Category Archives: Disaster planning

The Polar Vortex: Big Test for Virginia’s Energy Infrastructure

Temperature difference from normal simulated by European model about one mile high into the atmosphere on Wednesday, in degrees Celsius. (Image credit: Washington Post)

Another Polar Vortex is descending upon the United States, and it’s expected to bring record cold to the Midwest and Mid-Atlantic. The news media will be full of human-interest stories about new temperature records, homeless people freezing, and disruptions to daily life and business. But the real action will be how the energy industry — electric utilities, natural gas pipelines, home oil deliveries — hold up under the strain. If the system holds together, the harm to human health will be limited. If pieces of the system fail, hundreds or thousands of people could die from the cold.

Judging from the map above, based on the forecast of a European weather model that’s now a few days old, Virginia will be on the edge of the vortex. But we’re part of the PJM Interconnection system, whose territory will be smack dab in the middle of the weather system. Also, bitter cold will strain the capacity of natural gas pipelines to deliver gas used for home heating.

As legislators ponder Virginia’s energy future, debating the proper mix of solar, wind, coal, nuclear, natural gas, and electric transmission capacity, this is exactly the kind of extreme-weather event we need to prepare for. We can build an electric grid and gas-pipeline system that can perform beautifully 360 days of the year, but if it isn’t robust enough to handle a polar vortex, hurricane or other infrequent but recurring stressor, the result could be catastrophic. Continue reading

Filling Virginia’s Flood Insurance Gap

by Lisa Miller

A new Federal Emergency Management Agency report is shocking: 69% of Virginia homes in high risk flood zones do not have flood insurance. Another report reveals 17% of Virginia properties should be listed in high risk zones – but are not. Congress’s continued failure to reform an increasingly expensive National Flood Insurance Program (NFIP), coupled with last year’s record-setting floods and now Hurricanes Michael and Florence, has created an urgent need to improve the availability and affordability of flood insurance. The Virginia General Assembly and legislatures in other states can help address this dangerous situation by encouraging a larger private flood insurance market.

There is only one private insurance company writing primary flood insurance in Virginia, defined as up to $250,000 in coverage. Although 106,000 Virginians have NFIP coverage, FEMA’s report, “An Affordability Framework for the National Flood Insurance Program,” found that only residents with higher incomes are buying it, leaving an ever-growing majority of others unprotected.  While FEMA studies the situation, the private market is moving ahead and delivering more affordable flood insurance where it can.

New catastrophe models are allowing insurance companies to better understand risk and thus accurately price flood premiums – down to the individual property – providing greater consumer choice and alternatives to the federal NFIP. When state government encourages it, a vibrant, competitive environment emerges as it has in Florida where, in just 3 years, almost 30 companies are offering better coverage at a cheaper price. In Miami-Dade County, ground zero for Hurricane Andrew in 1992, one private insurer’s average premium is $677 compared to the NFIP’s $980 average.

Catastrophe models, model law. The use of catastrophe models in setting rates isn’t new. But it’s usually used together with claims data, something the NFIP hasn’t been willing to share, citing privacy concerns. Also, greater consistency is needed among individual state insurance departments on how catastrophe models may be used in submitting rates.

The National Conference of Insurance Legislators (NCOIL) has begun reviewing a simple two-page proposed draft law, based on Florida’s, whose concept is, “If you build it, they will come.” The draft law permits companies, as an example, to test market rates in order to promote competition and choice, with the regulator approving policy language if a state requires a review (some do not) to ensure policies meet or exceed NFIP coverage.

The model law also ensures that insurance agents educate consumers about the dangers of going without coverage, and that insurance commissioners certify that policies are adequate to meet mortgage banking requirements. The safeguards in this simple model law will reduce our reliance on federal flood insurance.

Some in the insurance industry are concerned that this proposed regulation is overreaching or unnecessary. It is nonetheless designed to provide suggestions to regulators and those regulated on how to work together to launch and grow a successful market. What isn’t in dispute is private flood coverage’s cost savings, improved benefits, and greater consumer choice.

Start the conversation. NFIP premiums are rising an average of 8% this year but in some areas by 18%,the maximum annual increase allowed under law. So it just makes sense for state legislators and regulators to begin the conversation to fast-track the growth of a private market, which has the added benefit of spreading the risk to private insurers and away from U.S. taxpayers.

Too many Virginians are unprotected from the hazards of flood waters. There’s an urgent need to improve the availability and affordability of flood insurance so more homeowners are able to buy protection for their property and families. While Congressional paralysis stymies needed NFIP reforms, we must work toward model private flood insurance legislation to let Washington know “we got this.”

Lisa Miller is a former Florida Deputy Insurance Commissioner who served as an advisor on passage of Florida’s key laws encouraging a vibrant private flood insurance market. She is CEO of Lisa Miller & Associates, a Tallahassee, Florida-based consulting firm. @LisaMillerAssoc

Shoreline Resiliency Funds for Hampton Roads?

In 2016 former Governor Terry McAuliffe signed a bill that set up a revolving loan fund to help homeowners and businesses elevate their properties to safeguard against sea level rise. Just one problem, says the Virginian-Pilot. The fund has no dedicated revenue source. Two years later, “the well is dry.”

Now the Virginia Conservation Network is calling for the state to contribute $50 million to the Virginia Shoreline Resiliency Fund. “The coastal communities need help,” says Karen Forget with Lynnhaven River Now, a member of the environmental network. “This is a huge, really unprecedented, issue for the coastal communities all up and down the East Coast. We definitely need assistance.”

Virginia’s coastal tidewater region is highly vulnerable to flooding caused by land subsidence and a rising sea level. The inundations are increasing in frequency, and, according to some, will get worse as global warming intensifies and sea level rise accelerates. Even if you don’t buy the alarmist global-warming scenarios, there is no disputing that the sea level has been rising at a steady rate for more than a century and will continue to do so, or that land around Hampton Roads has been subsiding and will continue to do so. The flooding of coastal Virginia is one of the most predictable crises in history.

The million-dollar questions are (1) what should we do about it, and (2) who should pay for it? It’s not surprising that representatives from the Hampton Roads metro area are begging the state for money. Who can blame them? That’s what everyone does. And there is a case to be made that in a Commonwealth such as Virginia, we’re all in this together, and other regions should help out.

