Tag Archives: Stephen D. Haner

Can Dominion Be Made To Stand Behind Promises?

Perhaps the biggest weather risk to the performance of Dominion’s planned offshore wind project. In all the briefs about mitigating risk, the word hurricane appears once.

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy. Second of two articles.

In promoting its proposed Coastal Virginia Offshore Wind (CVOW) project, Dominion Energy Virginia has made many specific projections about its costs and performance. The State Corporation Commission is now being advised to convert one or more of them into binding promises, with financial consequences for the utility and its shareholders if the 176 turbines fail to meet expectations.

As noted in previous discussions, including part one yesterday, Dominion’s 2.6 million Virginia customers are fully exposed to any additional costs created if the construction schedule falters, if material costs explode, tax credits disappear, or if the amount of energy provided over the next 25-30 years fails to meet targets. As also previously reported, no other similar project on the U.S. East Coast is structured to put full risk on customers.

Virginia’s General Assembly created it that way. Many of the groups now offering advice on protecting consumers were supporting the bill at the time. But under the “better late than never” rule, their ideas now are worth exploring. The Commission had asked for this advice and got several responses in briefs filed June 24.

The most common suggestion is to create a performance guarantee built around what is called the capacity factor. Even the best power plants do not operate at full capacity 24/7/365. The actual power output divided by the full output potential produces a percentage “capacity factor.” In its application and in hearing testimony, Dominion stated its two-turbine CVOW demonstration project achieved a 47% capacity factor. For this much larger project and longer time period the company projected 42%. Continue reading

Offshore Wind Risks Stressed in SCC Briefs

The footprint for Dominion’s Coastal Virginia Offshore Wind project, 27 miles off Virginia Beach.

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy. First of two articles, with the second coming tomorrow.  

Virginia’s State Corporation Commission has now received a series of legal briefs offering opinions on what steps, under the law, it can take to protect Dominion Energy Virginia consumers from the massive risks facing its proposed offshore wind facility. Those risks range from cost overruns to poor energy output to failure.

All the parties asked responded that the SCC did have some authority to act and somewhat shift the risk. The utility had a more limited view. But the legal question is truly secondary, and the real question is whether two judges will take actions to protect consumers when their elected representatives openly and knowingly left them so exposed. Continue reading

This Year the VRS “Diet COLA” Will Really Hurt

by Steve Haner

The most recent year-over-year inflation measure approached 9%, with many key food or energy items growing in cost even faster. The official inflation estimate just used to increase the state’s gasoline taxes as of July 1 was 7%. So what inflation factor will be used to adjust state and local employee pensions this summer? Those will go up less than 4%.  Continue reading

Youngkin Now All-In on Offshore Wind

Gov. Glenn Youngkin

by Steve Haner

Governor Glenn Youngkin’s media spokesperson has told the Associated Press that not only is he committed to the current Dominion Energy Virginia offshore wind project, now under State Corporation Commission review, he is also willing to consider additional turbines off Virginia’s coast.

The Republican had campaigned a year ago expressing concerns for the consumer price impact of the mandatory renewable energy conversions in the Virginia Clean Economy Act of 2020.  The offshore wind proposal, currently slated to cost $10 billion for just the first tranche, is the largest driver of that expected consumer cost increase.  Continue reading

Dropping? Nope, Gas Tax Now Rises July 1

by Steve Haner

Virginia’s gasoline and diesel taxes will rise 7% on July 1, about three more cents per gallon when all the elements of the tax are combined.  This is the inflation-driven cost of living adjustment which Governor Glenn Youngkin (R) and most legislative Republicans tried to short circuit, but which was preserved by a vote in the Virginia Senate last week.

