The Electric Grid Just Got Smarter

Interesting development… Dominion Voltage, Inc., a subsidiary of Dominion Resources and sister company of Dominion Virginia Power, has announced the launch of a new product, EDGE Stabilizer, to help electric utilities manage the reliability impact of solar, wind and other distributed energy resources (DER) on the electric grid.

“Market forces are significantly increasing the amount of DER, and utilities need cost effective ways to safely and efficiently integrate DER into their grids,” said Todd Headlee, executive director of DVI. “In areas with high levels of DER, EDGE Stabilizer minimizes the need for additional costly hardware devices or other distribution system upgrades by orchestrating the use of existing residential smart inverters, large scale inverters, load tap changers, capacitors, voltage regulators and AMI/smart meters to ensure utility customer voltages remain in compliance.”

EDGE Stabilizer also integrates detailed weather forecasts to anticipate voltage volatility on a circuit by circuit basis.

Bacon’s bottom line: It will be interesting to see how Dominion’s right hand and left hand work together. Will Dominion Resources use its smart-grid technology to help Dominion Virginia Power, its regulated subsidiary, better integrate wind and solar into its generating mix? Or will regulatory obstacles and/or strategic considerations hamper the application of the technology? Another way of phrasing the question: Will a smart-grid technology invented in Virginia be applied in Virginia? I’ll be posing those questions to Dominion when I get the chance.

Dominion Doubles Down on Natural Gas

Questar pipeline operations

Questar pipeline operations

by James A. Bacon

With the acquisition of Questar Corporation, a Salt Lake City-based natural gas distribution and pipeline company, Dominion Resources is making a $4.4 billion bet that natural gas represents the energy future.

“Dominion expects the value of the Questar pipeline system to rise over time as Utah and other Western states seek to comply with the requirements of the U.S. Environmental Protection Agency’s Clean Power Plan and meet state-mandated renewable standards, with increasing reliance on low-carbon, gas-fired electric generation,” stated Dominion, parent company of Dominion Virginia Power (DVP), in a press release announcing the deal.

In the same statement, the company noted that it has committed $1 billion for three solar-generating facilities located in Beaver, Iron and Millard counties in Utah. “These solar facilities are backed by long-term power purchase agreements with local electric utilities,” the company said.

The announcements come at a time when the McAuliffe administration is wrestling with which strategy Virginia should pursue in meeting the requirements of the Clean Power Plan. The EPA gives states some flexibility in meeting its tough goals for reducing CO2 emissions from electric-generating plants. DVP has been leaning toward natural gas as the dominant fuel to replace coal, while keeping open the expensive nuclear option. The Sierra Club and other environmental groups are pushing for much more aggressive use of wind and solar, which emit zero CO2 but create grid-reliability issues when operated on a large scale.

Dominion and DVP contend that the giant Marcellus and Utica shale basins in West Virginia, Ohio and neighboring states will provide years, perhaps decades, of inexpensive natural gas. Although gas combustion does emit CO2, it creates far less than coal. The cost is lower than that of wind and solar, and the fuel source provides more flexibility. Critics counter that the price of gas is volatile and not necessarily the optimum long-term choice. Dominion prefers its DVP subsidiary to burn gas, however, in the expectation that DVP will purchase gas transported on the proposed Atlantic Coast Pipeline, of which Dominion is the managing partner, and utilize its gas storage assets in the Marcellus basin. Keeping the business all in the family, so to speak, will create more profit for the parent company.

The Questar acquisition suggests that Dominion’s top brass really does see natural gas as the energy future. Serving markets in Western states, Questar gains no benefit from its association with Dominion Virginia Power. Rather, as the company explained in its press release, “Questar would provide enhanced geographic diversity to Dominion’s natural gas operations. Dominion’s existing operations lie in the heart of the mid-Atlantic, whereas Questar’s system is the ‘hub of the Rockies’ and a principal source of gas supply to Western states.”

At the same time, Questar fits Dominion’s broad corporate strategy. “This addition is well-aligned with Dominion’s existing strategic focus on core regulated energy infrastructure operations,” said Thomas F. Farrell II. “Questar boasts best-in-sector customer growth in states with strong pro-business credentials and constructive regulatory environments. These high-performing regulated assets will improve Dominion’s balance between electric and gas operations.”

Market commentators had little light to shed upon the merger, noting mainly that stagnant demand for electric power due to energy efficiency has spurred a number of deals between utilities and natural gas distributors, which enjoy stable prices thanks to the supply glut from shale fields.

“Top-line growth in electricity is basically nil,” Kit Konolige, an analyst for Bloomberg Intelligence, said Monday. “They’re looking for a business on the gas side that’s similar to what they’re doing but, as they see it, would have better growth prospects.”

Tax Credit Scholarships Educate 1,400 Kids and Save Virginia $3 Million

St. Andrew's School in Richmond provides free educations to low-income students, predominantly minorities with a boost fro the Education Income Scholarship Tax Credit Program.

