Monthly Archives: October 2016

Probing the Curious Shortage of School Bus Drivers

Posted on October 31, 2016 by | 7 comments

school_busby James A. Bacon

There’s an odd little story in the Richmond Times-Dispatch today about how E.S.H. Greene Elementary School on the south side of Richmond is having trouble finding school bus drivers. The school has resorted to a “double back” system in which bus drivers, after dropping off the first load of kids, doubles back to pick up a second load. As a consequence, many kids are stuck at school as much as an hour after the 3:45 p.m. bell has rung.

Judging by the challenges that bedevil inner-city schools, keeping children late at school may not rank high on the list of concerns. What rankles is that the problem occurs in the first place. Richmond school officials indicate that similar problems are occurring at eight other schools and that “efforts to recruit bus drivers are underway.” Is the economy running at such a red-hot pace that people spurn jobs as school bus drivers? Or is something else going on?

The number of buses is not an issue. According to the T-D article, Superintendent Dana T. Bedden “said there are enough buses to get everyone home on a regular schedule but not enough drivers to get them on the road.”

Surely there are people in the poverty-stricken south side of Richmond who would like to make some extra money. The job search site Indeed indicates that bus drivers in Richmond make $11.63 an hour, considerably more than minimum wage.

Part of the problem may be absenteeism. As Principal Linda Sims describes the situation, “On a good day, we can get three [drivers]. On most days, it’s two, where he would have to run and run and run till we get all the children home.”

Another part of the problem might be the job requirements. Here is a list of requirements listed for bus drivers in Greene County, Va.:

Must demonstrate the ability to successfully complete the Virginia Education Department training curriculum for school bus drivers and obtain a Commercial Driver’s License with appropriate school bus endorsements within the probationary period. Complete State and County requirements of twenty hours of classroom and twenty hours of behind the wheel instruction. No reckless driving or driving under the influence convictions within five years and/or fewer than two moving violations within 12 months of employment. … Ability to: develop and maintain a positive and, helpful attitude toward students; learn computer hardware and software applications; communicate and develop effective working relationships with students, parents and staff.

What does it take to complete the state’s school bus driver training program? According to this VDOE document, prospective drivers can’t just sign up for training at the drop of a hat. They must have held a commercial drivers licence for at least two years beforehand. Then they must attend a training program, classes for which in the Richmond area are held once a year. This year the training took place in August.

Let’s see: Must have had a commercial drivers license for two years. Must go through 40 hours of training. Training available only once a year. Must be computer literate. And, oh, by the way, must have a decent driving record. I wonder how many people willing to work for $11 to $12 have those qualifications. No wonder it’s hard to find school bus drivers!

Meanwhile, Principal Sims is pursuing another option: getting her students to walk to school. To put the walk-to-school option into effect, she has secured a grant from the Virginia Department of Transportation to install sidewalks in tandem with crossing guards.

Hmmm… I wonder what the requirements are for crossing guards.

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Posted in Education (K-12)

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Hollow, Preposterous Babble

Posted on October 31, 2016 by | Leave a comment
labyrinth

Cranky in the Labyrinth

John Butcher (AKA Cranky) is a modern-day Theseus who plunges into the labyrinth of Virginia Department of Education (VDOE) practices and regulations — a task no normal mortal could undertake without losing his sanity.

On Cranky’s Blog he delved yesterday into the wording of the Memorandum of Understanding (MOU) that VDOE signs with schools or school divisions denied accreditation due to the poor testing performance of its students.

The language of the MOU template used by VDOE, he writes, “is ridiculous on its face. … hollow, preposterous babble” designed to accomplish nothing. Read his descent into bureaucratic madness here.

— JAB

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How Fast Is Electricity Usage Growing — a Multibillion Dollar Question

Posted on October 28, 2016 by | 12 comments

electricityby James A. Bacon

Last week Dominion Virginia Power issued a press release highlighting the fact that persistent hot, humid weather in July, August and September had set a three-month electricity-usage record for its service territory and the electric cooperatives that are part of its system.

Over those three months customers used 28.2 million megawatt hours of electricity. That represented a 3.3% increase from the 27.3 million megawatt hours consumed in the third quarter in 2010.

“It was not a summer of extreme high temperatures, but it was very hot and humid for days on end and that drove demand,” said Robert M. Blue, president of Dominion Virginia Power. “Our integrated system of power stations and transmission lines were able to meet the increased demands reliably and effectively. We also worked with customers on conservation efforts, including declaring 10 ‘Smart Cooling’ days where customers enrolled in the voluntary program allow their air-conditioning units to cycle on and off to reduce energy demand at peak times.”

The  numbers buttressed Dominion’s claim that the Virginia Peninsula is in danger of experiencing blackouts next year when Yorktown Power Station units 1 and 2 must be shut down to meet EPA clean air guidelines. Dominion, which wants to build a high-voltage transmission line across the James River to make up for the lost capacity, cranked up the aging, coal-fueled generators 20 times in July and August when needed to meet peak demand. If weather conditions are similar next summer, federal reliability rules could force Dominion to execute controlled blackouts rather than risk an incident that would trigger an uncontrolled, cascading blackout.

