Monthly Archives: August 2015

Walkability No Guarantee of Healthy Housing Market

This graph shows how the midsized cities (excluding Arlington) with Top 10 walkability rankings score in WalletHub’s latest ranking of cities with the healthiest real estate markets. Sad to say: High walkability seems to be correlated with moribund real estate economies. The cities are (from left to right): Jersey City, Newark, Hialeah, Buffalo, Rochester, St. Paul, Cincinnati, Richmond and Madison. (Click for more legible image.)

This graph shows how the midsized cities (excluding Arlington) with Top 10 walkability rankings score in WalletHub’s latest ranking of cities with the healthiest real estate markets. Sad to say: High walkability seems to be correlated with moribund real estate economies. The cities are (from left to right): Jersey City, Newark, Hialeah, Buffalo, Rochester, St. Paul, Cincinnati, Richmond and Madison. (Click for more legible image.)

There is an interesting juxtaposition of news items today. Redfin, the real estate brokerage website, has published a list of the Top 10 most walkable midsized cities in the country. Arlington County (a highly urbanized county) scored third and Richmond scored ninth, based on their Walk Score rankings.

Arlington won kudos for its Ballston-Virginia square neighborhood, where residents can walk to an average of 13 restaurant, bars or coffee shops within five minutes. While the Washington metropolitan area is notorious for its traffic, many Arlington residents live car-free, opting to get around on foot, bike and public transportation.

Richmond earned recognition for the revitalization of neighborhoods surrounding downtown, including Jackson Ward, Shockoe Bottom, Monroe Ward, the riverfront and Manchester. The Fan and Carytown neighborhoods to the west of downtown also stood out for their walkability.

To many urban theorists, walkability is a critical determinant of a community’s livability, ranking close behind the cost of real estate, the quality of schools and the level of taxes in what people take into account when deciding where to live. But it’s no guarantee of prosperity or rising real estate values…. which brings us to the other news item.

The top two midsized cities ranked by walkability are Jersey City (No. 1) and Newark (No. 2). But guess where Jersey City and Newark rank in WalletHub’s ranking of 2015’s Healthiest Housing Markets. Out of 94 midsized cities ranked, Newark scored 94th — dead last — while Jersey City ranked 76th. (Richmond ranked a ho-hum 45th among midsized cities.)

Bacon’s bottom line: I’ll concede that this is a quick-and-dirty analysis based on a comparison of midsized cities only, not a comprehensive comparison of all types and sizes of municipal governments, so it may not reflect the larger reality. But I would advance this as a reasonable hypothesis: Walkability is a wonderful thing, and many people desire it, but it is a relatively minor factor influencing the health of urban real estate markets.

— JAB

Yes, Virginia, the EPA Is Still Cracking Down on You

EPA_CPP_and_Vaby Bill Tracy

Many folks are trying to interpret the Environmental Protection Agency’s final Clean Power Plan (CPP) and its impact on Virginia. The EPA, along with its August 3 rule announcement, released a large volume of on-line support material including the popular State-at-a-Glance Summary sheets.

Unfortunately, Virginia’s state summary sheet is misleading. EPA made relatively large adjustments to Virginia’s 2012 Base Case, not shown on the state summary sheet. The adjustments were necessary to account for natural gas power plants that were already under construction. The 2030 final targets for Virginia do not seem logical unless you compare them against EPA’s adjusted 2012 base numbers.

Fortunately, EPA does give us enough source data in the State Goal Visualizer spreadsheet to allow me to calculate the adjusted 2012 base, shown below, according to my math:

Carbon intensity (pounds of CO2 emission per megawatt/hour of electricity):
2012 lbs CO2/MWhr: 1,477
2012 lbs CO2/MWhr: 1,366 (EPA Adjusted 2012 Base)
2030 lbs CO2/MWhr: 934

Total CO2 emissions permitted:
2012 CO2 Short Tons Mass: 27,365,439
2012 CO2 Short Tons Mass: 35,733,501 (EPA Adjusted 2012 Base)
2030 CO2 Short Tons Mass: 27,433,111

Now we can see that Virginia’s mass CO2 reduction target (23.2%) makes a lot more sense. The actual degree-of-difficulty is better described by the carbon intensity data (CO2 per MWhr), and Virginia’s 934 lbs target works out to a 31.6% CO2 reduction mandate.

To see how Virginia compares, I’ve hand-entered the data for all 50 states and plotted them up (see the graph above). The first conclusion that jumps out is how well Virginia (in purple) is doing, already operating at relatively low CO2 emission rates. The second conclusion is that Virginia does indeed seem to fall above the trend line, with our 31.6% CO2 reduction target. A bit lower target (27.5% reduction) would appear more equitable, assuming my trend line is correct. Virginia’s final carbon intensity mandate (934 lbs CO2/MWhr) could have been closer to a more manageable 1,000 lbs CO2/MWhr.

Those familiar with these numbers will recognize that 934 lbs CO2/MWhr is the approximate CO2 yield of a clean natural gas power plant. In others words, Virginia probably cannot operate many coal plants and still meet their 2030 CO2 target. In fact, EPA seems to be assuming that Virginia will shut down all but one coal plant by 2020, before CPP even kicks in. I’ve asked EPA to check their numbers to see if there is an error on the Virginia state summary sheet data for 2020.

Bottom line for me is that the Virginia CO2 targets appear very challenging. But somebody needs to check my numbers, and preferably EPA should show their adjusted 2012 base numbers on the State-at-a-Glance summary sheets. Meanwhile please be advised that most of the Virginia CPP information out there on the Web is using our non-adjusted 2012 base data.

