Category Archives: Environment

Solar Co-Ops: Competing through Innovation

solar_installationby James A. Bacon

Solar co-ops are popping up all around Virginia, as they are around the country. The concept is simple: Individuals who want to install solar power on their houses band together to select a single contractor to install their solar systems, saving up to 20% to 30%.

The Virginia Solar United Neighborhoods (VA SUN) website lists open co-ops in Northern Virginia, Richmond and Farmville and closed co-ops in nine other Virginia locations.

In an era of fast-improving solar efficiency and near-zero interest rates, the economics of residential solar look attractive. VA SUN advises that nine- to twelve-year paybacks (including the 30% federal tax credit) are typical. That implies a relatively low-risk return on investment in the neighborhood of 7% to 9%, which is better than most people can get parking their money in bank CDs or U.S. Treasuries and a lot less risky than investing in the stock market.

Bacon’s bottom line: While I’m skeptical of promoting solar energy production in Virginia through mandatory Renewable Portfolio Standards, I’m a big fan of innovators who improve the economics of solar and drive down the cost of installation. I could see myself giving serious thought to installing solar on my own house. (A decisive factor for me would be determining how many trees I’d have to cut down. Tree-cutting services charge charge a small fortune!)

Residential solar accounts for such a small percentage of the electric-generating capacity in Virginia that it doesn’t pose a problem for the stability and reliability of the electric grid. Yet. That could change as rooftop-solar becomes more ubiquitous. Solar homeowners and businesses like selling surplus electricity into the electric grid, and they like drawing upon the grid when the sun isn’t shining. They also like not paying a fair share of the cost of maintaining the grid that guarantees them a 24/7 supply of electricity. At some point rooftop solar could extend to so many customers that would undermine the financial integrity of the electric grid.

We’re nowhere near that point now, but we could get there. It would be prudent to start thinking now about what a next-generation grid capable of accommodating hundreds of thousands of solar rooftops would look like, and what would be reasonable for solar households to pay to support it.

— JAB

You Want Studies? We’ve Got Studies!

The latest news in the Bacon’s Rebellion in-box…

Coal ash. Resource International, an engineering and consulting firm hired by Prince William County, has concluded that lead found in well water near the Possum Creek Power Station  has no connection to the coal ash ponds nearby. Concludes the study:

The test results for the sample collected from the wells … appear typical of shallow wells in the Virginia Coastal Plain and Piedmont regions. Natural hydrogeologic processes do not allow for movement of shallow groundwater from the Possum Point Power Station toward the residences on Possum Point Road.  … Based on the foregoing, it is reasonable to conclude that the Dominion Ash Ponds do not represent a potential source in connection with lead or other constituents identified in the private well samples.

Mountain Valley Pipeline. Meanwhile, a new study by Key-Log Economics, commissioned by foes of the proposed Mountain Valley Pipeline, estimates that the total net-present-value cost to an eight-county region in Virginia and West Virginia would amount to between $8 billion and $9 billion. Annual costs in lost property value and lost ecosystem service value would range between $119 million and $131 million yearly.

The same group had estimated in an earlier study that the annual cost of the proposed Atlantic Coast Pipeline would run around $141 million annually.

— JAB

Next Front in the Coal Ash War: Groundwater Testing

water_testingby James A. Bacon

Brian West, whose property backs up the Dominion Virginia Power’s coal ash ponds at the Possum Point Power Station, has had his well water tested three times in the past few months. He got three very different results, leaving him wondering how safe the water is to drink.

The first test, conducted by the Virginia Department of Health, found lead, a metal commonly associated with coal ash, to be safely within Environmental Protection Agency (EPA) limits for drinking water: 3 parts per billion, a fraction of the EPA’s “action level” of 15 parts per billion. However, a second test commissioned by the Potomac Riverkeeper Network found a lead concentration of 549 parts per billion. A third test by the Virginia Cooperative Extension’s Household Water Quality Program logged lead of 120 parts per billion, lower but still over the limit.

Maybe the water is safe, maybe it isn’t. Needless to say, West isn’t taking any chances — he’s not drinking the water anymore.

The widely divergent test results, reported in an excellent article by the Richmond Times-Dispatch, raise critical questions as Dominion seeks Department of Environmental Quality (DEQ) permits to close its coal ash ponds at Possums Point and the Bremo Power Station.

