Air Board Approves Carbon Caps for Electric Utilities

The Virginia Air Pollution Board unanimously approved today regulations to reduce carbon from electric utilities by 30% between 2020 and 2030. The rule also will link Virginia to the Regional Greenhouse Gas Initiative (RGGI), which will allow Virginia utilities to swap carbon allowances with power companies in other states.

The vote “will make this Commonwealth a leader in the global fight to cut carbon and promote clean energy technologies,” said Governor Terry McAuliffe in a prepared statement. “This will allow us to achieve carbon reductions in the most innovative and cost-effective way possible with minimal impact on customer bills.”

Virginia is uniquely vulnerable to the threat of climate change and many of our residents are already experiencing its impacts. We do not have the luxury of waiting for Washington to wake up to this threat – we must act now. I am proud that Virginia is joining states around the nation that are filling the void of leadership that President Trump has left on transforming the energy sector and protecting our environment. With these regulations, we will significantly cut carbon emissions, continue our state’s explosive growth in the clean energy sector, and set an example for leadership in Washington, other states, and the entire world.

The public comment period and on-going enactment process is expected to be lengthy, especially if lawsuits are filed challenging the legality of the regulations. McAuliffe’s statement was short on details on how the regional greenhouse initiative will work.

Here follow responses from various parties as they come in.

House of Delegates Republicans: “This is a clear attempt by Governor McAuliffe’s Administration to circumvent the appropriate legislative process to impose wide-ranging regulations that, simply put, will necessitate higher electricity prices and discourage businesses from investing in the Commonwealth,” said House Speaker-designee Kirk Cox.

“Democrats purport to be champions of the poor and working class, but this policy will lead to higher electric bills for families, small businesses, seniors, and the working poor,” said Majority Leader-designee Todd Gilbert. “It will directly hurt people already anxious about making ends meet and getting through a cold winter, but it sure will please Governor-elect Northam’s California billionaire donors.”

“The Air Pollution Control Board does not have the authority to promulgate regulations at the state level that exceed those at the federal level,” said Commerce & Labor Committee Chairman Terry Kilgore. “Today’s action is clearly inconsistent with Virginia law and a gross example of bureaucratic overreach.”

Dominion Energy Virginia. “We already are a low-carbon producer of energy, and have continued to work to lower emissions both in anticipation of future state or federal regulation and because it’s the right thing to do,” said Dominion spokesman David Botkins. “We have plans to build more than 5,200 megawatts of solar arrays in Virginia, extend the lifespan of our nuclear plants and have closed or converted coal-fired generation. While we haven’t yet had a chance to fully study the state’s draft proposal, we expect to fully meet whatever regulatory requirements that result. We’ll review today’s vote and participate in the public comment period in due course.”

Appalachian Power: “Appalachian Power is reviewing the proposed regulations. Given uncertainties in the ultimate Virginia carbon budget, allocations, and allowance pricing, we are unable to estimate the impact of the proposal on our customers at this time” said Apco spokesman John Shepelwich. “But the company will participate in the public notice and comment process to ensure any final rule, if/when/promulgated, will have the least impact possible on our customers.”

APCo has already reduced CO2 generation emissions in Virginia by 96% since the year 2005, he added.

Update: I normally get a slew of press releases from environmental groups, but nothing has arrived in my inbox on this. But in its story the Richmond Times-Dispatch quotes the Virginia Conservation Network as calling the draft regulation “a critical first step in addressing the threat of climate change and spurring investments in clean energy in Virginia.”

Climate change is one of the most pressing issues of our time, especially when it comes to its devastating impacts on Virginia’s most vulnerable communities. It is imperative that every level of government steps up to be a part of the solution.

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31 responses to “Air Board Approves Carbon Caps for Electric Utilities”

  1. LarrytheG Avatar

    re: ” … The Virginia Air Pollution Board unanimously approved today regulations ”

    Isn’t this a draft proposal that is the starting point to receive comments?

  2. Elections have consequences, in this case a ban on future fossil fuel power plants in Virginia. We commit to importing power, or nukes.

