An Energy Reform Agenda for Virginia

Virginia City Hybrid Energy Center, St. Paul, VA. Dominion Photo.  Always a good political investment, never a good energy investment.

By Steve Haner

What should Virginia’s energy policy be?  What should the next Governor and General Assembly do? What should candidates be promising?

Based on what has now been my 15 years of close observation and direct involvement, here is the policy outline I would suggest to any candidate who asks (not that the phone is ringing). 

1)  Restore the proper oversight role of the State Corporation Commission over utility rates, profits, and capital planning. Let the SCC decide how to allocate costs between customer classes. The General Assembly has dangerously usurped that function, often leaving the SCC nothing but an administrative agency subject to changing political winds.

2)  Limit campaign contributions from all donors (still important even if the General Assembly stops usurping the SCC’s job in the future.) Require special designation or disclaimers on campaign finance reports for donations from state-regulated monopolies, their employees or related entities, so slow-witted reporters or opposition researchers can see them.

3)  Constrain if not prohibit the use of non-disclosure agreements in cases before the SCC. Too much vital information is redacted or contained in secret filings never made public.

4) Move the Consumer Counsel function outside of the Office of the Attorney General. Perhaps the job should be filled in the same manner as the SCC itself, or some other judicial position.  But it needs to be at least shielded from the election process and the person holding it should have a term certain and perhaps no expectation of reappointment.

5)  Review every code section dealing with electricity regulation or other energy use and remove the phrase “in the public interest,” which is the General Assembly’s method for dictating policy to the SCC despite the total ignorance of most legislators on these matters, and their sensitivity to donors.

6)  Review every code section and reconsider any financial subsidies or rewards offered to influence utility decisions about one project over another, especially any remaining bonus returns on equity for stockholder-favored investments. This would include recently approved (but not funded) subsidies for rich people to buy electric cars.

7)  On the other hand, remove any penalties on specific energy sources or carbon taxes, such as the recently imposed tax to cover Dominion’s participation in the Regional Greenhouse Gas Initiative.  Do not, for example, join the Transportation and Climate Initiative, still something Democrats want to do but not something Republicans are pressuring them over.

8)  Require more competition for utility-scale generation services both to discourage placing all the cost and risk on ratepayers, and to just be sure fair and honest pricing on utility-owned projects.

9)  Do not abandon the current structure entirely. The pure competitive supplier model has plenty of downsides (See Texas).  It is only attractive to so many in Virginians at this time because Dominion Energy Virginia has corrupted the market to unfairly enrich its stockholders.  If all these other steps are taken and electricity costs in Virginia stabilize, the desire to bolt from the monopoly service will wane.

Now to the various controversial decisions on generation and transmission being dictated by the Virginia Clean Economy Act, which will be radically revised by several of the points above.

One premise on my part is that the hysteria over climate change is not based on the actual science, which indicates that warming has been and will remain gradual and claims of “imminent tipping points” and “ten years to save ourselves” are outright, intentional lies.   We are already moving way more than India, China or other major countries ever will.  Where we are in 2100 might matter, but not 2050.

10)  The remaining coal generation should be allowed to die a natural death from market forces. As the environmental costs grow, and the revenues shrink, many will be closed early without any action by the SCC necessary.  Requests to fund improvements should be viewed with skepticism.  No new coal plants are going to be built.  The Virginia City plant in Southwest Virginia was always a good political investment, never a good energy investment.

11)  The SCC should be making the decision how much utility-scale wind or solar generation is justified, and when, and what are the best options for reasonable cost and reliable supply. That will likely reduce the amount of those investments over the next 25 years below the VCEA’s goals, but some will still happen.  However, the offshore wind project may fail that analysis, certainly the later phases.

12)  The SCC should be the one to respond to the desire of many companies and homeowners to install their own generation while remaining on the grid as a back-up, and to determine what is a reasonable stand-by cost. That cost should not be at the expense of other ratepayers.