Dominion’s preferred solution is controversial: Conservationists and other foes say the utility is exaggerating future growth of electricity demand on the Peninsula to justify its need for the transmission line. That debate mirrors a larger one — how valid is the utility’s forecast that electric usage will increase an average of 1.5% annually through the mid-2020s?

Last week the State Corporation Commission held a hearing in which participants debated the demand forecast contained in Dominion’s 2016 Integrated Resource Plan. Lawyers and consultants with environmentalist groups argued that Dominion inflated its projections in order to justify building new power plants within the plan’s 15-year time horizon, reports Jim Pierobon in Southeast Energy News,

“Dominion has layered error upon error that leads to only one result: unnecessary and costly investment in company-owned generation to meet an inflated and unlikely load growth,” charged Will Cleveland, an attorney with the Southern Environmental Law Center.

In other testimony, economist James Wilson challenged Dominion’s 1.5% growth figure, noting that demand has been relatively flat over the past decade. While the 2008-2010 recession was one reason, he said, slow load growth also stems from corporate investment in energy efficiency,

The slow growth of Dominion’s summer demand between 2010 and 2016 — about 0.5% annually — seemingly confirms the skeptics’ view. I discussed the slow growth with Dominion spokesman Dan Genest.

electricity_growth

Genest blames the slow load growth on slow economic growth following the recession, as seen in the chart above.”There are two principle reasons for the low growth,” he says. “First, the Commonwealth was still recovering from the recession. Second, Virginia was hit much harder than most states by the federal government’s sequestration program to reduce military spending.”

In 2014, Virginia’s economy finally gained steam. “The Gross Domestic Product growth for Virginia began a steady rise that currently is above 1.5 percent,” Genest says. “We expect that growth to continue and for our sales to follow suit.”

I asked if the trend toward increased usage could reflect the vagaries of variable summer temperatures. Meteorologists do measure “degree days” but Genest said humidity drove the record usage more than temperature. Dominion’s meteorologists have tried to develop a method for calculating the impact of humidity on electricity usage but have not been successful. The inability to precisely measure the impact of weather makes it difficult to gauge the the underlying usage patterns, thus introducing an element of uncertainty in any analysis.

In one sense Dominion’s forecast is conservative — it assumes that electric usage will grow more slowly than the economy. Dominion’s 1.5% average load growth compares to a 1.9% growth in the national economy assumed by the Office of Management and Budget for 2017 and 2.0% for the years following.

Whether that assumption is conservative enough is up for debate.

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Digging Deeper on the Link Between Spending and Educational Achievement

Posted on October 28, 2016 by | 4 comments

OLYMPUS DIGITAL CAMERA

A few days ago I posted data showing that K-12 spending in Virginia was 10.2% lower in 2014 than it was in 2008, yet National Assessment of Educational Progress (NAEP) scores for Virginia students had climbed over the same period. Given the evidence that Virginia schools showed they could do more with less, I asked, is it possible that money is not the main constraint holding back educational achievement?

In a blog post yesterday, the Commonwealth Institute argues that the cuts have hurt academic performance, particularly in poor school districts where budget cuts have hit the hardest. While overall performance has improved since the recession, it has suffered for low-income students, black students and English-as-a-second-language students.

For example, since 2007, 4th grade reading scores on the National Assessment of Educational Progress (NAEP) have gone up for all Virginians on average by 2 points, increasing 4 points for White students and 9 points for students that do not qualify for free or reduced lunch. Yet, they have fallen by 5 points for Black students, 2 points for students that receive free or reduced lunch, and an astounding 21 points for English language learners. Average eighth grade math scores show a similar divergence.

That’s a fair point worth closer examination. I’d like to dig deeper — are there other variables that could explain the divergent performance between racial/ethnic groups? The Commonwealth Institute divides the school districts into quintiles ranked by the size of the state budget cuts. How directly do those budget cuts correlate with declining test scores for poor, black and ESL students? We can’t conduct that kind of analysis with NAEP scores, but we can with SOL scores. I’d love to see that analysis.

— JAB

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Posted in Poverty & income gap, Race and race relations

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A Sinking Feeling at Naval Station Norfolk

Posted on October 28, 2016 by | 1 comment

naval-station-norfolk

The concrete piers at the Naval Station Norfolk are a lot more complex than the rickety wooden structures lining the waterfront down at the Rivah. Electric lines and steam pipes on the underbelly of the piers conduct power to the giant warships at dock. When water levels rise high enough, propelled by tides, storm surges and ocean winds, water can immerse the pipes. Base officials cut off electricity in anticipation of such events, which can disrupt training and maintenance on the ships.

Ten of the station’s 14 piers were built in the early 1900s. Sensors show that the water level has risen 18 inches over the past century. Navy officials say another 18-inch rise could incapacitate the naval base, reports E&E Publishing, which covers energy and environmental issues.

Norfolk is experiencing the fastest rate of sea level rise on the East Coast. Aside from warmer global temperatures, which melts glacier ice and expands water volume, the shift of tectonic plates and the pumping of water from aquifers underneath the city are causing subsidence. Fresh water withdrawal accounts for about half the subsidence.