    P.S.- for now

  3. LarrytheG Avatar

    Except it’s not a ban on fossil fuel – it’s not even a rule or regulation yet. It’s a draft proposal out for comment and it does not target coal but rather emissions and it allows flexibility in meeting the proposed emission targets.

    We need to be factual about this – and not start off claiming it’s a Democratic executive order .. because the facts are that at this point, it’s a proposal and there is already push back from the GOP in Va who claim that Virginia cannot have any pollution rules that are stricter than the Federal rules.

    I’d much want to hear DOM’s take on this and if they come out opposed to it – then we need to rethink it.

    but I’m amused that as a State that has often touted states rights – that we have codified in our own state law that we follow the fed rules and apparently do not have our own ideas about how much pollution we want or not – as other states have done that.

    1. You’re kidding, right?
      Let’s face it, Ralph Northam would have been facing the Dem wolves if he did not immediately ban growth of natural gas in Virginia. Maybe Northam wanted to go that way himself, so McAuliffe did Northam a huge favor by doing the dirty work for him.

      I don’t know how you can paint this as anything other than highly partisan, highly divisive , executive order and punch in the gut.

      It appears more strict than the orig. Clean Power Plan in that the “rate based” approach is missing, which allows growth as long as it is highly efficient re: carbon intensity. Seems to cut off an option for Virginia to improve the economy by being less of an importer of electricity from WV, and in that sense actually allows WV to continue burning coal to send the electrons to us.

      The only question remaining, is the next sentence approval of NA3?

      1. LarrytheG Avatar

        It’s a PROPOSAL and is subject to the full comments of any and all who want to .

        characterizing a proposal as “highly partisan” is only in the minds of the right.

        Yes.. you WOULD EXPECT those who actually are concerned about emissions to .. yes.. make a proposal.

        Now.. at the end of this process.. if they want to implement something that has wide spread opposition -then I might agree with you but like I said earlier – this is the state of the politics – where a PROPOSAL is characterized as a fait accompli .. regulation.

        Times are changing..the folks on the right are going to lose their grip.. and they should.. because at the end of the day – they really have no solutions other than partisan opposition – which – is less and less representative of the voting electorate. Elected folks have to represent the electorate – not their own ideology…

        and most people do want to reduce emissions.. and they want to see some proposals on how to do it.. and right now we only have one – not a second one from the other side.

        1. I don’t mind retiring coal-fired power plants, go for it. Virginia CO2 is already very low because we have nukes and import a lot of electricity. Who said there was a problem for Virginia that needed to be fixed? I wouldn’t mind a little more emphasis on clean cars (Prius owner here) to save CO2 for Va. This bill is not about fixing a CO2 issue, it’s about defining “politically incorrect” electric energy choice options.

          I am independent and unhappy with both sides. Until now McAuliffe was more pragmatic. I voted for him. Don’t resort that calling me “right wing” tactic. I get tons of emails from the Va. Dems asking me for money every day.

          1. LarrytheG Avatar

            re: “… it’s about defining “politically incorrect” electric energy choice options”

            ” McAuliffe was more pragmatic. I voted for him.”

            Don’t you think this IS McAuiffe’s approach and would have been what he would have done in a second term?

            How would you really expect the new guy – just elected – to have in-the-box, ready-to-go .. this kind of thing?

            you must be a cynic, eh? 😉

            I just assumed that Northam would pick up where McAuliffe left off .. give or take.. and McAuliffe was aggressive in pursuing his initiatives.. he did not roll over for the GOP… and we’ve yet to see what Northams style will be but he does not strike me as a hellion… he SEEMS more reserved… and with a lot less passion..on issues like this… I certainly don’t ascribe to him “far left” philosophies but if you think so and can cite some examples.. have at it. I just don’t see this guy as a marauding left wing zealot…. who fooled the electorate.. and now will run wild but I suppose you could “educate” me.

  4. Steve Haner Avatar
    Steve Haner

    Someone will probably litigate this. Apparently it is cleverly crafted to keep the revenue for the credits off the Commonwealth’s books, and thus away from the appropriations process. I haven’t read it. But the most likely parties to litigate are the power companies, and I suspect they will embrace this in the end. As was underlined in the Clean Power Plan debate, thanks to nukes and hydro Virginia is not one of the high CO2 states and meeting these goals may not be too hard. The problem will be the moving goal line I foresee – Lucy and the football. When the first fairly easy goal is met, then the new target will appear and the real costs will come.

