Category Archives: Economic development

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?

Big Data: the New Wave of Wealth Creation

apt

by James A. Bacon

We’ve all been hearing more and more about “Big Data,” which arises from the ability of computers to collect and process unimaginably huge gobs of data and sophisticated mathematical equations to detect patterns and anomalies that can be used to drive business decision-making. Capital One used Big Data before it had a name to revolutionize the credit card business, and it’s one of the biggest, most profitable companies in Virginia. Now comes Arlington-based Applied Predictive Technologies, which just sold out to MasterCard for $600 million.

That’s a remarkable valuation for a 16-year-old company of 300 employees and revenues approaching $100 million. Humongous pay-offs like that are routine for Silicon Valley but they’re rare in Virginia.

“We will stay Ballston-based, but we will be growing faster,” APT chief executive Anthony Bruce told the Washington Post in an email. “Our opportunity to grow and expand will be accelerated by this partnership, in Arlington and elsewhere.”

Here’s how the company describes its product: “APT’s Test & Learn software is revolutionizing the way leading companies harness their Big Data to accurately measure the profit impact of pricing, marketing, merchandising, operations, and capital initiatives, tailoring investments in these areas to maximize ROI.”

An illustration can be seen in the graphic above. Drawing from data on retail and restaurant sales at more than 100,000 locations nationwide, APT charted the impact of the 2015 NCAA Final Four basketball tournament on restaurant sales in Indianapolis. The APT Index also integrates weather and demographic data to allow retail executives to ask an even broader range of questions. It doesn’t take much imagination to see how MasterCard could use its relationship with retailers globally to sell this as a value-added product.

Read “Data Crush” by Chris Surdak to get a feel for how Big Data will transform industry after industry in ways we mortals can barely comprehend. Big Data will blaze a path of creative destruction easily equal to that of the Internet.

Bacon’s bottom line: Momma, don’t let your babies grow up to be lawyers. Engineers and computer programmers will make a decent living in the economy of the early-mid 21st century, but if you want your kid to have a shot at becoming the next Steve Jobs or Bill Gates, tell them to major in any branch of mathematics that lends itself to Big Data analytics.

If you want an argument in favor of STEM education (the “m” stands for mathematics), this is it. The Big Data revolution may have started in the United States, but the industry will move to wherever there are pools of mathematically gifted employees. We neglect mathematical instruction at our peril. (So says the guy who couldn’t tell you the difference between sines, cosines and tangents, much less between integral and differential calculus, much less actually compute anything requiring a retention of anything beyond 8th-grade algebra. I’m a dinosaur but at least I know it.)

Grid Pro Quo

Exhaust fumes blown into a sky.The EPA wants to restructure Virginia’s electric grid. Skeptics argue that slashing CO2 emissions will drive electric bills higher. Environmentalists disagree. Who’s right?

by James A. Bacon

President Barack Obama’s Clean Power Plan gives Virginia fifteen years to cut CO2 emissions by 38% from 2012 levels. Not only will the plan usher in a better world of cleaner air, bountiful “green” jobs and diminished global warming, supporters contend, Virginians will use less electricity and enjoy an 8% reduction in electric bills by 2030.

The State Corporation Commission (SCC) has nothing to say about global warming or green jobs, but the staff has commented upon the Clean Power Plan’s impact on electric bills:  Rates under the plan could be 20% to 22% higher for a typical Dominion Virginia Power customer than under a business-as-usual approach. That’s on top of the 14% that electric rates have increased since 2007, including rate adjustments for lower fuel prices that took effect this month, and it doesn’t include the impact on Appalachian Power or smaller utilities.

Who’s right? Will electric bills go up or down?

What we have here is a battle of dueling experts – Obama’s Environmental Protection Agency (EPA) and its allies in the environmentalist community on the one side, and the state regulatory commission and the electric power industry on the other. Whom do we believe?

It’s hard for citizens to know. The issues are anaesthetizingly complex, and few people have the patience to wade through both sides of the issues. For each assertion that one party makes, someone provides a counter. Peel away one layer of the debate, and there always seems to be another.

