In Hampton Roads, Life Is Not a Gas

natural_gas

Hampton Roads and other Tidewater communities see proposed natural gas pipelines in Virginia as a boon to economic development.

by James A. Bacon

While debate rages in western Virginia over the economic impact of natural gas pipelines on property values and local economies, we hardly hear a peep from the low country areas of Virginia and North Carolina that would benefit from an expanded supply of gas.

Elected officials claim, and economic developers confirm, that inadequate supplies of gas to Hampton Roads and outlying communities prevent them from competing for energy-intensive industrial customers, crimping efforts to grow their economies and create jobs.

“I’ve heard from cities and developers and builders. … We’ve got to get more capacity here,” says Sen. Bill DeSteph, R-Virginia Beach, chair of the Hampton Roads Caucus, who persuaded the region’s 33 state senators and delegates to sign a March letter supporting the proposed Atlantic Coast Pipeline (ACP).

Voices from Hampton Roads and places like Brunswick and Greensville counties, where new gas-fired power plants are being built, have been quiet during the pipeline controversy. The impact of pipeline construction is less tangible and immediate than it is for, say, landowners in the path of the ACP and the proposed Mountain Valley Pipeline. And the benefits are more theoretical — fresh gas supplies would put their communities in the running for manufacturing projects they can’t compete for now, but it’s not as if there’s a big job-creating project waiting in the wings. Natural gas proponents aren’t barraging the media with press releases, filing lawsuits or marching on the state capitol.

Still, economic developers and political leaders have quietly lined up behind pipeline development, especially the Atlantic Coast Pipeline. For DeSteph, the aha! moment occurred about two-and-a-half years ago when demand from a severe cold snap swamped the local gas distributor, Virginia National Gas. The utility had to tell some of its largest customers to curtail their use of the fuel, as called for under contract. “I was shocked that we shut down the gas supply,” says DeSteph. “In my opinion that’s something we should never do.”

While big industrial customers usually can manage such outages, supply curtailments send a signal that gas supplies are limited. No energy-intensive manufacturer would want to locate or expand in Hampton Roads when they could locate worry-free in other communities. Noting that the Norfolk Naval Station was one of the entities that curtailed its gas use, DeSteph even fears that the capped gas supply could undermine the region’s status as a military hub.

The decline in natural gas prices made possible by fracking and the exploitation of the Marcellus/Utica gas fields has driven the re-shoring of energy-intensive manufacturing back to the United States, says Rick Weddle, president of the Hampton Roads Economic Development Partnership. But the areas benefiting from the trend have been those with access to the abundant gas supplies. Hampton Roads isn’t in the running.

The Atlantic Coast Pipeline, designed to carry 1.5 billion cubic feet of gas per day, could change that. The pipeline would run from West Virginia through Virginia to North Carolina. A spur would split off from the main pipeline to deliver gas to Virginia Natural Gas, which has signed a 20-year customer agreement, and whose parent company AGL Resources is one of the partners in the project. The pipeline also would serve Piedmont Natural Gas serving the North Carolina market, which is a partner, too. (Dominion Resources, a sponsor of this blog, is the managing partner.)

A bigger supply of natural gas to the region would expand the prospects that Hampton Roads could compete for. “We would target new industries,” Weddle says.

The same logic applies to smaller communities in eastern Virginia and North Carolina, which also sit at the end of the existing pipeline distribution system.

The big five utilities in the industrial recruitment game are wastewater, electricity, fiber-optic cable and natural gas, says Christopher Chung, CEO of the Economic Development Partnership of North Carolina. “Most companies want gas, whether they’re using it for heating or as part of the manufacturing process. Not one hundred percent need it, but most do. It’s really hard for a community to make the case to recruit a manufacturer if it doesn’t have natural gas. Not impossible. But so many locations do have it that you’re at a major competitive disadvantage if you don’t.” Continue reading

Free the Data!

data

by James A. Bacon

I’m not sure if this idea will lead anywhere but it’s worth a try: The Commonwealth of Virginia has released an open data set of job postings in the state with the hope that someone will come up with innovative ways to use it.

The initiative arises from an executive order by Governor Terry McAuliff establishing the Commonwealth Center for Advanced Research and Statistics that, according to the Washington Business Journal, aims to improve labor market, workforce and education data.

“The data is available, and now we are gearing toward finding ways to make insights,” said Kim McKay, a research and policy analyst at the Council on Virginia’s Future, one of the program’s sponsors. “It’s important to note that this is a early stage pilot program.”