St. Andrew’s School in Richmond provides free educations to low-income students, predominantly minorities, with a boost from the Education Income Scholarship Tax Credit Program.

by James A. Bacon

When backers of the Education Improvement Scholarship Tax Credit were promoting their idea of giving philanthropists a 65% tax credit for donations to scholarship foundations, they predicted that the program would spur private-school scholarships and save the state money. Their logic was simple: For every 65 cents it lost in tax revenue, the state would save 90 cents in state aid to localities it didn’t have to pay.

But simple ideas often clash with messy reality. Among other potential complications, some recipient students might have enrolled in private school even without a scholarship. Other students might receive scholarships from more than one foundation. Now that the scholarship program has been in effect for three years, how does theory compare to actuality?

Pretty well. In 2014-2015 the tax credit helped nearly 1,400 kids from low- and moderate-income families attend private school. At the same time, it saved the Commonwealth of Virginia nearly $3 million in funding to localities. Those are the conclusions, based on actual donation, tax-credit and scholarship reports, reached in a legislative policy analysis by Christian Braunlich, past president of the Virginia  State Board of Education and vice president of the Thomas Jefferson Institute for Public Policy.

Here’s what the key numbers look like:


But the Old Dominion can do better. While Virginia has raised $6 million in scholarship money through its tax credit, Florida raised $358 million to help nearly 27,000 low-income students, Georgia has raised $58 million to assist 13,000 students, and Pennsylvania has raised $100 million to benefit 38,000 students. True, all three states are more populous than Virginia, but the key differentiator is that they offer tax credits of 90% to 100%.

Hiking Virginia’s tax credit from 65% to 90% would generate an additional 3,800 scholarships in Virginia, and increase the size of the scholarships, Braunlich projects. The state still would fare no worse fiscally than if the tax credit didn’t exist. Meanwhile school districts would be able to devote the same local and federal funds to a smaller number of students.

Bacon’s bottom line: Let’s expand the tax credit. I’d be interested to hear arguments against it, but I suspect critics will sing the old refrain that helping children attend private school will hurt public schools by depriving them of resources (downright false) or “cherry picking” the best students (highly debatable and irrelevant). The underlying motive, of course, is to preserve the public school monopoly and protect the interests of all those who feed at that trough. Commitment to the educational establishment trumps the welfare of low-income children.

Uber and Lyft Are Wonderful, but Not that Wonderful


Click for larger image

It makes a great story: The Department of Motor Vehicles registered some 86,000 drivers under new “transportation service company” rules in 2015, Virginians are availing themselves of Uber and Lyft ridership services in record numbers, and the rate of alcohol-related automobile crashes declined markedly last year. It stands to reason, more Virginians are taking rides with Uber and Lyft instead of driving under the influence.

“While it may be too soon to say definitively that the availability of Uber and Lyft in Virginia played a major role in that, there appears to be a causal connection,” said DMV Commissioner Richard D. Holcomb in a statement reported by the Richmond Times-Dispatch.

As regular Bacon’s Rebellion readers know, I’m a big fan of Uber and Lyft. They are spearheading the greatest transportation revolution since the invention of the automobile. But let’s not get carried away. It is too soon to credit the transportation service companies with playing a “major” role in reducing drunk driving.

The chart above is taken from DMV data, with provisional 2015 numbers plugged in. It shows clearly that the steep decline in alcohol-related accidents started in 2013, two years before the surge in Uber-Lyft activity. My working hypothesis is that Virginia courts and police intensified their crackdown of drunk driving around that time (as well they should have, given the soaring numbers before then). It’s fantastic that Uber and Lyft give late-night revelers a convenient alternative to driving while intoxicated, and I’m sure they helped in 2015. But I suspect that the bulk of the credit goes to the courts and police.


Gas Worse Carbon Polluter than Coal, Says Sierra Club

global_warmingby James A. Bacon

The Sierra Club has attacked the idea of natural gas as a “clean fuel” in a new broadside against the proposed construction of the Atlantic Coast Pipeline (ACP) and the Mountain Valley Pipeline (MVP) through Virginia. When viewed over the “natural gas fuel cycle” — including production, transportation and combustion — natural gas would be a bigger contributor to climate change than the existing electric generating fleet, including coal-fired plants, the environmental organization charged late last week.

“Natural gas only seems like a cheap and easy fix for climate change,” said Glen Besa, director of the Sierra Club Virginia Chapter, in a statement accompanying the white paper. “In reality, methane pollution is a serious problem that makes natural gas a dead-end solution. We have to stop kidding ourselves. Virginia should be investing in wind and solar and energy efficiency, not expanding infrastructure for more fossil fuel burning.”

The Sierra Club issued the report as the Virginia Department of Environmental Quality makes important decisions about how the state should implement the federally imposed Clean Power Plan, which calls for a massive reduction in carbon-dioxide emissions from Virginia power plants by 2030. The Sierra Club and other environmental groups have called for the most aggressive options, which would require more solar and wind and less natural gas than proposed by Dominion Virginia Power. Backers of the ACP and MVP pipelines have justified the projects on the grounds that they will supply gas-fired power plants in Virginia and North Carolina with cheap shale gas from West Virginia and Ohio.