Bill Tracy is a retired engineer, concerned citizen, and grandfather residing in Burke, Virginia.  

More Sequestration Pain for Virginia

pentagon_burning

Pentagon burning

by James A. Bacon

The pain of federal budget sequestration cuts in Virginia is not yet over. Look what The Washington Post reports today:

According to the Defense Department research, things are likely to worsen over the next four years. From 2010 to 2012, Virginia experienced $9.8 billion in defense cuts, with the vast majority of losses in Northern Virginia. Direct defense spending in the state is projected to drop from $64 billion this year to under $62 billion in 2019.

That’s only $2 billion in cuts compared to $9.8 billion previously. That sounds bad but not that bad. Actually, it is, says Sen. Mark Warner, D-Virginia: “If we have the return of sequestration, it’s going to be even worse than it was a couple of years ago, because every agency, particularly the Defense Department, has cleared out most of their coffers.”

I’m not sure exactly what “cleared out their coffers” means, but I’m guessing it means that defense agencies have burned through their budget gimmicks and are planning real cuts.

Adding to the woes, the impact of federal budget cuts will percolate through the rest of the economy. As government contractors consolidate, they’ll need less office space. That puts pressure on lease rates region-wide, there will be less construction work, and the necessary process of restructuring from inefficient and expensive land-use patterns to more cost-effective patterns will drag out. Meanwhile, transportation planning assumptions, predicated on wildly out-of-date assumptions about growth and development, will veer farther and farther from reality.

The rule is so simple: Things that can’t go on forever… won’t. The defense spending boom of the post 9/11 era could not continue forever… and it didn’t. The downturn and all the ugly consequences stemming from it were utterly foreseeable — I’ve been ranting about them for years.

I don’t lose a lot of sleep over real estate developers losing a fortune. They’re big boys and they know how to hedge their bets. (If they don’t, they shouldn’t be in the business.) I’m a lot more worried about the state and local government sinking billions of dollars on infrastructure designed for the go-go 2000s. It is astonishing to me that serious consideration is still being given to the Bi-County Parkway near Manassas, and I have serious questions about the assumptions underpinning the billions of dollars of improvements planned for Interstate 66 and the second leg of the Rail-to-Dulles project. Any project whose revenues are predicated on assumptions of increased traffic, which are based on the 2000s-era economic growth rates extended in a straight-line projection forever, will create nothing but headaches for taxpayers.

Charging Rate Payers for What?

appalachian_school_of_pharmacy

The Appalachian School of Pharmacy… located in Appalachian Power Co. service territory.

by James A. Bacon

In 2012 Dominion Virginia Power donated $10,000 to the Appalachian College of Pharmacy in Buchanan County, far outside the company’s service territory. It so happens that Del. Terry Kilgore, R-Gate City, head of the House Commerce and Labor Committee, has been a salaried fundraiser for the school, according to the Associated Press. It also so happens that Kilgore played an important role ushering legislation through the General Assembly this year that suspends until 2022 biennial reviews of Dominion’s base rates. Of the $10,000 Dominion donated, $4,000 was recouped from Dominion ratepayers, the AP says.

It’s one thing for Dominion shareholders to donate to charitable causes, even if the donation is politically motivated. Dominion should be entitled to the same right to participate in the political process as any business. But it’s quite another thing for the giant utility (and sponsor of Bacon’s Rebellion) to charge such donations to rate payers.

“Why should captive ratepayers, who have no option to get electricity from another company, be compelled to fund the charitable choices of a company?” AP quotes former Attorney General Ken Cuccinelli as asking. “Leave the ratepayers their money, and let them make their own charitable choices.”

We’re not talking about a tremendous amount of money here. According to the AP, Dominion included $1.37 million of donations in the cost of service it charged to customers in 2o11 and 2012. State Corporation Commission staff recently filed testimony saying that Dominion should not be able to pass along $3.3 million in donations from 2013 and 2014. Dominion spokesman David Botkins says the company will file a detailed rebuttal later this month.

Many of those donations may be entirely legitimate, tied at least tangentially to the business of generating, distributing and conserving electric power. I can’t get exercised about the $7,500 donation  to the Peninsular Council for Workforce Development, cited in the AP article, even if CEO Matthew James also serves as a Portsmouth delegate to the General Assembly. As a major employer, Dominion has as much a stake in workforce development as any company in Virginia. (Although I would be interested to know if Dominion donated to other workforce councils in its service territory.) And, frankly, from the rate payer perspective, we’re talking chump change here. There are much bigger issues to worry about, like how rapidly to phase in renewable energy sources, where to build electric transmission lines, whether or not to build a nuclear power plant, and so on.

But the controversy isn’t about the impact on ratepayers. It’s about the political clout of the most influential corporation in Virginia politics. Dominion shouldn’t charge ratepayers for actions designed to influence legislation effecting ratepayers.

Katherine Bond, director of public policy for Dominion, told the AP that the company feels it “is important to support the communities in which we do business.” But the Appalachian School of Pharmacy, located in Oakwood, Va., is not a community served by Dominion. The company’s motive in donating the money might have been pure as the driven snow — but no one is going to believe it.

Dominion would do itself a big favor by tightening its guidelines for billing ratepayers. Limiting donations to communities within the company’s service area would be one place to start. If the company doesn’t police itself, legislators might be tempted to draft a law limiting such donations — and those limits could well be stricter than any limits the company would want.