“This is the first time any state has taken online job postings and curated it for public use,” said Aneesh Chopra, co-founder of Arlington-based Hunch Analytics and a former secretary of technology of Virginia. “The governor made the goal to make the labor market work better … and this is a down payment on the idea.”

Chopra hopes that businesses will start finding uses for the data, just as the weather forecasting industry created applications that fed off government-compiled weather data.

Bacon’s bottom line: I’m not smart enough to imagine how the data, comprised of public and private job listings dispersed across multiple job sites, can be used. Maybe someone will come up with a brilliant idea, maybe nothing will come of it. In either case, state government is spending next to nothing to make the data available. It’s worth a try. Perhaps this initiative will lead to the liberation of other data sets and spark the creation of entirely new information products.

Virginia’s Email Scandal

House District 72 - does this look compact to you?

House District 72 – does this look compact to you?

by Brian Cannon

Today the Supreme Court of Virginia will hear a case about emails politicians don’t want you to see.  You may miss the story in the news because this has nothing to do with presidential politics. Rather it’s about Virginia’s 2011 gerrymander.

Five years ago, Virginia was split with Democrats in control of the Virginia Senate and Republicans in control of the House of Delegates. Governor Bob McDonnell appointed a blue-ribbon commission to propose less partisan maps for Virginia. Unfortunately, legislators did not take the directive seriously. Instead of agreeing to a reasonable approach that benefited Virginia voters, the partisan political leaders of both chambers agreed to feather their own nests. The Republicans in the House passed the Democratic gerrymander of the Senate and the Democrats in the Senate passed the Republican gerrymander of the House. Bi-partisanship at its worst.

Which lawsuit is this again? In 2015, Citizens from across the political spectrum joined to sue the Commonwealth over the lack of compactness in Virginia’s General Assembly districts. A quick look at the districts will give you a clear view of how non-compact these districts actually are. They include six drawn by the Democrats in the Senate and five drawn by the Republicans in the House. By specifically avoiding districts affected by the complication of the Voting Rights Act, the suit is a clear shot at Article II Section 6’s requirement for compactness without all of the complications of the moving target that is today’s VRA.

This lawsuit is funded by the non-partisan OneVirginia2021 with lawyers and a significant discount provided by Wyatt Durrette’s firm DurrettCrump. This is not the same initiative as the Democratic National Redistricting Trust challenge of racial gerrymandering. One of those cases changed Virginia’s congressional boundaries and the other is before the Supreme Court of the United States this fall.

So how do emails work into this?  In the discovery phase of this compactness trial (yeah, we still haven’t gotten to trial yet), the trial judge in Richmond made a ruling about the scope of legislative privilege. The plaintiffs argued legislative privilege should be narrowly construed — about a foot wide.  The defendants argued it is a broad privilege — about a mile wide. Judge Marchant of the Richmond Circuit Court ruled, in effect, that the privilege was a few feet wide. The House of Delegates complied and has been turning over emails and other related documents since.

In an unprecedented move to avoid turning over their emails, four sitting state senators requested instead to be held in contempt of court. The court obliged, fining each senator $100 a day since early April. The four sitting senators are all Democrats — the same ones behind the gerrymandering in 2011. Originally, the group included one sitting Republican Sen. Richard Stuart, R-Westmoreland, but he complied with the court order, stating to the Washington Post:

I’m a lawyer and I’m never going to refuse a court order. … You just don’t do that. Number two, I’m a public servant and I’m doing the public’s work. Number three, I believe in transparency.

If only Senators Dick Saslaw, D-Springfield, George Barker, D-Alexandria, John Edwards, D-Roanoke, and Dave Marsden, D-Burke, saw it that way and complied with the trial court’s order.

Brian Cannon is executive director of OneVirginia2021.

Metro Positions Itself for the Big Ask

metroby James A. Bacon

Staring into a fiscal black hole, Washington Metropolitan Area Transit Authority Chairman Jack Evans is trying to nail down the authority’s 2018 spending plan by November, months earlier than usual. The move, suggests Washington Post writer Martine Powers, “is a signal that the transit agency is preparing to ask the District, Maryland and Virginia for additional money if fares are not raised or the federal government does not come forward with more funding.”

How much money? Between $75 million to $100 million per jurisdiction.

Evans issued the warning after a meeting in which the WMATA board discussed a presentation by McKinsey & Company indicating that the mass transit organization was paying significantly more for expenses than comparable transit agencies.