Like other electric power companies, Dominion faces a federal mandate to shut down coal ash ponds in a two-step process. Dominion has received DEQ permits to de-water the ponds, a roughly year-long procedure it has commenced at both facilities. The next step is determining what to do with the dry coal ash. Dominion wants to impound it locally, capping it with impermeable material to prevent rain water from seeping through and getting contaminated. But environmental groups, arguing that the caps don’t prevent the leeching of compounds into ground water, insist that Dominion ship the ash to lined landfills. Dominion responds that such a solution could cost rate payers upward of $3 billion.

The sparring over well water tests shows how much uncertainty reigns. One might think that testing water for toxic levels of contaminants would be a straight-forward task. But West’s experience suggests that testing is anything but simple. Results may vary depending upon the methodology used, Dwayne Roadcap ta health department director, told the Times-Dispatch. Was the water sample taken as a “first draw” or after purging the water from the system? What was the sample’s chain of custody? It was not clear from the article how the Department of Health’s methodology might have differed from the Potomac Riverkeepers’.

A related question is whether or the lead in West’s well water originated from Dominion’s coal ash ponds. The Department of Health suggested that the lead might have come from West’s pipes. West rejected that possibility. But if West’s groundwater had been contaminated by the coal ash, would it not have been contaminated by other heavy metals as well? The article makes no mention of cobalt, cadmium, mercury or other substances commonly associated with ash.

Another question is how rapidly groundwater migrates through the proposed coal-ash pits and how fast contamination can spread through the water table. Dominion argues that the movement is very slow, that frequent testing on the perimeter can spot any build-up, and that the company can intercept the water flow by digging ditches, extracting the water and then treating it. Citing tests that indicate coal-ash contamination in Quantico Creek, riverkeeper Dean Naujoks doesn’t trust Dominion to do the job. The Southern Environmental Law Center, which provides legal representation to the Riverkeepers, says it is “still looking into whether there’s a connection between coal ash and the contamination at wells in Possum Point.”

Bacon’s bottom line: If environmentalists can’t persuade DEQ to force Dominion to truck the coal ash to landfills, expect them to fight for the toughest possible water testing requirements, holding out for a strict methodology and independent, third-party testing whose objectivity is beyond reproach. Expect Dominion to agree to almost any testing and mitigation regime that allows the company to avoid the $3 billion expense of shipping coal ash in thousands of truck trips along narrow roads past peoples’ houses to landfills dozens of miles away.

Lawsuit Pries Loose Warmist Emails

Playing with fire

Playing with fire

by James A. Bacon

The Competitive Enterprise Institute (CEI) has prevailed in a lawsuit to obtain emails detailing how GMU climatologists organized a call for a federal investigation into corporations that “knowingly deceived” the public about climate change. The campaign was organized by Jagadish Shukla, director of the Institute for Global Environment and Society (IGES), who subsequently drew notoriety for paying himself lavishly with federal research grant monies on top of his university salary.

Quoting from the account in the Watts Up With That? blog:

The [Richmond Circuit Court] judge ruled for CEI on all counts in an April 22 ruling in Christopher Horner and CEI v. George Mason University that the court released [Friday]. The ruling concluded that by leaving it to faculty who simply told the school’s FOIA officer they had no responsive records, GMU failed to conduct an adequate search; the judge also ruled that documents including emails from GMU Professor Ed Maibach must be released to CEI.

“This victory puts on notice those academics who have increasingly inserted themselves into politics, that they cannot use taxpayer-funded positions to go after those who disagree with them and expect to hide it,” said Chris Horner, CEI fellow and co-plaintiff. “These records … will be of great assistance to the public in trying to understand how their tax dollars are being used for political fights.”

Here are the emails:

Pages 1- 59
Pages 60-102
Pages 103-133
Pages 134-178
Pages 179-190

I haven’t had a chance to read through them, but judging from the highlights I’ve read in the Global Warming (GW) skeptic blogs, there are no smoking guns here. Some hint that the email haul could be as big as the so-called East Anglia “Climate Gate” scandal, but I don’t see it. The scandal in this case was right out in the open — scientists calling for a federal investigation into Exxon Mobil and other entities for allegedly lying to the public. The emails flesh out the details but don’t illuminate any fresh efforts at quashing threats to GW orthodoxy.

However, the emails do illuminate the thinking behind the controversial letter calling for the investigation. Marc Morano, author of the Climate Depot blog, sums up the tone of the correspondence:

It quickly emerges that some of the involved scientists (unwittingly) meandered out of their academic realm, with which they are comfortable and familiar, and into a political one that is very unfamiliar to them. Their scheme was ultimately aimed at intimidating and silencing scientific dissent. … Early on they were even advised that their case was very weak, and probably best left aside. … Yet [Ed Maibach] seemed unable to resist the opportunity of getting ‘lots of media attention.’ … Clearly the political arena was a new one for scientist Shukla.