For now, the Navy is adapting. It has replaced four old piers with double-decker piers and elevated utilities and has plans to build another eight more at a cost of $100 million each. States the article: “The base recently constructed a new building that sits 3 feet higher above the ground than normally encouraged by the Federal Emergency Management Agency. It’s including new standards and guidelines in its engineering plans for future projects.”

— JAB

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Posted in Disasters and disaster preparedness, Infrastructure

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Chart of the Day: Virginia 4th, 8th Graders Excel at Science

Posted on October 28, 2016 by | Leave a comment
Source: Virginia Department of Education

Source: Virginia Department of Education

Virginia 4th- and 8th-grade public school students out-performed their peers by wide margins in the 2015 National Assessment of Educational Progress, according to a press release issued yesterday by the Virginia Department of Education.

“Virginia’s science standards require students to investigate and understand scientific concepts and then apply what they have learned,” Superintendent of Public Instruction Steven R. Staples said. “The commonwealth also has made significant investments in programs to increase the content knowledge of teachers and equip them with the ability to tap into their students’ sense of wonder, whether they are teaching in the classroom or in the field.”

NAEP is the only nationally representative test of student knowledge in math, reading, science, and history. The 2015 NAEP science tests were administered in Virginia to approximately 2,300 fourth graders in 99 schools, and to approximately 2,300 eighth graders in 87 schools.

— JAB

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Merchant Power Plant Proposed for Charles City County

Posted on October 28, 2016 by | 9 comments
power plant

Merchant power plant in Hanover County.

Another independent power producer has filed an application to build a combined-cycle, gas-fired power plant in Virginia. C4GT, managed by Michigan-based NOVI Energy, proposes to locate a 1,060 megawatt power plant in Charles City County.

In a filing with the State Corporation Commission, C4GT stated that the facility “will promote the public interest by, among other things, providing significant economic benefits to the Commonwealth of Virginia, Charles City County and the surrounding area by providing a significant source of new merchant capacity in Virginia. … C4GT would operate the facility as a merchant power plant supplying electricity on a wholesale basis to markets in Virginia and surrounding regions,” reports the Richmond Times-Dispatch.

The proposed plant would be located on 88 acres near the Roxbury Industrial Park and less than a mile from Dominion Virginia Power’s Chickahominy substation.

Bacon’s bottom line: This is the third or fourth (I can’t keep count) application for a merchant plant to be announced in Virginia in recent months. It’s one thing to initiate the permitting process for building a new gas-fired power plant, however, and quite another to actually embark upon construction. I view these applications as a hedge in case the boom in gas-fired generating capacity proves durable.

As Tom Hadwin, a former utility executive, frequently observes in the comments section of this blog, the economics of solar power are improving so relentlessly that solar+battery storage could provide lower-cost electricity than gas-fired power within 10 to 15 years, displacing a lot of gas-fired generation. If his scenario pans out, solar will devastate the revenues and profitability of gas-fired plants financed with a 30- to 40-year life expectancy in mind, especially merchant plants selling into the super-competitive wholesale electricity market.

Evidently a number of players in the industry are more optimistic about natural gas’s long-term prospects. While the public has no way of knowing how serious these merchant generators are about actually building new gas-fired capacity, they are serious enough to spend the money it takes to keep their options open.

Big question for the SCC: Does it make more sense to let Dominion Virginia Power build another big gas-fired power station, for which the company sees a need in the early 2020s, and embed the cost — and risk — in its rate base, or should the commission let independent, merchant generators shoulder the risks and potential rewards of building new gas-fired capacity?

— JAB

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Posted in Energy

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A New Book Examines the Virginia Way

Posted on October 27, 2016 by | 7 comments

virginia-politicsby Peter Galuszka

Over the past several years, Virginia has seen plenty of high drama and low politics.

There was the tawdry corruption trial of former governor Robert F. McDonnell (R) and his wife, Maureen. At the University of Virginia, Teresa Sullivan, the school’s popular president, was temporarily ousted in a mysterious coup. Everywhere were unlimited amounts of political money, revolving doors and public benefits for rich individuals and companies.

Taken together, the events might be a tipping point for the Old Dominion, ending, or at least reining in, the so-called “Virginia Way” of lax ethics rules and the assumption that players are honest gentlepeople.

An excellent summation of how and why the stars have so aligned can be found in a new book, “Virginia Politics & Government in a New Century, The Price of Power,” by Jeff Thomas (The History Press).Thomas, a Duke University engineering graduate who worked in non-profits in the District, lays out in painstaking detail how largely unregulated money donations have led to an extraordinary web of conflicts of interest. This paradigm has been going on for years and has been largely unquestioned, until now.

Drawn largely from the work of Virginia journalists and political analysts, Thomas finds that:

Thomas Farrell, the head of the power utility Dominion Resources, set up his young son Peter, an “amateur thespian,” to get the Republican nomination to be a delegate from Henrico County. Later, the Farrells used their clout to get more than $1 million in state aid for a Civil War movie they wrote and produced and in which Peter Farrell acted.