The McKinsey report, issued in April, is must reading for Virginia legislators pondering how to respond when WMATA approaches, tin cup in hand, begging for more money or risk seeing the collapse of the mass transit service so critical to Northern Virginia’s economy. That report clearly lays out the management challenges facing the authority and provides concrete ideas on how to address them.

WMATA’s long-term mismatch between revenues and expenses has been getting worse, not better. According to McKinsey, Farebox recovery has declined from 47% of costs in 2011 to 45% today and will continue to drop further as passengers fed up with the rail system’s poor reliability commute by other means. Rail system revenues would need to grow at 7% yearly just to maintain the current operating deficit. Personnel growth averaging 5% annually has driven most of the cost inflation. The authority has more employees who getting paid more (wages growing 4% annually) to work less (regular hours per full-time equivalent employee down 2% annually).

Poor railcar maintenance is the single-most important driver of service unreliability — 63% of all rail line delays are caused by railcar failures, the report says. There are two main reasons for cars being unavailable: parts are frequently out of stock, and repair throughput is exceptionally low. “Estimated technician wrench time ranges between 25% and 40%, below a best-in-class standard of 60%.” The reasons for the low productivity can be traced to systemic management failures such as the uneven distribution of cars between shops, turnover in mechanic staff, and technicians starting work orders without all necessary tools and parts.

The report also took note of the high cost of MetroAccess, a transportation service for people with disabilities. McKinsey estimated that WMATA could cut the $110 million program’s costs 20% by experimenting with innovative delivery models. The report also recommended extensive changes to WMATA’s capital allocation model and the structure of its pension, retirement-benefits plans and workers compensation plans.

Bacon’s bottom line: The McKinsey report provides an objective checklist of reforms that WMATA needs to make before entrusted with any more Virginia taxpayer dollars. Give management the money without conditions, and the urgency to implement the reforms disappears. Make added money contingent upon implementing reforms, and WMATA actually might wind up needing less than it thinks it does. If WMATA’s board and management are unwilling or unable to execute these of equivalent reforms, Virginia should give them no more money.

Hat tip: Tim Wise

How One Gas Plant Can Save Billions

Dominion Virginia Power's gas-burning plant in Brunswick County opened this year. The Greensville power station, scheduled to open in 2018, will be even more cost efficient.

Shown here: Dominion Virginia Power’s state-of-the-art, gas-fired generating plant in Brunswick County. The company’s Greensville facility will be even more cost efficient.

There’s more to the natural gas boom than fracking. Technology deployed at Dominion’s Greensville power plant will squeeze more electricity out of a BTU of gas than ever before. 

by James A. Bacon

Last month Dominion Virginia Power commenced construction of the $1.3 billion Greensville County Power Station. When it opens in late 2018, the facility could well be the most efficient gas-burning electrical power plant in the world. That one facility will save Dominion customers $2.1 billion over its 36-year lifetime, the company says, even as it emits less carbon dioxide per kilowatt hour than other gas power plants and only 40% of that of a coal-fired plant.

Even if stretched out over 36 years, $2 billion represents a significant savings from a single power station. The average savings of $59 million a year compares to $7 billion annually paid by Dominion’s Virginia and North Carolina rate payers.

Rate payers might wonder: How does Dominion calculate that $2 billion in savings. The station will save $2 billion compared to what? Those questions seem all the more germane in light of commonly heard arguments that investing in massive natural gas-fired power plants instead solar panels and wind turbines is a bad idea when the price of gas will only rise in the future and the cost of renewable energy will steadily decline.

“We see the potential for a lot of stranded costs to be put on consumers as emissions of carbon pollution and greenhouse gas emissions continue to be ratcheted down,” says Kate Addleson, director of the Sierra Club-Virginia chapter. Solar is not just non-polluting but in many parts of the country it’s the lowest-cost energy source. As solar technology improves and the cost per kilowatt hour continues to decline, solar could become the low-cost option in Virginia, too. While natural gas might look like an attractive option today, it may not be as gas reserves are depleted and prices rise. Says Addleson: “Dominion is pointing to the benefits of gas because that’s what they see as the best outcome for their profit margin.”

Dominion defends its commitment to natural gas as the best deal for rate payers. The Greensville County Power Station will save money two ways: (1) by extracting more energy value from each BTU of gas, and (2) by using its access to two pipelines to purchase cheaper gas.

Greensville will be the third “three on one” Combined Cycle plant in Dominion’s generating fleet, using waste heat from three gas-burning turbines to power a traditional steam generator. Incorporating the most advanced Mitsubishi Hitachi Power Systems turbines, Greensville will squeeze more electricity from 1,000 BTUs of natural gas than ever before.