Update: Dominion has issued a response to the AP story. Here’s the  meat of it: “Some perspective about the source of funding for those investments is important. In 2014, our company donated $18.5 million to charitable causes; the vast majority of these funds were provided directly by shareholders. In fact, in our latest filing with the Virginia State Corporation Commission (SCC), we stated that only about $740,000 of these donations were supported by rates collected from our Dominion Virginia Power electric customers in the Commonwealth. That’s just 4 percent of the total.”

I have posted the full response in the comments and highlighted it in yellow.

Proudly Training the Next Generation of Indentured Servants

indentured_servantsIn the latest example of do-gooders creating social injustice, we now hear that nearly 7 million Americans have gone at least a year without making a payment on their federal loans.

As of July, 6.9 million Americans with student loans hadn’t sent a payment to the government in at least 360 days, according to the latest quarterly data from the U.S. Department of Education, reports the Wall Street Journal. That translates into 17% of all borrowers with federal loans being delinquent. Millions more are behind on their loans but haven’t hit the 360-day threshold that the government defines as default.

Absent a change in legislation, student loan debt can’t be dismissed through bankruptcy. Of course, do-gooder politicians, who urged laxer lending policies to begin with, now are falling over themselves to find ways to ease the debt burden incurred by the intended beneficiaries. Hillary Clinton, for instance, has proposed a plan that would cost $350 billion over 10 years and would be financed by a reduction in tax deductions for affluent taxpayers.

Summing up the problem: the United States higher ed system experiences endless administrative bloat… the costs of which universities pass on to students by means of higher tuition and fees… which the U.S. government makes easier to pay by allowing nearly unlimited borrowing… while no one addresses the underlying problem of rising costs. And the solution to the debt problem? Stick it to affluent taxpayers!

What a racket!

The rise of massive student indebtedness, now approaching $1.2 trillion, is as a clear-cut example of social injustice in the United States as you can find, but it is not portrayed is such because (a) the building blocks were put into place by social justice warriors themselves, and (b) the primary beneficiaries, universities, are bastions of do-gooder thinking.

This is only one of many examples of how the social justice crowd has immiserated the poor and working class in the United States through misguided policy. Before “helping” with student loans, the social justice crowd pushed for lower credit standards for mortgages in order to promote home ownership. The result: a deluge of foreclosures on sub-prime loans causing one of the greatest liquidations of wealth among the poor in U.S. history. Now the social justice crowd wants to “help” the poor by jacking up the minimum wage to levels that will, according to reputable estimates, result in the loss of 5% of such jobs in the short run, increase automation of low-wage jobs in the long run, and make it difficult for the poor and young to find entry-level jobs.

— JAB

Want Social Justice? Create Jobs.

Photo credit: Buz and Ned's

Photo credit: Buz and Ned’s

by James A. Bacon

I’m all in favor of people earning higher wages. I want to live in a society in which people make enough from their labors to live on without government assistance. I just don’t think that mandating a minimum wage is the way to go about it, for all the reasons that foes of the minimum wage usually cite that don’t bear repeating here. A better way to increase wages is to (a) increase the number of jobs in the economy, which would (b) give employees more options, which would (c) prompt employers to offer better wages, benefits and working conditions in order to hang onto their workforce. Crank up the jobs machine, and the wages, benefits and working conditions will follow.

This forehead-smackingly obvious formula can be seen at work in Richmond’s restaurant community. After years of sub-par economic growth following the Great Recession, competition for skilled restaurant employees in the Richmond region is finally heating up. And guess what’s happening — restaurateurs are raising wages.

Thus, we read in the Richmond Times-Dispatch today that Buz Grossberg, owner of Buz and Ned’s Real Barbecue restaurants, is bumping the starting pay to $12.50 per hour for regular employees and to $8 per hour for servers working for tips. That’s up from $8 and $6 an hour respectively.

Grossberg acted for reasons both idealistic and pragmatic. “This has been on my mind a long time, even before it became current politics,” he said. “It’s just gotten worse and worse. It’s gotten hard for people to repay their bills and see their family without working multiple jobs. … How do you attract people and keep people who can’t afford to feed their family? Pay them a living wage.”

But why did he act on his conscience now? Turns out that it’s getting harder finding and retaining talent, particularly kitchen workers, in Richmond’s increasingly competitive and crowded restaurant scene, according to other restaurateurs quoted in the article. Said Grossberg: “The people who would typically work [in the restaurant industry] are going other places.” Paying higher wages will bring them back in.

Bacon’s bottom line: It’s basic supply-and-demand economics. If the economy creates jobs at a faster rate, wages will rise faster. And how do we create more jobs? Once place to start would be to re-think some of the job-killing policies we’ve enacted over the past 15 years, starting with Sarbanes-Oxley, Dodd-Frank, the Affordable Care Act, EPA regulatory overreach, higher taxes, regulation of the Internet and dozens of other initiatives that collectively have gummed up the economy and slowed growth to a crawl.

Defenders of the current regulatory regime tend to blame mysterious “economic forces” beyond their control. I’m old enough to remember those who claimed the “stagflation” of the 1970s likewise was due to some mysterious change in the nature of the economy rather than the policies of Richard “We’re All Keynesians Now” Nixon and Jimmy “Gas Rationing” Carter. Then along came policies that killed inflation, deregulated major industry sectors, cut taxes and enacted and real government spending cuts, precipitating nearly two decades of job creation. The surge in jobs in the 1980s and 1990s made the minimum wage irrelevant in many parts of the country because businesses were so desperate for labor that they were paying more than the minimum already.