Sinecures abound. After he left the state senate in 2013, Henry Marsh, 80, became a part-time board member of the Alcoholic Beverage Control at a salary of $122,000. Del. Bob Brink 66, became a deputy commissioner for aging for $110,000 a year. Del. Algie Howell, 76, got a parole board seat worth $122,455 a year.

McGuireWoods, one of the state’s most prominent and wealthiest law and lobbying outfits, got more than $4.6 million in help from Richmond, otherwise crippled by a 25 percent poverty rate and crumbling school buildings, to build a new headquarters downtown.

The Washington Redskins, the fifth richest team in the National Football League, got $11 million from Richmond to build a summer training camp that the Redskins use only three weeks a year.

The state created a fund, with money from Virginia’s share of a huge health settlement with four large tobacco companies, to help Tobacco Road counties. One of its directors ended up in prison with a 10-year sentence for fraud and self-dealing. Still, the tobacco fund has paid money for new factories in the southern and western parts of the state that haven’t created anywhere close to the number of jobs advertised.

Exhibit A, of course, is the McDonnell case. The couple accepted more than $177,000 in cash, gifts, loans and vacations from vitamin supplement salesman Jonnie R. Williams Sr. The Supreme Court vacated the governor’s convictions, and he and his wife are now free. But their six-week-long trial in 2015 revealed extraordinary conflicts and hubris in the Executive Mansion.

Since then, the state has applied some cosmetic limits on accepting gifts. But donations can run sky high as long as they are reported. Even gift-giving still has plenty of loopholes, provided the giver is a “personal friend.” Travel funded by corporations is okay, too.

Thomas, a native Richmonder, has done Virginia residents a valuable service with his book. The depth of his research is impressive although the text is overly chopped up, making it a more difficult read.

In sum, he writes: “The Virginia Way cannot change as long as politicians’ self-conceptions hinge on their own righteousness, for if there can be no fall, there can be no catharsis.”

This review first appeared in the Washington Post’s “All Opinions Are Local” section.

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Posted in Money in politics, Scandals

Thinking Correctly about Corrections

Posted on October 27, 2016 by | 5 comments
Source: "State of the Region: Hampton Roads 2016."

Source: “State of the Region: Hampton Roads 2016.”

by James A. Bacon

In 2015 the Commonwealth of Virginia spent $1.13 billion operating state prisons holding 25,000 inmates. Is the state spending too much imprisoning people, or too little? Could it spend the money better? Those are questions we need to ask as Virginia faces a future of chronic fiscal stress. As I have blogged previously, we need to re-think state government from top to bottom, stem to stern.

James V. Koch, president emeritus of Old Dominion University and the lead author of “The State of the Region: Hampton Roads 2016,” applies economic thinking to the way Virginia deals with crime, incarceration and rehabilitation. His analysis doesn’t fit traditional “liberal” or “conservative” views of the problem, which makes it all the more worth thinking about.

The modern era of prison administration in Virginia began in 1994 when, at the urging of then-Governor George Allen, the General Assembly abolished parole for violent offenders. A tougher parole law, combined with a three-strikes-and-you’re-out law, precipitated a surge in Virginia’s prison population as offenders served longer sentences. The cost of running the prison system increased from 2.82% of total state expenditures in 1993 to 3.79% in 2002, making it one of the fastest-growing categories of state spending. Although absolute costs have continued to increase, prison’s share of state spending declined to 3.21% in 2015 as crime rates fell and the size of the prison population leveled off.

A central issue that Koch addresses is to what extent the get-tough approach on sentencing and parole contributed to the decline in crime rates. Are we keeping more offenders than necessary in prison and running up the cost of corrections more than we need to?

His review of the literature led Koch to conclude that “incapacitation” — taking criminals off the streets — is one of several factors accounting for Virginia’s decline in crime. “The available reputable research concerning the determinants of crime rates does not point to a single cause for the declines we have observed,” he writes. “Even so, the consensus is that increased incarceration probably [accounts for] 10 to 15 percent of observed declines in these rates.”

Here’s where it gets interesting:

It seems likely that the law of diminishing returns applies to law enforcement and imprisonment. Arrests focused on the most serious crimes and habitual criminals likely will reduce crime rates; however, as the volume of arrests increases, less serious crimes receive more attention and less dangerous criminals are arrested. Hence, each incremental arrest generates a progressively smaller decline in crime rates.

What this says to me is that the incapacitation strategy does work, but it needs to be fine-tuned.

Virginia spends $28,000 per inmate on average to operate its prisons, according to Koch’s data. Presumably, the cost of incarcerating less dangerous inmates in low- and medium-security prisoners is somewhat lower, but let’s use that number for purposes of comparison. What is the cost of operating an outpatient substance abuse program? Half? Two-thirds? And how does the recidivism rate from substance abuse programs compare to the recidivism rates for prison? If Virginia could take 5,000 substance abusers out of prison and treat them in outpatient programs cost $14,000 a year, could the state could save $70 million — and turn more offenders into productive citizens in the bargain?

