Category Archives: Energy

The Long and Winding Road to Net Zero

by Bill O’Keefe

State law, embodied in SB 851, requires Dominion Energy to supply 30% percent of its power from renewable energy sources by 2030 and to close all carbon-emitting power plants by 2045. In other words, Dominion must develop a plan to be emission free by 2045, less than 25 years from now.

The preeminent energy historian and author, Daniel Yergin, has just published The New Map: Energy, Climate, and the Clash of Nations. Not only does he address the geopolitics of energy but he addresses the challenges of transitioning from an energy budget that is 80% oil, gas, and coal to one that has net zero emissions.

The history of energy transitions shows that they do not happen quickly,  according to Yergin. The movement from wood to the dominance of coal took 200 years and it took another 100 years for oil to replace coal as our dominant energy source. Of course, those transitions did not involve the incentives created by government policies and funding, political activism, and the push for new energy technologies. The use of industrial policy to bring about this transition sooner may succeed but right now it is a triumph of hope over experience. During the time when the first oil embargo created economic havoc, the administrations of Richard Nixon and Jimmy Carter invested heavily to bring about alternatives to oil. All they achieved was a waste of billions of dollars. Continue reading

Assembly May Add Unpaid Power Bills to Yours

By Steve Haner

The General Assembly is moving toward a second method of transferring money from electricity customers who can pay their bills to those who cannot. A Senate bill up today will allow Dominion Energy Virginia and Appalachian Power to simply add yet another “rider” to everybody’s monthly bill for their uncollected accounts receivable.

It is still possible the Assembly will reach into assumed excess profits on the part of Dominion and use $320 million of that to cover payments which have been allowed to lapse during the COVID-19 pandemic. As reported here a while back, that idea is being proposed as an amendment to the state budget, still being written behind closed doors.

But only Dominion has such a pot of cash hanging out there to raid, not the other utilities with hundreds of millions of unpaid electricity, gas, and water bills. And that approach may indeed not appear in the budget after all, leaving Senate Bill 5118 as the main path forward. The link is to the substitute, to which the following was added by a Senate Committee last week:

The Commission shall (emphasis added) allow for the timely recovery of bad debt obligations, reasonable late payment fees suspended, and prudently incurred implementation costs resulting from an (Emergency Debt Retirement Plan) for jurisdictional utilities, including through a rate adjustment clause or through base rates. The Commission may apply any applicable earnings test in the Commission rules governing utility rate applications and annual informational filings when assessing the recovery of such costs.

 “Shall” is the key word, of course.  If asked, the State Corporation Commission must say yes.  And the provision allowing collection “through base rates” in effect does the same thing as the proposed budget language, allowing the SCC to apply any cash the utility has lying around during a rate case. It also could lead to an increase in base rates to cover the unpaid bills.  Continue reading

End the Coalfield Boondoggle

Alpha Natural Resources mine facility

By Peter Galuszka

The General Assembly’s auditing watchdog has recommended the elimination of  two coal tax credits that have been a bonanza to Virginia coal companies worth $315 million from 2010 to 2018 but have created only 10 jobs.

The report by the Joint Legislative and Audit and Review Commission (JLARC) studied 16 different tax credits to boost the state’s economy but recommended  only eliminating the ones involving coal production.

Those credits involve the Coalfield Employment Enhancement Tax Credit, formed in 1995, and the Production Incentive Tax Credit, formed in 1986 to help with electricity generation.

Virginia’s coal production peaked in 1990 and has been declining since. In 2000, for instance, it had been 33 million short tons but in 2019, it had dropped to 12 million short tons.

Continue reading

Keep California on the West Coast

Rolling blackout in Pasadena, CA.

by Bill O’Keefe

Virginia has passed a law — SB 851 — requiring Dominion Energy to supply 30% percent of its power from renewable energy sources by 2030 and to close all carbon-emitting power plants by 2045. According to the Energy Information Administration, natural gas fueled 53% of Virginia’s electricity net generation in 2018, nuclear power provided almost 31%, coal fueled about 10% and renewable resources, primarily biomass, supplied nearly 7%. Over the next decade, Virginia must replace its coal fired power and reduce its gas-generated electricity by over 40%. From its public statements, Dominion plans to go all out in wind and solar, emulating California.