However, when Hampton Roads asks for $50 million, a not inconsiderable sum, the rest of the state need not write a blank check. Let’s face it, it will take a lot more than $50 million to adapt to rising sea levels — it will take billions of dollars — and we can safely say that this request for state funds will be only the first of many in the years ahead.

While inland Virginia has a moral obligation to help Coastal Virginia, the obligation is not an open-ended, no-strings-attached commitment. Coastal Virginia needs to take actions, which, at the very least, will stop increasing the region’s exposure to flooding. Ideally, the region should take steps to reduce its exposure to flooding. And that will mean curtailing coastal development.

Now, I’m a free-market kind of guy, and I think people should be able to build where they want to (as long as they don’t cause harm to others). So, if someone wants to build a $5 million house on the beachfront, be my guest. But I don’t believe people have no right to expect society to insulate them from the risks they’re taking by, say, subsidizing their hurricane and flood insurance. Nor do I believe that they have a right to insist that society provide infrastructure — flood-proof roads, water, sewer, electricity, etc. — at any cost to beachfront dwellers need to sustain themselves in the facing of rising waters and increase funds.

That $50 million revolving fund will be used to help people put their houses on stilts. That may be a reasonable use of the money (although I’d like to see the fine print). But it doesn’t come close to addressing the massive unfunded liability Coastal Virginia has created for itself. Inland Virginians should extend a hand of assistance to their brethren on the coast — and insist they get serious about reducing their liabilities.

Update: Today’s Washington Post headline: “The world has just over a decade to get climate change under control, U.N. scientists say.” Yeah, right. That’s what they said ten years ago…. and twenty years ago. Those of us who remember past doomsday prophecies have become inured. But you don’t have to believe in global climate catastrophe to acknowledge that flooding risks on the Virginia coastline are real and slowly but steadily getting worse.

Hurricanes, Risk, and Fiscal Collapse

Graphic source: Wall Street Journal

John Rubino, publisher of, and I think a lot alike when it comes to the inevitable fiscal collapse of the United States. The country (indeed the globe) is riding high today on a giant credit bubble right now, but sooner or later the bubble will pop and the economy will crash. If you buy into my Boomergeddon theory — that the U.S. will experience massive social upheaval when federal and state governments are unable to maintain their commitments to core services and the social safety net — you might want to check his website for your daily frisson of fear.

I, like John, have been writing about the dangers lurking in states’ unfunded pension liabilities and the exploding student loan liabilities that are undermining our institutions of higher education. I’d urge John to give more coverage to the issue of hidden deficit spending in the form of growing infrastructure-maintenance backlogs. (Read the Strong Towns blog for a primer on state/local governments’ growth Ponzi schemes.) Meanwhile, in a recent post, John drives home a point to which I have given insufficient attention: the future cost of hurricanes.

Unlike unfunded pensions, student loan defaults and maintenance backlogs, upon which we can put reasonable figures, there is no way for Virginia to budget for hurricanes. The incidence of hurricane hits is relatively infrequent and highly random and the damages are so variable from storm to storm, that budgetary forecasts are a total crap shoot. But I think we can safely say three things about Virginia:

  1. Sooner or later, another large hurricane will hit Virginia;
  2. Subsidence and sea-level rise, which will occur even in the absence of global-warming scare scenarios, will magnify the impact of major storms;
  3. Continued development along the shorelines of the Atlantic Ocean and Chesapeake Bay will lead to more storm-related damage.

John is concerned about the prospect of a monster storm hitting a big city like Miami or New York and giving us “a trillion-dollar summer” that bankrupts major insurance companies, roils insurance markets, depletes federal flood insurance reserves and forces the U.S. government into another massive bail-out “just as federal deficits are exploding, public sector pensions are imploding, and student loans are defaulting en masse.”

I, too, worry that the federal government is headed for disaster. But as I observe the proceedings in Washington, D.C., I have written off the federal government. Our political culture in Washington is so dysfunctional, so toxic, so addicted to short-term political gain, that the federal government is beyond salvation. I don’t waste a lot of intellectual bandwidth wondering what might save Washington. Nothing can. But I would like to ensure that the Commonwealth of Virginia survives the wreckage. Some government entity will have to carry on when the federal government melts down, and state government is the only alternative.

But I worry about Virginia, too. As I blogged recently, we have no idea what governments and quasi-state agencies — from the Washington Metro to local economic development authorities — have piled up in long-term debt, unfunded pension liabilities, and maintenance backlogs, much less how vulnerable they are to the next economic downturn. Now, add the risk of damage from hurricanes to roads, bridges, railroads, water and sewer facilities, coal ash ponds, the electric grid, pipelines, and other infrastructure. How prepared are our state agencies and utilities to cope with a major disaster? What would the impact be on taxpayers and rate payers, what have we set aside in reserves?

In a word: How fiscally resilient is Virginia in the face of natural disaster? Puerto Rico showed how a hurricane can push a corrupt and mismanaged polity over the edge. Surely we’d hold up much better. But that assumes Uncle Sam can continue handing out billions of dollars in disaster relief and that insurance markets are functioning. No one knows. We live in ignorance at our peril.

Hurricane Response Challenged By State Senators

Spending line items for $60 million state response to Hurricane Florence. Source: Secretary of Finance

On Monday, Secretary of Finance Aubrey Layne talked about the cost of Virginia’s response to Hurricane Florence with little controversy, and that was before the storm spawned a series of tornadoes striking Mecklenburg County and Metro Richmond.

Thursday, after Florence visited Virginia directly, he made the same presentation to another committee and suddenly ran into major push back. “Shocking” was the word used by Senator Ryan McDougle, R-Hanover, who then admitted he was engaging in “Thursday morning quarterbacking.”

Under authority granted in state law and the budget, Governor Ralph Northam declared an emergency in Virginia on September 11 and authorized the expenditure of up to $60 million from state funds. He ordered an emergency evacuation in certain lowlands. Because his order followed a similar federal declaration, Virginia stands to recover up to 75 percent of the expense from federal funds, but only on a reimbursement basis up to two years from now.

