the UMWA president in the 1970s, and today’s fearless campaigns against mountaintop-removal mining.”

The movie (here is the trailer) is a personal mission for me. In 2013, after my book “Thunder on the Mountain, Death at Massey and the Dirty Secrets Behind Big Coal,” was published by St. Martin’s Press, Mari-Lynn Evans called me and said she liked the book and wanted me to work with her on the movie project. She is from a small town in West Virginia a little south of where I spent several years as a child and thought some of my observations in the book rang true.

I drove out to Beckley, W.Va. for several hours of on-camera interviews. Over the next two years, I watched early versions, gave my criticisms and ideas and acted as a kind of consultant. Mari-Lynn’s production company is in Akron and I visited other production facilities in New York near the Brooklyn Navy Yard.

Interesting work if you can get it. My only forays into film making before had been with my high school film club where he videographed a coffin being lowered into a grave (in West Virginia no less). I was greatly impressed when I saw the movie at its New York premiere.

Mari-Lynn and Jordan have been filming in the region for years. They collaborated on “The Appalachians,” an award-winning three-part documentary that was aired on PBS a few years ago and on “Coal Country” which dealt with mountaintop removal strip mining.

They and writer Phyllis Geller spent months detailing how coal companies bought up land on the cheap from unwitting residents, hired miners and other workers while intimidating them and abusing them, divided communities and plundered some very beautiful mountains.

Upper Big Branch is just a continuation of the mine disasters that have killed thousands. The worst was Monongah in 1907 with a death toll of at least 362; Eccles in 1914 with 183 dead; and Farmington in 1968 with 78 dead (just a county over from where I used to live).

By 2008 while Blankenship was CEO of Massey, some 52 miners were killed. Then came Upper Big Branch with 29 dead in 2010.

At least 700 were killed by silicosis in the 1930s after Union Carbine dug a tunnel at Hawks Nest. Many were buried in unmarked graves.

While state regulation has been lame, scores West Virginia politicians have been found guilty of taking bribes, including ex-Gov. Arch Moore.

The movie is strong stuff. I’ll let you know where it will be available. A new and expanded paperback version of my book is available from West Virginia University Press.

Blankenship is scheduled to go on trial on federal charges related to Upper Big Branch on July 13.

Blankenship’s Incriminating Tapes

don-blankenship By Peter Galuszka

It may sound like something out of the Nixon White House, but embattled coal baron Donald L. Blankenship regularly taped conversations in his office, giving federal prosecutors powerful new ammunition as he approaches criminal trial in July.

According to Bloomberg News, the former head of Massey Energy taped up to 1,900 conversations that often go to the heart of the case against him. Blankenship was indicted last Nov. 13 on several felony charges that he violated safety standards and securities laws in the run up to the April 5, 2010 blast at the Upper Big Branch mine in West Virginia that killed 29 miners.

The revelation of the tapes came about in a circuitous way. The tapes were given to federal prosecutors in 2011 by officials of Alpha Natural Resources, which bought Richmond-based Massey Energy in 2011 for $7.1 billion.

After reaching a non-prosecution deal with federal prosecutors, Alpha hired a powerful New York law firm to investigate Massey for any possible violations.

Alpha, based in Bristol, was required as part of a non-prosecution order it signed to surrender all evidence, including the tapes.

Earlier this year, Alpha declined to continue paying Blankenship’s legal bills since he was under criminal indictment. Blankenship, claiming Alpha was required to indemnify, him, sued Alpha in a Delaware court. The existence of the tapes was revealed in that venue.

According to court documents filed in Delaware, Blankenship seemed to know that his disregard and hardball management practices could hurt him.

The tapes show Blankenship’s disdain for the U.S. Mine Safety and Health Administration (MSHA), which regulates mines but also reveal Blankenship knew Massey’s practices were risky.

According to testimony, a tape has Blankenship stating, “Sometimes, I’m torn up with what I see about the craziness we do. Maybe if it weren’t for MSHA, we’d blow ourselves up. I don’t know.”

“I know MSHA is bad, but I tell you what, we do some dumb things. I don’t know what we’d do if we didn’t have them,” Blankenship said on tape in the Delaware case.