The new gasoline tax will be 28 cents retail, 8.2 cents wholesale plus another 0.6 cents per gallon to fund a program for removing old underground tanks safely.  That’s a combined tax of 36.8 cents per gallon. The taxes on diesel will be 28.9 cents retail, 8.3 cents wholesale plus the same tank fee, a total of 37.8 cents per gallon.  Continue reading

California Proposing More EV Rules for Virginia

Now the powerful regulator of Virginia’s vehicles sales and emissions, thanks to the General Assembly.

by Steve Haner

Virginia’s auto industry overlords in California have a new set of proposed mandates for both electric and internal combustion vehicles which, once adopted, will automatically apply here in the Commonwealth.  They do not advance the date for banning the sale of new gasoline and diesel vehicles earlier than 2035 but do increase the incremental targets for percentage of EV sales in earlier years.

The California Air Resources Board (CARB) regulatory process is well advanced, with a revised draft coming out soon, setting up a second round of comments and a final hearing in August.  Virginia’s dying news media cannot cover this state anymore, so don’t expect coverage of actions in Sacramento.  And, of course, the corporate media is now dominated by editors, writers and owners committed to the war on fossil fuels.

Adding to that, Virginia’s auto dealers themselves (big advertisers and campaign donors) played a huge role in supporting the decision by former Governor Ralph Northam (D) and the then-majority Democrats in the legislature to pass the 2021 bill putting Virginia under California’s control.  A 2022 bill to reverse that passed the House with its new Republican majority, but failed on a party line vote in a Senate committee controlled by Democrats.

Continue reading

Update: Richmond Could Still Close Gas Works

Pending Termination

by Steve Haner

The Senate of Virginia, after long avoiding a vote, has now approved a bill that would require a Virginia local government to try to sell its municipal natural gas utility before simply closing it.  The watered down conference report was all that remained of a more robust bill protecting the natural gas business in Virginia from the climate catastrophe fanatics.

It offers little to no real protection to municipal gas users beyond notifications.

The bill arose out of reports that Richmond City Council had passed a resolution last year expressing intent to get out of the natural gas business.  Its municipal gas works serves 120,000 customers with an exclusive territory that also includes locations in Chesterfield, Henrico and Hanover counties, some of them major industries.

House Bill 1257 in its more expansive form passed the House February 14, during the regular session.  It then hit the anti-fossil fuel wall in a stacked Virginia Senate committee, but a much narrower version was reported out of committee and passed on that chamber’s floor March 7.  The House then insisted on a conference committee seeking to restore deleted parts of the bill. Continue reading

Only Part of the Gas Tax Would Be Suspended

by Steve Haner

The gas tax in Virginia today is 33.8 cents per gallon and the diesel tax is 34.7 cents per gallon.  The fresh proposal from Governor Glenn Youngkin (R) for a 90-day suspension of those taxes does not eliminate Virginia’s full fuel tax bite.  The oft-ignored wholesale tax will remain while only the retail tax goes away.

Bacon’s Rebellion has plowed this ground before.  The Division of Motor Vehicles’ posted information on taxes remains intentionally misleading, listing the retail taxes in one place and mentioning the wholesale taxes somewhere else.   These taxes are also set up by different sections of the Code of Virginia.  Youngkin’s proposal would amend only one of those Code sections. Continue reading

Fuel Costs Explode on Dominion Bills in July

by Steve Haner

Are you enjoying paying more for gasoline? Have you noticed how that works its way through and inflates the price of just about everything else you buy? The other shoe drops in July when Dominion Energy Virginia increases its prices to reflect the rising cost of fuel. It will also spread more inflation virus throughout the economy.

The cost of fuel and purchased electricity is a separate charge, designated Rider A, on every monthly electric bill, residential and commercial. The annual fluctuations are usually small, and can go either way, but the increase this time will hit everybody hard and may hold for years. (Here is the case file.) Continue reading

You Just Paid More RGGI Tax, Virginians

Six RGGI auctions have reaped Virginia $378 million.

by Steve Haner

Last week Virginia collected another $76 million in carbon tax dollars through the ongoing Regional Greenhouse Gas Initiative allowance auction. That was the sixth such sale since Virginia joined RGGI, and the state’s total tax take is now $378 million in 18 months.