California’s electricity rates are 61% higher than Virginia’s — 19.79 cents per Kwh versus 12.28 cents. Over the past month, there have been numerous news stories about rolling blackouts in California caused by renewable energy mandates and inability to substitute enough from other sources when solar and wind aren’t able to meet demand. Continue reading

Is Green Hydrogen the Answer?

By Peter Galuszka

Utilities, including Dominion Energy, are increasingly exploring the use of now-costly hydrogen technology to produce electricity with little or no carbon.

One of the most promising uses involves using excess renewable electricity from solar farms or wind turbines to power electrolyzer devices that strip hydrogen away from oxygen in water. The hydrogen is then used to power special batteries.

The result? Carbon free power that is available at just about any time when winds are blowing or the sun isn’t shining.

According to the Wall Street Journal, Dominion plans on experimenting with hydrogen for another use. It will try to blend hydrogen into its natural gas distribution system to reduce carbon and methane emissions. It will be testing a 5% hydrogen blend in some natural gas shipments next year, the Journal reports.

Eventually, it may go the route of electrolyzers and use solar and wind power to produce hydrogen. It appears that Dominion’s experiments may take place in the Far West where it owns power generation and distribution systems in Utah.

Another firm that has plans for hydrogen is NextEra Energy Inc., based in Florida. It plans on using hydrogen and natural gas to run a power plant in California. “What makes us really excited about hydrogen is that it has the potential to supplement significant deployment of renewables,” the Journal quotes NextEra CFO Rebecca Kujawa as saying. Continue reading

Told You: You Will Cover Those Unpaid Power Bills.

By Steve Haner

If the Virginia General Assembly orders Dominion Energy Virginia to fork over hundreds of millions of dollars in “excess profits” to cover unpaid family utility bills, who is really paying?  We all are, of course.  Don’t say you were not warned.

That apparently is the latest approach to help folks behind on their bills, as reported in this morning’s Richmond Times-Dispatch by Associated Press.  Governor Ralph Northam is proposing a budget amendment to raid the presumed excess cash at Dominion, after legislative efforts to capture it were defeated in the special session.

Legislative manipulation of the regulatory process, bypassing the independent State Corporation Commission, created the opportunity for Virginia’s dominant electric utility to pile up a possible half billion dollars in excess profit.  But the money came from every Dominion customer, a large portion of it from the giant industrial consumers.  Only a small part came from those now behind on their monthly bills.

Some legislators see your electric bill as just another tax to be spent on their priorities, not yours.  Now they want to use it to pay electric bills for customers who have fallen behind due to a recession (again, a recession in part of the government’s making.)  Continue reading

The Trash Tax Returns; Energy Price Hikes Ignored

By Steve Haner

Proving once again how rare are the new ideas, Governor Ralph Northam’s proposed Special Session budget amendments resurrect a possible state-collected solid waste tipping fee, which crashed and burned in 2002 after being successfully tagged a “trash tax.”

The proposal calls for a study to be completed by November 1, laying the groundwork to include the new levy and substantial revenue when the Governor tweaks the budget again before the 2021 Regular Session. When former Governor Mark Warner proposed this, at the Veto Session following the 2002 Regular Session, it would have raised an estimated $75 million annually.

Frankly, what the language calls for (a plan) is something the Northam Administration can just do. By including this directive in the budget document, all the stakeholders are forewarned and forearmed. What’s the plan for the money? “The plan shall include recommendations for the amount and structure of any proposed fee, and recommendations for use of any revenue that may be generated from such fee.”    Continue reading

REC Coop to Invest in Battery Storage

A battery storage facility: not nearly as photogenic as solar panels and wind turbines

by James A. Bacon

Rappahannock Electric Cooperative (REC) is partnering with Charlottesville-based East Point Energy to install the first grid-scale battery-storage project by a Virginia electric cooperative.

