Battle Lines Forming Over Clean Power Plan

Attorney General Mark R. Herring

Attorney General Mark R. Herring

The partisan battle lines are forming over the implementation of the Environmental Protection Agency’s Clean Power Plan, which calls for Virginia to reduce carbon dioxide emissions from state power plants 32% by 2030.

Attorney General Mark R. Herring, a Democrat, announced two weeks ago that Virginia will join a coalition of 17 other states supporting the Obama administration against a lawsuit filed by 24 other states. Foes of the plan argue that the EPA far exceeded its legislative authority in regulating CO2, and observers say the case could well reach the U.S. Supreme Court.

Del. Israel O'Quinn, R-Washington.

Del. Israel O’Quinn, R-Washington.

Meanwhile, Del. Israel O’Quinn, R-Washington, has introduced a bill that would require the General Assembly to approve and oversee implementation of the plan in Virginia. While the Clean Power Plan mandates CO2-reduction targets for each state, it allows each state to figure out how to achieve the goals.

Herring justified his support for the plan on the grounds that climate change “is a real and urgent threat to the health and safety of Virginians, our environment, and our economic success as a Commonwealth.” By way of specifics, he cited the threat of sea-level rise in Hampton Roads that could displace residents and businesses and threaten Naval Station Norfolk, and the prospect of extreme weather, droughts and floods. said Herring: “It’s long past time to acknowledge these realities and take decisive action.”

O’Quinn’s bill would require the Department of Environmental Quality (DEQ) to work in conjunction with the State Corporation Commission (SCC) to prepare a report assessing the plan’s effect on the Virginia’s electric power sector, electric customers, jobs, economic development, economic competitiveness,  and state and local government.

The report also would identify new state laws that might be needed to implement the plan, study whether to rely upon EPA measures for calculating the CO2 reduction goal, and report on whether the Commonwealth should invest in energy efficiency programs, promote non-emitting nuclear power or participate in multistate programs. The report also would advanced recommendations on how best to avoid stranded investments in power plants that would be shuttered before they were fully paid off.

Getting answers to those questions is probably a good idea — the more information, the better — but sure to be controversial is the final item in the bill: “DEQ shall not submit to the EPA any state plan until both the Senate and the House of Delegates have adopted resolutions that approve the state plan in accordance with this act.”

It is safe to predict that the McAuliffe administration will not respond favorably to the idea of requiring the Republican-dominated General Assembly to approve the plan. Separation-of-power issues are potentially at stake here as well as ideological differences over climate change. Look for this to become a hot topic in the 2016 session.


Striking a Balance on Municipal Broadband

broadbandby John Szczesny

Changes in latitudes, changes in attitudes… towards municipal broadband, that is. As officials in the Roanoke Valley move forward with plans for a municipal fiber network the state of North Carolina is busy suing the FCC to prevent its local governments from doing the same.

To be fair, municipal broadband is no cakewalk in Virginia. Commonwealth regulators at the SCC require localities to essentially tax their own operations in an amount they would charge an incumbent Internet Service Provider (ISP) for such things as licenses, pole attachments, and street opening permits. They also prohibit cross-subsidizing telecommunications from other government operations, except when no other competitors are vying to offer similar services. Municipal networks must provide open access to other providers. And they can forget about cable TV.

Rules like these typically raise hackles from those on the left who see no problems with municipal broadband, since they relish the expansion of government control.  In their view such telecom legislation is nothing more the genesis of greedy cable companies, and while there’s no denying the influence of the cable lobby in state legislatures — apparently cable companies run the show in N.C. — there are, in fact, dangers in stripping all restraints from municipal network providers.

As long as government entities have a monopoly power on taxes and absolute control over land use, there is a need to hold them in check. Just ask the incumbent providers. Too many communities have abused their authority by exacting unreasonable fees for right-of-way permitting, and have bogged down network deployments through bureaucratic inertia. Much like developers seeking zoning approvals, the ISP network is viewed as another revenue stream.