Layne, who is known for loving to provide the details, added a chart listing the various plan elements and their authorized cost, reproduced above. Given the worst predictions didn’t come to pass for Virginia, only some of the funds were spent and the final accounting is not yet made.

It was some of those line items that generated the commentary in the Senate Finance Committee, especially three emergency shelters for 5,800 people at a possible cost of $32 million. Simple math pegs that at $788 per person per day, for shelter in state-owned buildings, not hotels. Questions also arose about $20 million authorized for two Virginia-based specialized rescue teams, based on a planned 10-day deployment, and other line items that appeared to include very generous amounts for food and lodging.

“Where in the world are they sleeping and what are they eating?” asked Sen. Richard Stuart, R-Westmoreland. “Somebody is gouging us.”

Layne promised to follow up with itemized costs and promised that auditors would be going over the expenses later. He repeated that what was authorized was not the same as what got spent, and the lump sum amounts for some of those teams probably included pay, transportation and other expenses beyond food and lodging. Some of them were dispatched to North Carolina instead when it became clear Virginia was out of the bulls-eye.

Would it really bother you if this rescue team had been sent from Virginia?

Which prompted yet another question from McDougle about whether North Carolina ever does the same and provides help when Virginia needs it. Layne was firm in responding to that, saying during his time as Secretary of Transportation he knew of times when North Carolina helped Virginia and he thought the Department of Emergency Management could provide other instances.  Senator Bill Carrico, R-Galax, a former police officer, chimed in with some examples from his part of the state.  Nobody else questioned the Governor’s decision to offer help to our neighboring state.

“If we had had the devastation we all expected, we wouldn’t be questioning this,” said Senator Rosalyn Dance, D-Petersburg. And one of her fellow Democrats, Janet Howell of Fairfax, went to climate change and how “these storms are coming at us at a frightening rate” and the federal government needs to “work on the models.”

Virginia’s response to this threat was far more robust than previous examples, as further data from Layne showed. He listed 26 “events” going back to 2010, including other hurricanes, with a total emergency response authorization of only $71 million. The big differences came from the early decision to mandate evacuations (with more that could have followed) and to open those three major shelters. Some of the expenses were made as emergency purchases outside the state’s normal procurement.

There might be an element of damned if you do or if you don’t in this.  It was a badly-needed reality check and drill, with some lessons to be applied next time, because there will be a next time and we can all see what the Carolinas are now having to endure.  Governor, Mr. Secretary, send them anything they ask for and we’ll worry about payment later.

Follow up:  Details added in the Richmond Times-Dispatch story sparked by the same meeting.  The reporter got to see the invoice for the shelter contract.

Florence Could Provide First Test of Dominion’s Undergrounding Program

Image source: Dominion. Click for larger image.

Hurricane Florence may not be the cataclysm for Virginia that everyone anticipated two or three days ago. Forecasts suggest that the hurricane will veer west, not north, when it hits the Carolina coast. But other hurricanes are spawning in the Atlantic Ocean, Virginia is still a potential target, and it is still worth exploring the implications of Dominion Energy’s grid transformation program for disaster preparedness.

A big part of Dominion’s proposed multibillion-dollar grid modernization program involves hardening infrastructure and burying vulnerable distribution lines to reduce the frequency and length of electricity outages in the event of a natural disaster.  The utility already has buried hundreds of the most outage-prone tap lines under a pilot program launched four years ago, and it proposes under the Grid Modernization and Security Act to bury thousands more, funded by profits over and above the level to which it normally would be entitled, in an expansion of the initiative.

No investments have been made under the auspices of legislation passed earlier this year. Dominion has submitted its modernization plan to the State Corporation Commission (SCC) for review, and it doesn’t expect a final order until January.

But Hurricane Florence could provide a test case for the value of the strategic undergrounding program. Over the past four years, Dominion has buried 968 miles of electric line. While undergrounding obviously increases reliability for the customers directly affected, there is a system-wide benefit, explains spokesman Rayhan Daudani. “The system wide benefit is seen when we can reallocate crews more quickly and respond to outages more quickly than we would have been able to before. Fewer down wires means fewer repair locations, which means our crews can respond to the outages remaining, restoring service more quickly for all customers.”

According to data filed with the SCC, distribution lines incorporated into the strategic undergrounding program experienced 29 outage events in 2017. That compares to 1,683 events that were predicted to have occurred in the absence of the burial program. The average outage duration for customers served was 1.05 minutes compared to a predicted 386 minutes.

The Dominion-supplied graphic above shows how the undergrounding program fits into larger disaster recovery efforts. The red bars schematically show the length of restoration time before the Strategic Undergrounding Program (SUP) and the green bars the length of time after. How accurate a reflection of reality this schematic is, I do not know, but it conveys what Dominion is talking about.

On a side note… For rate payers, there may be a silver lining to those hurricane storm clouds. In the past, the repair of storm damages was incorporated into base rates base and passed along to ratepayers. Under the Grid Modernization Act, Dominion’s base rates are frozen. If Hurricane Florence causes millions of dollars worth of damage, the utility will absorb the cost of repairs and restoration.

The Cyber Threat to Utilities Just Got Scarier

Russian hackers have broken into the control rooms of U.S. utilities where they could cause blackouts, federal officials have told the Wall Street Journal.

The Russian hackers, who worked for a shadowy state-sponsored group previously identified as Dragonfly or Energetic Bear, broke into supposedly secure “air gapped” or isolated networks owned by utilities with relative ease by first penetrating the networks of key vendors who had trusted relationships with the power companies., said officials at the Department of Homeland Security.

“They got to the point where they could have thrown switches” and disrupted power flows, said Jonathan Homer, chief of industrial-control-system analysis for DHS.

Federal authorities did not identify which utilities had been compromised.

Needless to say, all manner of groups — from the North American Electric Reliability Council, the federal agency that regulates electric reliability, to PJM Interconnection, which oversees the regional grid of which Virginia is a part, to the electric utilities themselves — are paying very close attention to this issue.  The obvious question for Virginians is this: What can state legislators and regulators do… if anything?