Those numbers are purely illustrative. But they provide an idea of the kind of economic thinking Virginia needs to apply to its corrections system.

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Posted in Crime , corrections and law enforcement

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Hexavalent Chromium May Be Endemic in Piedmont Well Water

Posted on October 27, 2016 by | 25 comments

hexavalent-chromiumby James A. Bacon

Hexavalent chromium, a potent carcinogen, is detectable in 90% of the North Carolina water wells sampled in a Duke University research study, and in many cases exceeds levels deemed safe for drinking water.

The chemical, made famous by the movie “Erin Brockovich,” originates not from coal ash ponds but from the natural leaching of mostly volcanic rock in aquifers across the Piedmont region, said Avner Vengosh, professor of geochemistry and water quality at Duke’s Nicholas School of the Environment in a press release issued yesterday.

Piedmont formations with volcanic rocks are common across the southeastern United States, Vengosh noted, so millions of people in regions outside North Carolina with similar aquifers may be exposed to hexavalent chromium without knowing it. Vengosh published his findings Oct. 26 in the peer-reviewed journal Environmental Science and Technology Letters.

The controversy over hexavalent chromium has roiled politics in North Carolina. In 2015 the state’s water-quality officials issued temporary “do not drink” recommendations to residents living near coal-burning plants after tests detected potentially harmful levels of hexavalent chromium in their well water samples. Because elevated levels of chromium typically occur in coal ash, many people assumed the contamination was linked to the coal ash ponds. The Vengosh study, states the Duke press release, is the first to show otherwise.

A similar controversy has raged in Virginia where the compound has been detected in well water of homes near the Bremo Power Station and the Possum Point Power Station where Dominion Virginia Power is de-watering coal ash ponds and has applied for permits to cap the dried coal-combustion residue in place.

The Duke study undoubtedly will change the tenor of the coal ash debate in Virginia, whose Piedmont geology is similar to North Carolina’s. The Duke findings are consistent with Dominion’s contention that the hexavalent chromium found in wells did not originate from its coal ash ponds. Dominion’s own measurements had indicated no such groundwater impact.

But controversy over coal ash disposal will not go away. Tests by the Potomac Riverkeeper Network have found elevated levels of lead in wells near the Possum Point coal ash ponds and also have detected potentially toxic levels of other heavy metals found in coal ash. However, Virginia Department of Environmental Quality tests have not replicated the results.

Meanwhile, the Duke findings raise issues about the safety of well water generally. Speaking about the situation in North Carolina, Vengosh said: “The bottom line is that we need to protect the health of North Carolinians from the naturally occurring threat of hexavalent chromium, while also protecting them from harmful contaminants such as arsenic and selenium, which our previous research has shown do derive from leaking coal ash ponds. The impact of leaking coal ash ponds on water resources is still a major environmental issue.”

Bacon’s bottom line: Hopefully, Vengosh’s findings will elevate the discussion about coal ash in Virginia. The most important takeaway is this: Just because a particular chemical is found in both in coal ash and the water from nearby wells, we cannot assume that the chemical necessarily came from the coal ash. Underground aquifers contain many chemicals that have leached from naturally occurring rocks and minerals. Nature is not pristine. Underground water is not as pure as distilled water. When we start measuring water quality in parts per billion, we will find all sorts of compounds we never imagined were there.

Conversely, just because hexavelent chromium occurs in natural conditions, we cannot assume by analogy that lead, selenium, arsenic or other chemicals found in well water near coal ash ponds are naturally occurring as well. We just don’t know. We need to conduct more comprehensive testing before making multi-billion dollar decisions on the best way to dispose of coal ash and/or commit ourselves to remedies that we (and our descendants) have to live with for hundreds of years.

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Posted in Energy, Environment

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Chart of the Day: Revenue per Hotel Room

Posted on October 26, 2016 by | 1 comment
Source: "State of the Region: Hampton Roads 2016"

Source: “State of the Region: Hampton Roads 2016”

As Virginia casts around for an industry to lead the way in economic growth, don’t look to the hotel sector. Hotels in Virginia have severely under-performed the national average as measured by a key indicator, revenue earned per available room (REVPAR). The chart above, taken from the “State of the Region: Hampton Roads 2016” compares the change in this metric over the course of the current business cycle for the U.S., Virginia, Hampton Roads and various sub-markets in Hampton Roads.

Don’t blame Airbnb, says the report, which was produced by the Center for Economic Analysis and Policy at Old Dominion University. “There is little mystery attached to the causes of the under-performance of the hotel industry in Virginia in recent years. The combination of the Great Recession plus federal government budget sequestration constituted powerful blows from which the industry has yet to recover.”

Aggravating the tumble in demand, the supply of hotel rooms in Virginia increased between 2006 and 2015, creating oversupply. If there’s a silver lining says the report, supply has leveled off — it’s actually a tiny bit smaller than in 2010. “Nonetheless, happy days are not likely to return until federal spending in the Commonwealth, especially for defense, revives.”

