Category Archives: Energy

Impractical Solar Power, Illustrated With the Math

by David Wojick

This was first published at cfact.org and is reproduced with Wojick’s permission.

Many states and the utilities they regulate are talking about replacing their coal and gas fired generators with solar and wind power. For example, I recently wrote about how the crazy-named Virginia Clean Economy Act already has almost 800 square miles of solar slabs in the developmental lineup.

Given the high intermittency of wind and solar, the idea of running on solar and wind turns out to be an extremely costly prospect. It is all about reliability. Electricity must be there when we need it. Below I present some simple calculations that show just how bad this idea really is.

Reliability analysis of large scale solar and wind power generation can be very complex. Both depend on the weather, which can vary dramatically and quickly. Both can depend heavily on other available power sources, if available. They can also depend on each other under some conditions.

Here we will simply analyze certain basic features of power generation, as a way to scale the issues. For a start we will simply consider what a standalone 1,000 MW solar system with battery storage requires for reliability. Continue reading

A Regulatory Path to End the RGGI Carbon Tax

The states currently in the Regional Greenhouse Gas Initiative compact.

by Steve Haner

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

Governor Glenn Youngkin (R) will proceed to remove Virginia from the Regional Greenhouse Gas Initiative carbon tax compact by the same route Virginia entered it: he will push to repeal the underlying regulation.

As with much else in his promised “Day One” agenda, it will actually take time. What he gave Virginia on Day One was an executive order outlining the coming steps, which still must follow the letter of Virginia’s administrative process rules. Regulations are created, amended and repealed routinely.

His administration will also notify the RGGI organization of Virginia’s intent to withdraw, a step contemplated and allowed under the governing memorandum of understanding.

It was a vote of the Air Pollution Control Board, citing authority over airborne carbon dioxide emissions, that implemented the cap and trade rules that require electric power producers to buy carbon allowances. That allowance cost is then passed on to power customers, in the case of Dominion Energy Virginia customers, directly on every month’s bill. Continue reading

Can Financially Failing Coal Plant Be Closed?

Virginia City Hybrid Energy Center, St. Paul, VA. Dominion Photo.

by Steve Haner

The economic decision on whether and when to cut and run from a losing investment is always complicated. The debate over the future of Dominion Energy Virginia’s economically failing coal plant in Wise County will be complicated by power politics.

The State Corporation Commission has been asked to accept an agreement between the utility, the Office of the Attorney General and environmental opponents of fossil fuel generation to consider closing the plant in just a few years. The stipulation calls for a report later this year on the economic cost and benefits of pulling the plug as soon as 2026.

Dominion has been proposing to operate the plant, which opened in 2012, until at least 2045. Legally it can, despite the move away from fossil fuels in recent state laws. In the pending matter before the SCC, it continued to argue Wise County should stay open despite the economic losses.

The economic costs either way will fall mainly on the company’s customers. We have been subsidizing the operation of the money-losing plant as it sank into red ink. But if the decision is made to close it, the utility will seek to recover – from its customers – the $1.6 billion of outstanding investment it has in the facility.  Heads they win and tails we lose.

That’s how we do electric power regulation in Virginia. It was the General Assembly that mandated construction of the plant, far outside Dominion’s service territory, in 2007 legislation riddled with political trade-offs. The investment would never have been found reasonable and prudent by the SCC absent legislative interference, but was deemed “in the public interest” by law. Continue reading

Virginia, Heed the EU’s Failed Climate Policy

by Bill O’Keefe

U.S. climate policy has been heavily influenced by actions taken by European nations, even when it was obvious that many of those actions were fraught with problems.

Now the European Union (EU) may be on the verge of taking steps to reverse course and allowing economic and political realities to exert a greater influence on policy. The EU, which led the movement away from fossil fuels to green energy, mainly wind and solar, is seeing its dream become a nightmare — wind and solar don’t work the way they were supposed to, and energy costs are skyrocketing.

On New Year’s Day, Reuter’s reported that the EU may be on the verge of reversing course. It has developed a proposal that would allow some natural gas and nuclear facilities to qualify as “green.”

Since CO2 is the alleged threat to our future, nuclear power, which doesn’t emit CO2, is by definition “green.” Disposal of nuclear waste is an issue, but not a major one if you believe that the alternative is destruction of the planet. Similarly, natural gas emits far less CO2 than coal, and companies are investing in carbon capture technology. EU green advocates continue to build natural gas plants because gas is what they burn when wind and solar can’t meet the demand for electricity. Continue reading

Virginia, Take Another Look at Nukes

Terrapower’s technology is said to be safer than older nuclear technologies. Nuclear can provide a carbon-free electricity base-load that wind and solar cannot.

by Brian Glass

Dominion Energy, Inc., has ordered 176 wind turbines from Siemens Gamesa for its 2.6-gigawatt offshore wind farm at a cost of $9.8 billion. Electricity consumers will pay for this generating capacity. Let’s take a look at whether or not we will be getting our money’s worth.