Virginia regulators will need to find a middle road so municipal networks can fill voids where private sector ISPs are not competing, while also ensuring that municipalities and their network partners aren’t conferred unfair advantages.

Best Cities for Small Black Business


Source: Thumbtack annual small business friendliness survey.

I don’t know how valid these findings are, based as they are upon only 1,663 responses to a national small business survey, but they are encouraging. Nine of ten of the cities rated highly by African-American small businessmen (and women) are located in the South and two — Richmond and Virginia Beach — are located in Virginia.

The questions posed by the Thumbtack annual small business survey asked small business owners (1) How friendly is your city? (2) How easy was it to start a business? and (3) Would you encourage others to start a business in your city?

Small business is an important path of upward mobility for African-Americans in a lackluster economy. As Thumbtack notes:

Bacon’s bottom line: Conservatives should never give up appealing to the African-American electorate. While the political left in the United States cultivates grievance and outrage, the political right emphasizes economic opportunity and upward mobility. Leftist-progressive policies destroy economic opportunity and engender bitterness; conservative, market-oriented policies create opportunity and hope. Which one will win in the long run? The one that offers opportunity and hope.


Thanks For the Memories

I have not written much over that past several months because I have been dealing with some family problems. I thought a brief article on the Dave Brat interview might be worth a comment. Boy,was I wrong.

I was upset at one of the responses to my Brat article and have decided that continuing to prepare and write an occasional article for this blog is not worth the time. I have never been accused of being a liar. It seems that some simply don’t understand the give and take, is not an excuse to call into question the basic values of one with whom they do not agree.

— Les Schreiber

Du Bois-Washington Debate as Relevant as Ever

W.E.B. Du Bois

W.E.B. Du Bois

by James A. Bacon

As debate rages in the comments section of Bacon’s Rebellion over the legitimacy of the demands made by African-American student activists at Virginia Commonwealth University last week, I asked myself whether differential graduation rates between different race/ethnicities might be playing a role in the frustration experienced by the student militants. The answer is, probably not. What I found instead was an upbeat story, which, though a few years old, reflects well upon the VCU administration — and, to my mind, represents exactly the kind of policy the university ought to be pursuing.

A pair of reports issued by The Education Trust in 2012 found that VCU had eliminated the graduation gap between African-American and white students between 2004 and 2010, raising the black graduation rate from 34.5% to 49.8%. VCU ranked 16th nationally on the list of “Top 25 Gainers in African-American Student Graduation Rates among Public Institutions,” according to a report summary prepared by the VCU news office. Results improved for Hispanic students as well.

The key to success? VCU’s University College, a program that prepares entering students for college-level work.

Booker T. Washington

Booker T. Washington

“Our Focused Inquiry Program helps new students experience a college curriculum in a very short time,” said Joseph Marolla, vice provost for instruction and student success. From the article:

The Focused Inquiry I and II courses are the central component of the University College curriculum. Those courses target oral and written communication, critical thinking and problem solving, the development of quantitative abilities, information retrieval and evaluation and collaborative work.

Class sizes are limited to 22 students. Marolla said the 43 faculty members teaching at University College are critical to the success of the program and its students.

Here is a program with 43 faculty members — an expensive commitment — geared to help insufficiently prepared students achieve success at the university.

This strikes me as money well spent. VCU’s proper priority is providing African-American students the academic support that allows them to complete their graduation requirements.  It also strikes me that anyone interested in improving the prospects of African-Americans in Virginia should be focusing on substantive issues like on-time graduation instead of politically potent but ultimately trivial issues such as those articulated by the VCU student protesters.

What we’re seeing played out in the modern American campus is a reprise of the old debate between Booker T. Washington and W.E.B. Du Bois more than a century ago. Where should African-Americans focus their energy: upon education and self-improvement or advancing a civil rights agenda? Du Bois won that debate, resulting in sweeping and much-needed civil rights reforms in the 1960s. Economic gains for poor African-Americans since then have been limited, but African-American political and thought leaders have shown relatively little interest in revisiting core assumptions in light of new conditions. White micro-aggressions and insufficient support for campus cultural institutions aren’t what’s holding back African-Americans today, either at VCU or society at large. Low graduation rates in high school and college are.