So far, little has been revealed about what evidence the U.S. Attorney’s Office in Charleston, W.Va. has against Blankenship. Irene Berger, a U.S. District Judge in Beckley, W.Va., issued a massive gag order forbidding lawyers and even family members of the 29 mine victims from discussing the case, now scheduled for July 13 in Beckely.

The gag rules were order modified after the Charleston Gazette and the Wall Street Journal among other news outlets challenged them before the U.S. Fourth Circuit Court of Appeals in Richmond.

In some cases, apparently, the tapes cut both ways. In Delaware, Blankenship’s lawyers played a tape from 2009 which has Blankenship urging executives to tighten up on safety. “I don’t want to go to 100 funerals,” he is quoted as saying. He allegedly told Baxter Phillips Jr., then Massey’s president, that if there were a fatal disaster, “You may be the one who goes to jail.”

According to Bloomberg, Alpha initiated the internal probe after reaching a non-prosecution deal with federal prosecutors. It hired Cleary Gottleib Steen & Hamilton of New York to handle it.

Since Alpha refused to continue paying Blankenship’s legal bills, Blankenship reportedly has paid his lawyers $1 million himself.

The writer is the author of “Thunder on the Mountain, Death at Massey and the Dirty Secrets Behind Big Coal,” 2012, St. Martin’s Press. Paperback , West Virginia University Press, 2014.

Private Immigrant Jail May Face Woes

Farmville jail protest

Farmville jail protest

By Peter Galuszka

Privatization in Virginia has been a buzzword for years among both parties. In this tax-averse state, contracting off public functions is seen as a wise and worthy approach.

But then you get debacles such as the U.S. 460 highway project. And now, you might have one brewing down in Farmville.

The small college town is in Prince Edward County, which gained international notoriety from 1959 to 1964 when it decided to shut down its entire school system rather than integrate. Many white kids ended up in all-white private schools and many African-American children were cheated out of an education entirely.

About six years ago, another creepy project started there – a private, for-profit prison designed exclusively to imprison undocumented aliens. It’s a cozy little deal, as I outline in a piece in Sunday’s Washington Post.

Farmville gets a $1 per head, per day (sounds like slavery) from the U.S. Immigration and Customs Enforcement agency. Immigration Centers of America, the private firm run by Richmond executives Ken Newsome and Russell Harper, gets profits. Then, in turn, also pay taxes to Farmville and the county.

The ICA facility, whose logo includes an American flag, pays taxes as well and provides about 250 jobs locally. The project even got a $400,000 grant from the scandal-ridden Virginia Tobacco Indemnification and Community Revitalization Commission for water and sewer works.

What might sound like a no-lose operation, except for the mostly Hispanic inmates who might have entered the country illegally, overstayed their visas, or had other bureaucratic problems, may face problems.

The census now at the jail is about 75 percent of what it could be. President Obama has issued an executive order that could free some five million undocumented aliens. It is being challenged by 26 states but Virginia Atty. Gen Mark Herring has filed an amicus brief in favor of Obama.

So what happens to Farmville if Obama wins? It could affect 96,000 aliens in Virginia. Could there someday be no prisoners? Wouldn’t that be too bad for Farmville?

Recent history is instructive. Back in the 1990s, Gov. George Allen, a conservative darling, was pushing private prisons in Virginia as he successfully got rid of parole in part of his crime crackdown. Slave labor was part of the deal.

Executive Intelligence Weekly wrote in 1994:

“Slave labor in American prisons is increasingly being carried out in what are called “private prisons.” In his campaign to “reform” Virginia’s penal laws, Gov. George Allen pointed to prison privatization as the wave of the future, a moneymaking enterprise for the investor, and a source of good, cheap labor for Virginia’s municipalities. Indeed, after taxes, pay-back to the prison, and victim restitution are removed, the inmate earns an average of $1 per hour in these facilities.”

Well guess what happened. Allen pushed for more public and private prisons. They were overbuilt. Demographics changed. Crime rates dropped. Prisons had to be shut down.