That’s why God created Bacon’s Rebellion. My goal in this article is to clearly delineate the main points of contention. You may not change your mind – who ever does? — but at least you will leave with a clearer idea of what the issues are.
Because this piece is so long, I have broken it into digestible chunks. Use these links to navigate the article.

The Clean Power Plan and how it works
McAuliffe administration asks EPA to modify Virginia targets
The SCC response
SELC sides with EPA
Nukes vs. Renewables
Wholesale electricity to the rescue
Energy efficiency to the rescue
How reliable is renewable power?

The Clean Power Plan and how it works

The purpose of the Clean Power Plan is straightforward: It is designed to radically curtail the CO2 emissions blamed for global warming by setting CO2 targets for each state. Nationally, the plan aims to cut CO2 emissions by 30%, but state targets vary widely. Under proposed regulations, Virginia would have to slash 2012-level emissions by 38% by 2030, with a majority of the cuts occurring by 2025.

While the EPA sets targets for each state, it theoretically allows states flexibility as to how they achieve those targets. The agency provides four broad strategies, which, it contends, should achieve the goals at a reasonable cost. States can mix and match as best fits their circumstances. The strategies include:

  • Make coal-fired power plants more efficient. By capturing more heat from coal combustion, coal-fired plants can generate the same amount of energy with fewer CO2 emissions. EPA says that an average “heat rate improvement” of 6% should be achievable.
  • Use more natural gas. Although it is a fossil fuel, natural gas releases less CO2 per unit of energy generated than coal. The EPA expects the biggest reductions to come from switching to this fuel.
  • Use more renewables and nuclear. Solar power, wind power and nuclear power release zero CO2. In the EPA’s estimation, this strategy is second only to natural gas in its potential to cut CO2 emissions.
  • Conserve energy. Investing in energy efficiency reduces the demand for electricity, which means less generating capacity is needed. The EPA says it should be possible to increase demand-side energy efficiency by 1.5% annually.

Continue reading

Obessions of Inequality

Graphic credit: "Geographies of Opportunity"

Graphic credit: “Geographies of Opportunity”

by James A. Bacon

Sarah Burd-Sharps and Kristen Lewis, authors of “Geographies of Opportunity,” provide a state-by-state and congressional district-by-congressional district measurement of “well being” across the United States. Overall, Virginia fares reasonably well in the report, scoring 11th overall. Well being is determined by a set of measures for life expectancy, education and median income. But state averages can mask a lot. Indeed, Virginia stands out for the inequality of income and well being inside its borders.

The premise of the report is that there other ways to measure progress than by the usual metrics of economic growth. The study draws upon the United Nation’s Human Development Index to measure three “fundamental human dimensions” — a long and healthy life, access to knowledge, and a decent standard of living. “There is a broad consensus that these three capabilities are essential building blocks for a life of value, freedom and dignity.”

The Index score for the United States as a whole is 5.06. Connecticut is the best off, with an index of 6.17, and Virginia comes in at 11th at 5.47. Mississippi (no surprise) comes in last at 3.81. (Play with the data here.)

Burd-Sharps and Lewis also break down the numbers by congressional district. Virginia has three of the top 20 districts in the nation ranked by well being — the 8th (Arlington, Alexandria, Fairfax), the 10th (Manassas to Winchester), and the 11th (Reston to Quantico). And it has one of the poorest — the 9th, in the far Southwest.

OK, what does all this tell us? I’m really not sure. Other than obsessing about what we all know to be true — there are huge wealth gaps in the United States — the study doesn’t tell us much. Gee, there’s a link between education level and health? Who would have figured? And there’s a link between income and health, too? Gosh, tell me more.

In a sidebar, the study notes how the ethnically pluralistic residents of the 8th district in the affluent Virginia suburbs of Washington, D.C., live eight years longer than the predominantly white residents living in the isolated mountains of Southwest Virginia. Longevity in affluent U.S. congressional districts exceeds that of Japan. Longevity in the poorest districts, like the 9th, compares to Gaza and the West Bank.

So, what do we do about it? Improving human development outcomes in Appalachia, the authors opine, “requires greater investment in peoples’ capabilities to thrive in the new economy” — specifically, a high-quality pre-school experience.