As PBS summarizes his thinking, Washington seems more relevant than ever: “He believed in education in the crafts, industrial and farming skills and the cultivation of the virtues of patience, enterprise and thrift. This, he said, would win the respect of whites and lead to African Americans being fully accepted as citizens and integrated into all strata of society.” That assessment may or may not have been valid in the 19th century when virulent racism was still prevalent, but it may be the best path forward for African-Americans in the 21st century when only vestiges of racism survive.

VCU’s African-American students need to ask themselves which will benefit them most: more self improvement and educational achievement or the cultivation of resentment and grievance over symbolic issues.

Dominion’s Proposed Six-Year, Virginia Infrastructure Spend: $11.7 Billion


Source: Chmura Economics & Analytics

by James A. Bacon

Dominion Resources proposes to expend $11.7 billion over the next six years on energy infrastructure serving Virginia, including new generating plants, electric transmission lines, a gas pipeline and environmental clean-up, the company announced today. Of that amount, an estimated $5.7 billion will be spent in Virginia, producing a direct and indirect economic impact averaging $1.68 billion per year over the six-year period.

“Our growing Commonwealth requires an expanding and reliable energy infrastructure,” said Paul Koonce, CEO of Dominion’s Energy Infrastructure Group and president of Dominion Virginia Power. “Our capital investment program over the next six years is designed to meet that need and achieve environmental goals of the federal Clean Power Plan.”

Governor Terry McAuliffe weighed in with a favorable comment upon the investment program. “In order to build the new Virginia economy, we must have low-cost, diverse and reliable energy resources. These investments not only build upon an already solid foundation for economic growth in Virginia, they also create tens of thousands of jobs and produce billions of dollars in capital that benefits the Commonwealth today.”

Only one project on the list, construction of the Brunswick County gas-fired generating plant, has received regulatory approval. Others are at various stages of development, from being “on the drawing board” to moving through the regulatory process, according to Dominion spokesman David Botkins. Especially controversial are the proposed Atlantic Coast Pipeline, a natural gas pipeline; continued pre-construction development of the proposed North Anna 3 nuclear power plant; and several proposed electric transmission lines; all of which are opposed by landowners and/or environmentalists. Also controversial, because of potential impact on rate payers, is a proposal to put vulnerable electric distribution lines underground.

Assuming all the projects go forward, the economic impact on Virginia would be considerable. According to a study commissioned by Dominion and conducted by Chmura Economics & Analytics, Dominion’s capital investment would inject $771 million directly into Virginia’s economy in the first year, 2015, and would generate an additional $579 million in indirect and induced impact for a total impact of nearly $1.4 billion. Total impact would peak in 2017 at $2.5 billion and then level off around $1 billion annually in subsequent years.

About half the impact would come from construction spending, the press release stated, while “the rest would result from growth in other sectors of the economy as spending spread.”

Frank Rambo senior attorney with the Southern Environmental Law Center, responded in an email communication that Dominion should reallocate its investments from capital-intensive projects, which “produce high shareholder profits at the ratepayers’ expense,” into more labor intensive energy resources such as renewable technologies and energy efficiency. A shift from an over-reliance on natural gas to clean energy, he said, “will not only create more jobs but also help lower electric bills and create healthier communities.”

Bacon’s bottom line: The impact of Dominion’s proposed energy projects on Virginia’s economy would be considerable. More important than the short-term stimulus of the design, engineering and construction work is the necessity of expanding the capacity of Virginia’s energy infrastructure to meet the anticipated growth of Virginia’s population and economy — a critical point made in the press release by Virginia Chamber of Commerce CEO Barry DuVal. That benefit, not captured by the Dominion numbers or the Chmura study, would dwarf the impact of the capital expenditures themselves.