So, if immigration reform ever comes about what happens in Farmville? Don’t forget, the private jail came at a time when a construction boom, especially in Northern Virginia had drawn in many immigrants especially from Latin America. Their papers may not have been in order.

Neo-racists like Corey Stewart, chairman of the board of supervisors of Prince William County, ordered a crackdown on brown-skinned people who spoke Spanish. But when the real estate market crashed, fewer Latinos arrived. And, if they did, they avoided Stewart’s home county.

Wither Farmville?

Dave Brat’s Bizarre Statements

 By Peter Galuszka

Almost a year ago, Dave Brat, an obscure economics professor at Randolph- Macon College, made national headlines when he defeated Eric Cantor, the powerful House Majority Leader, in the 7th District Brat Republican primary.

Brat’s victory was regarded as a sensation since it showed how the GOP was splintered between Main Street traditionalists such as Cantor and radically conservative, Tea Party favorites such as Brat. His ascendance has fueled the polarization that has seized national politics and prevented much from being accomplished in Congress.

So, nearly a year later, what has Brat actually done? From reading headlines, not much, except for making a number of bizarre and often false statements.
A few examples:

  • When the House Education and Workforce Committee was working on reauthorizing a law that spends about $14 billion to teach low-income students, Brat said such funding may not be necessary because: “Socrates trained Plato in on a rock and the Plato trained Aristotle roughly speaking on a rock. So, huge funding is not necessary to achieve the greatest minds and the greatest intellects in history.”
  • Brat says that the Affordable Care Act (Obamacare) is a step towards making the country be more like North Korea. He compares North and South Korea this way:  “. . . it’s the same culture, it’s the same people, look at a map at night, half the, one of the countries is not lit, there’s no lights, and the bottom free-market country, all Koreans is lit up. See you make your bet on which country you want to be, right? You want to go to the free market.” One problem with his argument:  Free market South Korea has had a single payer, government-subsidized health care system for 40 years. The conservative blog, BearingDrift, called him out on that one.
  • Politifact, the journalism group that tests the veracity of politicians’ statements, has been very busy with Brat. They have rated as “false” or “mostly false” such statements that repealing Obamacare would save the nation more than $3 trillion and that President Obama has issued 468,500 pages of regulations in the Federal Register. In the former case, Brat’s team used an old government report that estimated mandatory federal spending provisions for the ACA. In the latter case, Politifact found that there were actually more pages issued than Brat said, but they were not all regulations. They included notices about agency meetings and public comment periods. What’s more, during a comparable period under former President George W. Bush, the Federal Register had 465,948 pages, Politifact found. There were some cases, however, where Politifact verified what Brat said.
  • Last fall, after Obama issued an executive order that would protect up to five million undocumented aliens from arrest and deportation, Brat vowed that “not one thin dime” of public money should go to support Obama’s plan. He vowed to defund U.S. Citizen and Immigration Services but then was told he couldn’t do so because the agency was self-funded by fees from immigration applications. He then said he would examine how it spent its money.

The odd thing about Brat is that he has a doctorate in economics and has been a professor. Why is he making such bizarre, misleading and downright false statements?

Beware Stalling Growth in Northern Virginia

northern virginia mapBy Peter Galuszka

For at least a half a century, Fairfax County, Alexandria and Arlington County have been a growth engine that that has reshaped how things are in the Greater Washington area as well as the Old Dominion.

But now, apparently for the first time ever, these Northern Virginia localities have stopped growing, according to an intriguing article in The Washington Post.

In 2013, the county saw 4,673 arrivals but in 2014 saw 7,518 departures. For the same time period, Alexandria saw 493 arrivals and then 887 departures. Arlington County showed 2,004 arrivals in 2013 followed by 1,520 departures last year.

The chief reason appears to be sequestration and the reduction of federal spending. According to a George Mason University study, federal spending in the area was $11 billion less  last year than in 2010. From 2013 to 2014, the area lost 10,800 federal jobs and more private sectors ones that worked on government contracts. Many of the cuts are in defense which is being squeezed after the wars in Afghanistan and Iraq.