The project has a peak capacity of two megawatts and a duration of eight megawatt hours, enough to power about 1,000 homes for eight hours, the coop stated in a press release two days ago. REC provides electricity to 170,000 connections in portions of 22 Virginia counties.

There has been much discussion about large-scale battery storage as a supplement to solar and wind power as Virginia moves to a carbon-free grid by 2050. In theory, batteries will be able to store excess electricity generated by the intermittent power sources and release it when the weather isn’t cooperating. But the aim of the REC energy-storage project, to be located in Spotsylvania County, is more modest. Anticipated benefits include: Continue reading

We Underpaid Dominion in 2019? Not Really.

Future Dominion price increases. Source: SCC.  Actually, 1000 kWh per month is a bit low for the average residential customer, so many Virginians will be paying much more. Click for large view.

By Steve Haner

You will be shocked to learn that we customers of Dominion Energy Virginia did not pay it enough money in 2019. The shareholders did not get the profit margin they were due, the utility reported to the State Corporation Commission, which subsequently reported it to us on August 18.

Actually, these guys were not utility accountants, but they were on the right track.

We’ve entered the realm of energy comedy. The utility accounting process now mirrors the famous movie “The Producers,” with the goal being to book little or no actual profit so high rates can be maintained or even made higher. There is honest accounting, show-biz accounting, but for real whiz bang results there is utility accounting.

The SCC’s annual report to the General Assembly on utility accounting, now including projections of future rate costs, normally comes out closer to September. I was tipped to expect it early by a Dominion big wig, which should have told me it was a report they wanted publicized. This is Dominion playing the long game, preparing for the 2021 showdown on its rates and profits in a formal SCC audit and rate case.

The rules for this long game have been rigged in the utility’s favor over several years by a compliant General Assembly. This is not news to Bacon’s Rebellion readers. But here we go again.  Continue reading

California, Here We Come!

by James A. Bacon

For a look at Virginia’s energy future, just take a look at California. It’s not a pretty picture. The state’s grid operator imposed short rolling blackouts twice over the weekend due to an inability to meet peak demand caused by a heat wave. More blackouts are possible later this week.

Both Virginia and California aspire to have 100% carb0n-free electric grids, but the Golden State is farther along in adopting wind and solar power. The California Energy Commission estimates that “34% of California’s electricity came from renewable sources in 2018.”

The Northam administration has signed legislation requiring Dominion Energy to generate 100% of its electricity from renewable sources (primarily solar and wind) by 2045, and Appalachian Power to meet that goal by 2050. All coal-fired plants must close by the end of 2024. California’s present is Virginia’s future just a few years out. Continue reading

Meters Keep Spinning On Unpaid Utility Bills

Amounts various Virginia utilities are owed by customers as of June 30, four months after the State Corporation Commission prohibited utility disconnections. Source: SCC

By Steve Haner

During the first four months of the COVID-19 pandemic, Virginians piled up $184 million or more in unpaid bills with several Virginia utilities, and that was before the worst of the heat arrived in July.

The figure comes from a short letter from the State Corporation Commission to General Assembly leaders dated today, listing the totals in arrears as of June 30.  The SCC issued an order in March, renewed in June, which prohibited the disconnection of regulated utility customers for unpaid bills during the recession. The order was extended after legislators claimed they would be addressing the problem at the August special session.

The SCC’s order suspending disconnections expires on August 31. That legislative session is now just four days away and no suggestions for a solution have surfaced publicly. No bill on the topic is filed. This issue is not mentioned in a story in today’s Richmond Times-Dispatch listing some of the budget actions Governor Ralph Northam will propose next week.  Continue reading

How Discount Power For Poor Will Raise Your Bill

By Steve Haner

Virginia’s two major electric utilities estimate that as many as 150,000 of their poorest residential customers will see their monthly bills reduced next year using money extracted from all their other customers on their own power bills.