13)  The SCC should review, accept, or reject demand-side management programs based on purely economic analysis, and again limit the transfer of costs to other ratepayers not involved. Claims of general public benefit should be tested several ways, including old tests now in disfavor.

14)  Somehow nuclear energy needs to get back into the discussion, but if not dictated as “in the public interest” or heavily subsidized, can it? That is not a question I am prepared to answer yet, but Virginia’s energy policy should be totally open to expanding reliance on nuclear power and explore how to make it feasible.

This is not a complete list, and of course would engender incredible debate and even full scale war at the General Assembly.  But it is where Virginia needs to go  to keep electricity costs reasonable.

You may now resume your incessant and repetitive arguments about vaccines and masks.

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38 responses to “An Energy Reform Agenda for Virginia”

  1. Stephen Haner Avatar
    Stephen Haner

    Had a couple of gnats buzzing in my ear yesterday demanding that I spell some things out, so developed this list. Again, in the middle of this insane and constant war over the stupid masks and the incredibly successful and wise vaccines, actual calm discussion of anything else proves impossible. Four minutes, four minutes after I post this another post resumes the culture wars.

    1. Hallelujah, Steve. This may be a pipe dream but there are some well-intended folks in the GA who sure need this checklist to help guide them — and some voters who need to judge their representatives accordingly.

      It’s a nit but I have one suggestion for the version of this you mass produce and hand out to anyone who will listen:
      in #5, keep the phrase “in the public interest” where it defines/limits the SCC’s authority (as, for example, in 56-235.1), but eliminate those all-too-numerous instances where a statute substitutes the GA’s finding of “public interest” for the Commission’s.

      1. Stephen Haner Avatar
        Stephen Haner

        Yeah, that was a broad brush….

    2. Stephen Haner Avatar
      Stephen Haner

      One of my first readers (of my six regulars, which includes the gnats) called my attention to VPAP today which has a report on donations of $10,000 or more to campaign committees. We’re in the time window when they are reported promptly. Northam’s PAC got $25,000 from Dominion a couple of days ago and the PAC run by Senator Lionell Spruill (also not on the ballot this year) $97,000 from Dominion in two recent checks. Same old same old. All that $$ of course will be laundered to others who are on the ballot, but who then deny Dominion support.

      1. DJRippert Avatar

        I won’t claim credit but I remember the days when you believed the unlimited campaign contributions were no big deal and we battled on these very comment threads. I battled Jim Bacon too.
        Welcome to the Force! Virginia is corrupt to the core and the center of that corruption is the unlimited campaign contributions. This is really a non-partisan issue. Chap Petersen (D-Fairfax) has worked hard to end the corruption. Tommy Norment is filthy with the corruption. Dick Saslaaw (D-Mecklenbug) ought to be wearing suits with vertical black and gray stripes.

        Dear Glenn Younkin – wake up!!! Make the campaign contributions your signature issue and drown Terry “the swamp snake” McAuliffe in his own record as a governor who didn’t care about the rampant corruption. This is not hard. If educated, 80%+ of Virginia voters would agree that unlimited campaign contributions (especially from supposedly regulated monopolies like Dominion) = de facto corruption.

        Wake up, Glenn. Wake up!!!!

  2. Actually, this is a reform agenda for two things: energy policy, and governance of energy policy. For the most part, Steve makes good arguments for both. On the issue of campaign finance reform, I’m not as persuaded as Steve (and Don Rippert) are that capping campaign contributions will make much of a difference.

    I know, I know, we’ve had this argument before. I agree that campaign contributions are potentially corrupting. But guess what, if private interests perceive they have something to gain from influencing the political process, they will find a way to influence the political process — if not one way, then in another.

    Look at the environmental groups in Virginia. No need to donate money to political candidates — they set up nonprofits, fund activist groups, publish policy papers, work the media, and file lawsuits. The Sierra Club and Southern Environmental Law Center may not own individual lawmakers, but they control policy-making by determining which issues are raised and framing how they will be discussed. Lawmakers operate within the parameters set by environmental groups. Sierra and SELC accomplished most of this before Michael Bills and Clean Virginia came along.