    When legislation was introduced to join RGGI, the fiscal impact estimate was $250 million annually from ratepayers. That estimate probably came from the power companies themselves. What’s a quarter billion a year give or take when the unregulated monopoly companies we now have is already enjoying (per the SCC) excessive rates? I do not trust their numbers anymore.

    Where I’m really going to watch this is the promise that they will let the SCC oversee this process and determine where the revenue goes, this amorphous promise that the benefits and costs will balance. Giving the SCC authority in this issue will be meaningless unless total SCC authority – the authority taken away by the Assembly in 2015- is restored. This cannot be another silo – the SCC needs to be back fully engaged in regulating rates and ROE, reviewing costs for reasonableness, demanding the power companies explore alternatives, etc.

  5. TooManyTaxes Avatar

    Doesn’t this allow Dominion to make a credible argument that the rate freeze should remain in effect?

  6. LarrytheG Avatar

    Her’s the thing about the politics of this issue.

    It”s NOT like the Dems offer one proposal and the GOP offers their own different one.


    WHATEVER proposal is made by the Dems is immediately OPPOSED outright with no alternatives proposed by the GOP.

    What would the GOP in Virginia do about carbon pollution?

    Is that a relevant question?

    If they are like many of their counterparts – in a word – nothing in part because some do not believe there is a problem to start with – and for others whatever they’d do – never sees the light of day because it never goes anywhere in the GOP – as a party.

    like health care, immigration and other tough-nut issues – the GOP these days offers few changes even as they vociferously litigate these issues publicly and use them – in their political campaigns – their basic position is – do nothing – because the GOP itself cannot agree and align themselves pretty much with the skeptics.

    the following chart pretty much explains and verifies this:

    1. TooManyTaxes Avatar

      Larry – I’m confused about what appears to be an ongoing assumption – laws need to change constantly and that not supporting change is somehow wrong. “WHATEVER proposal is made by the Dems is immediately OPPOSED outright with no alternatives proposed by the GOP.”

      Let’s move from carbon emissions to immigration. A perfectly logical position is to maintain the status quo and enforce the existing federal immigration laws. No one has a right to move to the United States and become a permanent resident, much less become a citizen, simply by crossing the border illegally or over-staying a visa limit. I suspect a sizable number of U.S. citizens would think that this a reasonable position. Why would someone, some party, be required to propose changes to these laws? Most nations on earth have similar statutes and enforcement policies.

      I’m not arguing against considering any specific changes to the laws. But when did opposing those who are taking a position that we need to change laws for the sake of changing laws or because some people want them changed become equal to dysfunction of the political system.

      Another example, a number of American States have abolished the death penalty in favor of mandatory life sentences. And, from time to time, I read where legislators propose to repeal that law and reinstate the death penalty. Using your logic, death penalty opponents should not work to maintain the status quo, but rather, to offer a different proposal to reinstate the death penalty.

      The reality is: It is reasonable for legislators, political parties and the like to react to a proposal to change the law by working to maintain the status quo.

      And if you get to say some issues are so important (say reducing carbon emissions) that maintaining the status quo is not acceptable, so too can every other Virginian take the position that some other issue is so important that defense of the status quo is not acceptable.

      1. LarrytheG Avatar

        well TMT -you sort of jumped out of the subject ..

        but in my view.. opposition to any change whether it’s climate or immigration or other problems is not a legitimate way to deal with issues and it does reveal a bigger problem with folks on the right in that they not only do not agree with folks on the left.. they also do not agree within their own ranks.. AND they refuse to compromise… that’s not governance – it’s not sustainable and it leads to even worse outcomes..

        The test of leadership and governance is to deal with the issues.. not to go hide in a closet and hum.

        1. TooManyTaxes Avatar

          Larry – with all due respect, this is crazy. “opposition to any change whether it’s climate or immigration or other problems is not a legitimate way to deal with issues.”

          I could propose a large number of legislative changes (as could any other BR participant) that people on the left or on the right would oppose 100%. Yet, your logic suggests either that this (total opposition to change) should not be permitted at all or some group of people that seems to include you, get to decide when and where everyone must accept change of one type or another. That sounds like Heads, you win; tales, I lose.