However, not all energy projects are created equal. Some offer a higher risk-adjusted Return on Investment than others. Is it worth $808 million to keep open the option of a third nuclear power unit at the North Anna power station that even Dominion concedes would cost rate payers $19 billion — with no guarantee that the project ever will be built? Is it worth spending $1 billion to bury roughly 20% of Dominion’s local distribution system to reduce the number of electric outages and shorten recovery times during major storm events?

Perhaps more fundamental is the question of what kind of electric grid Virginia wants to build. Dominion’s vision of the energy future is one in which Dominion continues to play a major role, building the power plants (including nuclear, natural gas, solar and wind), the electric grid, and the natural gas pipeline to supply the gas, all embedded in the larger, multistate PJM Interconnection system in which Dominion would swap electric power with out-of-state power producers as needed to meet peak demand and ensure reliability. Dominion’s critics envision a decentralized future with more wind and solar generated by independent, small-scale power producers less dependent upon large-scale transmission lines that shuttle electric power long distances. The costs and benefits of the competing visions are all but impossible to estimate with econometric models.

Dominion Acquires Accomack Solar Plant

solar_panelsby James A. Bacon

Dominion Energy, an unregulated subsidiary of Dominion Resources, announced today that it will acquire a planned 80-megawatt solar facility on the Eastern Shore for an undisclosed price. The solar plant, the largest yet announced in Virginia, will supply Amazon Web Services data centers in Northern Virginia.

Dominion is purchasing the project from Community Energy, Inc., which had announced the project in conjunction with Amazon back in June. Community Energy had consolidated 44 properties into a 900-acre site near a Delmarva Power electric transmission line in Accomack County and inked the necessary agreements with Amazon, PJM Interconnection, Delmarva Power, Dominion and municipal authorities. Construction is expected to begin in 2015, and the plant is scheduled to enter service in fall 2016.

“We look forward to expanding our relationship with Amazon as it seeks to increase the mix of renewable energy on the electric grid powering its data centers,” said Thomas F. Farrell II, chairman, president and chief executive officer of Dominion. “This project also shows Dominion’s commitment to building additional clean, renewable solar facilities in Virginia.”

Through both its regulated and unregulated subsidiaries, Dominion has ramped up its commitment to solar power in the past year. Dominion Virginia Power has set a goal of building 400 megawatts of large-scale solar by 2020, and it filed with the State Corporation Commission (SCC) in October for approval of three separate projects in Powhatan, Louisa and Isle of Wight counties totaling 56 megawatts. Shortly thereafter, the SCC rejected a previously filed proposal to build a 20-megawatt solar facility near its Remington gas-fired power plant. The commission ruled that Dominion needed to seek third-party market alternatives before building its own facility.

Dominion also purchased in October a 25-megawatt facility under development in North Carolina by Invenergy, Inc., a Chicago company. That facility will supply electricity to the Naval Station of Norfolk, advancing the Department of Navy’s goal of bringing 1 gigawatts of solar electricity into procurement. Moving in a parallel track, Dominion has built a significant solar portfolio in six other states across the country.

Bacon’s bottom line: While Dominion may not be  moving quickly enough to satisfy some of its environmental critics, the company clearly is upping its commitment to solar energy. I expect the pace to pick up. As a regulated utility, Dominion Virginia Power in particular has a conservative corporate culture that puts the reliability of the electric system at the top of its list of priorities. The company is determined to move cautiously, adding solar in incremental steps and building experience not only in how to develop and operate solar facilities but in how to integrate the fluctuating energy production into the electric grid.

What I can’t get a handle on is the economics of solar. Yes, yes, as a broad generality, the cost of solar is declining steadily, and one day could be the most economical form of energy on the grid. But how economical is it in Virginia now? What are the trade-offs between high up-front capital costs and zero fuel costs? I just can’t get the numbers. Everyone seems bound by non-disclosure agreements, and no one is releasing the numbers. I’ll write more about that shortly.

