Author Archives: Steve Haner

TCI is Now Dead. Happy to Have Helped.

by Steve Haner

You’re welcome.

Well, nobody is likely to thank me actually, but why not take a bow. After Connecticut’s governor announced he would give up on imposing the Transportation and Climate Initiative on his citizens, Massachusetts’ governor made a similar announcement yesterday.

Governor Charlie Baker of that state was the driving force behind TCI, one of the few Republican governors pushing it. TCI is dead. It was a bad idea a decade ago, and now is a bad idea that has totally lost relevance. Time and reality have passed it by.

The drumbeat against it in Virginia started softly with this article on Bacon’s Rebellion in March of 2019, and I’ve written about it often here and for the Thomas Jefferson Institute. Those stories, and some polling, legal and economic analysis published by the Jefferson Institute, successfully tagged TCI for what it was: a big fuel tax increase coupled with a government-mandated rationing scheme. Continue reading

Another Blue State Bails on Tax-and-Cap TCI, VA Democrats Dig In to Protect Their Green Revolution

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy.

The Governor of Connecticut has abandoned his efforts to enroll that state in the Transportation and Climate Initiative, an interstate compact which would impose a cap, tax and ration scheme on gasoline and diesel fuel.

Virginia remains a part of the planning group that developed the compact, which has now been under consideration for more than a decade but not implemented anywhere. In late 2020, Connecticut was one of four jurisdictions pledging to go forward in 2021, while Virginia remained on the sidelines.

As in Virginia, Connecticut’s participation in the compact required legislative blessing, which Governor Ned Lamont was unable to secure during 2021, even in a legislature controlled by his own party. In light of that failure, and the lack of any other signs of movement toward an agreement, Lamont announced Tuesday he would not try again in 2022. He was quoted in the Hartford Courant:

“Look, I couldn’t get that through when gas prices were at a historic low, so I think the legislature has been pretty clear that it’s going to be a pretty tough rock to push when gas prices are so high, so no,’’ Lamont said Tuesday, acknowledging that the cost of motor fuel was likely to rise under the initiative, known as TCI.

At a later appearance in East Hartford, Lamont said that gasoline prices had reached a seven-year high and there was not enough support in the legislature in 2022 — a year when both Lamont and the entire legislature are up for reelection.

The Rhode Island legislature also passed on the issue in 2021 despite its governor’s efforts. Only Massachusetts and the District of Columbia are poised to join TCI once enough states make it viable, and in Massachusetts opponents have put the issue in front of the voters in a 2022 referendum question. Continue reading

Will Election Fallout Extend to Local Union Push?

By F. Vincent Vernuccio

Virginia’s new collective bargaining law is forcing local government officials to deal with a controversial issue fraught with potential errors and legal risks.

If the 2021 election showed anything, it was that Virginia voters felt the Commonwealth was going in the wrong direction. The sweep of Republicans for governor, lieutenant governor, attorney general and the House of Delegates sent a clear message: Voters wanted change.

Local governments should take heed, especially on controversial issues such as public sector collective bargaining. Elected officials should carefully consider not just voter sentiment, but what new executive authority means for interpretation and implementation of recent laws.

One law, passed in 2020 by a Democratic governor, House and Senate, was a radical change to decades-old precedent. The new law gave local elected officials the ability to pass ordinances allowing government unions to have a monopoly and represent all public employees (even those that do not want representation) and to bargain on almost any issue. However, now there may be stricter scrutiny on the interplay between these ordinance and state laws, not to mention the U.S. Constitution. Continue reading

What Dominion is Hiding in its Wind Application

The cover page that declares we the ratepayers cannot see how Dominion Energy Virginia has calculated the levelized cost of energy for its $10 billion offshore wind project. The SCC should break this seal and open this document.

by Steve Haner

When an applicant at the State Corporation Commission claims certain information is proprietary, or extraordinarily sensitive, a reader not privy to the full document can at least get an idea what is missing.