The most dramatic cuts appear to be in Fairfax which saw a huge burst of growth in 1970 when it had 450,000 people but has been slowing for the most part ever since. It still grew to 1.14 million people, but the negative growth last year is a vitally important trend.

Another reason for the drop offs is that residents are tired of the high cost and transit frustrations that living in Northern Virginia brings.

To be sure, Loudoun County still grew from 2013 to 2014, but the growth slowed last year from 8,904 newcomers in 2013 to 8,021 last year.

My takeaways are these:

  • The slowing growth in NOVA will likely put the brakes on Virginia’s move from being a “red” to a “blue” state. In 2010, Fairfax had become more diverse and older, with the county’s racial and ethnic minority population growing by 43 percent. This has been part of the reason why Virginia went for Barack Obama in the last two elections and has Democrats in the U.S. Senate and as governor. Will this trend change?
  • Economically, this is bad news for the rest of Virginia since NOVA is the economic engine for the state and pumps in plenty of tax revenues that end up being used in other regions. Usually, when people talk about Virginia out-migration, they mean people moving from the declining furniture and tobacco areas of Southside or the southwestern coalfields.
  • A shift in land use patterns and development is inevitable. The continued strong growth of an outer county like Loudoun suggests that suburban and exurban land use patterns, many of them wasteful, will continue there. The danger is that inner localities such as Fairfax, Arlington and Alexandria, will be stuck with more lower-income residents and deteriorating neighborhoods. The result will be that localities won’t have as much tax money to pay for better roads, schools and other services.
  • Virginia Republicans pay lip service to the evils of government spending and have championed sequestration. Well, look what a fine mess they have gotten us into.

The rest of the Washington area is seeing slowing growth, but appears to be better off. The District’s in-migration was cut in half from 2013 to 2014 but it is still on the plus side. Ditto Montgomery and Prince George’s Counties.

NOVA has benefited enormously from both federal spending and the rise of telecommunications and Web-based businesses. It is uncertain where federal spending might go and maybe increased private sector investment could mitigate the decline. Another bad sign came in 2012 when ExxonMobil announced it was moving its headquarters from Fairfax to Houston.

In any event, this is very bad news for NOVA.

Non-Coal Jobs Thriving in Energy Sector

Coal MinersBy Peter Galuszka

Is there a real “War on Coal” or is it part of a natural transition to more non-polluting and less destructive forms of energy? One way to find out is to track job creation.

A new study at Duke University shows that since 2008, more than 49,000 jobs in the coal industry have been lost. But, about 196,000 jobs – or four times as many – have been created in other energy sectors such as natural gas, solar and wind.

The study suggests that all the gnashing of teeth that President Obama and the U.S. Environmental Protection Agency are out to ruin the energy sector by killing off coal may be off base.

This has been the cry of Virginia’s utilities, and its few coal firms, along with some members of the business establishment that the EPA’s proposed Clean Power Plan to encourage cuts in carbon dioxide by 2030 are unworkable and too threatening to employment in the coal industry since some coal-fired power plants are likely to be shut down. (Of course, some of them have been in operation for 60 years, but never mind).

Overlooked is that as coal jobs die, more energy jobs have been created in natural gas thanks to hydraulic fracking and in renewables like solar and wind which are getting increasingly cheaper.

“Our study shows it has not been a one-for-one replacement,” says Lincoln Pratson, a Duke professor of earth and ocean sciences who is one of the report’s authors.

Hardest hit are the coalfields of southern West Virginia and eastern Kentucky. Small wonder. The coal is of excellent quality but easy-to-reach seams have been mined out and abundant shale gas has undercut its price power. Coal has also taken hits in Utah, the Powder River Basin of Wyoming and Montana, and Colorado. The biggest job increases are in the Northeast, Southwest, Midwest and West.

Where does Virginia fit in with renewables? Hardly anywhere just yet. Its neighboring states are much farther along. One reason is they have mandatory renewable portfolio standards to force shifts to wind and solar. Even coal-heavy West Virginia had mandatory standards although the legislature just dumped them.