Dave Brat, What to Make of this Guy?

As I flipped though the New York Times Sunday Magazine, I was shocked to find a full-page interview with Rep. David Brat.  The Times usually does not pay much attention to House freshmen, but Brat has created a high profile for himself by becoming an outspoken member of the “Freedom Caucus” of ultra-right wing Republicans that recently promoted the resignation of Speaker John Boehner of Ohio.

The interview was amazingly short on policy as Brat seemed to want to dwell on his knowledge of philosophy rather than on governing.  The brief outline that he did give of policy consisted of not raising the debt limit, lowering taxes, and bulking up the military. Brat refused to say how he would accomplish these goals, which taken into totality seem to defy simple math. How is he able to lower taxes and hike defense spending, without significant cuts in the rest of the budget? One doesn’t need a PhD in econometrics, to see that the numbers don’t add up: witness the presidency of George W. Bush and the deficit fiasco that followed.

Brat seemed to be critical of popular culture.  In the interview, he bemoaned what he perceived as a paucity of movies “capturing the highlight of Western tradition.” It seems that the congressman has forgotten that the purpose of free speech is to put all ideas in the public sphere.  Spoken by a federal legislator, this type of media criticism is nothing if not disturbing.

Brat, as most economists, is a fan of Adam Smith who in 1776, published Wealth of Nations, which described the fundamental workings of market-based economies, but Brat transforms the questions about the application of Smith’s principals to today’s complex problems into a criticism of European economies. Perhaps Dr. Brat is unfamiliar with the classic article written by Robert Mondell, the theory of optimal currency unions, and compares this work with the European Union’s plan to implement the Euro. Brat, this “scholar–his word”, should compare the present Euro zone that demonstrates the results of the type of austerity that Brat seems to advocate, with low inflation, but near-zero growth and very high rates of unemployment.

This guy should represent Disneyland!

— D. Leslie Schreiber

Nous sommes touts Parisien

How Does Virginia’s Most Diverse, Liberal University Manage to Alienate African-Americans?


by James A. Bacon

Following up on our conversation about the demands made by black Virginia Commonwealth University students, I stumbled across this data compiled by the college ranking website. I was startled to find that the VCU student body ranked itself as the most liberal of any college or university in Virginia — and the 88th most liberal among the 880 colleges surveyed. VCU also got the highest score for diversity of any Virginia institution (tied with Marymount University).

African-American students invaded the VCU president’s office Thursday and issued demands for more African-American professors, more funding for African-American cultural programs, and implementation of a “cultural competency” course for all students. VCU President Michael Rao engaged in a respectful, two-hour dialogue with the protesters.

I find it fascinating that this surge of unrest by African-American students — fueled, they say, by their alienation from campus life — occurred on the campus that is the most diverse and the most liberal of any university in Virginia. (Read here the methodology behind’s survey, and how it included only those institutions with statistically meaningful results.)

One is prompted by these numbers to ask where the feelings of alienation come from.

Can VCU be said, by any objective measure, to be a hostile or even an indifferent place for minority students when the university rates an “A” for diversity? That is hard to swallow.’s diversity rating gives 20% weight to the percentage of international students, 20% to racial diversity of the student body, 20% to student survey characterizations of the institution, 15% to the percentage of out-of-state students, 10% to faculty diversity, and smaller percentages to gender and socio-economic diversity. (See the methodology here.) Whatever flaws VCU may have, it cannot be said that the university administration lacks a commitment to diversity.

Can it be said that African-American students feel excluded by other members of the student body — that they are marginalized by other students’ racist attitudes? One reason to suspect otherwise is the fact that only half the student body (51%) is white and nearly one-fifth (18%) of the student body is African-American, with significant percentages of Asians and Hispanics. Not only are whites less predominant than at other college campuses, those whites likely are more liberal minded than white students generally. Unless we accept the proposition that self-professed white liberals are closet racists, this explanation does not hold water. (Caveat: We have to be careful drawing hard-and-fast conclusions about student attitudes given the modest size of the survey samples and the inevitable margin for error.)