I do feel badly for anyone trying to make a living on the minimum wage. But the answer isn’t more of the same “social justice” economics that have created our moribund economy and depressed wages. The best social justice program in the world is a strong job-creating economy.

It’s the Buzzard Talking

Buzzards on a power line -- no telling what might case an outage.

Buzzards on a power line — no telling what might cause an outage.

If you want to understand why Dominion Virginia Power does what it does, visit the Henrico County operations center where the company manages 6,400 miles of electric transmission line.

by James A. Bacon

Electric power companies have spent tens of billions of dollars hardening their electric transmission grids and building redundant systems to guard against the varied threats that nature, mankind and animals throw against them. Tornadoes, hurricanes and ice storms pose a frequent danger. Then there are the ditch diggers who cut underground lines, the loggers who drop trees onto above-ground lines and the barges that run into river-spanning towers.

And let’s not forget the vultures. There have been documented instances of large birds knocking out power lines. A buzzard perched on a power line in a sub-station might take flight, releasing what Kevin Curtis, director of transmission planning for Dominion Virginia Power, politely refers to as a “streamer.” The material creates a connection between a conductor and a tower, and kaboom! Says Curtis: “It’s not uncommon on a landfill [near a power station] to find a dead buzzard on the ground.”

It’s Curtis’ job to preserve the reliability of Dominion’s electric grid, which serves roughly five million Virginians and a not inconsiderable number of North Carolinians in the face of fluctuating temperatures, power surges, foreseeable threats like storms and hurricanes, and crazy stuff like an uncontrolled emission of buzzard poop that no one can predict.

The good news is that the electric grid is more robust than it was on August 14, 2003, around 2 p.m., when a high voltage power line in northern Ohio became overloaded, heated up, drooped, brushed against some overgrown trees and shut down. The voltage in the system found alternate routes and overloaded new lines, three of which shut off. A cascade of failures ripped through southeastern Canada and eight northeastern states. Fifty million people lost power for up to two days in the worst blackout in North American history.

As disruptive as the infamous 2003 Northeast Blackout was for electricity customers — it contributed to at least 11 deaths and cost an estimated $6 billion — it was traumatic for the electric power industry, which has since re-engineered the North American grid to ensure, hopefully, that nothing similar happens again.

The bad news is that new threats to the grid, what some have called the world’s largest and most complex machine, are emerging: an electro-magnetic pulse from nuclear weapon, cyber-attacks, terrorist sabotage and, more prosaically, a re-structuring of the grid for environmental purposes that entails shuttering stable, reliable coal-fired power plants and plugging in intermittent power sources such as solar and wind power. The utility has a host of critics who maintain that it’s moving too slowly on reducing CO2 emissions, it’s too stodgy about implementing new smart grid technology, it’s insensitive to landowner rights, its transmission lines are blasting through Virginia’s cultural heritage. And they all have a point. But, then, it’s not the critics’ job to keep the lights on. It’s Dominion’s. And the stakes are very high.

As part of my coverage of energy and environmental issues (sponsored by Dominion), I determined that I needed to learn a lot more about how the electric grid works — not the distribution lines that run through our neighborhoods but the backbone of the system, the high-voltage transmission lines that transport electricity from power plants to sub-stations where the voltage is stepped down to levels for transfer to the distribution lines. I asked David Botkins, director of media relations, for a tour of the Dominion Operation Center in Henrico County. Not only did he agree, he lined up Kevin Curtis, director of transmission planning, as the tour guide.

The operation center in Innsbrook takes security seriously. Visitors are not allowed admittance to the main operations room itself but to a viewing room, with movie theater-style seating, a locked door and a retractable screen that is kept closed except for scheduled viewings. No photography was allowed. I was only the third journalist granted admittance to the viewing room in 11 years. The others were a reporter from NPR and a reporter for the Richmond Times-Dispatch. I wasn’t sure whether to be flattered or whether the subject was just so esoteric that most journalists never think to ask.

The viewing room opens onto a much larger room — the brain of Dominion’s electric grid — with about a half dozen work stations and a massive wall board. The wall schematic displays the 6,400 lines of transmission line in the Dominion system: 500 kv lines in green, 230 kv lines in blue, and 115 kv lines in red. Bulbs light up at critical junctures like power plants, sub-stations and other important nodes to indicate an “abnormal” condition.

In Curtis’ ideal world, the board is blank — no lights. That means everything is functioning entirely normally. (Ironically, everything being normal would be an abnormal situation; there is always something going on.) A light is not necessarily a cause for alarm: Often it simply means that a facility is down for planned maintenance, as was the case for a Pentagon City substation that lit up like a Christmas tree the morning I visited. But every light makes the job of keeping the grid stable just a little more complicated.

Dominion runs a computer program every three minutes to check for trouble in the system. As a double check, PJM Interconnection, the regional transmission organization of which Dominion is a part, also runs a computer program. There is zero tolerance for allowing a situation that might lead to a melt-down. The standard set by the North American Electric Reliability Council (NERC) is to keep at least “two contingencies” away from a crisis. In other words, the system must maintain enough redundancy to accommodate two unplanned outages in extreme conditions. All it takes to shed load, says Curtis, is “a one in a million chance of a breakdown.” Continue reading

It's the Buzzard Talking

Buzzards on a power line -- no telling what might case an outage.