Virginia is just gearing up with solar. As for wind, Dominion has plans for two turbines off Virginia Beach.

Remarkably, this vision of non-coal energy jobs growing four times the amount of coal jobs cut is left out of the debate as Dominion gets the General Assembly to freeze electricity rates and forego State Corporation Commission audits for several years on the theory that it doesn’t know what the EPA will do about carbon dioxide reduction.

And, to show you how bizarre the coal people are, and appeals court in the District of Columbia is ready to shoot down a coal-led attack on the EPA’s carbon rules. Among the plaintiffs is Robert Murray, the iconoclastic CEO of Murray Energy which has been picking up West Virginia coal properties from long-time operator Consol, which obviously is happy to unload them

During the 2012 presidential race, Murray ordered his workers to attend a rally for Mitt Romney under threat of firing. He insists that Obama is trying to put him out of business.

One problem the appeals judges have with his lawsuit is that the rules are only proposed rules. They are not official. EPA is asking for comment by this summer show it can make adjustments. So why is Murray suing?

It would be as if I were to sue Jim Bacon for an idea he might be envisioning. I know it’s a tempting idea, but it would be silly.

The Duke report was published in the peer-reviewed journal, Energy Policy.

The Fifth Anniversary of Upper Big Branch

A memorial to the Massey Energy miners at Upper Big Branch

A memorial to the Massey Energy miners at Upper Big Branch

By Peter Galuszka

Five years ago this morning, miners near Montcoal, W.Va. clambered into low, truck-like vehicles called “mantrips” for a nearly-hour-long ride to their positions at Upper Big Branch, a coal mine owned by a subsidiary of Richmond-based Massey Energy.

Some of the miners were queasy because the mine, known as UBB, was especially gassy, had substantial air ventilation problems and lots of coal dust. Even worse, the chief executive of Massey Energy, Donald L. Blankenship, was known as a hard-charging bean counter who liked to cut corners and maximize profits, investigators say.

As the shift neared its end, a “long wall” machine that rips into coal seams hit a clump of slate. Sparks flew from the badly-maintained long wall device. A jet of methane flame about the size of a basketball flared out. Safety measures, such as streams of waters designed to extinguish such flames, didn’t work. As miners scrambled for their lives, an enormous blast, fed by high levels of coal dust, roared through seven miles of shafts, blowing apart or suffocating 29 miners.

It was the worst disaster in this country in 40 years. Several investigations gave scathing reports of Massey’s lax attitude about mine safety. One report was titled “Industrial Homicide.”

So what’s been done to improve mine safety lives? Not very much.

Federal legislation such as the Robert C. Byrd bill that would give federal regulators subpoena power when probing safety violations has gotten nowhere in Congress.

Worried about slumps in coal production caused by as flood of natural gas from fracking drilling methods, the West Virginia legislature has come up with the “Creating Coal Jobs and Safety Act.” You read that right. The bill puts “jobs” first and “safety” second.

As W.Va. Del. Barbara Fleischauer of Monongalia County puts it: “There’s not anything in this bill that improves safety, nothing. And I can’t believe, after all the fires and explosions we’ve had in this state, recently, we would, and you know what they are; Upper Big Branch, Aracoma, Sego, that we would ever consider rolling back safety protections.”

The Associated Press reports that while mine deaths are down, thanks because of the competition against coal by natural gas. Mine inspections spiked after UBB and accidents, while they still occur, are down.

But, the AP says, the coal dust problem hasn’t been resolved. Massey had been fined continuously for not keeping levels of coal dust low. There was so much coal dust in the mine that autopsies of dead miners (at least the ones that had enough long tissue that could be recovered after the massive blast) all showed evidence of black lung disease, which was supposed to have been rooted out years before by regulatory upgrades.

Coal dust problems are still evident. In January, federal officials found excess methane and coal dust at Mill Branch Coal Corp’s Osaka mine in Wise County, Va. Another mine, Camp Creek in Wayne County, W.Va., had been cited 64 times in the last two years for failing to follow ventilation plans. And, a miner was recently killed at a showcase Virginia mine.