          One can make a very good argument that market forces are driving out fossil fuel energy and that, based on government’s track record of making economic decisions, any Virginia carbon cap and phase down will have some bad results that will wind up hurting ordinary people. So why not let the market fix this problem?

          And as far as compromise is concerned, what would Northam and the rest of the Democrats do if the GOP in the GA told him they’d support a bill that would reduce carbon emissions by 20% or 25% between 2020 and 2030?

          If this plan is found to be legal and is implemented, dollar to donuts wealth will be transferred from lower-income people to the those at the top. And we will pay higher energy bills because Wall Street will somehow be involved in emission credit trading.

          Why not let the market decide?

          1. LarrytheG Avatar

            @TMT – changes when changes are needed..there are problems – and those who hold positions they will not alter or compromise and will sit on change if they can.

            It’s only heads and tails if you consider getting changes you don’t want or like and a majority does.

            Govt making market decisions.. the govt makes decisions on taxes necessary to fund needs and on pollution restrictions that will cost and harm taxpayers and citizens … It takes govt to do something like acid rain reductions.. the “market” won’t do that because there is no profit in it. Ditto with carbon pollution. The govt sets the framework and environment for those markets because those market would not exist in the “wild” to being with.

            re: compromise… in order for that to happen – the opponents have to propose an alternative other than just opposition. Try it .. it can work but the primary characteristic of the GOP these days is that not only will they not compromise with the Dems.. they can’t even compromise within their own ranks on tough issues like immigration so they prefer no changes..just gridlock on the issue.

            and Conservatives are “worried” about low-income folks? Since when? what a canard! Conservatives trot that thing out when they don’t want change… right?

            got your number TMT!!! 😉

  7. Some things need to be cleared up about this discussion. First, Virginia cannot become a full participant in RGGI without legislative approval. That is why this workaround was developed. Virginia cannot directly auction allowances within the RGGI framework until the GA approves it. I have not seen the Air Board’s draft guidelines, but I assume they are setting up a hybrid process that sets a cap (33 or 34 tons in 2020) and a period for reductions in the cap. That is the 30% reduction, 3% per year, in CO2 emissions between 2020 and 2030 that has been described. Presumably, there would be a penalty applied for failing to meet the required reductions.

    A panel, convened in May, discussed the best ways for Virginia to deal with this issue. The panel included representatives from Virginia’s regulated utilities, merchant producers and electrical cooperatives as well as environmental groups and renewable energy and energy efficiency organizations.

    Governor McAuliffe directed the DEQ to develop a regulation that allows for the use of “market-based mechanisms and the trading of carbon dioxide allowances through a multi-state trading program.” The Governor wants Virginia to become “trading-ready”.

    The only program that met those criteria was the Regional Greenhouse Gas Initiative (RGGI), a cooperative effort between nine Northeast and Mid-Atlantic states, that sets regional yearly caps for carbon emissions, regulates emissions from fossil fuel power plants above 25 megawatts, and auctions off those carbon-dioxide “allowances.” The proceeds are invested in programs that improve energy efficiency and advance renewable energy technology.

    A complication to add Virginia to this group is that it would be the only state that has not deregulated its utilities. Utilities in the member states are not affected by greater investments in energy efficiency and distributed solar in the way Virginia utilities might be.

    To avoid the need for legislative approval, rather than having utilities purchase their credits, Virginia utilities would receive a certain amount of allowances at no cost, based on their emissions. They would have to sell those credits at auction before buying back the number of allowances needed to offset their emissions. If the utility sells more credits than it buys, it can keep the money, although state regulators might have some say in how it is spent.

    Dominion’s claim that “We already are a low-carbon producer of energy, and have continued to work to lower emissions both in anticipation of future state or federal regulation and because it’s the right thing to do,” is open to question. According to Inside Climate News,” If Virginia does join the carbon market it will be the biggest emitter of the participating states, boosting the RGGI’s 2020 cap (78 million tons) by more than 40 percent.”