But elsewhere we read that the higher the proportion of foreign-born residents in a congressional district, the longer the district’s life expectancy. In sunny California, there is a “surprising” 3.2-year life expectancy gap in favor of foreign-born Latinos as compared to their U.S.-born counterparts. Surprising — really? It’s only surprising if you think that the only meaningful determinants of public health are education and income levels, and that culture has nothing to do with it. As it turns out, the longer poor Latinos live in the U.S. and adopt fast food-heavy diets, the greater their risk of obesity-related illnesses.

Now that would have been an interesting angle to pursue. When affluent populations have better health outcomes than poor populations, the assumption is that the difference can be attributed to superior access to health care. Surely some of it is. But how much is due to different diets and lifestyles? Are there strategies that attack health problems more directly than, say, by increasing spending on pre-K?

Another thing that irritated me was the failure to adjust incomes for cost of living. If the purpose is to compare well being, the cost of living is a major consideration. The authors contrast Connecticut and Wyoming, states with similar GDPs per capita, in the $65,000 to $68,000 range. “Does this mean that the people living in these two states enjoy similar levels of health, education and living standards?” the authors ask. “It does not. Connecticut residents, on average, can expect to outlive their western compatriots by nearly two and a half years, are 40 percent more likely to have bachelor’s degrees, and typically earn $6,000 more per year.”

Here’s what the study doesn’t bother to tell you. According to CNN Money’s cost of living calculator, earning $50,ooo in Cheyenne, Wyoming, is the equivalent of earning $64,900 in Hartford or $76,600 in New Haven. Incomes are lower? Yes, but the dollar stretches 30% to 50% further. The question I would ask is this: How is it that the residents of Wyoming, who aren’t nearly as well educated as the residents of Connecticut, manage to earn higher incomes on a cost-of-living-adjusted basis?

As an aside, let’s talk about income disparities within congressional districts. Which state do you think has greater disparities of vast wealth and poverty in close proximity — Wyoming, a state of cowboys and coal miners, of Connecticut, a state of inner-city poor and hedge-fund billionaires?

For a document entitled, “Geographies of Opportunity,” this study has almost nothing to say about the economics of opportunity. It has nothing to say about strategies that poor people can pursue to lift themselves out of poverty or lead healthier lives. All recommendations call for an activist and interventionist government. Promote health by cracking down on smoking. Regulate food advertising. Invest public dollars in recreational facilities and (a remedy I actually agree with) in more walkable neighborhoods. Expand pre-school programs. Keep teens in high school until they graduate. Raise the minimum wage. The list goes on with a host of suggestions that have absolutely nothing to do with the data presented. As for the one sure-fire way to wage raises for the poor — create conditions conducive to economic growth so that companies hire more workers, drive down unemployment and bid up wages — it doesn’t warrant a mention.

The numbers in this study are potentially useful. The analysis and recommendations are not.

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.

Two Cheers — Venture Funding Rebounds in D.C. Metroplex

vc_funding

Good news/bad news business story out of the Washington area… Venture capital funding is rebounding. Washington-area companies scarfed up $330 million in funding during the first quarter — 55 percent more than in the same quarter of 2014 and the best first quarter since 2001, reports the Washington Business Journal. That’s just what the regional tech economy needs to shake off the effects of federal sequestration and to start growing again.

The not so good news is that the D.C. metropolex, which includes Northern Virginia, is a loooooong way from establishing national leadership in the venture space. The total funding for metro Washington barely amounted to a rounding error for Silicon Valley.

Broken down by state, Virginia ranked 12th in the country for venture funding in the 4th quarter of 2014 (the most recent data available online today), according to data compiled by PricewaterhouseCoopers and the National Venture Capital Association. The $156 million raised by Virginia firms compares to $7.6 billion for California and $1.9 billion for Massachusetts.