What do these mines have in common? They are owned by Bristol-based Alpha Natural Resources, which bought failing Massey Energy in 2011 for $7 billion. Alpha tried to absorb Massey miners and retrain them in its “Running Right” safety program, but it obviously has lingering problems.

Alpha has been lying off many miners because of the production downturns and lack of demand for both steam and metallurgical coal. After enduring millions of dollars in losses, its stock has trading at a dollar and a penny. Cash short Alpha has had to sell its new headquarters building just off of Interstate 81 in the Bristol area.

Blankenship, meanwhile, is slated to go on trial for criminal charges related to UBB in Beckley W.Va. on April 20. It is the first time a coal chief executive has been so indicted. Blankenship’s lawyers are trying to get a change of venue, claiming that he is so well-known and disliked in southern West Virginia that he can’t get a fair trial. For a time, he won a gag order preventing anyone, including families of the deceased UBB miners, from discussing the trial but it was overturned by the U.S. Fourth Circuit Court of Appeals in Richmond.

His trial may be delayed, but it won’t be much of a victory. Alpha Natural Resources, meanwhile, is refusing to pay his legal bills.

Note: Peter A. Galuszka is author of “Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal.” It was first published by St. Martin’s Press in September 2012 and is now available in paperback from West Virginia University Press.

 

Cruz, “Liberty” and Teletubbies

AP CRUZ A USA VA By Peter Galuszka

Where’s the “Liberty” in Liberty University?

The Christian school founded by the controversial televangelist Jerry Falwell required students under threat of a $10 “fine” and other punishments to attend a “convocation” Monday where hard-right U.S. Sen. Ted Cruz announced his candidacy for president.

Thus, Liberty produced a throng of people, some 10,000 strong, to cheer on Cruz who wants to throttle Obamacare, gay marriage, abolish the Internal Revenue Service and blunt immigration reform.

Some students stood up to the school for forcing them to become political props. Some wore T-Shirts proclaiming their support of libertarian Rand Paul while others protested the university’s coercion. “I just think it’s unfair. I wouldn’t say it’s dishonest, but it’s approaching dishonesty,” Titus Folks, a Liberty student, told reporters.

University officials, including Jerry Falwell, the son of the late founder, claim they have the right as a private institution to require students to attend “convocations” when they say so. But it doesn’t give them the power to take away the political rights of individual students not to be human displays  in a big and perhaps false show.

There’s another odd issue here. While Liberty obviously supports hard right Tea Party types, the traditional Republican Party in the state is struggling financially.

Russ Moulton, a GOP activist who helped Dave Brat unseat House Majority Leader Eric Cantor in a primary last summer, has emailed party members begging them to come up with $30,000 to help the cash-strapped state party.

GOP party officials downplay the money problem, but it is abundantly clear that the struggles among Virginia Republicans are as stressed out as ever. Brat won in part because he cast himself as a Tea Party favorite painting Cantor as toady for big money interests. The upset drew national attention.

Liberty University has grown from a collection of mobile homes to a successful school, but it always has had the deal with the shadow of its founder. The Rev. Falwell gained notoriety over the years for putting segregationists on his television show and opposing gay rights, going so far as to claim that “Teletubbies,” a cartoon production for young children, covertly backed homosexual role models.

Years ago, the Richmond Times-Dispatch published a story showing that the Rev. Falwell took liberties in promoting the school he founded in 1971. Brochures touting the school pictured a downtown Lynchburg bank building with the bank’s logo airbrushed off. This gave the impression that Liberty was thriving with stately miniature skyscrapers for its campus.

Some observers have noted that Liberty might be an appropriate place for the outspoken Cruz to launch his campaign. The setting tends to blunt the fact that he’s the product of an Ivy League education – something that might not go down too well with Tea Party types – and that he was actually born in Canada, although there is no question about his U.S. citizenship and eligibility to run for question.

Hard-line conservatives have questioned the eligibility of Barack Obama to run for U.S. president although he is likewise qualified.

With Cruz in the ring and Liberty cheering him, it will make for an interesting campaign.