    Carbon emissions in all nine RGGI states fell to 79 million tons in 2016, down 5 percent from the previous year. Since 2008, before RGGI began, emissions have fallen 40 percent.

    In contrast, according to the DEQ, the carbon output of Virginia’s power plants increased from 31 million tons in 2011 to 34 million tons in 2016 and is projected to increase to 37 million tons by 2019.

    Of the eight plans presented in the 2017 IRP, Dominion’s carbon output produced by the plan relying on a mixture of solar and natural gas generating additions increased carbon emissions from 40 million tons in 2017 to over 46 million tons in 2042. The pay-no-attention-to-carbon plan produced almost 54 million tons in 2042. The exorbitantly expensive option of using nuclear units to provide energy with lower carbon emissions still resulted in an increase of Dominion’s carbon output to nearly 42 million tons in 2042.

    We might have something to learn from the RGGI participants. Between RGGI’s founding in 2009 and 2015, using renewable energy technologies, energy efficiency, and modern utility regulatory concepts, the RGGI states have achieved the following:

    • $2.3 billion in lifetime energy bill savings
    • 9 million MWh of electricity use avoided
    • 28 million MMbtu of fossil fuel use avoided
    • 5.3 million tons of CO2 emissions avoided

    These results indicate that if we approach this issue with open minds and innovative solutions, we can achieve carbon emission reductions and cost savings at the same time. We would be best served by avoiding knee-jerk responses and concentrate on a serious discussion about how best to move Virginia forward in ways that improve our environment and our economy.

  8. LarrytheG Avatar

    Thanks Tom for the background info and explanations…

    It’s your view that Virginia cannot really do much on RGGI without concurrence of the GA and I presume DOM?

    re: ” .. Dominion’s carbon output produced by the plan relying on a mixture of solar and natural gas generating additions increased carbon emissions from 40 million tons in 2017 to over 46 million tons in 2042. ”

    how can that be ? is it higher electricity use? One would presume that a mixture of gas and solar ..compared to coal would REDUCE .. unless there are more folks using electricity and/or more folks using more electricity.

  9. No, I did not say that Virginia cannot do much. The AG said that Virginia can set standards for CO2 emissions and establish appropriate regulations. What I said was that Virginia cannot act directly in the RGGI auctions without GA approval. That is why these “hybrid” regulations are out for public comment. Governor McAuliffe wants to move forward with limiting CO2 output in Virginia in a way that does not need legislative approval.

    CO2 output is projected to increase in Virginia because Dominion plans on building more natural gas-fired power plants, to meet an increase in demand that only Dominion foresees. People have a general misconception that natural gas-fired power plants help with climate issues. More CO2 is more CO2, whether it comes from a coal plant or a natural gas-fired one. Natural gas is a benefit only compared to coal, in terms of CO2. Other options such as energy efficiency and renewables can provide generating capacity at a lower cost and with zero CO2 emissions. That is what the nine RGGI states have discovered. Governor McAuliffe has suggested that we investigate that option in Virginia.

  10. LarrytheG Avatar

    Tom – all things being equal – and they never are – and I acknowledge gas emits CO2 in significant quantities – a one for one replacement of a coal plant with a gas plant ought to bring a reduction of some kind. I don’t really know how much if it’s half as much or 1/10th as much.

    And I thought whatever that reduce number was – it could be reduced even further by using renewables instead of gas – when those renewables were available instead of gas, and that in a mature system .. you’d STILL need some kind of fossil fuels or nukes for the night even with significant energy efficiency -there’s still going to be a demand for electricity that has to be met.

    So I presume the RGGI is basically to incorporate as much as possible -renewables but not to the degree where we actually do not have sufficient power for the night… as some have claimed California has gone “too far”.

    However – here’s something pretty interesting – Virginians use twice as much electricity as Californians, half again as much in cost but a lower monthly bill:

    ———–avg usage(kwh)——-price–avg bill
    California………… 547 …………..17.39…. 95.20
    Virginia ………….. 1,120………… 11.36 …127.14

    Folks might say that California does not have heating costs but they do in Northern California and in Southern -you think more air conditioners so what explains it – beyond price?

    what might be interesting and perhaps you have the data – to show how much CO2 per capita in California vs Virginia….