One of the aims of the Grid Modernization and Security Act of 2018, enacted this year, is to upgrade the electric transmission and distribution systems maintained by Dominion Energy, Appalachian Power Co., and the electric cooperatives. Priorities include protecting the grid against terrorist attacks and cyber attacks, although it is not clear yet what additional resources will be allocated to those efforts. Whatever conversation occurs, much of it will be behind closed doors on the not-unreasonable grounds that we don’t want to tip off the bad guys to what we’re doing.

But public involvement would helpful in some areas. What grid configuration would be the most secure? One could make the argument that a centralized grid operated by a handful of players would be easier to protect from cyber-intrusion than a grid with many players that is only as secure as the most vulnerable among them.

Conversely, one could argue that a distributed grid would be preferable. It would be easier for the Russkies (or Chinese, or Iranians, or North Koreans) to take out, say, a nuclear power plant or to overload a critical transmission line than it would be to take out thousands of small rooftop generators connected by a micro-grid.

The answers to such questions would shape the kind of electric grid that will best serve the interests of all Virginians.

Bacon’s Rebellion is in the process of organizing a roundtable on the Future Grid to discuss issues just like this. Right now, we are looking for a neutral venue (not tied to any particular faction or interest group) to host the first meeting. If you would like to participate or can suggest a meeting location, please contact me.

No, Coal Did Not Save the Grid in January

Contrary to a recent report that coal-generated electricity prevented a system collapse during January’s “bomb cyclone” deep freeze, PJM Interconnection, the regional transmission organization of which Virginia is a part, says it had plenty of reserve capacity. The reason PJM dispatched so much electricity from coal-fired units was that it was cheaper than electricity generated by natural gas, the price of which surged during the cold spell — not because there were inadequate supplies of gas.

“Natural gas and nuclear units were not unreliable or otherwise unavailable to serve increased customer demand, nor would PJM have faced ‘interconnected-wide blacksouts’ without the particular generating units dispatched, states PJM in a response forwarded to U.S. Energy Secretary Rick Perry. (Hat tip: Albert C. Pollard, Jr.)

Last week Bacon’s Rebellion summarized key findings of a report by the National Energy Technology Laboratory (see “How Coal Saved the Electric Grid,”) which noted that coal-fired generation increased dramatically during the extreme, 12-day chill. Nuclear energy output didn’t change (nukes run flat-out all the time, regardless), wind/solar output declined slightly, and gas output was constrained by pipeline constraints and other factors. The NETL report argued that without the backup coal capacity, “a 9-18 GW shortfall would have developed, depending on assumed imports and generation outages, leading to system collapse.”

But PJM says that the regional electricity transmission system maintained significant reserves during the bomb cyclone. “PJM reserves were over 23 percent of peak load demand, and there were few units that were unable to obtain natural gas transportation.” The reason coal-fired output leaped was that it was cheaper than gas — not that the gas was unavailable.

During the cold snap, the region experienced an increase in the price of natural gas, which made coal resources (which often did not run under periods of lower natural gas prices) the more economic choice during times of high gas prices. But one cannot extrapolate from these economic facts a conclusion as to future reliability within PJM. …

The fact that additional coal resources were dispatched due to economics is not a basis to conclude that natural gas resources were not available to meet PJM system demands or that without the coal resources during this period the PJM grid would have faced “shortfalls leading to interconnect-wide blackouts.”

The PJM report did confirm other parts of the NETL analysis. Electricity from nuclear power plants stayed constant through the 12-day weather event. Wind and solar output declined ever-so-slightly. And natural gas did suffer minor supply-related outages… but they accounted for less than 2% of the total load requirement at the time.

Bacon’s bottom line: Coal-fired units kicked in 13,000 megawatts of additional output during the deep freeze. That was roughly one-third of the system’s 32,600 megawatts in reserve capacity. In the absence of the coal surge, customers in Virginia and across the multi-state PJM system would have paid more for their natural gas, but they would not have faced blackouts in January. It seems safe to say that the impression created by the NETL analysis was wrong.

But PJM did not address the longer-term outlook in its report. The political reality is that in the U.S. and in Virginia, powerful interest groups seek to curtail coal production. There is a strong likelihood that Virginia will enter the Regional Greenhouse Gas Initiative, a cap-and-trade arrangement designed to cut carbon emissions, most likely through the closure of additional coal plants. Looking out a decade or more, some environmental and consumer groups oppose the plans of Dominion Energy Virginia to re-license its four nuclear power units that currently produce 30% of the company’s electric power. Furthermore, the same groups, worried by the contribution of natural gas to CO2 emissions, want to slam the door on construction of any more gas-fired power plants.

As can be seen in the chart above, which details the breakdown of electricity by fuel type in the PJM system before and during the deep freeze, coal and nuclear accounted for 65% of the interstate region’s electricity production before the event and 66% during the cold snap.

Put another way, coal accounted for 45,900 megawatts of system-wide output during the freeze, and nuclear contributed another 35,400. Compare that to the system’s 32,6oo megawatts in reserve capacity.

While PJM has plenty of reserve capacity today, we have to ask ourselves, will the system have plenty of reserve capacity 10 or 15 years from now if coal- and nuclear-powered units continue to shut down? While the pipeline capacity exists today to supply today’s natural gas demand, will it be sufficient to meet demand when gas picks up much of the load for shuttered coal and nukes? While we can always purchase out-of-state electricity through PJM, will there be sufficient transmission-line capacity to get that electricity to Virginia load centers?

I don’t know the answers to these questions. Perhaps everything will turn out fine. But we can’t assume that it will just because PJM has ample reserve capacity today. As Virginians calibrate the balance between coal, nuclear, gas, hydro, solar, wind and battery storage, we need to consider the long-term outlook. The future will be upon us before we know it.

Put-up-or-Shut-up Time for the Sun Spot Theory

Recent sun spot cycles. The last time the sunspot cycle was almost as weak as the current one was in the 1970s, a period of declining global temperatures that prompted widespread concerns of a new ice age. Image credit:

I have frequently expressed skepticism of dire Global Warming scenarios by noting that the increase in global temperatures over the past 20 years fits the lowest range of forecasts made by the climate models. Sorry, folks, I just can’t get exercised about warming-generated calamities, no matter how many after-the-fact justifications are proffered to explain the failure of reality to conform with theory.