The Virginia Clean Economy Act went into effect on July 1, 2020, with a goal of a carbon-free electric grid by 2050. The timetable for installing the first 880 megawatts turbines is 2024, with Phases Two and Three scheduled for 2026. Assuming a projected life span of 30 years, the useful life of the turbines will end between 2054 and 2056, just a few years after the Commonwealth’s zero-carbon deadline.

This doesn’t seem logical to me. The State Corporation Commission, which has received Dominion Energy’s application for the project, should take a hard look at whether or not it can meet the goals of the Virginia Clean Economy Act beyond the arbitrary 2050 deadline. Continue reading

Dominion Green Energy Conversion Cost Dips, Partly by Sacrificing Reliability

by Steve Haner

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

The projected consumer cost of Dominion Energy Virginia’s conversion to wind and solar power rises steeply in the utility’s latest capital spending plan. Although slightly reduced from earlier estimates, the utility told the State Corporation Commission its residential customers may see prices jump more than 50% by 2030 and 70% by 2035.

The higher consumer energy costs expected from going “green” became a political talking point during the last election. Another effort is expected in the 2022 General Assembly to revise or repeal the Virginia Clean Economy Act. That 2020 legislation mandated the coming move to wind and solar and the end of fossil fuels, but it passed only narrowly on largely party-line votes.

In 2020, the Commission staff reviewed the company’s capital plan and predicted that by 2030, a residential customer using 1,000 kilowatt hours per month would pay up to $808 more per year. In this recent review, the projection using the SCC staff assumptions comes out to $733 more per year ($61 per month) by 2030, still a 53% increase above 2020 levels.

What changed? For one thing, Dominion altered the plan by removing some additional natural gas generation it was planning to build. The 970 megawatts of new gas plants were intended to add reliability to the system as the intermittent wind and solar plants became a larger part of the daily power mix. Dominion may have lowered its projected costs by sacrificing its safety net. Continue reading

Our Media Trusts “The Smart Ones”

by Steve Haner

Not every policy imposed by government is subject to public hearings or votes. That’s one reason to vote for smart candidates who have the country’s best interests at heart and not for those who rant about personal liberty without accepting any social responsibility for individual decisions.

That was part of a response I received by email from somebody who read Friday’s post on the Air Pollution Control Board’s new regulation which ties Virginia’s auto market to emissions rules promulgated by California. I had noted how the state’s usual and statutory requirements for notice and comment had been bypassed on the orders of the General Assembly.

Clearly this reader thought that was just fine, which floored me. My respondent was a member of the working news media. If anybody should be standing up for transparency and public participation, it would be news reporters, editors and producers, right? Not this person, not on this issue. (I’ll withhold the name.)

The comments from a “journalist” about “smart candidates” versus “those who rant about personal liberty” speak for themselves. Note they would apply equally to COVID mitigations and efforts to eliminate carbon dioxide, with disdain poured on skeptics in either case. It was a refreshingly honest admission that explains the selective coverage we must wade through on so many issues. It came at a time when I was already shaking my head over the media coverage of Governor-elect Glenn Youngkin’s proposal to exit the Regional Greenhouse Gas Initiative. Continue reading

Now California Will Control Virginia’s Auto Sales

A BMW model qualified as zero emissions by the California Air Resources Board. You see more and the subsidies California provides buyers here.

By Steve Haner

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

Virginia’s automotive sales market is now officially controlled in Sacramento, with the likelihood that no new internal combustion engines can be sold in the Commonwealth after 2035.

The Virginia Air Pollution Control Board, acting not with discretion but on orders from the General Assembly, voted on December 2 to adopt Advanced Clean Cars Program regulations that delegate ultimate control to the California Air Resources Board. Virginia will simply follow Sacramento’s lead in dictating that an ever-increasing percentage of new car sales be certified as low emission or zero emission by the CARB.

Legally it would be similar to Virginia being forced to comply with federal regulations, except these rules will come from and be amended by California and its governor, regulators and legislature. Who in Virginia gets to vote for them? No one.