  11. LG, your CA to VA comparison shows more than consumption quantity per capita. Look at the price difference.

    The problem in CA, where they have gone “too far,” is with aggressively subsidizing the cost of renewables, resulting in more built than they can use efficiently. And the gen that backs it up and runs at night is not used efficiently; they never “run out at night” but they run units designed for peaker use more than they should, and don’t run efficient cycling units because they don’t have enough of them, and can’t run baseload that can’t be shut down daily . And to answer your other question, yes, a lot of the difference in consumption is climate driven. The population along the coast and in the Valley benefits from mild winters (even north, the air off the ocean is milder) and the dry desert heat is less oppressive in summer than ours. Also CA consumers have been better about cutting energy waste, in part because of that high unit cost.

  12. TMT, you comment, “Doesn’t this allow Dominion to make a credible argument that the rate freeze should remain in effect?” Sure, they’ll probably argue that. If the RGGI compliance cost is treated like a fuel cost, then it will pass through the fuel adjustment rider not base rates. The best deal for a regulated utility is to have rates “frozen” but every significant variable component of the rate (like fuel, purchased power, carrying cost of new construction) covered by “riders” that evade the “freeze” and no adjustment for retirements.

  13. Everybody knows what’s happening in South Australia, right?

    Electricity crisis because no power, and costs escalating out the roof. Why? well apparently they shut down their power plants in belief of the cheap renewables miracle, which did not materialize. Now all of their abundant fossil fuel supply is committed to China under long term contracts, and cannot be used to solve the problem.

    In the USA, we are seeing rapid reductions in CO2, not because of RGGI, but because natural gas is very inexpensive. So we are making enormous strides in CO2 reduction *. Admittedly there is an asterisk that many American liberals say natural gas is totally unacceptable to them.

    Consequently this proposed legislation to eventually end its use in Virginia.

    The point is, it is easy to bad mouth natural gas, when natural gas is greatly reducing electricity costs and power is plentiful. But the future is unknown. Potentially RGGI causes a future crisis, because it’s a club of Northeast Blue States refusing to build power plants – just importing from Canada etc. If a future crisis arises, it would be better to not have Virginia committed to self-destroy our economy. But wait, Larry says that could be a good outcome because the resulting self-inflicted depression would help reduce CO2 further.

    1. TBill,

      I am not sure what information you are using to support your hypothesis.

      According to the EPA, since 1990, U.S. greenhouse gas emissions have increased by about 4 percent. Emissions can rise and fall due to changes in the economy, the price of fuel, and other factors. In 2015, U.S. greenhouse gas emissions decreased compared to 2014 levels, but have increased again in 2017. The EPA says, the 2015 decrease was largely driven by a decrease in emissions from fossil fuel combustion, which was a result of multiple factors including substitution from coal to natural gas consumption in the electric power sector; warmer winter conditions that reduced demand for heating fuel in the residential and commercial sectors; and a slight decrease in electricity demand.”

      We are not making enormous strides in CO2 reduction, not because of what liberals say, but because gas-fired plants are being added to our generation mix in a significantly greater amount than coal plants are retiring.

      The northeastern states are not relying primarily on imports from other areas, rather they are reducing the need for fossil-fired generation using energy efficiency and renewables. This is occurring in a way that is aiding their economy, not destroying it, by lowering energy costs by billions of dollars and creating thousands of new jobs.

      This does not precipitate an economic downturn. Instead it cushions us from one. Natural gas-fired plants will be used for the foreseeable future in Virginia. It’s a question of whether we need to build any more of them. Increasing our reliance on natural gas exposes us to a higher energy cost future. Industry insiders acknowledge that we are beyond the historic low gas prices that we experienced the past few years (because a financial bubble-caused a surplus of supply) and future supplies of gas will be more expensive because we are exhausting the most productive areas now.

      Creating a more balanced mix of generation and energy efficiency puts us in a better position. Exchanging an over-reliance on coal for an over-reliance on natural gas is not a good strategy.

      The states that move to more modern energy systems will have an economic advantage. Energy prices will be lower for families and businesses and the state’s economy will be more attractive to organizations looking to relocate.