On the other side, the anti-Global Warming crowd has advanced an alternative explanation for climate change. The extreme skeptics suggest that solar activity — sun spots, or the lack of them — have a far greater influence on earth’s climate than the level of CO2 in the atmosphere. According to this theory, solar radiation interacts with the earth’s magnetosphere to block cosmic radiation from penetrating to the atmosphere and seeding cloud formation. Boiling the argument down to its essence, more sun spots predict higher temperatures on earth, fewer sun spots predict lower temperatures. We may have reached put-up-or-shut-up time for that theory as well.

The skeptics are getting excited now because the incidence of sun spots is crashing. Indeed, sun spots have almost disappeared. The last time the sun exhibited similar characteristics was in the 1600s, the so-called Maunder Minimum which coincided with a decline in global temperatures known to history as the Little Ice Age. If the solar warming rejectionists are correct, “global warming” could disappear in a hurry.

Writes Robert Zimmerman with the Global Warming Policy Forum:

If the solar minimum has actually arrived now, this would make this cycle only ten years long, one of the shortest solar cycles on record. More important, it is a weak cycle. In the past, all short cycles were active cycles. This is the first time we have seen a short and weak cycle since scientists began tracking the solar cycle in the 1700s, following the last grand minimum in the 1600s when there were almost no sunspots.

If the planet is entering a new solar minimum, the theory would predict falling temperatures. Perhaps not immediately — there may be buffering effects that aren’t well understood — but in not too many years.

Here’s the nice thing about the sun-spot theory: It’s a testable hypothesis. The theory states in no-uncertain terms that solar radiation as measured by sun spots is a key driver of earth’s climate. The theory says that cycles in earth’s temperatures closely match cycles in sun spot activity. We appear to be entering a phase in which sun spots are going dormant. Temperatures should drop — not just for a year or two but in a sustained matter. We should be able to confirm or disprove the sun-spot hypothesis within a few years.

If the sun-spot hypothesis is confirmed by the data and we see a decisive shift in temperature trends, the theory that posits CO2 as the driving climate variable will be dashed. Conversely, if the sun-spot model  is proven incorrect, a lot of moderate Global Warming skeptics (like me) will be more receptive to the CO2 model — although it still has to explain the two-decade-long pause. (“Pause” is not quite the right word. Global temperatures have crept higher. They just haven’t conformed to predictions.)

Perhaps I’m being naive to think that reality will settle the debate. Reality has a way of being frustratingly complex and ambiguous, and zealots are endlessly creative at devising fallback theories. We didn’t account for the effect of increased particulates in the atmosphere. Or temperatures didn’t rise as expected because the missing heat is lurking undetected deep in the ocean. 

The stakes of this scientific debate are huge. Climate change advocates want to de-carbonize the economy in order to fight what they fear is runaway and calamitous global warming. That means converting motor vehicles to electricity, and it means converting electric power generation to renewable sources. Market forces are pushing the electric power industry toward renewables — especially solar here in Virginia — but not rapidly enough to suit the warmists. The next big debate is whether Virginia should join the Global Greenhouse Gas Initiative a cap-and-trade regime to squeeze out electric-power carbon emissions. Ancillary debates are occurring on how Hampton Roads should deal with the rising sea levels expected to accompany the higher temperatures.

Here’s another hypothesis: The urgency of combating global warming is a driving force behind the insistence of the social engineers to restructure the economy. If global temperatures cool, that sense of urgency will diminish. Hard-core believers won’t change their minds, but the general public will. Conversely, if temperatures rise in the face of a new sun spot minimum, the warmists will be vindicated.

How Coal Saved the Grid in January

The 2017-18 Bomb Cyclone

The twelve days between Dec. 27, 2017, and Jan. 8 this year saw one of the longest and most intense deep freezes ever recorded for the East Coast. Snow, ice and frigid temperatures plunged much of the United States into winter misery for a seemingly endless period.

The so-called “bomb cyclone” also put the East Coast electric grid under intense stress. The period of Jan. 4-6 accounted for three of the top ten winter demand days in the history of PJM Interconnection, the regional transmission organization of which Virginia is a part. Electricity consumption and output surged 21% over average daily loads.

Were it not for the ability to fire up old coal and oil power plants, many of which are scheduled for phasing out, the regional grid would have been overloaded and the system would have been hit with widespread blackouts, concludes a report, “Reliability, Resilience and Oncoming Wave of Retiring Baseload Units,” issued last month by the National Energy Technology Laboratory.

The Lab’s analysis of the PJM system found that coal generation surged from 20 gigawatts to 51 gigawatts of supplied capacity during the bomb cyclone. By contrast, nuclear power, which typically runs all out with little variability throughout the year, provided no surge capacity.

Natural gas generation averaged about 25 gigawatts, but its surge capacity was limited by pipeline constraints and the necessity of competing with gas as a home-heating fuel during the freeze. As a percentage of total output, gas actually fell. Emphasizes the report: “It was coal, and secondarily fuel oil, fired primarily in fuel switching natural gas units, that provided the electricity crucial for keeping natural gas-fired residential furnace fans operating during the extreme cold of the BC.”

And renewables? Renewable output declined. That’s what happens when clouds and snow blot out solar output. As it happened, wind power declined as well. “Intermittent generating sources experienced a significant decline nearly inverse to growth in demand,” states the report. “As the storm settled over the Mid-Atlantic area, PJM saw decreased output from solar and wind resources.”

Coal, the fuel that everyone loves to hate, saved the day. Had the coal capacity not been available, the report stated, “a 9-18 GW shortfall would have developed, depending on assumed imports and generation outages, leading to system collapse.”

Let that sink in: “Leading to system collapse.”

Should I repeat that for you?

The study authors fear for the future. They write:

The 30 GW of coal that ramped up to meet the surge in PJM load includes the units most likely to retire due to insufficient market support, given those units were not running at baseload levels before the event. As more of these units retire, the ability of the system to respond to extreme events with reliance, let alone economically, deteriorates. To maintain the resilience seen in this event, any retiring units that were dispatched during the event would have to be replaced with other resilient generation sources and their associated infrastructure (e.g. pipelines, transmission).