    Eliminate campaign contributions, and corporations like Dominion will find other ways to influence the process. Typically, those ways will be less transparent, and we’ll be more in the dark. There is no easy answer to the corruption of politics.

    That aside, I agree with most of what Steve says here.

    1. LarrytheG Avatar

      Well, I always admired effective activism, especially if they did not emulate corrupt corporate behaviors.

      I understand the “money is fungible” argument, but I think regulated monopolies should never be allowed to directly contribute to those who actually vote to decide the powers of regulators of monopolies, like the SCC.

      In my mind, that’s part and parcel how we got the convoluted system we now have.

      1. Stephen Haner Avatar
        Stephen Haner

        The SCC, being judges, cannot even accept lunch from a regulated entity. That’s why the power needs to reside there.

    2. tmtfairfax Avatar

      Any nonprofit that spends money on salaries or contractors to influence public policy should be stripped of its tax-exempt status, both at the federal and state levels.

      Private foundations should have a limit on their lives. Say 25 years. At that point, they either give their money to bona fide charities that help people or it becomes subject to a 25-year catch-up tax. They’d pay 25 years worth of income taxes on their earnings, plus interest. If small landlords have to pay taxes on recaptured depreciation, do something similar to private foundations.

      1. LarrytheG Avatar

        That would pretty much kill most charities as well as most political PACs and a lot of dark money so I’d probably support it if it applied also to PACs and other dark money.

        It would not stop environmental activists, though.

        The Sierra Club as an example – has two parts. One is a C3 and the other is not.

        1. tmtfairfax Avatar

          Nail the Sierra Club too based on its affiliation with, and close operational connection to, the Sierra Club PAC and lobbying arm.

          One of the few things done by Bill Clinton with which I agree was the elimination of the tax deduction for federal and state legislative lobbying. There is no reason to allow nonprofits to lobby and influence public opinion while remaining tax free. If a truly volunteer organization’s members write Congress or the state legislature, leave them alone. But once you hire someone to do that for you or conduct a public relations campaign to influence public opinion, bye-bye tax-exempt status. That would go a long way to draining the swamps in the U.S. and state capitol buildings.

          1. LarrytheG Avatar

            So , I’d ask you something about for-profit entities lobbying and writing off their lobbying expenses.

            So same rule for all?

            no tax write-off for any lobbying, PR, etc… not Sierra Club, not Dominion?

            Also – dark money groups where people and corporations essentially hide their involvement because the receiving group does not have to identify them?

            Are you familiar with Donors Trust and similar groups?


    3. Stephen Haner Avatar
      Stephen Haner

      You have not been behind the closed doors and heard the real conversations about why this or that vote went one way or the other. “I had to…they gave me XXXX.” It is just human nature to be influenced this way. And I said LIMIT, not eliminate.

  3. tmtfairfax Avatar

    Residential customers in Texas had the choice of sticking with price-regulated electricity or moving to a market-determined price. Many times, the latter was cheaper than the former. But not always.

    I buy my natural gas from a supplier other than Washington Gas. But I signed a fixed price, fixed term contract.

  4. LarrytheG Avatar

    I’m appreciative for Steve’s contributions to BR and I’ve learned some things from him that I did not know but…there’s always a but – I can’t agree with his skepticism and denial of Climate Change and how that should affect energy policy.

    On the non-partisan , non-denial side – after reading most or all of Steve’s posts AND listening to Tom and Acbar and others who seem to have expertise – I’m in the camp that believes that Dominion has essentially a stranglehold on Virginia through it’s very effective strategy to influence any/all aspects that affect Dominions monopoly interests.

    I’m pretty sure their attitude is something along the lines that they have a monopoly, and they’re entitled to extract as much value as they can from it – in any way that they can – and that includes going along with the political winds as long as someone is willing to pay them handsomely for it and their investors are held harmless.