— JAB

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Posted in Business and Economy

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Introducing a Novel Concept: Cost per Ton of CO2 Reduced

Posted on October 26, 2016 by | 20 comments

tji_studyby James A. Bacon

A new Thomas Jefferson Institute for Public Policy paper about the impact of a Renewable Portfolio Standard (RPS) on Virginia warrants close examination. You may or may not accept the study’s conclusion that implementing a requirement for 6% solar and wind in Virginia’s electricity mix by 2025 would increase electricity rates in Virginia by 9.85%, depress gross state product by $3.4 billion, and cost 24,000 jobs. Frankly, those who want to believe the numbers will believe them, and those who don’t want to believe them will not. Experts can argue all day about the assumptions, methodologies, models and data inputs that go into studies like this and none of it will mean anything to politicians or the public.

But the author, Timothy J. Considine with Natural Resource Economics, Inc., does raise a really fascinating question. Forget the electric rates, forget the jobs. Let’s say your No. 1 priority is reducing carbon dioxide emissions. Is mandating a minimum percentage of wind and solar production a cost-effective way to achieve your goal?

In the study, “Evaluating the Costs and Benefits of Renewable Energy Portfolio Standards for Virginia,” excerpted from a larger study encompassing 12 states, Consadine makes what seems to be an uncontroversial point: The cost of achieving RPS goals will vary from state to state, depending upon the cost structure of existing power sources and the availability of wind and solar resources. He writes:

For states with a fleet of low cost electricity generation capacity, imposition of RPS could raise electricity costs significantly higher because higher-cost wind and solar generation displace low cost sources of power.

Implementing a 6% RPS goal in Virginia, Consadine says, would reduce annual CO2 emissions by 7.6 million tons per year in 2025 at a total cost (including federal subsidies) of $182 million inflation-adjusted dollars. The cost to achieve those reductions: $182 per ton. The CO2 savings would increase in subsequent years and the cost would decline as the benefit from “free” fuel kicked in, driving down the cost per ton of CO2 avoided down to $136 by 2040.

That compares to the Environmental Protection Agency’s estimate of CO2’s social cost per ton of $12 to $24 (assuming a 5 percent discount rate to reflect the fact that a dollar today is worth more than a dollar in the future). Even if your sole priority in driving energy policy is CO2 emission, you have to confront the finding that the cost of implementing a 6% RPS goal for Virginia would exceed the social benefit by a margin of about 10 to 1.

I’m in no position to appraise Consadine’s methodology for arriving at these numbers. I’m sure that RPS advocates could poke holes in his approach, that Consadine could rebut them, and that the RPS advocates could counter the rebuttal. But a 10 to 1 differential is massive. Assuming Virginia’s goal is to reduce CO2 emissions at the lowest possible cost, as opposed to simply subsidizing the renewable energy sector, I think that everyone, including the most ardent environmentalists, would be open to the idea that there might be more cost-effective ways to achieve that goal.

While Virginians need not accept Consadine’s numbers at face value — it is always important to subject such studies to critical analysis — we should embrace the concept of “cost per ton of CO2 reduced,” we should seek to identify the most cost-effective means to cut CO2 emissions, and we should debate whether it makes sense to implement policies that cost more than the EPA’s estimated social cost. Finally, we should recognize the reality that policies that might make sense in other states might not make sense here.

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Posted in Energy, Environment, Regulation

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Give It Up, Dudes, There’s Nothing There

Posted on October 25, 2016 by | 1 comment
The McCabe family

The McCabe family

by James A. Bacon

The Wall Street Journal editorial page has doubled down on the newspaper’s insinuation that Governor Terry McAuliffe’s financial support for state senatorial candidate Jill McCabe was somehow linked to her husband Andrew McCabe’s handling of the FBI investigation into Hillary Clinton’s private email server. Drawing upon the Journal’s news report the previous day, the newspaper’s top editorial finds significance in the fact that “[McAuliffe], a longtime friend of Hillary and Bill, steered money to the campaign of the wife of a top FBI official.”

But the article did not demonstrate a quid pro quo, or even suggest what the quid pro quo might have been, and neither did the editorial.

As far as I’m concerned, former Secretary Clinton deserves all the scrutiny she gets for her Clinton Foundation ties, her decision to buck State Department policy by setting up her own jinky home-based server, her decision to destroy 30,000+ “personal” emails, thousands of which turned out not to be so personal, her repeated lies to the public, and the obstruction by her allies and even State Department officials to delay and thwart the email releases. There’s plenty to investigate. But the Journal does a dis-service by creating a flimsy distraction that can be used as evidence that Republicans and conservatives are just making stuff up. .

Here is the Journal’s logic:

Mrs. McCabe announced her candidacy the same month (March 2015) as the news broke about Mrs. Clinton’s private email server. Mr. McCabe was running the FBI’s Washington field office at the time, and he was promoted to the No. 3 FBI spot not long after the formal FBI investigation began in July 2015.

 

The FBI said in a statement that none of this is an issue because Mr. McCabe wasn’t promoted to the No. 2 position until February 2016, months after his wife lost her race, and only then did he assume “for the first time an oversight role in the investigation into Secretary Clinton’s emails.”