The Climate Gate emails revealed how a handful of activist scientists conspired to keep dissenting views out of peer-reviewed journals, thus corrupting the scientific process. By contrast, the GMU emails show how a group of politically naive scientists wanted to suppress dissent from Global Warming orthodoxy in the political sphere — an odious sentiment, to be sure, but not one that undermines the scientific process.

The real scandal, brought to light by Climate Warming skeptics who were punching back against Shukla, has gone relatively unremarked upon: the potential for professors to enrich themselves with federally funded research grants and the inability of conflict-of-interest forms and in-house academic review to either spot or do anything about such double dipping. We still don’t know whether Shukla’s practices, which included putting his wife on the payroll and funding a private charity in India, is widespread among research scientists — not just climate change scientists, but researchers of all stripes. The sad thing is that no one in the media or punditocracy seems remotely interested in knowing the answer. Having put Shukla in his place, even the skeptics don’t seem interested.

Update: The emails may be more significant than I thought. Katie Brown with the Energy in Depth blog argues that the emails “pull back the curtain further on the level of collusion between anti-fossil fuel activists, their funders, and the attorneys general that have launched climate investigations into people, companies, and think tanks with which they disagree on the issue.”

Nuke Foes Take Case to Dominion Shareholders

North Anna nuclear power station

North Anna nuclear power station

by James A. Bacon

Foes of a third nuclear power plan at Dominion Virginia Power’s North Anna Power Station have taken their case to the shareholders of parent company Dominion Resources, which is holding its annual shareholders meeting in Columbia, S.C., today.

Dominion is racking up billions of dollars of potential liabilities on the nuclear unit (NA3) that it may never recover, argues a shareholder resolution filed by Ruth McElroy Amundsen. State regulators may balk at paying for a project that, according to a Dominion estimate filed with the State Corporation Commission, would cost approximately $14.8 billion and, according to an expert witness for the Office of the Attorney General, would cost $19.3 billion,

Amundsen’s shareholder resolution (page 54) calls for Dominion to prepare and make public “a financial analysis” by November 30 reporting on “potential impact on earnings, share price and dividends should the State Corporation Commission deny a certificate for the development of North Anna 3 and further deny the recover of $1.87 billion in costs associated with the North Anna 3 nuclear reactor.”

“The massive $19 billion cost for the North Anna 3 nuclear reactor project makes it the biggest single threat posed today to the pocketbooks of Virginia consumers,” said Irene Leech, president of the Virginia Citizens Consumer Council. “The ever-escalating cost of this project and the fact that it is at least twice as expensive as other alternatives, including energy efficiency and renewables, makes this a situation that cries out for responsible shareholders to speak up and be heard.”

Dominion responded in its 2016 shareholders proxy statement that the company faces immense regulatory uncertainty. Federal courts must rule on the constitutionality of the Clean Power Plan and then, if the plan is deemed constitutional, the commonwealth of Virginia must select one of four broad regulatory strategies to meet the goals of the plan, which is designed to combat climate change by reducing utility carbon-dioxide emissions.

“The analysis and report … [would] require hypothesizing a number of unrelated factors and contingencies,” stated the board of directors in recommending against the shareholder proposal. “The potential outcomes of these issues, each of which would depend, in part, on subjective determinations by regulators, would need to be taken into account if we were to prepare the requested report. The complexity of any cost-recovery analysis is further compounded by the fact that the legislative process can, at times, alter the regulatory landscape.”

Amundsen’s resolution, which echoes the arguments made by consumer and environmental groups, focuses on the risk that the nuclear plant might never get built and that the company may not recover the significant investments it is making before receiving regulatory approval. Virginia Office of Attorney General has raised concerns with the SCC whether the expenditure of $19.3 billion developing NA3, which could translate into an average rate increase of 25.7% over current Virginia retail rates, is “reasonable and in the public interest.”

The total delivered cost of power from NA3 would amount to 19 cents per kilowatt/hour, which compares to the average wholesale price of electricity in the PJM interconnection region of 5.3 cents per kilowatt/hour in 2014, stated a supporting document for the shareholder proposal. And that doesn’t take into account the prospect of more cost increases if the project runs behind schedule and over budget.

Even if Dominion never builds the nuclear facility, it has been spending hundreds of millions of dollars on engineering and regulatory work to keep the nuclear option open. As of Sept. 30, 2015, the company had incurred $580 million in development costs, and Dominion expects to have spent $4.7 billion in development by the end of 2020, states the supporting document. “By the time the SCC is allowed to review this spending, more than one-quarter of the total cost will have been spent.”