    So I’d like to hear from TomH,Acbar and others on Steve’s proposal.

    But I’d also like to hear what are the best existing utility models in the US?

    We know Texas and California have issues.. But are there any states
    that do electricity the way it should be done, and how do their models compare to what Steve is advocating?

    1. Stephen Haner Avatar
      Stephen Haner

      There is change but there is no crisis. But like always, you mischaracterize and make stuff up and then attack the straw man.

      1. LarrytheG Avatar

        okay, here’s what you said:

        ” One premise on my part is that the hysteria over climate change is not based on the actual science, which indicates that warming has been and will remain gradual and claims of “imminent tipping points” and “ten years to save ourselves” are outright, intentional lies. ”

        And what I said: ” I can’t agree with his skepticism and denial of Climate Change and how that should affect energy policy.”

        That’s pretty straight forward – direct response to your statement, and I see nothing in your policy recommendations related to climate.

    2. DJRippert Avatar

      May the Force be with you, Larry. Dominion and The Imperial Clown Show in Richmond are the Dark Side. The very easy first step is to eliminate or tightly cap campaign contributions. Especially from regulated monopolies. Virginia can join 46 other US states in doing this. There is nothing hard or odd about campaign contribution caps.

      Here’s a deal – you urge you man McAuliffe to push for strict caps and I’ll urge my man Younkin to do the same.

      1. LarrytheG Avatar

        I’ve been with you on this from the very beginning. Campaign donations in general are bad enough but for a regulated monopoly, it truly is corrupt.

        And yeah, I’ld like to see Youngkin weigh in on that as well as give his view on wind/solar and how it should fit into Va energy policy (or not).

        But once more I will say, campaign contributions aside , Dominion has the view that they’ve been granted a monopoly and they’ve held up their side with reliable and dependable power for the state and they are entitled to every penny they can extract for their shareholders from that bargain – and that probably means they do not think that other providers should be given any access to the market that Dominion has been contracted to serve.

        Dominion will use any/all means at their disposal to defend what they perceive to me their legitimate interests.

        I’d be curious to hear Youngkins AND McAuliffes view on this issue.

    3. Larry: Dominion Energy is in business to make money. One way to make more money is to lobby the GA, quite legally, to favor its interests through legislation. I do not blame Dominion for doing so. I blame the GA for being such a pushover that it goes along with every Dominion whim.

      The real evil here is the laxity of Virginia’s laws governing lobbying and political donations and the like, and the Virginia Supreme Court’s interpretation of the Virginia Constitution a few years ago to find that the State Corporation Commission, despite being established as the utility regulator by the Constitution, has only those regulatory powers the General Assembly lets it have from time to time — thus gutting the SCC as an effective regulatory agency. If you stripped away the entirety of Title 56 of the Virginia Code except for secs. 56-234 and 235 you could have good and sufficient utility regulation by the Virginia SCC; the rest is simply a bloated set of mandates and constraints imposed by the GA over the century since the SCC’s creation.

      You ask for other models. Other states offer many such models — but they differ mainly as to their politics, not as to their laws. The way to assure regulatory independence is through the Virginia Constitution, something deeply resisted by those in the GA who like the status quo.

      Some indeed have referred to this state of affairs as the Imperial Clown Show. The public waits in vain for the lion to rise and attack the clowns who taunt him.

      1. LarrytheG Avatar

        Thanks and agree with the premise that Dominion’s mission is to make money for their investors, but is there a difference between any business that might lobby the GA over their interests and a regulated monopoly, or is that little different?

        I totally understand Dominion’s reluctance to have any value of their monopoly given to other interests. They’re going to defend their interests and beyond that if legislators want less polluting energy – wind/solar carbon credits, etc, sure why not as long as Dominion gets their cut?

        On the models, yes… name some states that do electric utilities “right” both from a regulation perspective AND on campaign finance.