Combustion at higher temperatures also releases less carbon-dioxide into the atmosphere. The Greensville plant will emit 780 pounds of CO2 per megawatt hour (MWh), an incremental improvement over the 790 pounds for the Brunswick plant and 2,100 pounds for a typical coal-burning plant. Mike Dowd, director of air quality for the Department of Environmental Quality (DEQ), noted that the air permit sets the limit at 813 pounds per MWh, the toughest ever set on a combined cycle, natural gas power station. Environmental groups claimed credit for the “stronger pollution protection” they lobbied for. But the real enabler of the stricter environmental standards was the same combustion technology that makes the facility so economical to run.

Glenn Kelly, director of Generation System Planning, walked me through Dominion’s methodology for calculating the cost savings. If Dominion did not build the Greensville plant, he said, the company would have to purchase the megawatts from wholesale electricity markets maintained by PJM, the regional transmission organization of which Dominion is a part. “PJM market is always an option. We can always buy energy and capacity there  – that’s our benchmark. ”

In the PJM wholesale market, utilities purchase capacity (the right to draw electricity, if needed) and energy (the actual electricity consumed) in day-before and same-day auctions. Prices vary by season, time of day, weather conditions, and other factors such as the volume of electricity being bought and sold at any given point of time and the ability of transmission lines to deliver the electricity to the consumer in different parts of the country. In all likelihood, Greensville’s replacement electric power would come from a mix of gas-fired, solar, wind, and other energy sources — whatever other utilities and merchant providers are willing to put on the market.

How does Dominion know what PJM will charge Dominion years in the future? It doesn’t. It relies upon its economic consulting company, ICF, to make realistic assumptions. ICF assumes that prices will fluctuate around the long-term cost (including a reasonable corporate profit) of generating the electricity, and that the cost of burning gas or building a solar panel can be estimated with some degree of reliability. “Gas prices are very volatile short-term,” says Kelly. Right now prices are depressed, running between $2 and $3 per million BTUs. ICF projects gas prices will likely climb to about $5.11 per million BTU by 2025. “We have it going up pretty fast.”

Many people are familiar with the fact that the cost per KWh of solar energy has gone down as solar panels get more efficient at converting sunlight into electricity, but few are aware how the cost of generating electricity from gas has gone down — and not just because of the fracking revolution that has flooded the market with gas. State-of-the-art power stations extract more electricity from the same amount of gas.

The G Class turbines installed in Dominion’s Brunswick County power station, which opened this year, are more efficient than the previous generation, says Bill Newsom, executive vice president-new generation systems with Mitsubishi Hitachi Power Systems Americas. They are about 59% efficient; that is, they extract about 59% of the energy value from the natural gas. The rest goes up the smokestack or is lost as waste heat. Continue reading

Making Net-Zero Energy Affordable

Kelly Vaughn explains how exterior sun shades adjust the sunlight and energy admitted into the Rocky Mountain Institute headquarters building.

Kelly Vaughn explains how exterior sun shades adjust the sunlight and energy admitted into the Rocky Mountain Institute headquarters building.

The new Rocky Mountain Institute headquarters building in Basalt, Colo., demonstrates how to drive net energy consumption down to zero at a cost that offers a four-year payback.

by James A. Bacon

When the Rocky Mountain Institute (RMI) decided to build a new headquarters building in Basalt, Colo., it had its own high standards to uphold. The free-market, environmental think tank had set a goal of transforming four billion square feet of building space into smart, energy-efficient structures, enough to reduce energy consumption over five years by 398 trillion BTUs and prevent emissions of 50 million metric tons of CO2 — the equivalent of decommissioning 17 coal-fired power plants.

Doubling as a meeting center where legendary co-founder Amory Lovins could convene with Fortune 500 executives visiting nearby Aspen, the new facility had to push the envelope for passive, integrative design. But it also had to show that investing in energy efficiency made economic sense. There wasn’t much point in demonstrating cutting-edge approaches that were too expensive to replicate.

When the 15,610-square-foot Innovation Center opened in December 2015, it was one of only 200 buildings constructed to net-zero energy standards, meaning that it produced more energy than it consumed on an annual basis. But it was more than an ideological fashion statement. Although achieving net-zero and a design life of more than 100 years added an incremental cost of 10.8%, RMI will recoup that sum, primarily through energy savings, in just under four years.