Why so little? Northern Virginia has the best educated population of any region in the United States and one of the most tech-savvy workforces. Supposedly, corporations and capital like to locate in markets where there is  a deep labor pool of technical talent. The usual response is that, well, California has Stanford and Berkeley, and Massachusetts has Harvard and MIT, and all Northern Virginia has is George Mason University… and… and… Marymount College. (OK, that’ s not entirely fair. The George Washington University engineering campus is in Loudoun County.)

But what world-class R&D powerhouses can be found in New York or Florida, both of which raised way more money? And how do you explain that Maryland, home to the Johns Hopkins University, which ranks No. 1 in R&D spending, ranks even lower than Virginia?

Clearly, the presence of a strong research university is an advantage when it comes to raising venture capital, but it’s hardly a prerequisite. I’m happy to be proven wrong on this, but I keep coming back to the fact that the corporate culture of Washington-area tech firms is geared to operating in sync with the metabolism of the federal government, not Silicon Valley. Yes, there are exceptions — and, I’d wager, they’re the ones getting the venture funding. But there don’t seem to be enough to change to fundamentally alter the nature of the Northern Virginia economy.

If Northern Virginia is ever going to wean itself from its dependence upon the federal government, we’re going to have to see a lot more venture funding than $150 million a quarter. As for the rest of Virginia, it would be nice to see any venture funding at all!

– JAB

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 Next Wave of Energy Conservation: Collaborative Business Districts

open_iot

Click for more legible image. Graphic credit: Tridium

by James A. Bacon

As the Obama administration presses forward with its campaign to restructure the U.S. electric industry to reduce carbon dioxide emissions, the Environmental Protection Agency (EPA) and its friends in the environmental movement have touted the potential for energy conservation to ease the transition to a clean energy economy. One key premise of the EPA’s Clean Power Plan EPA plan is that it should be possible to cut energy demand by 1.5% annually over the next 15 years from what it otherwise would be. The EPA is short on specifics, however. It’s not clear exactly where those energy savings would come from.

As it happens, there is tremendous potential to conserve energy — way beyond weatherizing old houses and installing Energy Star appliances. An entire industry, the building automation industry, has arisen around the opportunity to squeeze energy savings out of office, retail and industrial buildings. Although there are many other applications for building automation, the most tangible Return on Investment comes from reducing electricity consumption from HVAC, lighting, computers and industrial processes.

The industry is charging full-steam ahead with no special incentives from government. Property owners find that installing building automation systems is a competitive use of capital that lowers operating costs. Even more encouraging, the industry could be just scratching the surface of potential savings. Energy conservation could move to a new, higher plateau if property owners began collaborating.

Wayne C. Tighe, vice president of sales for Tridium Inc., a company for which I have done some free-lance work, has written an important paper for ei, a magazine of the National Electrical Manufacturers Association. The next step, he says, is for the industry to move from creating open building systems. in which different devices within a building talk to one another, to open city systems, in which different buildings and municipal infrastructure systems talk to one another.

Tridium provides an open platform, Niagara, that connects dozens of different types of sensors and devices inside buildings. “But we see no logical reason,” writes Tighe, “why connectivity should end at the property line. Our goal is to integrate buildings with each other and with municipal systems.” He continues:

Building automation systems optimize energy consumption of HVAC, lighting, elevators, servers and computers, and other electricity-consuming devices inside buildings and building complexes. But commercial buildings plug into electric grids. Smart grid technologies enable power companies to become defter at managing electric loads. Utilities are experimenting with time-of-day pricing, load shedding, and other strategies to reduce peak electric loads.

The more data that power companies and commercial buildings can share, the more power companies can curtail capital expenditures that get passed on to ratepayers. Sharing energy consumption data also opens the potential for businesses to generate and share their own power in eco-districts — installing solar power, perhaps, or generating electric power and utilizing heat waste.

Tighe describes other benefits from what he calls the “open Internet of Things”: water conservation; conservation of outdoor lighting; improved tracking of employees, visitors and their cars; optimization of space dedicated to parking; and transportation demand management.

From a managerial perspective, implementing building automation in individual buildings is simple —  there’s only one property owner to deal with. Creating functional groups out of the businesses, government entities and non-profit groups across an entire business district, with all their conflicting priorities and financial capabilities, is more complicated. But that’s the future of energy conservation.