Do not for one minute allow yourself to be fooled into thinking this money is not coming out of the pockets of Virginia’s citizens or businesses. Do not fall for the ploy Dominion Energy Virginia is attempting by claiming it will charge it off to “base rates.” The pea is still under your walnut shell.  Continue reading

School Choice Tax Credits Reduced in New Budget

by Steve Haner

The famous phrase about no one’s life, liberty or property being safe while the legislature sits probably arose after somebody got burned by an out-of-control conference committee. It just happened again to Virginia’s private schools, who had a popular scholarship tax credit program chopped Wednesday.

The Education Improvement Scholarship Tax Credit (EISTC) is available for donations to support free or reduced tuition for the lowest income Virginia students, those who otherwise would never have a way into a private school. It dates back to Governor Bob McDonnell (R).  Continue reading

Sales Tax On Groceries With Us Through Christmas

The food tax will still be with us for Thanksgiving and Christmas?

by Steve Haner

Everybody eats. With all the money sloshing around the Virginia treasury for the General Assembly to play with, it is hard to see the logic in continuing the state sales tax on groceries an additional six months, delaying that particular tax cut until January 1.

The inflation on everything at the grocery store means more tax revenue is coming in from that source than was expected when the initial budget was prepared last year. If they had allowed the tax cut effective July 1 rather than January 1, inflation on other items people buy (restaurant meals, furniture, electronics, clothing, non-food items) would protect the state’s spending in full (necessities and niceties.)  Continue reading

Progress: Standard Deduction Up 166% since 2018

by Steve Haner

First published today by the Thomas Jefferson Institute for Public Policy.

Do not be surprised if, by the time the next Virginia General Assembly elections roll around, the Democrats who are now complaining about the level of tax relief in the pending budget compromise switch positions, and campaign as champions of the deal.

The two key elements – a substantial increase in the standard deduction for income tax filers and a cut in sales and use tax on groceries for everybody – are ideas with long and bipartisan histories. Only the reluctance of previous governors and General Assemblies to part with the revenue stood in their way. Both are logical, populist reforms many Democrats had also championed in the past.

The Thomas Jefferson Institute has long been an advocate for a higher standard deduction, and the proposed 78% increase from $4,500 to $8,000 per person (up to $16,000 for a couple) falls just short of the recommended 100% increase.  Remember, as recently as tax year 2018 it was only $3,000 (or $6,000 per couple) and raising it in 2019 was also a major recommendation of ours that was adopted.

This new amount will apply to this tax year. So in two steps over three years, the standard deduction has risen by $10,000 for a working couple. That 166% increase saves most of them $575 per year. Continue reading

What the Wind Project Costs You and Who Pays

The annual revenue required from Virginia customers to finance Dominion Energy Virginia’s offshore wind installation. It peaks at about $800 million in 2027, driving the amount to be collected on monthly bills. Source: SCC Testimony. Click for larger view.

by Steve Haner

If the project goes as planned, the consumer cost for Dominion Energy Virginia’s offshore wind installation will rapidly rise to a peak in 2027 and then descend annually over the following 20 years. If it produces power for 30 years, in the final phase the revenue related to the project will exceed the remaining capital costs.

What is this going to cost Dominion’s captive ratepayers?  There is also a related but often ignored question: which of those customers did the Virginia General Assembly exempt from those costs, effectively bumping up the price to those not exempt? Continue reading

Miyares Wins Partial Transparency Victory

Jason Miyares, Attorney General of Virginia

by Steve Haner

Attorney General Jason Miyares (R) was partially successful in his efforts to challenge much of the secrecy shielding key data in Dominion Energy Virginia’s application to build its planned offshore wind facility, with some useful precedents set for the future.

Just before the hearings on the application began last week, a State Corporation Commission hearing examiner accepted the Attorney General’s office’s motion in part and rejected it in part. As a result, several portions of the SCC staff testimony have been filed again with dozens of previously redacted sections now open. Continue reading