I gained an interest in energy-efficient buildings when my wife worked at Richmond-based Tridium, developer of a software platform for smart buildings. Buildings account for about 60% of the electricity generated around the world, and energy constitutes a major expense of property ownership. A whole industry has grown up around using technology to wring electricity savings from HVAC and lighting. But the RMI Innovation Center went beyond tweaking its HVAC system — it dispensed with it altogether. Instead of paying for heaters, coolers and ducts, RMI invested in solar energy, sensors, insulation and passive design.

Exterior shot of the Innovation Center. Photo credit: Rocky Mountain Institute

Exterior shot of the Innovation Center. Photo credit: Rocky Mountain Institute

During my visit to Aspen earlier this month, I took a side trip to Basalt a few miles away to check out RMI’s Innovation Center myself. I wanted to see what state-of-the-art energy efficiency looked like and gauge what potential might exist for cutting electricity consumption and CO2 emissions by redesigning the built community. RMI was kind enough to assign Kelly Vaughn, a marketing manager with RMI’s communications team, to give my friend and me a tour.

The building sports many of the features one might expect from an energy efficient building — big windows with a southern exposure to the sun, shades to control sunlight entering the building, and solar panels to generate electricity on-site. Less visibly, the building is so tightly insulated that the Passive House Institute declared it to be one of the most air-tight buildings it ever measured. Heat is stored in concrete floor slabs and other thermal masses such as walls.

Also invisible, more than 120 submeters track temperature, humidity, CO2, lighting and other critical variables that feed into the building’s brain. “The building is so smart,” says Vaughn, “that it saves us from making stupid decisions. You don’t just walk up to the thermostat. The building makes critical decisions based on outdoor temperatures projected out to the next day.”

Most office lighting comes from outside, although RMI does use LED lights as backup.

Most office lighting comes from outside, although RMI does use LED lights as backup.

The building generates solar electricity, some of which it stores in a 30 kW lithium ion battery system. The batteries provide a buffer for periods of peak demand, such as the coldest hours of the coldest days of the year. The storage allows the building to keep peak demand under 50kW, which places it in a lower commercial rate class with its local electric co-op.

Perhaps RMI’s greatest innovation is to re-think the 68º-to-72º temperature zone maintained in most office buildings by taking an innovative approach to delivering thermal comfort. “We’ve thought beyond what temperatures we need to maintain in a building and expanded our ideas about how to deliver comfort on an individual level, allowing us to expand our temperature bandwidth from 67º to 82º,” says Vaughn.  Continue reading

The State Department of Superintendent Protection

monkeysby John Butcher

On June 7, I posted a letter to the President of the State Board of Education from a former Latin teacher in the Roanoke County system alleging cheating at one or more schools in that system. That teacher, Robert Maronic, averred “widespread” cheating and claimed to have informed the administration of the problem in November, 2012, the Board of Supervisors in October, 2015, and the School Board in November, 2015.

(Maronic posted an op-ed in Bacon’s Rebellion on the same topic: “Halt the High School Cheating Epidemic.” — JAB)

On June 24, Maronic received a reply (reproduced below) from the President of the Board of Education. Let’s analyze that letter.

Thank you for your letter detailing concerns with the Roanoke County Public School system. I appreciate you [sic] taking the time to contact the Virginia Board of Education.

Just from the first sentence we know this letter is Bad News: President Cannaday characterizes allegations of wholesale cheating as “concerns.”

The [Roanoke County Public School] division informed the Department that it is taking measures to address this issue and is working with outside support to combat this challenge.

So, the Roanoke County division admits to some or all of the allegations:

  • It is taking unspecified “measures.”
  • Those measures will “address,” but perhaps not eliminate the cheating.
  • The division is “working” with outsiders to “combat this challenge.”

What this does not say is that the Roanoke County School Superintendent has eliminated the cheating and fired the people responsible for it.

Pursuant to the Constitution of Virginia, the Board of Education determines and prescribes the Standards of Quality for school divisions, and the supervision of schools in each school division is vested in the local school board.

Hmmm.  Let’s look at authority:

  • Va. Const. art. VIII, § 4:  The general supervision of the public school system shall be vested in a Board of Education . . .
  • Va. Code § 22.1-65:  A division superintendent may be assessed a reasonable fine, suspended from office for a limited period or removed from office by either the Board of Education, upon recommendation of the Superintendent of Public Instruction or the school board of the division for sufficient cause.

We need not parse the scope of “general supervision” to understand that the Roanoke County Superintendent is responsible for what happens in his system.  Either he knew of the cheating and needs to be fired for not dealing with it, or he did not know of the cheating so he needs to be fired for incompetence.

And Cannaday is president of one of the two boards that can do the firing.

Continue reading