Category Archives: Energy

Can Dominion Be Made To Stand Behind Promises?

Perhaps the biggest weather risk to the performance of Dominion’s planned offshore wind project. In all the briefs about mitigating risk, the word hurricane appears once.

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy. Second of two articles.

In promoting its proposed Coastal Virginia Offshore Wind (CVOW) project, Dominion Energy Virginia has made many specific projections about its costs and performance. The State Corporation Commission is now being advised to convert one or more of them into binding promises, with financial consequences for the utility and its shareholders if the 176 turbines fail to meet expectations.

As noted in previous discussions, including part one yesterday, Dominion’s 2.6 million Virginia customers are fully exposed to any additional costs created if the construction schedule falters, if material costs explode, tax credits disappear, or if the amount of energy provided over the next 25-30 years fails to meet targets. As also previously reported, no other similar project on the U.S. East Coast is structured to put full risk on customers.

Virginia’s General Assembly created it that way. Many of the groups now offering advice on protecting consumers were supporting the bill at the time. But under the “better late than never” rule, their ideas now are worth exploring. The Commission had asked for this advice and got several responses in briefs filed June 24.

The most common suggestion is to create a performance guarantee built around what is called the capacity factor. Even the best power plants do not operate at full capacity 24/7/365. The actual power output divided by the full output potential produces a percentage “capacity factor.” In its application and in hearing testimony, Dominion stated its two-turbine CVOW demonstration project achieved a 47% capacity factor. For this much larger project and longer time period the company projected 42%. Continue reading

Offshore Wind Risks Stressed in SCC Briefs

The footprint for Dominion’s Coastal Virginia Offshore Wind project, 27 miles off Virginia Beach.

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy. First of two articles, with the second coming tomorrow.  

Virginia’s State Corporation Commission has now received a series of legal briefs offering opinions on what steps, under the law, it can take to protect Dominion Energy Virginia consumers from the massive risks facing its proposed offshore wind facility. Those risks range from cost overruns to poor energy output to failure.

All the parties asked responded that the SCC did have some authority to act and somewhat shift the risk. The utility had a more limited view. But the legal question is truly secondary, and the real question is whether two judges will take actions to protect consumers when their elected representatives openly and knowingly left them so exposed. Continue reading

Hurricanes: Dominion’s Big Bet With Our Money

By David Wojick

My regular readers know that I have been fussing about the threat of hurricanes destroying proposed Atlantic coast offshore wind arrays. The issue arises because the offshore wind industry is based in Europe, which does not get hurricanes. My focus has been Dominion’s massive project off Virginia, but the whole East Coast is hurricane alley.

Now I have found some research that actually quantifies the threat and it is very real. It looks like wind generators will have to be redesigned specifically to withstand hurricanes. In fact, that work is underway. In the meantime we should not be building conventional offshore wind towers. Continue reading

Youngkin Now All-In on Offshore Wind

Gov. Glenn Youngkin

by Steve Haner

Governor Glenn Youngkin’s media spokesperson has told the Associated Press that not only is he committed to the current Dominion Energy Virginia offshore wind project, now under State Corporation Commission review, he is also willing to consider additional turbines off Virginia’s coast.

The Republican had campaigned a year ago expressing concerns for the consumer price impact of the mandatory renewable energy conversions in the Virginia Clean Economy Act of 2020.  The offshore wind proposal, currently slated to cost $10 billion for just the first tranche, is the largest driver of that expected consumer cost increase.  Continue reading

Dropping? Nope, Gas Tax Now Rises July 1

by Steve Haner

Virginia’s gasoline and diesel taxes will rise 7% on July 1, about three more cents per gallon when all the elements of the tax are combined.  This is the inflation-driven cost of living adjustment which Governor Glenn Youngkin (R) and most legislative Republicans tried to short circuit, but which was preserved by a vote in the Virginia Senate last week.