Buzzards on a power line — no telling what might cause an outage.

If you want to understand why Dominion Virginia Power does what it does, visit the Henrico County operations center where the company manages 6,400 miles of electric transmission line.

by James A. Bacon

Electric power companies have spent tens of billions of dollars hardening their electric transmission grids and building redundant systems to guard against the varied threats that nature, mankind and animals throw against them. Tornadoes, hurricanes and ice storms pose a frequent danger. Then there are the ditch diggers who cut underground lines, the loggers who drop trees onto above-ground lines and the barges that run into river-spanning towers.

And let’s not forget the vultures. There have been documented instances of large birds knocking out power lines. A buzzard perched on a power line in a sub-station might take flight, releasing what Kevin Curtis, director of transmission planning for Dominion Virginia Power, politely refers to as a “streamer.” The material creates a connection between a conductor and a tower, and kaboom! Says Curtis: “It’s not uncommon on a landfill [near a power station] to find a dead buzzard on the ground.”

It’s Curtis’ job to preserve the reliability of Dominion’s electric grid, which serves roughly five million Virginians and a not inconsiderable number of North Carolinians in the face of fluctuating temperatures, power surges, foreseeable threats like storms and hurricanes, and crazy stuff like an uncontrolled emission of buzzard poop that no one can predict.

The good news is that the electric grid is more robust than it was on August 14, 2003, around 2 p.m., when a high voltage power line in northern Ohio became overloaded, heated up, drooped, brushed against some overgrown trees and shut down. The voltage in the system found alternate routes and overloaded new lines, three of which shut off. A cascade of failures ripped through southeastern Canada and eight northeastern states. Fifty million people lost power for up to two days in the worst blackout in North American history.

As disruptive as the infamous 2003 Northeast Blackout was for electricity customers — it contributed to at least 11 deaths and cost an estimated $6 billion — it was traumatic for the electric power industry, which has since re-engineered the North American grid to ensure, hopefully, that nothing similar happens again.

The bad news is that new threats to the grid, what some have called the world’s largest and most complex machine, are emerging: an electro-magnetic pulse from nuclear weapon, cyber-attacks, terrorist sabotage and, more prosaically, a re-structuring of the grid for environmental purposes that entails shuttering stable, reliable coal-fired power plants and plugging in intermittent power sources such as solar and wind power. The utility has a host of critics who maintain that it’s moving too slowly on reducing CO2 emissions, it’s too stodgy about implementing new smart grid technology, it’s insensitive to landowner rights, its transmission lines are blasting through Virginia’s cultural heritage. And they all have a point. But, then, it’s not the critics’ job to keep the lights on. It’s Dominion’s. And the stakes are very high.

As part of my coverage of energy and environmental issues (sponsored by Dominion), I determined that I needed to learn a lot more about how the electric grid works — not the distribution lines that run through our neighborhoods but the backbone of the system, the high-voltage transmission lines that transport electricity from power plants to sub-stations where the voltage is stepped down to levels for transfer to the distribution lines. I asked David Botkins, director of media relations, for a tour of the Dominion Operation Center in Henrico County. Not only did he agree, he lined up Kevin Curtis, director of transmission planning, as the tour guide.

The operation center in Innsbrook takes security seriously. Visitors are not allowed admittance to the main operations room itself but to a viewing room, with movie theater-style seating, a locked door and a retractable screen that is kept closed except for scheduled viewings. No photography was allowed. I was only the third journalist granted admittance to the viewing room in 11 years. The others were a reporter from NPR and a reporter for the Richmond Times-Dispatch. I wasn’t sure whether to be flattered or whether the subject was just so esoteric that most journalists never think to ask.

The viewing room opens onto a much larger room — the brain of Dominion’s electric grid — with about a half dozen work stations and a massive wall board. The wall schematic displays the 6,400 lines of transmission line in the Dominion system: 500 kv lines in green, 230 kv lines in blue, and 115 kv lines in red. Bulbs light up at critical junctures like power plants, sub-stations and other important nodes to indicate an “abnormal” condition.

In Curtis’ ideal world, the board is blank — no lights. That means everything is functioning entirely normally. (Ironically, everything being normal would be an abnormal situation; there is always something going on.) A light is not necessarily a cause for alarm: Often it simply means that a facility is down for planned maintenance, as was the case for a Pentagon City substation that lit up like a Christmas tree the morning I visited. But every light makes the job of keeping the grid stable just a little more complicated.

Dominion runs a computer program every three minutes to check for trouble in the system. As a double check, PJM Interconnection, the regional transmission organization of which Dominion is a part, also runs a computer program. There is zero tolerance for allowing a situation that might lead to a melt-down. The standard set by the North American Electric Reliability Council (NERC) is to keep at least “two contingencies” away from a crisis. In other words, the system must maintain enough redundancy to accommodate two unplanned outages in extreme conditions. All it takes to shed load, says Curtis, is “a one in a million chance of a breakdown.” Continue reading

You Know Things Are Bad When the Turnaround Team Quits

Richmond city hall: out of control

Richmond city hall: out of control

City of Richmond finances are such a mess that Mayor Dwight Jones hired a special turnaround team around the beginning of the year to fix it. Now key members of that team, City Finance Director Paul Jez and Controller Leon Glaster, are bailing.

“I just realized that I wasn’t the right fit for the city at this particular point in time,” Jez told the Richmond Times-Dispatch. “I had reached the point that I wasn’t happy coming to work.” The challenges, he added, “are far greater than … I could have imagined. If I had known last year what I know today, I don’t know that I may have made a different decision.”