Bacon’s bottom line: Let me spell out what this means for energy policy in Virginia. Current regulatory policy is hostile to coal-generated electric power, and could become even more hostile if Virginia joins the Regional Greenhouse Gas Initiative. Powerful environmental and activist groups backed by out-of-state money want to phase out nuclear power by blocking the bid of Dominion Energy Virginia to re-license four nuclear units in the years ahead, and they want to halt the construction of any more gas-fired units. And, although it appears to be too late to do so, they opposed construction of the Atlantic Coast Pipeline and the Mountain Valley Pipeline. In effect, they want to build a grid in which in gains from energy efficiency plus increases in intermittent wind and solar power replace all coal and nuclear and account for any incremental increase in demand growth.

If we assume advances in the economics of battery storage, a renewables-heavy grid can be made to work just fine under routine circumstances. In theory, massive banks of batteries can store excess solar wind power to shift electric loads to times of the day when the sun isn’t shining and the wind isn’t blowing. Building all those batteries would be expensive, but it could be done. But it’s one thing to store enough electric power to handle daily load shifts. It’s another to build enough batteries to provide power for a 12-day storm system. It can’t be done. And when the electricity runs out, not only do the 40% of households who rely upon electricity to heat their homes start freezing, so do the households that use natural gas because there’s no electricity to run the fans and blowers.

Massive storm systems like the bomb cyclone and the Polar Vortex of several years ago occur only once every few years. But occur they do. And the energy mix of our electric grid must be built around that reality. Far from increasing resilience — the buzzword of the day — we could be laying the groundwork for self-inflicted disaster.

Dominion Files to Recover Undergrounding Costs

Key metrics for Phase 2 and Phase 3 of Dominion’s Strategic Undergrounding Program

Dominion Energy Virginia has filed for a $73 million rate increase to cover the cost of Phases 2 and 3 of its Strategic Undergrounding Program (SUP). The two phases of the program, designed to limit outages from severe weather events and shorten recovery times, will bury 660 miles of tap lines between them.

The State Corporation Commission (SCC) had permitted a trial of the undergrounding program advocated by Dominion but limited expenditures to $4o million in Phase 2. In the recently approved Grid Transformation and Security Act, however, the General Assembly declared undergrounding to be in the public interest. Now Dominion is filing to recover the full $105 million it has spent on Phase 2 plus another $179 million for Phase 3.

Legally, the law removes the “rebuttable presumption” that the conversion of overhead lines to underground lines will provide local and system-wide benefits, and declares that the costs associated with new underground facilities “are deemed to be reasonably and prudently incurred.” The legislation contains two limits: The cost should not exceed $20,000 per customer, and the average cost per mile should not exceed $750,000 (exclusive of financing costs).

Said Alan W. Bradshaw, director of Dominion’s undergrounding program, in testimony included as part of the filing:

The Company remains firm in its belief that the targeted undergrounding of the most outage prone tap lines will continue to improve the resiliency of the Company’s electric distribution system. The Company believes that a targeted SUP will result in an annual reduction of the total number of outage events and a reduction of repair locations. When outages do occur, it will lead to a reduction in the time required to restore power, particularly as to outages resulting from severe weather events.

According to data provided in the filing, the two undergrounding initiatives would allow Dominion to bury 1,769 tap lines dispersed across the state for a total cost of $284 million. The cost per customer and the cost per mile are well below the limits defined in the legislation.

There are tangible benefits to this investment, but Dominion documents only some of them in the filing. The buried lines accounted for 9,368 outages over the past 10 years — or about $30,3000 per outage avoided. Assuming that a comparable number of outages would have occurred in the future without the undergrounding, how much will the company save in restoration costs? How much outage time will customers save, and what is the economic value of the time saved? Perhaps rate payers will see those numbers in the hearing so they can judge the value of the undergrounding program for themselves.

Nuclear Fortress

North Anna’s nuclear containment domes

How safe are Virginia’s nuclear power plants from terrorists, hackers and natural disasters? Let’s put it this way: Dominion worries about such threats 24/7 so you don’t have to.

In addition to interfering in U.S. elections, Vladimir Putin’s busy cyber-servants have been probing information technology weaknesses in U.S. industry and infrastructure. Sophisticated cyber-attacks have been ongoing since at least March 2016. Perhaps most alarming, the Department of Homeland Security asserted last week, Russian hackers gained access to critical control systems at unidentified nuclear power plants.

“We now have evidence they’re sitting on the machines, connected to industrial control infrastructure, that allow them to effectively turn the power off or effect sabotage, the New York Times quoted Eric Chien, a security technology director at digital-security firm Symantec, as saying. “They have the ability to shut the power off. All that’s missing is some missing political motivation.”

Journalist Ted Koppel highlighted the vulnerability of the U.S. electric grid to attack in his 2016 book, “Lights Out: Cyberattack, a Nation Unprepared, Surviving the Aftermath.” Novelists have imagined the horrifying societal collapse following the collapse of the electric grid. As for nuclear plants, the potential for radioactive contamination makes the threat even more terrifying. Fear-inducing scenarios involve terrorist takeovers, the theft of spent radioactive fuel, and jetliners slamming 9/11 style into nuclear reactors. 

The issue of security was top of mind for me when I toured Dominion Energy Virginia’s North Anna Power Station last month. I had the opportunity to pose the kind of questions that members of the public might ask.

I’m not qualified to render judgment on the effectiveness of Dominion’s security efforts, but I can say one thing: Security at the nuclear facility is something the company thinks about around the clock. Utility officials have spent enormous time and effort anticipating and preparing for any scenario you can imagine. Earthquake? Check. Hurricane? Check. Cyber-attack? Check. Armed terrorist attack? Check. Hijacked airplane flying into the nuclear containment dome? Check.

Based on what I learned, I’m not worried about natural disasters or terrorist attacks. The threat of cyber-sabotage continues to unsettle me, but the danger is to the transmission and distribution grid, not to nuclear power plants. Dominion officials assured me — and for a simple reason that I shall explain in due course, I believe them — that their nuclear power plant controls are not vulnerable to a cyber-threat.