Carbon Cuts: Why PJM Has a Better Idea

pjm-region-1024x657By Peter Galuszka

Amidst all the gnashing of teeth in Virginia about complying with proposed federal carbon dioxide rules, there seems to be one very large part of the debate that’s missing.

Several recent analytical reports explore using regional, carbon marketplaces to help comply with proposed federal Clean Power Plan rules that would cut carbon emissions by 2030. They conclude that the carbon goals can be attained more cheaply and efficiently by using a regional approach.

The lead study is by the PJM Interconnection, a grid that involves all or parts of 13 states including most of Virginia. Its March 2 report states that “state by state compliance options – compared to regional compliance options – likely would result in higher compliance costs for most PJM states because there are fewer low-cost options available within state boundaries than across the entire region.”

The same conclusion was made by another report by the Washington-based consulting firm Analysis Group on March 16. It states: “PJM’s analysis of compliance options demonstrates that regional, market-based approaches can meet Clean Power Plan goals across PJM states at lowest cost, with retirements likely spread out over a number of years.”

PJM set off in its analysis by setting a price per ton of carbon dioxide emissions with an eye towards the entities being exchanged among PJM-member utilities in a new market. The PJM report shows that electricity generation varies greatly among members. Some are farther along with renewables while others are greatly reliant upon coal.

By exchanging carbon units, some coal plants might actually be kept in service longer while overall goals are still achieved. EnergyWire, an industry news service, quotes Michael Kormos, PJM’s executive vice president for operations, as saying that the market-based carbon exchange, somewhat counterintuitively, might keep coal plants running longer.

“With the renewables and nuclear coming in as basically carbon free, we’re actually able run those coal resources more because they are getting credit from renewables and the nuclear as zero carbon.”

In December, PJM had 183,694 megawatts of generation. Some 67,749 megawatts are from coal-fired units.

Kormos says that a number of coal-fired units are going to be retired in the 2015 to 2030 timeframe regardless of what happens with the Clean Power Plan, whose final rules will be prepared by the U.S. Environmental Protection Agency later this year. The retirements of older coal plants are expected to involve a minimum of 6,000 megawatts of power.

It is curious that very little of this report is being heard in the vigorous debate in Virginia about complying with the Clean Power Plan. What you hear is a bunch of humping and grumping from Dominion Virginia Power and its acolytes in the General Assembly, the State Corporation Commission and the media.

This is not a new concept. Carbon trading is active in Europe and has worked here to lessen acid rain.

It is amazing that one hears nothing about it these days. It is shouted down by alarmists who claim that Virginia ratepayers will be stuck with $6 billion in extra bills and that there’s an Obama-led  “War on Coal.” The New York Times has a front-pager this morning about how Kentucky’s Mitch McConnell is taking the rare step of actually leading the “War on Coal” propaganda campaign.

Also strange, if not bizarre, is that this approach is precisely market-based which so many commentators on the blog claim to worship. Where are they on the PJM idea? Has anyone asked Dominion, which is running the show in this debate?

Does Dominion Win or Lose from the New Law?

pain_point

Who’s taking the hit — Dominion or rate payers?

Virginia’s biggest power company could benefit from the freeze in electric rates but it also could take a big hit to earnings from power-plant shutdowns. 

by James A. Bacon

One of the biggest stories of the 2015 General Assembly session was lawmakers’ efforts to prepare the state for the oncoming Environmental Protection Agency regulations that will compel Virginia utilities to reduce carbon dioxide emissions 38% from 2005 levels by 2030. Virginia political reporters, as is their wont, covered the debate as a political story, with an emphasis on Dominion Virginia Power’s role in shaping the final legislation. That coverage left me deeply dissatisfied, as I wrote last month in “Does Anyone Really Understand This Dominion Deal?” The argument I advanced then was that no one understood the deal. Legislators were buying a pig in a poke.

The overriding question was, and still is: Who will pay for the restructuring of Virginia’s electric power industry in order to meet EPA mandates? Dominion and the State Corporation Commission contend that write-offs on four coal-fired power plants could go as high as $2.1 billion while ratepayers could be stuck with $5.5 billion to $6 billion to replace the lost capacity with new electric generating facilities — as much as $8 billion all told. Environmental groups argue that energy-efficiency measures could reduce the impact on customers significantly. Still, that’s a lot of pain to spread around. Who will get stuck with the bill — Virginia’s electric utilities, ratepayers or someone else?