The city is months late in completing its 2014 Comprehensive Annual Financial Report. City officials have cited employee turnover, a lack of training and challenges in implementing a new financial system as reasons for missing the deadline. The city’s current external auditor, Cherry Bekaert, basically fired the city as a customer effective next year, citing a dysfunctional working environment.

Bacon’s bottom line: When the outside auditors and key players in the turnaround team quit, something is severely wrong in the City of Richmond administration. No longer is this a problem that Mayor Jones can delegate to someone else. He needs to forget about baseball stadiums, children’s hospitals and Redskins training grounds, and give his total unremitting focus to figuring out what’s broken and then fixing it. Richmond has seen more than its fair share of administrative scandals already. If city hall loses control of its finances, it loses control over every department in city hall.

— JAB

A Plethora of Pipelines

pipeline_constructionFour companies are talking about building gas pipelines through Virginia. How many are needed — and who decides?

by James A. Bacon

How many natural gas pipelines does Virginia need? A lot of people are asking that question as two projects — the Atlantic Coast Pipeline and the Mountain Valley Pipeline — are actively developing routes between the Marcellus shale gas fields to the northwest and fast-growing markets to the south. Meanwhile, the Williams Companies, owner of the giant Transco pipeline, is talking up the Appalachian Connector, and Columbia Gas Transmission says it might upgrade an existing pipeline terminating in Northern Virginia.

All told, the four projects would add a capacity of 6.8 billion cubic feet per day, or roughly 200 billion cubic feet monthly. While much, if not most, of that gas would be destined for markets outside Virginia, that’s still a tremendous amount of capacity. By way of comparison, existing pipelines deliver to Virginia between 20 billion and 60 billion billion cubic feet monthly, depending on the time of year.

The question of how much is too much has become an urgent one as landowners in the path of the proposed pipelines resist survey crews from entering their property and vow to resist acquisition of their land by eminent domain. To acquire right of way using eminent domain, they say, companies must articulate a compelling public need to the Federal Energy Regulatory Commission (FERC). While there may be a need for some new pipeline capacity, they contend, it’s hard to justify all four projects.

“We’ve got a big infrastructure build-out proposed,” says Greg Buppert, staff attorney for the Southern Environmental Law Center (SELC), who is tracking the issue. “My suspicion is that some but not all of this capacity is needed. There is even a possibility that existing infrastructure can meet the need.”

But some say the market is self-limiting. Pipeline companies won’t spend billions of dollars adding new capacity unless they get enough long-term contracts to ensure they can pay for a project. If there is insufficient demand to support all four pipeline projects, all four pipelines will not get built.

For decades, Virginia has relied mainly upon two companies, the Williams Companies and Columbia Gas, to deliver gas to the state. Williams operates the high-capacity Transco pipeline — energy journalist Housley Carr refers to it as “the gas-transportation equivalent of an eight-lane highway”– connecting the Gulf of Mexico gas fields with New York by way of Virginia and other Atlantic Coast states. Columbia Gas runs a parallel pipeline highway west of the Appalachias, which serves a multi-state distribution system that feeds into Virginia via West Virginia.

Traditionally, most gas from both pipelines has come from the Gulf of Mexico. But fracking has turned North American energy economics topsy turvy. Gas fields tapping the Marcellus and Utica shale deposits in West Virginia, western Pennsylvania and Ohio are reputed to contain as much natural gas as Saudi Arabia. Marcellus gas is abundant and cheap, and gas pipeline companies have been scrambling to develop new markets, mostly in the U.S., but also for foreign markets by means of Liquefied Natural Gas.

The explosion in supply coincides with a surge in demand, especially from electric power companies. In two major waves of regulation in recent years the Environmental Protection Agency (EPA) has mandated power companies to reduce their toxic emissions from coal-fired power plants and then, with final rules issued early August, to reduce emissions of carbon dioxide by 32% nationally. In both cases, utilities are shifting en masse from coal to natural gas. While renewable sources such as solar and wind power are expected to gain electricity market share, industry officials say they must be backed up by gas generators to take up the slack when the sun doesn’t shine and the wind doesn’t blow, so demand growth for renewables actually supports demand growth for natural gas. Meanwhile, gas companies foresee a kick in long-term demand from a growing population and economy, especially among manufacturing operations seeking to tap some of the world’s lowest cost energy and chemical feedstock.

“Virginia is in need of new natural gas transmission that can get these new reserves to the parts of Virginia that need it the most,” says Christina Nuckols, deputy communications director for Governor Terry McAuliffe. “Hampton Roads is considered an energy cul-de-sac where natural gas capacity constraint has been an issue for years.  Particular counties in central and southern Virginia also have reported on numerous occasions that they lose out on manufacturing-related economic development opportunities almost immediately because they cannot provide access to natural gas.

“With any new market opportunity, there are going to be a number of companies looking to find success,” she says. “All of these proposed pipeline projects are recognition that Virginia is in need of additional natural gas capacity and the infrastructure to provide it.  It remains to be seen which projects will get approval from the appropriate entities.”

Here are the major projects proposed for Virginia: Continue reading

Another Shot at Redistricting

Current Virginia congressional boundaries

Current Virginia congressional boundaries. Source: VPAP

by James A. Bacon

So, the General Assembly is under the gun to redraw the boundaries of Virginia’s congressional districts, which most disinterested observers would agree are a travesty of democracy and desperately in need of a fix. While Republicans and Democrats justify their positions with lofty principles, few voters are under any illusion that either party is interested in anything other than advancing its own electoral prospects.