If there had never been a Chernobyl or Fukushima, I might not even be asking these questions. As it is, those calamities did occur. We learned that, as thorough as they try to be, nuclear engineers don’t foresee every conceivable contingency. With nation states from Russia and China to Iran and North Korea seeking to penetrate and compromise our infrastructure, we need to keep up our guard. At the same time, we should avoid creating unnecessary alarm. So far, I’ve seen nothing that makes me lose any sleep.

Earthquakes, hurricanes, and aircraft strikes

On August 23 at 1:51:04 p.m., the control room of the North Anna Power Station began to shake, as if it were sitting on a giant vibrating phone, recalls Lee Baron, who worked in the control room then and now runs the company’s simulation center. Lights on the control board began blinking. Alarms emitted shrill beeping noises. Tiles fell from the ceiling. Outside the facility, some electric transformers cracked. 

The earthquake, the worst trembler to shake the East Coast in at least a century, exceeded what the power station had been designed for, says Baron, but the facility “shrugged it off.” Following Electric Power Research Institute guidelines, the operators powered down the plant without incident. After minor repairs and two months of intensive inspections, the nuclear station was up and running again.

Media attention focused on the fact that the North Anna station was located on an ancient geologic fault line. The fact that the epicenter of the earthquake was just a few miles away under the town of Mineral led many to conflate the two. But, the two fault lines were unrelated, says Richard Zuercher, manager-nuclear fleet communications for Dominion.

Indeed, as College of William & Mary geologist Chuck Bailey concluded in a 2012 review of maps, photos, and reports, the fault underlying the North Anna Power Station had last been active about 200 million years ago. On the other hand, as the Mineral earthquake demonstrated, the geologic plate upon which the East Coast rests was more active than previously supposed.

Unlike some earthquakes that have a highly localized impact that creates heavy damage, Zuercher says, the Mineral shaker, which registered 5.8 on the Richter scale, diffused its energy and caused light damage over a vast area. The quake was felt as far away as Atlanta and New Brunswick. Virginia does not face a California-like threat of a massive killer quake.

Hurricanes and tornadoes are another theoretical threat. The concern is that wind might pick up a cars or telephone poles and hurl them like projectiles. The nuclear reactors, a third of which are underground, are protected by massive containment domes made of compressed concrete lined by steel plate and reinforced by steel rebar.

The 4 1/2-feet-thick dome wall “is built to take a licking,” says B.E. Standley, the Dominion executive in charge of nuclear power plant safety. “It can survive anything short of an asteroid strike or zombie apocalypse.”  Continue reading

Buried Lines and Microgrids

Downed power lines in Puerto Rico. Photo credit: ABC News.

Virginia has enjoyed a welcome respite from meteorological history, having dodged full-fledged hurricanes since Hurricane Isabel struck the Old Dominion in 2003 and Hurricane Gaston in 2004. But sooner or later, we’ll get hammered again. After surveying the devastation of Puerto Rico by Hurricane Maria, made worse by the total collapse of the territory’s electric grid, we Virginians should be asking ourselves how well our electric grid would stand up to a Category 4 hurricane — and what can we do to make it more resilient.

Two potential actions come immediately to mind: burying distribution lines and decentralizing the grid.

Last year Dominion Virginia Power advanced a $2 billion plan to bury the utility’s most outage-prone and difficult-to-repair electric distribution lines to limit the loss of electricity during severe weather events and speed the restoration of electric power. The company said the improvements would cut disruption of service to customers in half after a major hurricane. While the State Corporation Commission approved a small-scale version of the plan, it rejected the full-scale proposal as not worth the cost to rate payers.

There are alternatives to burying electric lines, such as hardening sub-stations, installing sensors that provide early-warning detection of damage, and aggressively pruning trees along right of way. But with the example of a prostrate Puerto Rico before our eyes, one might be more inclined to err on the side of caution. The wisdom of the line-burial policy depends upon the numbers — the cost of burying the lines, the cost of the alternatives, the number of people affected, the likelihood of a major hurricane or other natural disaster, and the economic value lost due to disrupted electric service. I don’t know if anyone has assembled all those numbers, but the topic is serious enough that someone — Dominion, perhaps, or state government — should pull them together for the public to digest.

Others have suggested that Virginia should move toward a distributed electrical grid, less dependent upon central power stations and endless miles of transmission and distribution lines. A distributed grid would rely instead upon wind and solar, batteries, and microgrid technology that allows local circuits to operate independently of the larger system. In theory, local islands of electric power would function even if the larger system were thrown into disarray.

Slate magazine describes Higashi Matsushima, Japan, in the aftermath of the earthquake that knocked out the Fukushima nuclear power plant:

After losing three-quarters of its homes and 1,100 people in the March 2011 tremblor and tsunami … The city of 40,000 chose to construct micro-grids and de-centralized renewable power generation to create a self-sustaining system capable of producing an average of 25 percent of its electricity without the need of the region’s local power utility.

The city’s steps illustrate a massive yet little known effort to take dozens of Japan’s towns and communities off the power grid and make them partly self-sufficient in generating electricity.

Sounds great. But questions arise. How well would Americans function with only 25% of their electricity supply? Also, how well do solar panels hold up in 120 mile-per-hour winds? Some pro-solar sources on the Web say that panels are designed to withstand up to 140 m.p.h. Do those claims withstand scrutiny?

Another issue is what happens when a massive weather system blots out the sun for days at a time. Batteries might be able to store power for a day, but solar + batteries could leave leave owners of rooftop solar bereft of electricity until the storm front passes and the sun reappears. On the other hand, Inside Climate News reports that, while Hurricane Irma cut power to 6.7 million Floridians, homeowners with rooftop solar arrays did just fine.

If unbiased reporting and analysis backs up such claims, perhaps Virginia needs to discuss how to move more expeditiously towards a distributed grid. That would mean solving tricky issues like net metering — whether to charge rooftop solar owners for access to backup power from the larger grid. A mediation initiative is trying to work through that question now. Perhaps Puerto Rico’s plight will provide the stakeholders with a heightened sense of urgency.

Disaster + Fiscal Insolvency = Puerto Rico

Lights out in San Juan. Photo credit: Los Angeles Times.