What is missing from the application Dominion Energy Virginia recently filed at the SCC, a document so dense and complex it was broken into eleven volumes, with 61 separate documents (here)? (That is not counting the tables of contents.) Here are some of the topics masked from view that turned up in a cursory review (in the order they appear in the documents):

  • The cost of foreign currency hedges the utility proposes to buy (with ratepayer money), because about $4 billion of its planned capital and service purchases will actually be in Euros or Danish Krone and subject to exchange rate risk.
  • Information on how it calculated its claimed 97% “availability factor” for the turbines. That predicts how often turbines will be down for maintenance or some other issue over the predicted 30 years of useful life.
  • An entire appendix to the generation portion of the application, “which contains the Company’s analysis of the levelized cost of energy.” That is the key financial consideration. Under the Virginia Clean Economy Act, a LCOE determination which is too high would give the SCC the ability to reject the application. (Expect another post on this issue.)

Continue reading

Turbine Costs Appear on Dominion Bills in 2022?

Illustration of Dominion’s wind project from its Bureau of Ocean Energy Management documentation.

by Steve Haner

Customers of Dominion Energy Virginia will begin to pay for its planned 176 wind turbines off the coast of Virginia Beach next September, years before the first electricity is produced, if the company’s request for initial project funding is approved by the State Corporation Commission.

As with all such projects now, the bill will be paid through a specific addition to monthly bills, a rate adjustment clause or RAC. The cost for residential customers will work out to $1.45 per 1,000 kilowatt hours, but that is just for the first rate year beginning in 2022. In a news release Friday, the company claimed eventually the “net” cost to residential users would be $4 per 1,000 kWh, but that includes assumptions about future tax benefits and future costs of the alternatives abandoned.

The gross cost to consumers may be buried somewhere in the mound of Dominion documents that now constitute the full application. Or it may be among the items of data which the company seeks to withhold from public view.

On Friday, the record of the case was just a few cover letters and the company’s motion asking the SCC to let it keep much of the key information confidential.  Monday up to 40 (40!) additional documents were posted on the SCC’s case file, full of some details, but reviewing a table of contents one can see example after example of information redacted, in anticipation of SCC approval of the motion for secrecy. Continue reading

General Herring: Air All Data in Wind Application

Attorney General Mark R. Herring

An open letter to Virginia Attorney General Mark Herring:

Dear General Herring:

As was reported by the Richmond Times-Dispatch, Dominion Energy Virginia filed on Friday its application for approval to build offshore wind turbines with a nameplate capacity of 2,600 megawatts. The very first motion made to the State Corporation Commission was a request to keep all the important financial and engineering information confidential, away from public inspection.

I write as a Dominion customer and write to you in your statutory role as the representative for consumers before the SCC.  You are my lawyer.

Please do everything in your power to persuade the SCC to reject that motion for secrecy. On behalf of the people of Virginia, break that seal. I hope other likely parties in the case will join you, but you should take the lead. There is no justification for hiding all the reams of information which will be produced in the coming review, and which will have a direct impact on the cost and reliability of our electricity for decades to come.

Waiting until the smoke had cleared from the recent election, in which the company embarrassed itself, the announcement included an admission that the price of the proposed project has already risen more than 20% to almost $10 billion.

There 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 attention given to these matters in the traditional news media, with the most active news source these days hardly objective but instead a cheerleader for this unreliable, intermittent electricity source. Continue reading

Personnel is Policy On Future Energy Reform

SCC Commissioner Angela Navarro, whose term ends January 31, 2022.

by Steve Haner

Does Tuesday’s election result mean Virginia is going to move back towards a rational energy policy? Watch two key personnel decisions, both entirely matters for the next legislature to decide.

State Corporation Commissioner Angela Navarro was elected by the 2021 General Assembly to fill the unexpired term of Mark Christie, who moved to the Federal Energy Regulatory Commission. His SCC term was expiring January 31, 2022, so hers does too, putting her up for reconsideration immediately.

A former staff lawyer for the Southern Environmental Law Center, she was an architect and advocate for the 2020 Virginia Clean Economy Act. Key decisions on that are beginning to fill the SCC docket, the largest being the next Dominion integrated resource plan and the first tranche of offshore wind development.

Will the new Republican majority in the House of Delegates deny Navarro a full term and choose another judge less associated with that bill? Well, the oldest rule in the legislature is “what goes around comes around.” When the Democrats took full control of the Assembly in the 2020 session, former Commissioner Patricia West was seeking an extension on her partial SCC term that began in 2019.

She was denied that extension, and instead replaced by Jehmal T. Hudson, who had been serving at FERC in a staff position. Continue reading

Should Choice of Supplier Extend to Natural Gas?