I have spent the better part of the past week reading documents, conducting interviews and checking facts. I don’t pretend to have definitive answers. Indeed, there may be no definitive answers. Every time I peeled away one layer of the onion, I reached another layer that raised more questions. But I do think I can clarify the issues and get us closer to the answers. In this blog post I will address how General Assembly legislation impacts Dominion, which supplies 80% of the electric power consumed in Virginia. In the next I will explain how the law affects rate payers.

First, some background…

Last year the EPA issued rules designed to reduce carbon-dioxide emissions implicated in global warming. Given the way the rules were formulated, Virginia will be required to make especially onerous cuts. In October 2014 the State Corporation Commission (SCC) staff weighed in with a letter contending that the proposed regulation would raise electric rates and jeopardize the reliability of Virginia’s electric grid. In November the McAuliffe administration, which supports the CO2-reduction initiative in principle, followed with a letter suggesting how the proposed guidelines could be made more equitable to Virginia.

Last fall legislators, too, were concerned what impact the EPA regulations would have on Virginia rate payers.  The SCC estimated that shuttering four of Dominion’s five coal  plants would result in a 22% increase to electric rates. In response, Sen. Frank Wagner, R-Virginia Beach filed Senate Bill 1349, which he characterized as a “place holding bill” to jump-start discussion of how to deal with the challenge.

An early version of the bill was “very hostile” to the EPA’s Clean Power Plan, says Cale Jaffe, attorney with the Southern Environmental Law Center. By the time the bill reached the governor’s desk, however, language that would have made it difficult to shut down the coal plants was stripped out and provisions were inserted to encourage investments in solar energy and energy efficiency. The capital press corps interpreted the legislative drama as a display of Dominion’s political muscle, making frequent mention of its outsized political contributions to legislators and its veritable army of lobbyists and PR staff.

Was the final legislative package, in fact, a giveaway to Dominion? Let’s start with a summary of the main features of the legislation. The new law:

  • Freezes base rates and exempts Dominion from biennial rate reviews for five years. The next rate review will be in 2022.
  • Requires the utility, not customers, to bear the risk of power plant closures due to federal carbon regulations over the next five years.
  • Requires the utility to forgo collecting $85 million in fuel costs from 2014.
  • Accelerates a reduction in fuel-cost cuts by 30 days.
  • Requires the utility, not customers, to bear the risk of all weather events and natural disasters over the next five years.
  • Establishes a pilot energy assistance program for low-income, elderly, and disabled customers.
  • Declares up to 500 MW of utility-scale solar capacity to be in the public interest.
  • Affirms the SCC’s ability to audit Dominion’s books at any time and requires SCC approval before any power plant can be permanently retired.

Now the gory details…

Base-rate freeze. Legislators and Dominion justify the five-year freeze on base rates, which comprise roughly half of the total electric bill, as a way to provide a measure of certainty to both Dominion and consumers as the EPA regs work their way through the system. According to the Virginia Committee for Fair Utility Rates, a group of large industrial customers, this measure would fix Dominion’s base rates at a level deemed by the SCC in the last biennial review as likely to be excessive by $280 million a year. The freeze, critics say, allows Dominion to continue pocketing those excess earnings.

Dominion takes issue with the $280 million excess-earnings figure. That number does not include one-time costs like employee severance, unplanned environmental costs, storm costs and power plant impairments, which added up to $600 million in 2011 and 2012, according to David Botkins, Dominion media relations director. The excess-earnings forecast is meaningless, he says: There are always one-time expenses that must get factored in. Natural disasters like hurricanes, tornadoes and ice storms are recurring events. Dominion will continue to be affected by new rules emanating from the EPA. The $280 million number, says Tom Wohlfarth, senior vice president of regulation for Dominion Resources, “is a “picture-perfect” forecast of earnings that does not take into account “stuff that happens.” Continue reading