Tighe’s article highlights Envision Charlotte, the not-for-profit group that has pulled together 61 of the 64 largest buildings in downtown Charlotte, N.C., to promote sustainability as a competitive economic advantage. I don’t see any comparable activity here in the Old Dominion. We’d better get moving soon, or once again we Virginians will find ourselves eating Tarheel dust.

Amateur Hour at the General Assembly

virginia_state_capitol502By Peter Galuszka

If you are an ordinary Virginian with deep concerns about how the General Assembly passes laws that impact you greatly, you are pretty much out of luck.

That’s the conclusion of a study by Transparency Virginia, an informal coalition of non-profit public interest groups in a report released this week. Their findings  came after members studied how the 2015 General Assembly operated.

Among their points:

  • Notice of committee hearings was so short in some instances that public participation was nearly impossible.
  • Scores of bills were never given hearings.
  • In the House of Delegates, committees and subcommittees did not bother to record votes on 76 percent of the bills they killed.

“Despite a House rule that all bills shall be considered, not all are. Despite a Senate rule that recorded votes are required, not all are,” states the 21-page report, whose main author is Megan Rhyne, executive director of the Virginia Coalition for Open Government. Transparency Virginia is made up of 30 groups, including the American Civil Liberties Union, NARAL Pro-Choice Virginia, the the Virginia Education Association and the League of Women Voters in Virginia.

The scathing report underscores just how amateurish the General Assembly can be. It only meets for only 45 days in odd-numbered years and 60 days in even-numbered years. The pay is pin money. Delegates make only $17,640 a year and senators earn $18,000 annually.

It is not surprising then that a part-time group of 100 delegates and 40 senators can’t seem to handle their 101 committees and subcommittees that determine whether the consideration of thousands bills proceeds fairly and efficiently.

“A Senate committee chair did not take comment on any bills on the agenda except for the testimony from the guests of two senators who were presenting bills,” the report states. In other cases, legislators were criticized by colleagues for having too many witnesses. Some cut off ongoing debate by motioning to table bills. Bills were “left in committee” never to be considered.

The Virginia Freedom of Information Act requires that open public meetings be announced three working days in advance. A General Assembly session is considered one, long open session. But the FOIA is often subverted by sly legislators who manipulate the agendas of committees or subcommittees or general sessions.

Agendas of the General Assembly are not covered by the FOIA because there is too much work to cram in 45 or 60 days. In the case of local and state governments, similar meetings are, presumably because they meet more regularly. House and Senate rules do not stipulate how much notice needs to be given before a committee or subcommittee session. So, crucial meetings that could kill a bill are sometimes announced suddenly.

The setup favors professional lobbyists who stand guard in the Capitol ready to swoop in to give testimony and peddle influence, alerted by such tools as “Lobbyist-in-a-Box” that tracks the status of bills as they proceed through the legislature. When something important is up, their beepers go off while non-lobbyist citizens with serious interests in bills may be hours away by car.

The report states: “While most of Virginia’s lobbyists and advocates are never more than a few minutes from the statehouse halls, citizens and groups without an advocacy presence may need to travel long distances.” Some may need to reschedule work or family obligations, yet they may get only two hours’ notice of an important meeting. That’s not enough time if they live more than a two-hour drive from Richmond.

The report didn’t address ethics, but this system it portrays obviously favors lobbyists who benefit from Virginia’s historically light-touch approach when it comes to limited gifts. That issue will be addressed today when the General Assembly meets to consider Gov. Terry McAuliffe’s insistence that a new ethics bill address the problem of allowing consecutive gifts of less than $100 to delegates or senators.

The only long-term solution is for Virginia to consider creating a legislature that works for longer periods, is better paid, more professional and must adhere to tighter rules on bill passage. True, some 24 states have a system somewhat like Virginia and only New York, Pennsylvania and California have truly professional legislatures.

The current system was created back in Virginia was more rural and less sophisticated. But it has grown tremendously in population and importance. It’s a travesty that Virginia is stuck with amateur hour when it comes to considering legislation crucial to its citizens’ well-being.