Look at the map above of the boundaries of the current congressional districts. The packing of African-Americans into the oddly shaped district stretching from east Richmond through the Virginia Peninsula to Norfolk stands out. A federal court declared that gerrymandering to be unconstitutional on the grounds that it dilutes the impact of African-American voting in other districts. The district must go. But that means redrawing the entire map.

What might the new districts look like? So far, Republicans have yet to present a plan of their own. But two Democrats have. Here, according to the Virginia Public Access Project, is what the congressional districts would look like under the plan submitted by Sen. Mamie Locke, D-Hampton:

The Locke plan. Source: VPAP

The Locke plan. Source: VPAP

And here’s the plan submitted by Sen. Chap Peterson, D-Fairfax:

The Peterson plan. Source: VPAP

The Peterson plan. Source: VPAP

Both Democratic plans would concentrate Republicans into districts deemed by VPAP to be “much more Republican,” while creating other districts deemed merely “more Democratic.” What we can’t tell from the VPAP data is which districts, after the dust settles, will end up dominated by Republicans, which will be dominated by Democrats, and which will be competitive.

Of the two, the Peterson map is the more elegant, creating more compact communities with fewer squiggly lines. That holds out the hope of creating more competitive districts rather than more reliably Democratic and Republican districts where the real contests are in the nominating fights dominated by hard-line party partisans. Competition is good for democracy, we need more of it, and a superficial look at the Peterson map suggests that his plan just might deliver it.

The Next Battle in Virginia’s Sharing Economy: Airbnb

airbnbby James A. Bacon

The fracas in Virginia over Uber and Lyft has settled down. The two “transportation network companies” have submitted to regulation requiring background and safety checks of drivers, and nearly 19,000 vehicles have registered with the state, according to the Richmond Times-Dispatch. The next legal front in the sharing economy is likely to focus on Airbnb, the company that enables individuals to rent out houses, rooms and apartments for short-term lodging.

The problem, according to the Commonwealth Institute, is that Airbnb does not collect and remit the lodging taxes on these rentals, meaning that local governments could be losing millions of dollars in tax revenue.

Thousands of Virginians have signed up on Airbnb to offer accommodations to paying visitors. A check this morning showed 692 rentals being offered in the City of Richmond as the UCI Road World Cycling Championships approaches, 288 rentals in beach destination Virginia Beach, 489 rentals in the college town of Charlottesville and more than 1,000 rentals each in Fairfax County, Arlington County and Alexandria near the nation’s capital. Charges can vary from $37 per night for a “very, very rustic cabin by the river” in Hinton… to $225 per night for a three-bedroom house in Blacksburg during football weekends… to $2,000 per night for a three-bedroom house in Old Town Alexandria.

The state requires hotels, motels and campgrounds to collect a sales tax of 5.3% to 6% for reservations of less than 90 days. Many localities also collect a local occupancy tax, which in the case of Richmond, Henrico, Hanover and Chesterfield amounts to 8% to cover debt from building the Greater Richmond Convention Center. Other communities use the occupancy tax to support local convention and visitors bureaus (CVBs) and tourism initiatives.

Airbnb is not collecting taxes in Virginia. According to the Commonwealth Institute, the company suggests that renters charge and remit occupancy taxes on their own. But the taxes can be confusing for casual Airbnb hosts to understand and localities are not set up to monitor and enforce collections on casual rentals.

Earlier this year, however, Airbnb reached an agreement with Washington, D.C., to collect and remit occupancy taxes on all of its rentals in the District. That follows agreements in Portland, San Francisco and Wake County (Raleigh, N.C.) to do the same.

Bacon’s bottom line: I can see why the hospitality industry is up in arms over Airbnb. Airbnb rentals under-price hotels and motels offering comparable accommodations but they don’t contribute to the collective efforts of CVBs to market and promote their metropolitan region as a destination. Forcing casual renters to handle the paperwork would be a deal breaker for many, but Airbnb’s administrative systems should be able to execute the task of remitting taxes with little difficulty. I agree with the Commonwealth Institute that the Commonwealth of Virginia and its localities should seek the same kind of tax-collection deal that North Carolina and several of its jurisdictions have struck with the company. Create a level playing field and may the best competitors win!

The Next Battle in Virginia's Sharing Economy: Airbnb

airbnbby James A. Bacon

The fracas in Virginia over Uber and Lyft has settled down. The two “transportation network companies” have submitted to regulation requiring background and safety checks of drivers, and nearly 19,000 vehicles have registered with the state, according to the Richmond Times-Dispatch. The next legal front in the sharing economy is likely to focus on Airbnb, the company that enables individuals to rent out houses, rooms and apartments for short-term lodging.

The problem, according to the Commonwealth Institute, is that Airbnb does not collect and remit the lodging taxes on these rentals, meaning that local governments could be losing millions of dollars in tax revenue.

Thousands of Virginians have signed up on Airbnb to offer accommodations to paying visitors. A check this morning showed 692 rentals being offered in the City of Richmond as the UCI Road World Cycling Championships approaches, 288 rentals in beach destination Virginia Beach, 489 rentals in the college town of Charlottesville and more than 1,000 rentals each in Fairfax County, Arlington County and Alexandria near the nation’s capital. Charges can vary from $37 per night for a “very, very rustic cabin by the river” in Hinton… to $225 per night for a three-bedroom house in Blacksburg during football weekends… to $2,000 per night for a three-bedroom house in Old Town Alexandria.