I would propose a different explanation: that the alienation expressed by a relatively small number of African-American students at VCU — about 30, who may or may not be representative of the larger African-American student body — stems not from VCU’s insufficient commitment to diversity or the racist attitudes of a non-dominant white student body, but the ideology of victimization and grievance that is intrinsic to liberalism in the ivory tower. African-American students at VCU — or at least the students participating in the protest — feel alienated because the peculiar form of liberalism that prevails on college campuses fosters alienation. Fifty years of failed liberal policies have done nothing to lessen the breadth or intensity of African-American poverty in America, but rather than admit the unintended consequences of social engineering, liberals in academia have doubled down on the racism paradigm. Thus, they seize upon ever more subtle manifestations of racism, as evidenced by the recent distress over “micro-aggressions” on college campuses.

Of course, liberals will take issue with my analysis. If past is prologue, some will insinuate that I am racist for criticizing the liberal paradigm — in other words, I’ll be tarred with the “R” word not because I am antagonistic in any way toward African-Americans but because I entertain different ideas of how to bring them into the mainstream of American society. My deeply held hope is that America one day can become a country where racism disappears, where the historic legacy of slavery and Jim Crow are overcome, and where every child has an opportunity to succeed regardless of the color of his or her skin. I just don’t think we get closer to those goals by cultivating victimization and grievance. As long as universities continue to do so, they will remain reservoirs of African-American discontent.

No Easy Route on the Jeff Davis Highway

jeff_davis_highwayby John Szczesny

Kudos to the Richmond Times-Dispatch for putting a human face on Chesterfield County’s plan to revitalize the Jefferson Davis Highway corridor. The RTD’s Pathway to Poverty feature is a sobering look at how poverty and homelessness have made life a daily struggle for so many in the area. It also begs the question of how Chesterfield’s plan will impact the lives of these individuals and families.

The visible signs of blight along the roadway make it easy to overlook how the surrounding area buzzes along as a hive of industrial activity. Not far from the trailer parks and run-down motels exists the most vital cluster of manufacturing employment in the Richmond metro: Dupont, Philip Morris, Kaiser Aluminum and other companies will soon be joined by Chinese-owned Tranlin Paper, which state officials expect to create 2,000 jobs at an average salary of $45,663. There is also the massive Defense Supply Center Richmond (DSCR) complex, scheduled for further expansion by the feds. And just a few miles to the south is the Amazon fulfillment center in Chester which opened in 2012.

County officials deserve their share of credit for these economic development successes. Through incentives and other means they have created an environment conducive to business and job creation.

Yet the industrialization on the edges of Jefferson Davis Highway has not done much to improve conditions for the 11,000 residents in the County’s study area, where 30% of the population lives below the poverty line. Chesterfield officials have gone a long way to offer assistance and resources for corporations in the Bermuda district. It is only fair that they offer a similar helping hand to area residents by connecting them with the employment opportunities in their own neighborhood. Workforce training programs would be a win-win for employers and job-seekers, and would help bridge the skills gaps needed for these positions.

Perhaps the thorniest issue for County planners is what to do about land use. It will be tempting to call for zoning revisions to invigorate the Jeff Davis area with new housing and retail projects. Redeveloping underutilized properties along the corridor would make economic sense, create jobs, and boost county tax coffers. But allowing these changes would probably also lead to the demolition of the motels and trailer parks where some of the poorest residents live, often just one missed rent payment away from homelessness. A redevelopment plan that throws these people out on the street without a suitable housing option is immoral and unacceptable.

Chesterfield has taken a noble first step in developing a plan to reverse the decline of the Jefferson Davis Highway corridor. It is now imperative for county officials to make future decisions with an eye towards improving the lives of area residents as opposed to just the built environment.

John Szczesny is a Chesterfield resident, urban planner, and telecommunications consultant.