“The overwhelming consensus of state and federal policymakers – which the Virginia chapter of the Sierra Club ignores – is the increased use of natural gas for electric generation is essential to meeting the Clean Power Plan,” responded Jim Norvelle, director-media relations for Dominion Energy, the managing partner of the ACP.

“This is the view of President Obama and elected officials from states across the country,” he said. “It is also the clear guidance of the [Environmental Protection Agency], which identified increased use of natural gas generation as one of three key building blocks for meeting the goals of the Clean Power Plan.”

Because the combustion of natural gas releases less CO2 per unit of heat than the combustion of coal, it is commonly argued that a switch to gas, while less helpful than a shift to solar and wind in reducing CO2, does make a significant contribution as a “bridge” fuel in the fight against global warming. But the Sierra Club argues that such a combustion-only analysis excludes the impact of the release of gas during fracking operations and pipeline leaks. Summarizes the Sierra Club statement:

In addition to emitting large amounts of CO2 when burned, natural gas is a major contributor to climate change in the extraction and transmission stages, where significant amounts of methane escape from wells and pipeline leaks. Methane is a much more powerful greenhouse gas than CO2, and these “fugitive emissions” of methane have emerged as an area of serious concern that undercuts the case for natural gas as a cleaner substitute for coal. …

Greenhouse gas emissions for Atlantic Coast Pipeline would be more than five times the annual emissions from Dominion’s Chesterfield Power Station, the largest coal fired plant in Virginia, and equal to more than 80% of the total carbon pollution from all 177 stationary sources in the EPA’s 2014 inventory of GHG emissions in Virginia, states the Sierra Club.  The impact of the Mountain Valley Pipeline would be even greater.

Critics of renewable fuels counter that solar and wind farms produce electricity only  when the sun is shining and the wind is blowing, not when there is a demand for electricity. Natural gas generation can be dialed up and down quickly as electricity demand changes. That flexibility is particularly critical if electric utilities are to adopt “demand-response” rate structures that encourage users to conserve energy during periods of peak demand. Gas advocates also note that the gas infrastructure has less impact on the landscape. Solar and wind requires far more land to generate comparable amounts of electricity; wind turbines and vast expanses of solar panels also are more visually intrusive than buried pipelines.

Guns, Shmuns

NYC_handgunsWith all the stories I read about guns sold in Virginia making their way to criminals in New York, I figured Virginia was a haven for gun nuts. The impression was reinforced by the recent hooplah over Attorney General Mark Herring’s bid to sever reciprocity of gun rights with other states, and then the dramatic reversal of the policy after a deal cut between Governor Terry McAuliffe and General Assembly Republicans.

But it turns out that guns are less of a thing in Virginia than most other states. According to the listicle freaks at WalletHub, Virginia’s economy is less dependent upon gun manufacturing and sales than most states, gun ownership/sales are less prevalent, and the influence of the gun and anti-gun lobbies is only so-so.

Virginia ranked 39th overall out of the 50 states in WalletHub’s gun index: 35th for the contribution of the gun industry to the local economy, 35th for gun prevalence (ownership and gun sales per capita) and 27th for gun politics (as defined by political contributions for and against guns). If guns are your thing, head to Idaho or Alaska.


Virginia’s Pet Rock


A delegation from Piedmont Virginia Community College brought a sample of Nelsonite for legislators to view.

As if we needed any more proof that Virginia is tragically behind the times, here it is: The Commonwealth is one of only four states in the nation that has not designated an official “state rock, mineral or gemstone,” writes Sen. Creigh Deeds, D-Bath in his most recent constituent newsletter.

Fortunately, Deeds has submitted legislation recognizing Nelsonite as the state rock. Nelsonite, first discovered in Nelson County, is a billion-year-old mineral comprised of apatite and ilmenite…. whatever they are. It was mined over 70 years to extract titanium for use in house paint.

Deeds’ bill, as originally submitted, qualifies as one of the shortest pieces of legislation ever written. It consisted of two words, “Rock — Nelsonite,” inserted into a list of official emblems and designations. The only legislation I can imagine that might have been shorter, by one letter, would have been a bill listing “Beverage — Milk.” A great virtue of Deed’s economically phrased bill is that no one can say, as Nancy Pelosi famously declared of Obamacare, that we’ll have to pass the bill in order to know what’s in it.

Nelsonite joins such other quintessentially Virginia phenomena as the official state bat (the Virginia big-eared bat), state dog (American foxhound), state fleet (replicas of the Susan Constant, Godspeed, and Discovery), state dance (square dancing), state insect (Tiger Swallowtail Butterfly), and state shell (oyster).

The designation of the state rock is not as contentious as the selection of a state song last year, but the passage through the Senate was something of a rocky road. Five senators voted against the bill. The bill was amended to reinsert mentions of the state bird (the cardinal) and the state tree (the dogwood), which had been omitted somewhere along the way. But according to the Richmond Times-Dispatch,”Sen. John A. Cosgrove Jr., R-Chesapeake, expressed mock indignation that the American dogwood is Virginia’s state tree, noting that its scientific name is Cornus florida.”