Amundsen’s bottom line: “Dominion is incurring its North Anna 3 costs purely at its stockholders’ risk.”

Dominion’s recently published 2016 Integrated Resources Plan lays out four potential regulatory strategies for Virginia if the Clean Power Plan is approved. One of those scenarios, a “mass-based” approach that sets caps on CO2 emissions for existing and new power plants, would restrict coal- and gas-based electric generation so drastically that the company would have little choice but to shift to solar and nuclear power, the company has argued.

While the Sierra Club Virginia Chapter argues that “the company can substantially reduce carbon pollution with renewable energy like solar and wind power,” Dominion says that the intermittent nature of wind and solar production forces the company to maintain backup capacity it can rely upon. The low-cost option for “dispatchable” power is natural gas. But the regulatory scenario preferred by environmental groups effectively precludes gas and coal, leaving nuclear as the only option. The company also contends that neither energy-efficiency initiatives nor purchases of wholesale power from the PJM system can make up the difference.

In effect, Dominion regards its expenditures on the NA3 nuclear unit as an insurance policy should Virginia adopt the most carbon-restrictive Clean Power Plan regulatory option.

A World Where Bats and Blades Coexist

bats_and_blades
by James A. Bacon

Critics have long lambasted wind turbines for killing hundreds of thousands of birds and bats. Charlottesville-based Apex Clean Energy, which seeks to build a wind farm in Botetourt County north of Roanoke, has submitted a plan that it says will mitigate the worst effects of its 25 whirling turbine blades.

Apex would turn the turbines off from dawn to dusk every year between May 15 and Nov 14 when bats are foraging for food reports the Roanoke Times. But they would keep the turbines running when winds exceed 15 miles per hour or when the temperature drops below 38 degrees, conditions when bats tend not to fly.

“There are proven steps we can take to build and operate projects in an environmentally responsible manner,” said Apex spokesman Kevin Chandler.

Local conservation groups like the Rockbridge Area Conservation Council have opposed the wind farm on the grounds that the blades could cause the death of migratory songbirds, bats and perhaps golden eagles. Bird conservationists assert that wind turbines kill an estimated 600,000 birds a year in the United States and that the number could rise to two million with the deployment of more wind energy. Wind advocates say the number is miniscule compared to the 600 million or more killed each year by flying into buildings or hitting cars and trucks, but concerns remain an obstacle to widespread deployment of the turbines in Virginia.

Apex believes that damage to wildlife can be managed. The company hired professional birdwatchers to log the number of warblers, sandpipers, owls and other threatened or endangered species around its proposed wind farm. The surveys, conducted in consultation with the U.S. Fish and Wildlife Service and the Virginia Department of Game and Inland Fisheries, found that most North American birds would not be impacted. Eagles, hawks and falcons were not seen in large enough numbers to raise concerns.

But four endangered or threatened species — the northern long-eared bat, the Indiana bat, the tricolored bat and the little brown bat — were spotted during the surveys. In addition to restricting wind-turbine operations, Apex proposes to avoid cutting trees within five miles of the bats’ cave or within 150 feet of summer roosting trees for northern long-eared bats.

Bacon’s bottom line: Apex’s proposal is an idea worth exploring. On the one hand, it is desirable to minimize wildlife deaths, especially of rare and endangered species. Wind farms should be held to the same standard as pipelines, transmission lines and other energy projects when it comes to mitigating their impact on the environment. On the other hand, it appears that Apex has proposed a reasonable plan to minimize wildlife deaths. The company wisely initiated the wildlife surveys two years ago, long before the issue could become a deal-killer, and it has tailored a response to the local ecosystem. The solution isn’t perfect: Presumably a number of birds and bats still could die, and the company definitely will lose revenue by curtailing production. But, barring some tweaking in negotiations with regulators and conservationists, the proposal could well represent the optimal tradeoff.

Can the rest of us learn anything from this? Virginia will have to build a lot of infrastructure — wind farms, solar farms, pipelines, transmission lines, and who knows what else — as it to re-tools the electric grid to a low-carbon, low-pollution future. Inevitably, some of the projects will conflict with ecological, historical and cultural resources that Virginians want to protect. Collectively, we need to adopt a problem-solving mindset that allows critical infrastructure to be built while protecting those resources. There will never be perfect, pain-free solutions. But some solutions will be clearly preferable to others, and we need to find them.

NRDC Blasts Dominion’s $13 Billion Cost Projection

With least cost planning, says the NRDC, Virginia would continue to sufficiently reduce carbon emissions, in absence of Dominion’s IRP proposal.