Appalachian Power Company projects about 30,000 of its low income customers will receive subsidies of $500-$600 per year. Dominion Energy Virginia projects bill subsidies to about 120,000 households of about $750 per year.

Both companies told the State Corporation Commission recently that to pay for this, about $1.12 will be added to the cost of every 1,000 kWh of electricity used by homes, businesses, and industries in Virginia. The cost per kWh is the same for all customer classes, and thus represents a larger percentage price increase for the commercial and industrial users.  Continue reading

What Needs To Be Done After the ACP

By Peter Galuszka

For six long years, Dominion Energy and its partners in the $8 billion Atlantic Coast Pipeline have waged war against Virginians as they have pushed their way forward with the 600-mile-long natural gas project.

Their strong-armed methods have created untold misery and expense  for land-owners, members of lower income minority communities, nature lovers, bird watchers, fishermen, and many others.

When some declined to let the ACP to trespass on their property for survey work, they ended up in lengthy and expensive lawsuits. Others spent hundreds of hours on their own time and dime fighting Virginia regulatory agencies who all but seemed to be in the pocket of the ACP.

And so it goes. For what? So Dominion and its partners could make billions of dollars, some of it paid for by electricity ratepayers, for a project whose public need was always in doubt. On July 5, the ACP threw in the towel.

I put together this commentary in The Washington Post suggesting what might be done to prevent this from happening again: Continue reading

Virginia Supremes Uphold SCC, Rule Against Wal-Mart

by L. Steve Emmert

Yesterday the Supreme Court of Virginia issued a ruling in Wal-Mart Stores East, LP v. SCC. The question here is whether Wal-Mart can shed the shackles of buying electricity from the dominant utility, a regulated monopoly that you know as VEPCO or APCO, depending on where in Virginia you are.

Some time ago, the 140 Troublemakers created a framework for some semblance of competition in electric utilities. Nonresidential customers whose demand exceeds five megawatts have the right to buy electricity from a competitor to VEPCO and APCO. Any customer, including a plain-old homeowner, has the same right if they want 100% renewable energy and their “host” utility doesn’t offer a choice.

There’s a third category for nonresidential customers. If separately they demand less than five MW but can aggregate different locations to exceed that threshold, they may ask the State Corporation Commission to permit them to bolt and get their electricity elsewhere. The commission has the discretion to approve the request if there are no adverse effects to other customers and the request is consistent with the public interest.

Wal-Mart, as you know well, operates a lot of stores in Virginia. The individual locations don’t use five MW, but when you add up all of them, they greatly exceed that figure. Wal-Mart accordingly filed an application seeking to enter the wholesale energy market, to save a few dollars. Continue reading

What Cost to Make a 100% Carbon-Free Grid Resilient?

Source: “Cost Projections for Utility-Scale Battery Storage,” National Renewable Energy Laboratory

by James A. Bacon

The Northam administration has set the goal of achieving a zero-carbon energy grid by 2045, that is, an energy grid that uses zero fossil fuels. Natural gas and coal would be replaced in the Clean Energy Virginia plan Governor Ralph Northam announced yesterday, with “new investments in solar, onshore wind, offshore wind, energy efficiency, and battery storage.”

The key to making a 100% renewable electric grid work is battery storage. Solar and wind power are inherently intermittent, dependent upon weather conditions that cannot be controlled. Renewables advocates say the way to even out the fluctuations in power output is to store excess power in batteries when the sun is shining and the wind blowing, and to release the power when conditions are cloudy and calm. While the cost of battery storage is extremely high now — batteries are used at present mainly to regulate minute fluctuations in voltage and frequency — costs per kilowatt hour (kWh) are expected to decline dramatically, as seen in the chart above.

The questions then become, how much battery storage capacity will we need? How will reliance upon batteries change the need for redundant renewable power facilities? And how much will the package cost? Continue reading