Legislation in 2021 directed the Air Pollution Control Board to adopt these rules with no deference to the regulatory processes. If you missed the usual public notices or hotly-contested public hearings, it may be because they didn’t happen. Media coverage has also been sparse.  Continue reading

Youngkin to Withdraw From RGGI, End Carbon Tax

The RGGI member states.

By Steve Haner

First published by the Thomas Jefferson Institute for Public Policy.

Governor-elect Glenn Youngkin told a business audience Wednesday afternoon that he intends to withdraw Virginia from the Regional Greenhouse Gas Initiative. His decision came two days after Dominion Energy Virginia filed a petition to increase the RGGI tax on its bills by 83% next year.

“RGGI describes itself as a regional market for carbon,” Youngkin told a meeting of the Hampton Roads Chamber of Commerce. “But it is really a carbon tax that is fully passed on to ratepayers. It is a bad deal for Virginians. It is a bad deal for business and as governor, I will withdraw us from RGGI by executive action. I promised to lower the cost of living in Virginia and this is just the beginning.”

The Thomas Jefferson Institute for Public Policy sought to dissuade the state from joining RGGI and imposing this carbon tax and has reported often on the development and imposition of Dominion’s bill adder to collect it. We applaud this decision, knowing that Youngkin may face a struggle to implement it.

Virginia has been part of the interstate tax, cap and trade compact for a year now. Every large electrical generating facility in the state must buy allowances in a multi-state auction equal to the number of tons of carbon dioxide its operations will emit. With the only large fleet of Virginia coal and gas generators, this is basically about Dominion Energy Virginia and its 2.6 million customer accounts. Continue reading

More Bacon Bits

Mia Love to Speak at UVa. Mia Love, the first Black Republican woman elected to Congress, will deliver a speech at the University of Virginia tomorrow, addressing the topic, “Preserving the American Tradition.” Love’s address is the second in a series of events bringing outside conservative voices to UVa sponsored by The Jefferson Council. For details, click here.

Police shortages not just for big cities. The City of Lynchburg Police Department has 28 open positions, and recruiting new officers is difficult. In 2010, the department saw between 1,500 and 2,000 applicants. Last year, it had only 342 applicants. “Officers are just getting into a profession that they don’t feel like they’re valued in a lot of times, unfortunately,” Police Chief Ryan Zuidema told WSET News. As a consequence, response times to 911 calls are slower, he said. Part of the problem is that Lynchburg police tend to be younger and have less experience. Another is that mental health calls are taking officers off the streets. “On any given night or any given day, we have multiple police officers sitting at the hospital with mental health patients, and those officers are not available to respond to calls for service.”

Another one bites the dust. The Henry County Board of Zoning Appeals has turned down requests from two solar energy companies to convert hundreds of acres near the community of Axton into solar farms, according to The Martinsville Bulletin. Henry County’s solar ordinance calls for no more than 2.5% of the land area within a five-mile radius to be devoted to solar, and one solar farm already operates in the Axton area. “Solar energy is here, and it’s the future, but Axton doesn’t need to be the epicenter of it,” said zoning director Lee Clark. Solar projects are being approved in Virginia, but arguably not enough to meet the requirements of the Virginia Clean Economy Act to decarbonize Virginia’s electric grid by 2050.

TCI is Now Dead. Happy to Have Helped.

by Steve Haner

You’re welcome.

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

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

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

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

by Steve Haner

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

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

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

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

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

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

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

What Dominion is Hiding in its Wind Application

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

by Steve Haner

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

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

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

Continue reading

Turbine Costs Appear on Dominion Bills in 2022?

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

by Steve Haner

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

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

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

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

The World Doesn’t Work that Way

Image credit: Roanoke Times

by Bill O’Keefe

The political elites who promoted the passage of the Virginia Clean Economy Act would have us believe that planning an energy transition is no more difficult than planning a long vacation. You know where you want to go, how long you will be gone, and how you plan to travel. The Clean Energy Act was demonstrated extreme hubris. Uncertainties and unintended consequences were viewed as minor matters, if considered at all.

Advocates seemed to think that what looks doable in theory will be doable in practice. That was certainly the case where members of the Virginia General Assembly and environmentalists who pushed passage of the Virginia Clean Economy Act. The world doesn’t work that way. The announcement by Dominion’s CEO that the cost estimate has risen from $8 to 10 billion was an early sign about future cost increases.

These advocates forget the truism that in theory, theory and practice are the same but in practice they are not. We are slowly beginning to see nationally as well as here in the Commonwealth that long-term energy planning involves a lot of uncertainties, unintended consequences. and consumer sensitivity to price increases. Continue reading