 

All of this asks voters to believe that Mr. McCabe as the No. 3 official at the FBI had nothing to do with the biggest, most sensitive case at that agency. This strains credulity. Before he became No. 3 at the FBI Mr. McCabe ran the bureau’s Washington, D.C., field office that provided resources to the Clinton probe. Campaign finance records show that 98% of the McAuliffe donations to Mrs. McCabe came after the FBI launched its Clinton probe.

McAuliffe, of course, has denied any skulduggery. He began recruiting Mrs. McCabe to run against Sen. Dick Black, R-Leesburg, for the 13th senatorial district, in February 2015, before the email scandal broke, said the governor’s office in the Times-Dispatch today, The recruitment efforts were led by Lieutenant Governor Ralph Northam as part of a larger bid to re-take control of the state senate. I would conjecture that Democrats considered the seat, occupied by one of the most conservative members of the senate, to be more vulnerable than most. It is not implausible to think that the Dems targeted the seat and plowed money into Mrs. McCabe’s candidacy because they thought she could win.

One way the Journal could have buttressed its story was to talk to Northam and other leading Democrats. Did they find McAuliffe’s support for McCabe controversial in any way? Were they baffled that he poured so much money into her race? Or did Democratic Party leaders share the perception that McCabe was the best candidate with the best chance of beating Black? For the record, although McCabe lost the election, she did put in a strong showing against an incumbent, garnering 47.6% of the vote.

The Journal also could have talked to Thomas V. Mulrine, an Army veteran and attorney who had announced his candidacy before McCabe did. The T-D‘s Graham Moomaw did talk to him, and it turns out that he was a little miffed that McAuliffe had backed McCabe, calling it “unseemly” that the governor would recruit one Democratic candidate to run against another. “I think the citizens of the county ought to choose who their representatives are and not just have somebody foisted on them by somebody from afar,” Mulrine said.

One might ask why McAuliffe chose to intervene on McCabe’s side before the nomination. Is it unheard of in Virginia Democratic Party politics for the governor to get so involved in selecting candidates? If so, McAuliffe’s intense interest in McCabe might be cause for suspicision. But if McAuliffe involved himself in the selection of other candidates, then there is no need in McCabe’s case to invoke another explanation entailing a corrupt desire to influence the outcome of an FBI investigation. Continue reading →

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The Peninsula’s Infrastructure Bottleneck

Posted on October 25, 2016 by | 20 comments
The Virginia Peninsula, utility bottleneck

The Virginia Peninsula: utility cul de sac

by James A. Bacon

I don’t envy the poor blokes in charge of economic development for the Virginia Peninsula. The Newport News-Hampton-Williamsburg area has major infrastructure issues — constrained electricity, water and gas capacity — that are hindering economic growth. Any one of these deficiencies would put the 500,000-person sub-region of Hampton Roads at a competitive disadvantage in the economic development game. The concurrence of all three knocks it out of the running for recruiting a broad swath of new industrial prospects.

The Peninsula has landed no new investments so far this year, and only one industrial expansion worthy of a gubernatorial announcement: a $25.7 million expansion of a PrintPack facility, creating 50 new jobs. There was no new-company news last year either, although TE Connectivity and Canon USA did announce expansions.

Hampton Roads lagged the national averages during the current economic recovery, due in large part to a slowdown in military spending. If the Peninsula wants to diversify its economy, it will need to attract new industry. To do that, it must address its infrastructure bottlenecks.

Electricity. In the previous post (“What’s the Hold-up on the Surry-Skiffe’s Permit?”) I noted that the Peninsula faces the likelihood of recurring blackouts next summer after Dominion Virginia Power is compelled to shut down its two coal-fired boilers at the Yorktown Power Station. Even if Dominion gets the go-ahead from the U.S. Army Corps of Engineers (ACOE) to build a controversial high-voltage transmission line across the James River, it will take a year or longer to complete construction. While there will be sufficient capacity from other transmission lines to supply the region with electricity most of the time, hot summer days will put the regional electric grid under severe strain, in which a single mishap could trigger an uncontrolled, cascading blackout. To prevent a worst-case scenario PJM Interconnection, which governs the 13-state transmission grid of which Dominion is a part, will require the company to implement controlled blackouts during periods of peak demand. If temperatures are as warm next summer as this year’s, there could be as many as 20 such incidents.

The ACOE cannot say when it will complete its permitting review process, in which it must balance economic considerations with harm to priceless cultural and historic resources. Local conservation groups and their national allies say that running a transmission line across the James River near the original Jamestown colony would blight the viewshed of the cradle of American history. If ACOE turns down the permit request, the likely fallback option would be extending a high-voltage line from the Chickahominy River to Williamsburg, but Dominion rejected that option previously because of the disruption it would pose to historical and environmental resources as well as residential neighborhoods.

Water. At least there are potential solutions to the Peninsula’s electricity straitjacket. There is no obvious remedy for the region’s constrained water supply. Hampton Roads draws much of its water from an aquifer complex lying under Virginia’s coastal plain. At present, industrial and municipal users are draining the aquifer system faster than it can be replenished by rainfall. Although the underground water should last another 50 years at current rates of usage, it will not be sustainable if big new users start drawing from it. Accordingly, the Department of Environmental Quality has placed tough conditions on any industrial customer filing for a water permit.