The new gasoline tax will be 28 cents retail, 8.2 cents wholesale plus another 0.6 cents per gallon to fund a program for removing old underground tanks safely.  That’s a combined tax of 36.8 cents per gallon. The taxes on diesel will be 28.9 cents retail, 8.3 cents wholesale plus the same tank fee, a total of 37.8 cents per gallon.  Continue reading

California Proposing More EV Rules for Virginia

Now the powerful regulator of Virginia’s vehicles sales and emissions, thanks to the General Assembly.

by Steve Haner

Virginia’s auto industry overlords in California have a new set of proposed mandates for both electric and internal combustion vehicles which, once adopted, will automatically apply here in the Commonwealth.  They do not advance the date for banning the sale of new gasoline and diesel vehicles earlier than 2035 but do increase the incremental targets for percentage of EV sales in earlier years.

The California Air Resources Board (CARB) regulatory process is well advanced, with a revised draft coming out soon, setting up a second round of comments and a final hearing in August.  Virginia’s dying news media cannot cover this state anymore, so don’t expect coverage of actions in Sacramento.  And, of course, the corporate media is now dominated by editors, writers and owners committed to the war on fossil fuels.

Adding to that, Virginia’s auto dealers themselves (big advertisers and campaign donors) played a huge role in supporting the decision by former Governor Ralph Northam (D) and the then-majority Democrats in the legislature to pass the 2021 bill putting Virginia under California’s control.  A 2022 bill to reverse that passed the House with its new Republican majority, but failed on a party line vote in a Senate committee controlled by Democrats.

Continue reading

Update: Richmond Could Still Close Gas Works

Pending Termination

by Steve Haner

The Senate of Virginia, after long avoiding a vote, has now approved a bill that would require a Virginia local government to try to sell its municipal natural gas utility before simply closing it.  The watered down conference report was all that remained of a more robust bill protecting the natural gas business in Virginia from the climate catastrophe fanatics.

It offers little to no real protection to municipal gas users beyond notifications.

The bill arose out of reports that Richmond City Council had passed a resolution last year expressing intent to get out of the natural gas business.  Its municipal gas works serves 120,000 customers with an exclusive territory that also includes locations in Chesterfield, Henrico and Hanover counties, some of them major industries.

House Bill 1257 in its more expansive form passed the House February 14, during the regular session.  It then hit the anti-fossil fuel wall in a stacked Virginia Senate committee, but a much narrower version was reported out of committee and passed on that chamber’s floor March 7.  The House then insisted on a conference committee seeking to restore deleted parts of the bill. Continue reading

America’s Petroleum Refining Capacity in the News – What is Going On?

By James C. Sherlock

This is a note about perhaps the highest profile national inflation issue, the price of gasoline and diesel.

The President is demanding more supply from U.S. refineries.  Headlines like this one blare at us today:

Biden threatens oil companies with ’emergency powers’ if they don’t boost supply amid inflation spike.

The letter behind such headlines, which is exactly what it seems to be, was sent to the largest refiners in the country.  Among other things, the President wrote:

My administration is prepared to use all reasonable and appropriate Federal Government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied.

I looked up the data on oil refining that Mr. Biden’s Energy Information Administration has published.

From the numbers on American refinery input and capacity, Mr. Biden will need more than “emergency powers” to increase refining output.

He will need a a genie.

Continue reading

Fuel Costs Explode on Dominion Bills in July

by Steve Haner

Are you enjoying paying more for gasoline? Have you noticed how that works its way through and inflates the price of just about everything else you buy? The other shoe drops in July when Dominion Energy Virginia increases its prices to reflect the rising cost of fuel. It will also spread more inflation virus throughout the economy.

The cost of fuel and purchased electricity is a separate charge, designated Rider A, on every monthly electric bill, residential and commercial. The annual fluctuations are usually small, and can go either way, but the increase this time will hit everybody hard and may hold for years. (Here is the case file.) Continue reading

Democracy Dies in Sophistry

Secretary of Energy Jennifer Granholm

by James C. Sherlock

All should note the article, “Average U.S. gas prices top $5 a gallon, as surging energy costs squeeze economy,” in The Washington Post.

The same Washington Post that is the only newspaper for most Northern Virginians who get one.

That article shows again the depths to which the progressive press will descend to deny the effects of the conscious policies of the left on domestic energy production.

It displays end-to-end such a thorough misunderstanding of economics that it is hard to critique the details.

It is hard to miss, however, that this lengthy report consciously avoids the point that the Biden administration came into office declaring a war on domestic energy that continues to this day. Continue reading

The Defense Production Act as a Political Tool to Boost Solar Farms

Courtesy Dominion Energy

by James C. Sherlock

We have had multiple discussions, good ones, on the issues surrounding solar farms in Virginia.