Artist rendering from the Chickahominy Power LLC website.

by Steve Haner

Should there be retail choice for natural gas? The developers of a proposed natural gas-fired merchant electricity plant are testing the waters with a proposal to bypass their local monopoly supplier by building their own one-customer pipeline to another source.

In the electricity arena, this is an old issue as large industrial or commercial uses have agitated for the right to seek lower-cost competitive suppliers to Dominion Energy Virginia or Appalachian Power Company. The battle has raged at the General Assembly and in front of the State Corporation Commission.

Under state law a large-enough customer can opt out of the monopoly power company under certain conditions. Similar mega-customers exist in the natural gas arena, but there is no comparable provision in state code allowing them to choose alternative gas suppliers.

The proposed Chickahominy Power LLC plant in Charles City County, which will also be ready to burn hydrogen to produce electricity if and when hydrogen is available for that, has many certificates and permits it needs from the state. The war on fossil fuels crowd did its best to block the permits but has failed, so far.

It also has a wholesale market for the 1,650 megawatts of electricity it will produce, and in general the expansion of merchant generation not built and controlled by the monopoly utilities is considered an economic boon. The 2020 Clean Energy Economy Act, among many other things, will require the use of more purchased power agreements by the utilities.

What Chickahominy lacks at this point is an agreement with Virginia Natural Gas, service which might require a new 24-mile connection. This was to be one of two such plants in Charles City served by a planned expansion of the VNG pipeline in Virginia, but that project was mobbed by environmental opposition and abandoned by the utility last year. Continue reading

JLARC Agrees: VA Economy Lags National Growth

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy.

This makes if official: Even the Joint Legislative Audit and Review Commission (JLARC) has documented and highlighted how poorly Virginia’s economy is performing, how far our state is lagging national growth averages.

Source: JLARC 2021 Report on Virginia State Spending, Slide 7.

The admission comes in the most recent summary on state spending trends, an annual report (detailed version here) which was submitted to and approved by the legislators on the panel last week. It covers the ten-year period of 2012-2021 and does a rolling update on previous years.

Virginia’s average annual change in gross domestic product of 1.2% was just 63% of the national average, our per capita income grew 1.1% annually (58% of the national average) and our labor force grew just 0.6% annually over the period, 60% of the national average. The general correlation of the three deficits just demonstrates their interdependence. Continue reading

The State Tax Gravy Train Accelerates

by Steve Haner

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

Any claim that Virginia cannot reduce taxes on its citizens without damaging state programs has been further eroded by two recent announcements.

The explosion of revenue from recent state tax increases is continuing into this new fiscal year, pointing to a potential repeat of last year’s $2.6 billion general fund surplus, which the state’s leadership is still trying to attribute to anything but its tax legislation. In the first three months of this new fiscal year general fund revenue is running $570 million ahead of last year’s record amounts, blowing out projections that assumed last year’s surplus was pandemic-related lagniappe.

The flood of money wasn’t related to the pandemic, not totally. It was related to tax policy decisions made in 2019, 2020 and 2021, the bulk of the surplus revenue coming from higher individual and corporate income taxes.

Adding to that, the Virginia Retirement System told legislators Monday that it has done so well with its investments (a 27% return in one year), the next General Assembly will be able to reduce the amount of cash it invests in the next few years, a significant reduction in annual costs. Continue reading

Climate Rationality Preached in a UVA Pulpit

Jason S. Johnston, Professor, University of Virginia School of Law

by Steve Haner

Efforts to rapidly expand our reliance on wind and solar generation for electricity, while at the same time closing baseload natural gas generation with similar haste, makes no sense economically. “The only explanation for that policy is you want to shut down the economy.”

Another voice of reason has emerged to challenge the climate alarmist orthodoxy, a Virginia voice,  Professor Jason S. Johnston at the University of Virginia School of Law. He brings to the discussion the experience and analysis of a regulatory law expert and economist, distilled into a somewhat daunting 656-page book published by Cambridge University Press in August.

“Climate Rationality: From Bias to Balance” (available through Amazon here) focuses at length on the legal precautionary principle behind most climate regulatory schemes, with little or no consideration taken of either the economic costs or unintended environmental consequences. He writes in an excerpt from his introduction:

The precautionary principle says little if anything about how such costs should be weighed in designing policy. But, given the highly uncertain and unpredictable future impacts of rising atmospheric GHG concentrations and the unprecedented cost of reducing GHG emissions, any rational regulatory response to curbing human GHG emissions must surely closely scrutinize the case for decarbonization. The purpose of this book is to provide precisely such an examination…

Precautionary US climate policy has already cost lives, damaged the environment, and increased costs for the basic life necessities, such as electricity, in ways that are felt most acutely by the poorest American households.