        Do other states allow their regulated monopolies to give money to legislators?

        Finally, on the Nukes. Do you have a view on them in Virginia Acbar? Should we have more, new ones?

        1. There are restrictions in some states concerning lobbying by regulated entities, but not in Virginia. In many states the cost of lobbying is excluded by the regulator(s) from retail rates. Not sure about Virginia.

          Other states? Well, I used to practice before the utility commissions of MD, D.C. and DE, and FERC, and had frequent contact with the commission staffs in PA and NJ as well, and none of them was as much under the thumb of the legislature as in VA. I can’t tell you much about the state lobbying laws of each but there are plenty of public interest groups out there that rate the states on that score.

          Nukes: a complicated issue. Yes, I’d like to see more, and we certainly should retain what we have, with a subsidy if necessary; retiring a nuclear generating plant is a huge negative. But, building new units at a reasonable cost requires untangling the federal bureaucracy, particularly the CYA nightmare called the NRC, which has managed to kill the industry with regulatory ‘love’ and unfilled promises on waste disposal while claiming to support the industry’s revival. I’m in favor of NA3 but only if Dominion builds it for profit at shareholder (not ratepayer) cost, which isn’t going to happen in today’s wholesale electric marketplace — because, frankly, a new nuke unit is not a cost-effective choice these days.

          1. LarrytheG Avatar

            Thanks for your view!

            I’d support NA3 – even a subsidized NA3 if it were a modern design that could ramp up and down quickly in response to varying demand on the grid.

            Older design nukes take hours/days to ramp up and down and thus seem to be completely incompatible with intermittent sources like wind/solar.

            We’d still have to have the gas to deal with demand.

            Otherwise, 60-year old design nukes are not only not cost-effective but incompatible with wind/solar.

  5. energyNOW_Fan Avatar

    I am not enamored with full EV’s and do not like political mandates to force that. On the other hand I drive Hybrids and think more Hybrids could greatly reduce carbon, perhaps more than EV’s. But of course Democrats want to ban ALL use of fossil fuels and Detroit wants to go to full EV mandates because they cannot compete with Japan on Hybrids. Resist the temptation to mandate EV’s over hybrids. I believe if we got rid of Virginia’s crazy car tax, our car fleet would instantly get newer and cleaner, and car dealers would sell more and more expensive cars.

    1. Stephen Haner Avatar
      Stephen Haner

      Absolutely the main reason I hang onto my 10 year old Camry is the minimal annual tax. I could afford pretty much any car I want, but would HATE paying the tax (well, and the insurance….)

      1. energyNOW_Fan Avatar

        Last time, I probably voted for TMac.
        TMac was opposed to taxes on Hybrid cars, and he stopped it his first day.

        Now we have the extra taxes back on all high MPG cars and Hybrids, and I do not think he will stop it. Add that to my energy policy Steve.

        On the car tax, make it I dunno 7% at purchase. Give half to the state and half to the locality. That’s it no annual tax, or tax cars at 1% like the house. Why have a super-tax on cars?

    2. LarrytheG Avatar

      I kind of got the impression that car manufacturers worldwide were going to EVs including Japan, Korea, Europe, etc. That sounds like a bigger thing that just US Dems, no?

      And that damnable Va car tax, I agree but not sure all other states do high car taxes locally.

      This is how Virginia counties fund schools and balance real estate taxes with other taxes.

      Seniors and low income are given a break on their homes and those with newer cars get whacked.


    3. Eric the half a troll Avatar
      Eric the half a troll

      Every bite at the apple saves less gas. The real savings comes when we shift from 25 mpg to 50 mpg (standard IC to hybrid – 10 gallons over a 500 mile trip). The next step 50 mpg to 100 mpg (standard hybrid to plug in hybrid) saves less – 5 gallons over 500 miles…. and so on. Unless solely powered from solar, there is some point where a EV is no better than a really good hybrid in terms of carbon emissions. I am not sure what the mpg equivalent would be for an EV in terms of carbon emissions.