Jim Bacon wrote an excellent column about it in February of 2021 titled “The Political Economy of Solar Farms.” It was good then and prescient as of yesterday.

He wrote another one two days earlier.  From that piece:

With the enactment of the (Virginia Clean Economy Act) VCEA, Freitas wrote in the press release, Virginia is experiencing extensive land leasing and acquisition by solar developers. More than 180 solar projects accounting for 140 million solar panels are in various stages of approval or construction. Full implementation of the ACT would consume 490 square miles of Virginia’s forests and farmland, an area twenty times the size of Manhattan.

Thanks to President Biden’s new political/industrial policy, those solar farms just got cheaper. And Chinese solar stocks just got more expensive.

Both of which were made to happen because the President removed the tariffs on Chinese solar panels. Readers rationally can be for that action or against it. But the left has settled on the Defense Production Act as a favored service animal.

So, the President, in addition to removing the tariffs, invoked that act as a national emergency response to mandate additional domestic production of solar panels.

Let’s try to pin down the nature of the emergency and the unintended consequences. Continue reading

You Just Paid More RGGI Tax, Virginians

Six RGGI auctions have reaped Virginia $378 million.

by Steve Haner

Last week Virginia collected another $76 million in carbon tax dollars through the ongoing Regional Greenhouse Gas Initiative allowance auction. That was the sixth such sale since Virginia joined RGGI, and the state’s total tax take is now $378 million in 18 months.

Do not for one minute allow yourself to be fooled into thinking this money is not coming out of the pockets of Virginia’s citizens or businesses. Do not fall for the ploy Dominion Energy Virginia is attempting by claiming it will charge it off to “base rates.” The pea is still under your walnut shell.  Continue reading

How are Virginians Preparing for the Coming Food Price Shocks?

by James C. Sherlock

Virginians have only begun to experience price inflation at the grocery store.

Price increases are in the food pipeline that will be a much bigger problem starting this summer.

Farmers and ranchers invest up front. They borrow money to do it. They are incredibly efficient at what they do, but are at the mercy of input prices. They must wait until their crops and animals are sold to recoup their investments.

Everything farmers and ranchers do with their farm machinery requires diesel. So do the trucks that move crops to those who prepare them for our use and then to market. Diesel prices are expected to reach more than $6 per gallon this summer, a 35% increase from current prices. Inventories are low.

Most fertilizer is an oil derivative and has skyrocketed up to 300% since early 2021. On average, fertilizer in March of this year was 35% more expensive than it was in the fall of 2021, with Roundup up nearly 90%. In six months.

Of course, the feed ranchers buy for their animals comes from the produce of America’s farmers.

Producer prices that reflect what they have paid for diesel and fertilizer and the trucking costs of moving those crops are predicted to reach grocery stores in the summer and fall. That hardly suggests that the 9% inflation recently seen in retail food prices is the end of it.

It is important to ask what our governments and our best charities are doing to prepare. Continue reading

What the Wind Project Costs You and Who Pays

The annual revenue required from Virginia customers to finance Dominion Energy Virginia’s offshore wind installation. It peaks at about $800 million in 2027, driving the amount to be collected on monthly bills. Source: SCC Testimony. Click for larger view.

by Steve Haner

If the project goes as planned, the consumer cost for Dominion Energy Virginia’s offshore wind installation will rapidly rise to a peak in 2027 and then descend annually over the following 20 years. If it produces power for 30 years, in the final phase the revenue related to the project will exceed the remaining capital costs.

What is this going to cost Dominion’s captive ratepayers?  There is also a related but often ignored question: which of those customers did the Virginia General Assembly exempt from those costs, effectively bumping up the price to those not exempt? Continue reading

Youngkin Endorses Dominion Wind Project

by Steve Haner

Republican Governor Glenn Youngkin’s administration has filed a letter with the State Corporation Commission asking the regulators to approve the Dominion Energy Virginia application to build a 176-turbine Coastal Virginia Offshore Wind (CVOW) project.

The letter was on Department of Energy letterhead and signed by that agency’s director, John Warren, a holdover from the Democratic Ralph Northam administration. Continue reading