With least cost planning, says the NRDC, Virginia would continue to sufficiently reduce carbon emissions, in absence of Dominion’s IRP proposal.

by James A. Bacon

The 15-year planning document filed by Dominion Virginia Power last week vastly overstates the cost of complying with the Clean Power Plan and is chock-full of errors, flaws and misjudgments, charged Walton Shepherd, staff attorney for the National Resources Defense Council (NRDC) and a member of a committee of stakeholders advising the McAuliffe administration on how to comply with the plan, should it meet federal court approval.

“Dominion’s IRP … outlines a gargantuan, $13 billion energy plan to reduce total carbon pollution that asks its customers to pay for a Ferrari, when it already has a finely tuned car that can safely — and more affordably — get everyone to the store and back in time for dinner,” wrote Shepherd.

In a blog NRDC post yesterday, Shepherd cited three major flaws in Dominion’s analysis.

  1. Dominion’s $12.8 billion dollar building plan assumes that it will have to replace electricity generated by every single one of its coal-fired plants. That’s not true, he said. As a result of previous initiatives undertaken before the announcement of the Clean Power Plan, Virginia “has already achieved so much of its compliance obligation that it would likely make the carbon reductions required by the Clean Power Plan even in absence of the federal regulations.”
  2. Dominion disregards the existence of the interstate electricity grid — the company is part of the PJM regional transmission organization — which allows it to tap into wholesale electricity markets. “That national grid, which of course includes all of Virginia in its continent-wide footprint, is precisely why Dominion doesn’t need to build new plants: transporting cheaper and cleaner electricity from elsewhere was the entire point of building out our vast and sophisticated transmission network.”
  3. Dominion’s plan overlooks the obligation by Virginia regulators to find the least-cost measure to meet customer needs. “Robust analysis of the CPP shows the compliance costs for the entire region (of VA, WV, PA, OH, and NJ) to reduce carbon pollution from existing and future power plants could be less than one-fifth of Dominion’s cost of $13 billion, which is a price tag for Virginians to pay alone.”

Bacon’s bottom line. The first point requires some explanation for readers not intimately familiar with this debate: That $13 billion price tag is Dominion’s estimate for what it says is the most expensive of the four Clean Power Plan compliance strategies (so-called Plan E) on the table — the plan preferred by Shepherd and the NRDC. It would impose a mass-based cap on carbon dioxide emissions from Virginia’s fossil fuel-fired generating fleet, including existing and new facilities — 27.43 million short tons of CO2 in 2030 and beyond.

To achieve that goal, Dominion maintains that it would have to go beyond the currently planned shutdown of oil-fired Unit 3 at Yorktown Power Station, coal-fired Units 3 and 4 at Chesterfield Power Station, and both coal-fired units at Mecklenburg Power Station. Dominion’s econometric modeling suggests that Plan E would require the shut-down of Units 5 and 6 at Chesterfield, both units at Clover Power Station by 2022, and the Virginia Hybrid Energy Center by 2029.

Shepherd is contesting that assertion. He is saying that simply following existing policy, which shuts down coal-fired units to meet the toxic-emission standards issued earlier this decade, got Virginia below the mass-based level at temporarily in 2012, and that it would take only modest effort to keep it below that level through 2030. (See the chart above.) This appears to be a fundamental disagreement in analysis with Dominion.

On the second point: Dominion’s 2016 IRP does indeed glide over discussion of purchasing power on the wholesale markets. One of the advantages to participating in a regional electric grid is that it is easier to balance electric-generating sources, especially variable sources like wind and solar, over a larger geographic area. PJM has said that the system should be able to accommodate as much as 30% renewable power without jeopardizing grid reliability.

However, Shepherd’s understanding of how the PJM grid works differs from mine. It is not a vehicle that Dominion can tap to import vast supplies of renewable energy. Some renewable energy, yes, but not limitless amounts. First, there are transmission constraints. There is a limited number of transmission lines with a finite amount of capacity, which cannot be exceeded without incurring significant congestion charges and creating reliability issues. Second, Dominion cannot simply be an electricity taker. It has to be able to feed power into the regional grid as well in order to help maintain the regional balance. Perhaps Dominion could purchase more electricity off the regional grid, but it’s not clear how much more.

On the third point: Dominion says compliance will cost $12.8 billion, NRDC says it will cost one-fifth that amount for Virginia and nearby states. Dominion has its econometric model; NRDC has its own econometric model. Without knowing the inputs and constructions of each model, it is impossible for disinterested citizens to know which is a more accurate representation of reality.