I can watch only so much CNN and MSNBC before I get nauseated, but I have seen enough the past day or two to be appalled at how the media are spinning the post-hurricane disaster of Puerto Rico: It’s another Katrina. The Trump administration hasn’t responded fast enough or aggressively enough to help the battered territory, where two hurricanes shut down electric service, cell phones, the transportation system and government services. Others can engage in the blame game if they want to, but I want to point out the obvious: Puerto Rico illustrates the incapacity of a bankrupt government to carry out basic functions under highly stressful circumstances.

And let that be a warning to everyone. Puerto Rico is the future of many U.S. states unless we get our acts together. Garnering less attention than the human tragedy in Puerto Rico, the states of Pennsylvania and Connecticut have made headlines, too, in the past week. After Pennsylvania passed a budget without enough revenue to pay for its spending, S&P Global Ratings downgraded the state’s debt to A+, down two notches from the coveted AAA rating. Meanwhile, despite having the highest median household income in the country and the second highest tax burden (taxes as percentage of income), Connecticut faces a $3.5 billion biennial deficit. The state, notes the Wall Street Journal, is groaning under heavy debt load, large unfunded pension liabilities, and a shrinking population. S&P has placed nine Connecticut localities on negative credit watch.

Those two states have a long way to go before they achieve Puerto Rico-levels of insolvency, but they indicate the direction the U.S. is heading. On a national level, Republicans have abandoned any pretense at crafting a tax reform plan that will shrink the deficit (something that can be pinned on the Trump administration). The national debt is $20 trillion and growing, even in the absence of a recession, at a rate of more than $600 billion a year. It’s not a question of if we will share Puerto Rico’s fiscal fate, but when.

So, what happens when governments approach fiscal insolvency? One thing they do is starve infrastructure maintenance. Puerto Rican roads were in worse physical condition than roads in any U.S. state. Of the island’s 2,280 bridges, 55.8% were considered structurally deficient or functionally obsolete before the hurricanes struck. The territory has chronically under-invested in its water systems, which also failed during the hurricanes, and the government-owned electric system, the Puerto Rico Electric Power Authority (PREPA), has been a disaster-in-waiting for years now.

Reports the Los Angeles Times:

As of 2014 the government-owned company was $9 billion in debt, and in July, it filed for bankruptcy under the provisions set by the Puerto Rico Oversight, Management, and Economic Stability Act, a law signed by President Obama in 2016.

Problems accumulated. Cutbacks in tree pruning left the 16,000 miles of primary power lines spread across the island vulnerable. Inspections, maintenance and repairs were scaled back. Up to 30% of the utility’s employees retired or migrated to the U.S. mainland, analysts said, and the utility had trouble hiring experienced employees to replace them.

The neglect led to massive and chronic failures at the Aguirre and Palo Seco power plants. The three-day blackout in September 2016 underscored how fragile the system was, and that the company was “unable to cope with this first contingency,” the Synapse Energy report said.

No wonder the island’s electric grid collapsed. No wonder officials say it will take four to six months to restore electric power.

If you want your city, county or state to show resilience in the face of natural disasters, you need to have governments and utilities that are fiscally resilient. Entities hobbled by excessive debt scrimp on maintenance and upgrades, leaving roads and utilities more vulnerable to disruption and depriving authorities of resources with which to respond to emergencies.

Puerto Rico would be in terrible shape no matter what. Hurricane Maria wrought devastating destruction, and recovery is impeded by the fact that the island, unlike Houston and Florida, is inaccessible to help by land. But the incapacity of bankrupt government and utilities have made the challenges immeasurably worse.

A Patch in Time Saves Nine

The WannaCry and Petya cyber-assaults on banks, airports and other businesses in Europe in May used a vulnerability in Microsoft software to infect machines and spread around the world. Microsoft had issued a patch to close the back door months earlier, but many users never installed the update. Ironically, when Microsoft creates a software patch, it tips off bad guys to a previously unrecognized vulnerability. Cyber-criminals can create a virus to exploit that vulnerability sure in the knowledge that many corporations will fail to update the all of the thousands of computers and devices in their system.

The single-most effective thing that any IT manager can do to maintain security is to promptly install software patches. The task sounds pretty basic. But it’s easier said than done.

Christiansburg-based FoxGuard Solutions helps clients keep software up to date on critical infrastructure such as power grids, wind turbines and nuclear power plants. Founded in 1981, the company has seen its cyber-security business expand at a compounded growth rate of 42% over the past five years.

As far as FoxGuard CEO Marty Muscatello is aware, none of its customers were affected by the WannaCry and Petya attacks, reports Jacob Demmit with the Roanoke Times, after accompanying U.S. Rep. Morgan Griffith, R-Salem, on a tour of the FoxGuard facility. The company’s software is used in 40 different states and 35 countries. Reports Demmit:

FoxGuard has been using a $4.3 million cooperative agreement from the U.S. Department of Energy since 2013 to develop tools to track software updates and patches for 128 companies in the critical infrastructure industry.

It’s pretty easy to keep a single home computer up to date, but that becomes increasingly difficult when an IT department is trying to protect a power plant that could have 100,000 different machines across a power grid. A company might not even be aware of some computers on its network that could let hackers in, like an air conditioning system.

FoxGuard, it would seem, has a bright future, for its market will expand exponentially. As the Internet of Things takes off, embedding microchips and wireless in billions of devices, corporations will be hard-pressed to keep track of them all. Patching them all will be almost impossible, for Original Equipment Manufacturers typically stop updating software for devices they no longer manufacture. The challenge is particularly acute for electric utilities, which have cobbled together multiple generations of technology to operate their systems. As they move increasingly toward flexible “smart grids” to accommodate solar and wind power, they will install thousands of sensors and actuators across their systems, potentially making them even more vulnerable to cyber-attacks.

For a monthly fee, says the Roanoke Times, FoxGuard tracks all those machines and makes sure the client knows of every update on a timely basis. The company can even download and test the update in its own lab to check for compatibility issues before installing it in the field.

Bacon’s bottom line: The news brings daily remembers of how vulnerable the global Internet-connected economy is, and how anyone with a good cyber-security technology or service can tap into a global market. Governor Terry McAuliffe is right about this: Cyber-security is one of the biggest economic-development opportunities to come along in Virginia in a long time.