      Edit: Welp, google tells me that a gallon of gas emits 20 pounds of CO2 so that is about about 181 grams per mile for a 50 mpg hybrid. I’ve read the non-plugin hybrid range is actually 160-205. Currently an EV would emit about 200 grams of CO2 per mile. Get a good hybrid (like a Prius) and stick with that… for now… once the grid shifts to renewables… then go to EVs…

      1. LarrytheG Avatar

        Seems like if the cost of the batteries comes down, the numbers would get better for EVs.

        GM thinks battery costs are coming down.

        ” GM has said it aims to reduce battery cell cost to well under $100 per kilowatt-hour by 2025, compared with more than $150/kW today. GM executives also have said the company expects its future EV batteries to last for a million miles or more, with driving ranges of 500-600 miles (805 to 965 km) between charges.”

        The automaker’s $2.3-billion joint venture with Korea’s LG Energy Solution is due to start producing Ultium battery cells in Lordstown, Ohio, in 2022.

        1. Eric the half a troll Avatar
          Eric the half a troll

          From a CO2 emissions standpoint, there is currently no reason to move away from standard hybrids until they convert the grid to carbon neutral. That is years, even decades away. Prices may drop and if you have excess solar power (in a net basis) to charge your car then EV makes sense but as long as you are still drawing net power from the grid, EV makes no sense.

  6. Eric the half a troll Avatar
    Eric the half a troll

    “The SCC should be the one to respond to the desire of many companies and homeowners to install their own generation while remaining on the grid as a back-up, and to determine what is a reasonable stand-by cost. That cost should not be at the expense of other ratepayers.”

    The current standby charge is reasonable. It is $0 if you keep your system below 15kWac. That is a pretty big system for most residential applications. That being said, there really should be no disincentives to residential solar, imo. Worst case, if you exceed the 15kWac only slightly, the fee should be nominal. Right now, if you exceed, the economics get shot to hell – which is Dominion’s goal.

    1. LarrytheG Avatar

      I know you went over this before but missed it but when you say 15KWac – can you explain for your case what percent of your usage that is?

      If, by some good luck, the GA would want to change that , what would be a number that would really benefit folks?

      Are the Tesla powerwalls feasible financially or better to just use solar without?

      1. Eric the half a troll Avatar
        Eric the half a troll

        A 15 kWac system should be adequate to cover most (if not all) of a typical residential house need. Really shouldn’t be close. I am still tracking mine but it looks on track to cover it. You can determine your usage from Dominion over the past year or two. Once you do that, you can use that data to help size your system. A good installer will walk you through the right design for you. They will do it via email these days and can give you a preliminary design within a couple hours. You have to watch them though as they sneak some funny figures in to try to sell the system. It is kind of like buying a car that way when they start mixing financing into the deal. I ended up with three different bids and went with the local guy as his was the least expensive.

        Edit: Never answered your last question. As long as Dominion continues with fair treatment of typical residential systems (a big “if”, I know), and unless you truly want to go off the grid, net metering is a better approach to backup battery systems, imo. Here in Virginia that is.

        1. LarrytheG Avatar

          Thanks. and you also have a geo HVAC, right?

          1. Eric the half a troll Avatar
            Eric the half a troll

            Yes, I do. And solar hot water.

          2. LarrytheG Avatar

            so the solar you have is “enough”?

            would it be “enough” for a regular heat pump and hot water heater?

            probably not, right?

            got a view WRT “on-demand” hot water?

          3. Eric the half a troll Avatar
            Eric the half a troll

            It is hard to tell yet but unlikely 100%. I have a pool so that is a not insignificant draw that others may not have. The shoulder months are when I will over produce so it is going to take some time to see if I net out at zero or less.

  7. […] has long been too much secrecy in the SCC’s cases, a complaint I have aired several times in various forums.  This has been accompanied by a reduction in the amount of […]

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