The state requires hotels, motels and campgrounds to collect a sales tax of 5.3% to 6% for reservations of less than 90 days. Many localities also collect a local occupancy tax, which in the case of Richmond, Henrico, Hanover and Chesterfield amounts to 8% to cover debt from building the Greater Richmond Convention Center. Other communities use the occupancy tax to support local convention and visitors bureaus (CVBs) and tourism initiatives.

Airbnb is not collecting taxes in Virginia. According to the Commonwealth Institute, the company suggests that renters charge and remit occupancy taxes on their own. But the taxes can be confusing for casual Airbnb hosts to understand and localities are not set up to monitor and enforce collections on casual rentals.

Earlier this year, however, Airbnb reached an agreement with Washington, D.C., to collect and remit occupancy taxes on all of its rentals in the District. That follows agreements in Portland, San Francisco and Wake County (Raleigh, N.C.) to do the same.

Bacon’s bottom line: I can see why the hospitality industry is up in arms over Airbnb. Airbnb rentals under-price hotels and motels offering comparable accommodations but they don’t contribute to the collective efforts of CVBs to market and promote their metropolitan region as a destination. Forcing casual renters to handle the paperwork would be a deal breaker for many, but Airbnb’s administrative systems should be able to execute the task of remitting taxes with little difficulty. I agree with the Commonwealth Institute that the Commonwealth of Virginia and its localities should seek the same kind of tax-collection deal that North Carolina and several of its jurisdictions have struck with the company. Create a level playing field and may the best competitors win!

Gender “Justice” at Washington & Lee

kozak

W&L’s Lauren Kozak: “Is it possible that there is something In between consensual sex and rape … and that it happens to almost every girl out there?”

Can this column in PJMedia possibly be a fairly rendered reporting of a “sexual assault” hearing at Washington & Lee University? If the story is accurate, it is scary on at least two grounds: (1) the novel theory of “gray” rape, a consensual sexual act later viewed with regret by the woman, is grounds for dismissing a male student from a prestigious Virginia university; and (2) a student can be evicted in a hearing without any pretense of what most Americans would consider a fair trial. Indeed, the W&L hearing resembled nothing so much as an administration-sanctioned kangaroo court.

I hesitate to draw sweeping conclusions from an opinion column until I have seen all sides of the story, although the author, Hans Spakovsky, a legal fellow with the Heritage Foundation, is a serious commentator, not some no-name blogger, and his account is largely consistent with that of a subsequent lawsuit reported by the Roanoke Times. These allegations are far more momentous than the fabulist Rolling Stone UVa fraternity-rape story because they suggest that the administration of a prestigious university has abandoned core principles of American jurisprudence — punishment of a novel, never-bef0re-articulated offense, the right to a fair and open trial, the right to a lawyer, the presumption of innocence, adherence to basic standards of evidence — in its internal proceedings.

The Rolling Stone article inspired an outpouring of investigative journalism by mainstream media publications, most notably the Washington Post. That’s understandable, given the horrifying nature of the putative crime, which confirmed the narrative of a lot of correct-thinking people. The W&L incident, it seems to me, justifies just as much attention. When political correctness hijacks the administrative machinery of a respected university, that’s just as big a story as frat boys run amuck. Let’s hope the Roanoke Times gives this story the full attention it deserves.

Update: Meanwhile, there’s another date rape controversy brewing at Virginia Wesleyan College.

(Hat tip: Tim Wise)

— JAB

Gender "Justice" at Washington & Lee

kozak

W&L’s Lauren Kozak: “Is it possible that there is something In between consensual sex and rape … and that it happens to almost every girl out there?”

Can this column in PJMedia possibly be a fairly rendered reporting of a “sexual assault” hearing at Washington & Lee University? If the story is accurate, it is scary on at least two grounds: (1) the novel theory of “gray” rape, a consensual sexual act later viewed with regret by the woman, is grounds for dismissing a male student from a prestigious Virginia university; and (2) a student can be evicted in a hearing without any pretense of what most Americans would consider a fair trial. Indeed, the W&L hearing resembled nothing so much as an administration-sanctioned kangaroo court.

I hesitate to draw sweeping conclusions from an opinion column until I have seen all sides of the story, although the author, Hans Spakovsky, a legal fellow with the Heritage Foundation, is a serious commentator, not some no-name blogger, and his account is largely consistent with that of a subsequent lawsuit reported by the Roanoke Times. These allegations are far more momentous than the fabulist Rolling Stone UVa fraternity-rape story because they suggest that the administration of a prestigious university has abandoned core principles of American jurisprudence — punishment of a novel, never-bef0re-articulated offense, the right to a fair and open trial, the right to a lawyer, the presumption of innocence, adherence to basic standards of evidence — in its internal proceedings.

The Rolling Stone article inspired an outpouring of investigative journalism by mainstream media publications, most notably the Washington Post. That’s understandable, given the horrifying nature of the putative crime, which confirmed the narrative of a lot of correct-thinking people. The W&L incident, it seems to me, justifies just as much attention. When political correctness hijacks the administrative machinery of a respected university, that’s just as big a story as frat boys run amuck. Let’s hope the Roanoke Times gives this story the full attention it deserves.

Update: Meanwhile, there’s another date rape controversy brewing at Virginia Wesleyan College.

(Hat tip: Tim Wise)

— JAB