  14. An equivalent size gas-fired power plant emits about half as much CO2 as a coal plant. But in Virginia we are not talking about just substituting gas-fired plants for coal plants, but adding more gas-fired plants. That is why the projected emissions of CO2 in Virginia continue to increase.

    Dominion has a scenario where Mt. Storm operates at just a 40% capacity factor in order to reduce CO2 output. But if a new combined cycle-unit comes online that operates at an 80% capacity factor, it will release as much CO2 as Mt. Storm running at lower capacity. This is why Dominion wanted an intensity-based scheme rather than a mass-based scheme for the CPP. They could continue to add gas-fired units and increase total CO2 emissions under that scenario. Not so with the proposed regulations. What counts from a climate perspective is the total amount of carbon released not the amount per MWh. Many want the appearance of “doing the right thing”, without actually doing it.

    Energy efficiency is a source of 24-hour per day generation. It can replace the need for new generation and reduce existing demand. There is sufficient capacity to meet the night-time requirements using what we already have. There is no need to add any new baseload generation with an appropriate amount of energy efficiency.

    Adding more renewables does not reduce our ability to meet the load at night. There is no difficulty meeting night-time demand in California. The claim of “too-much” renewables in California is coming from owners of more expensive conventional plants that are being dispatched less frequently because of cheaper renewables. The higher concentration of renewables in California does pose a challenge of ramping up other units to meet the evening demand as the sun goes down, but there is no issue about being short of capacity to meet the load.

    As you noted earlier, higher electricity rates encourages conservation and energy efficiency. States with some of the highest rates in the Continental U.S. include California, New York and Massachusetts. All of these states have encouraged greater energy efficiency, better building codes, etc. They also do not have a significant winter heating load powered by electricity. Natural gas and oil are the predominant heating fuels in New York and Massachusetts. Comparing electric bills is not a completely accurate method of dealing with total energy use between states.

    Our climate is mild enough enough to make use of electric air-to-air heat pumps for home heating. They don’t work well in the much colder winters in the north.

    It is apparent that we are much less aware of how inefficient we are in Virginia. The latest CERES report still had Dominion dead last in energy efficiency in a list of 32 large utilities. But to be fair to Dominion, under our current scheme, they lose money by reducing demand. And utilities are not necessarily the best providers of energy efficiency measures. They are better at encouraging demand response options.

  15. TooManyTaxes Avatar

    “As you noted earlier, higher electricity rates encourages conservation and energy efficiency.” It also has bad effects, including discouraging the adoption of electric vehicles, more telecommuting using servers and more bandwidth, increases the cost of business and government and reduces spendable income for most people. This is a key reason why we need a strong counterbalance to environmentalists representing consumer interests. They don’t give a rat’s *** about people.

    America needs inexpensive and reliable energy to maintain our quality of life and to grow the economy. Do renewables deliver this? Or is it a path to higher energy costs and lower economic growth?

    1. TMT,

      Utilities in deregulated states and others in the energy industry are embracing energy efficiency and renewables because they are the lowest cost means of generating electricity and provide a fixed cost of energy for decades. It is our conventional means of generation that are presenting a challenge because they are all on an increasing cost trajectory. I am puzzled by the resistance to bringing new lower cost means of producing electricity into our generating mix.

      In Virginia, if we return the analysis of energy options to the SCC, we have an open, evidentiary process to examine the options on a rational basis. It is just not the best forum to discuss energy efficiency because the process centers around plans presented by the utilities, not what is best for the state.

      My comment about higher rates encouraging energy efficiency and self-generation was meant to address Larry’s point. However, this is accurate. Development of new gas-fired plants and refurbished nuclear units will raise our rates, that is certain. Higher rates will cause many customers to find ways to purchase less energy from the utilities. This leaves higher costs to be borne by customers that have not made changes in their usage. This will encourage them to do so and will accelerate the downward spiral of our utilities if we do not give them an updated business model to guide their operations.

      I agree completely that lower energy costs will aid in job creation and increasing economic activity. The only way to achieve that is to blend in new technologies with our legacy systems. Extending the habits of the 20th century will only make things more expensive.

      For example, as adoption of electric vehicles increases, that will provide a source of low-cost storage for renewable generation and provide low-cost grid storage and transportation energy storage during peak solar output. This gives conventional generating units a way to continue operating at peak efficiency as well.