Difficulty in acquiring new permits will make it challenging for water-intensive industries to locate in eastern Virginia, states a recent report by the Joint Legislative Audit and Review Commission (JLARC). (See “Amidst Abundant Rain, Eastern Virginia Still Faces Water Shortages.”)

“About 85 percent of local economic developers responding to a JLARC survey reported that availability and affordability of water were important factors for at least one new project during the past three years,” the report says. Survey respondents told JLARC of three incidents in which projects did not materialize due to water permitting issues.

Natural gas. The entire Hampton Roads region, both north and south of the James, is constrained by limited supplies of natural gas. While supply is adequate for the present, Virginia Natural Gas (VNG) had to cut supplies to its interruptible customers (who enjoyed a lower rate in exchange for accepting supply cuts in extreme cases) during the freezing conditions of the so-called Polar Vortex in 2014. VNG is not currently in a position to accommodate new industrial customers requiring a steady, uninterruptible supply of gas.

When Dominion Virginia Power was exploring alternatives to the Surry-Skiffes transmission line, it studied the option of converting the Yorktown coal boilers to natural gas. The company issued a Request for Information from the gas transmission companies serving Virginia (including sister company Dominion Transmission), according to Glenn Kelly, in charge of generation system planning for Dominion. VNG submitted the lowest cost proposal, which would have supplied 300,000 dekatherms per day to connect with the giant Transco interstate pipeline, add some compressors, widen the right of way, and lay new pipe. The project would have cost an estimated $70 million a year over a 20-year contract — some $1.4 billion in all. Dominion ruled it out as uneconomical. Continue reading →

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Virginia as Free Speech Zone

Posted on October 24, 2016 by | Leave a comment
George Mason University as free speech zone.

Free speech zone at George Mason University

Three Virginia universities received high rankings in the Heterodox Academy Guide to Colleges for their commitment to diverse viewpoints. The University of Chicago and Purdue University garner the top “heterodoxy” scores for freedom from politically correct strictures on speech, but the University of Virginia, College of William & Mary and George Mason University belonged to a cluster of 12 prominent universities receiving the next highest ranking.

Virginia Tech received one of the lower scores, although it did not fare as poorly as Harvard, Brown, Northwestern and others that have instituted safe spaces and speech codes. The ranking took note of how Jason Riley, a conservative writer with the Wall Street Journal, had been dis-invited from speaking.

The Heterodox Academy is a politically diverse group of scholars concerned about the shrinking diversity of viewpoints on college campuses. States the Academy’s website: “When nearly everyone in a field shares the same political orientation, certain ideas become orthodoxy, dissent is discouraged, and errors can go unchallenged.”

It will be interesting to see how UVa fares next year. The chastisement of engineering faculty member Doug Muir for making an unpopular comment on a Facebook page probably was not factored into the Academy’s calculations. Still it is reassuring to see that three of the four Virginia universities listed enjoy more freedom of expression than their peers.

The Academy rated the 150 colleges scoring highest in U.S. News & World-Report‘s college ranking. Key criteria include endorsement of the Chicago Principles on free expression, the presence of restrictive speech codes as determined by the Foundation for Individual Rights in Education (FIRE), and the Intercollegiate Studies Institute (ISI) appraisal of whether a campus is welcoming to conservative and libertarian students.

Update: My deep throat source at GMU saw this blog post and forwarded the following email distributed throughout the university:

Dear Patriots,

George Mason University is a public institution that is committed to freedom of expression and the creation of more just and inclusive communities. The University is proud to support individuals’ rights to express their views. We believe that learning is best achieved through critical thinking and open dialogue.

We are mindful that certain topics elicit stronger emotional responses than others, especially when those participating in the conversations have contrasting opinions or seek to provoke. It is our expectation that members of our community engage respectfully in such dialogue, even when what is heard may seem offensive or distasteful. Several recent incidents on the Johnson Center North Plaza have involved hostile behavior directed at guests to the campus, including physical confrontations. Such displays of incivility undermine the scholarly mission of our university, and could carry significant legal and disciplinary consequences.

Our campus community, like others, will continue to be challenged by activities that some may view as personally distasteful or offensive. However, unlike many communities, we have the opportunity here at Mason to set an example and lead. I ask that you please remain respectful of opposing viewpoints and not engage in acts of incivility. You most certainly can counter speech you are offended by with your own speech. You can counter activities that are disagreeable to you with your own activities. You can choose to engage with those who have opposing viewpoints or you can walk away. Although the University supports your right to express discontent in a lawful manner, it is also obligated to uphold the rights of those who visit our campus to engage in constitutionally protected activities. Therefore, your cooperation is appreciated as the University continues to serve as a venue for engaging dialogues and freedom of expression.

Rose Pascarell
Vice President for University Life

GMU has just risen in my esteem. What a contrast with my alma mater, UVa.

— JAB

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