Continue reading

Dominion and Despicable Voter Suppression

So it was Dominion Energy paying for campaign ads opposing gun regulation! Here is why.

by Steve Haner

Dominion Energy Virginia’s knowing participation in an effort to suppress the November 2 vote, aimed mainly at Western Virginia Republicans, is a truly despicable act. It should enrage all Virginians, without regard to party. This is a state-created and regulated monopoly and the $200,000 it spent on this underhanded activity was provided by captive customers.

I further assert that in previous election cycles, as heavily as Dominion funded various candidates, this type of expense would not have been approved by the management, including the late Thomas Farrell. But Farrell is dead and the political deciders at the top now are both long-time partisan Democrats who fully understood they were paying for voter suppression.

I would be expressing no anger whatsoever if Dominion had merely donated $200,000 directly and openly to Democratic candidate Terry McAuliffe. It would have been a logical move to support a former governor who strongly backed its failed natural gas pipeline project, and now has pledged to deeply enrich the company by accelerating the transition to unreliable renewable generation instead.

McAuliffe is nothing if not flexible. I used another word to describe his subservience to Dominion on Twitter yesterday and got blocked for 12 hours. Continue reading

Stronger Teacher Unions = Weaker Parents

Loudoun County parents pack a School Board meeting. Photo credit: Idiocracy News Media

Allowing collective bargaining will put yet another special interest ahead of the parents who simply want a say in what is best for their children.

by F. Vincent Vernuccio

First published by Virginia Works and reprinted with the author’s permission. 

Virginia parents soon could lose even more control over their children’s education.

Parents frustrated with school curriculum and other education issues throughout the state have earned national attention. But as that frustration boils over into school board recall petitions and the race for governor, one policy change that could limit parental and voter choice is being overlooked: public sector collective bargaining.

new law in Virginia gives local governments and school boards the power to permit government unions to have a monopoly on representing public employees. If school boards pass the law, they will be forced to negotiate with these union officials.

This will put an extra, unaccountable unelected layer of bureaucracy between parents, teachers and schools.  Continue reading

More Proof Virginia Disclosure Laws are Crap

Former Sen. John Watkins, R-Powhatan

by Steve Haner

In 2020, according to documents filed with the State Corporation Commission, Dominion Energy Virginia paid former state Senator John Watkins $92,297 for lobbying services. At the end of the reporting period, it officially claimed spending only $1,641 for him to influence the legislative process.

In a similar manner, former Fairfax Delegate John Rust was retained over four years for a combined $265,000. But for his services in 2020, the year of the massive Virginia Clean Economy Act, Dominion’s lobbying expense disclosure listed his fee at $7,679.

The full payments to both former Republican legislators, all perfectly legal, are the subject of an online article on the Richmond Times Dispatch website, probably awaiting print publication. It also focuses on large payments made to a Hampton Roads journalist and former Democratic gubernatorial aide, which Dominion never had to disclose on any state report since buying friendly editorials isn’t covered by disclosure laws.

Add up the reported payments to all the other outside law and lobbying firms Dominion hired, compare them to the official disclosures, and a similar pattern of under reporting will be evident. The reporter missed the best part of this story — that information gap.

What do we learn here?  Anything we didn’t know? Continue reading

Why Virginia Job Growth Lags Region, Nation

Chesapeake Climate Action Network webpage boasting about the defeat of a gas pipeline expansion, a signal seen by location managers all around the U.S.

by Steve Haner

“Virginia’s economic recovery continues to outpace the nation… Our unemployment rate remains well below the national average and has fallen consistently every month for the past fifteen months… I’m proud of our roaring economic growth…”

So claimed Governor Ralph Northam (D) in a September 17 news release.

It came just after Virginia’s economy showed especially anemic results in August employment data, capping a period of poor performance effectively described in a recent Bacon’s Rebellion post by Richmond economist A. Fletcher Mangum.  Virginia’s job growth this spring and summer has trailed the vast majority of other states, with the August data placing us at a shameful 47th out of 50. Simply achieving the national average growth rate that month would have meant 75,000 more jobs. Continue reading