      It is difficult to break habits that have worked well for a hundred years. But to achieve the inexpensive, reliable energy system that you desire, we have to be willing to look at things in new ways. Conditions are changing, our responses must change as well.

      1. TooManyTaxes Avatar

        I maintain that it is more important to secure reliable sources of affordable electric power to ensure economic growth and protect public health, welfare and safety than it is to reduce carbon emissions. From what I’ve read, renewable energy sources seem to be on path to achieve my goals, while also reducing carbon emissions. That sounds like a true win-win.

        But we cannot sacrifice the ability of current and future generations’ ability to live happy and productive lives to satisfy a subculture that puts Earth over its people. We need to find the paths to this result.

        1. Liberals trying to snatch defeat from the jaws of energy and eco Victory. Possibly there is a very expensive nuclear and off-shore wind centric option that works that is more palatable to the Dems. If there could be joint RGGI funding and risk sharing for mega projects such as NA3 and off-shore wind, we would be assured of adequate natural gas supply for many decades.

          1. TBill,

            North Anna 3 and offshore wind (at this time) are beyond the realm of affordability. We have an adequate supply of natural gas, it will just cost us more each year.

            What I have been trying to point out , since this is an article about RGGI, is that natural gas is part of the problem, not part of the solution. Adding new gas-fired units adds to our carbon output. To meet climate targets we must reduce, not increase, CO2 emissions. We are on the path of increasing carbon output in Virginia based on the 25-year plans submitted by Dominion.

  16. I think there is an elephant in the room on climate change. If the models are correct, we are well past the point of just needing to reduce greenhouse emissions. We are already at the point where we need to make serious plans to take major volumes of greenhouse gases (CO2) out of the atmosphere to have any chance of making even coming anywhere close to the Paris agreement targets.

    I know this is a Virginia-oriented blog, and these potential remediations would be beyond the state level, but why does no one ever mention it here? I know there are some insightful people on energy and environmental issues commenting on this blog. Please tell me I am wrong.

    1. Izzo,

      You are correct. The Intergovernmental Panel on Climate Change (IPCC) reports that to stay within the Paris Agreements long-term temperature goal (under 3.6 degrees F of temperature rise), the electricity sector must rapidly reduce its output of carbon dioxide. Globally, the production of electricity must occur without the release of CO2 by about the middle of this century.

      The electricity sector is now the largest emitter of carbon in the U.S., recently surpassing the transportation sector. What I have been trying to point out is that the methods that will reduce our carbon output the quickest (renewables and energy efficiency) are also now the least expensive ways to generate electricity. We do not have to make trade-offs to achieve our objectives. We only have to leave behind our old habits of increased fossil fuel use and create a lower cost, cleaner, and more modern energy system.

      The new Greensville combined cycle plant will go into operation late next year. It will not be paid off until 2053-2058. It should be the last baseload power plant built in Virginia if we are to do our share of meeting these climate goals. It will take excellent collaboration, a revision in our regulatory scheme, and awareness and support of Virginians to do this in a way that enhances our economy and overall well-being. It is certainly possible to do this, but we have to start now. Another decade of business as usual will overburden us with too many new gas-fired plants and unnecessary, expensive pipelines. Investing in old technologies will not only make it nearly impossible to achieve our climate targets but will saddle us with billions in stranded costs when these facilities have to be curtailed or closed in the 2040s, only partially paid for.

      All this will take is a shift in mindset. All of the technology already exists and will only get cheaper and better. This is purely a matter of public willingness to create a reasonable life for our grandchildren. The good news is that it is the cheapest way too.

      Currently the utilities are trying to maximize the existing rules for the benefit of their shareholders. They are important players in developing the new system (but not the only ones). We owe it to them to lay out a new set of rules that allows them to prosper by doing the things that are good for the rest of us.

    2. Izzo- You are absolutely correct.
      However, I believe climate change is a “red herring” in this debate. I will write this up one day, but I feel the Liberals true agenda is to eliminate the American fossil fuel industry and all “dirty” industry. If you go back 10-years, the justification was peal oil. When that turned out to not be true, the rationale was changed.

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