Category Archives: Energy

SCC Hikes Electricity Bills For New PIPP Subsidy

By Steve Haner

All customers of Dominion Energy Virginia and Appalachian Power in Virginia will begin soon to pay an extra monthly charge related to the coming Percentage of Income Payment Program, the General Assembly’s new electricity cost subsidy for low-income residential customers.

The PIPP was initially created in the 2020 Virginia Clean Economy Act and then revised with a bill in 2021, but just when then bill subsidies begin is still to be determined. The Department of Social Services, which will determine eligibility, still needs to devise the program. No start date is specified in the law.

The bill charges we will be paying in advance are just to raise the $3 million per year that is being allocated to cover that administrative task. The General Assembly has ordered customers to pay that, too, perhaps not being aware that it would soon be sitting on a $2.6 billion surplus.

Here are the July 29 State Corporation Commission orders establishing the charge for Dominion and APCo customers. Dominion customers will provide $2.4 million and APCo customers $600,000 per year. Far larger amounts will be collected when the benefits begin to flow in the future. Continue reading

Dominion Takes $206M From You Off the Top

by Steve Haner

As of late 2020, Dominion Energy Virginia had forgiven $206 million in unpaid electric bills for customers financially stressed by last year’s COVID-19 pandemic and recession. Those unpaid bills are not being covered by any of the billions in federal COVID emergency funding, nor are stockholders eating a loss.

We, the other Dominion customers, will pay them. As reported last year, this was decided by the Virginia General Assembly. How it happens is about to unfold.

The $206 million figure is prominently featured in Dominion’s initial filing in its pending triennial financial review by the State Corporation Commission, which actually covers a four-year period ending with 2020. The amount of bill relief is directly deducted from any calculation of excess profits, dollars which otherwise might justify rebates or even a rate cut.

This will be the first official review of the company’s cost of service and earnings since 2015, the hiatus being another little gift to the Dominion stockholders from legislators. It is a long and sordid tale how we got here, too often told. Thanks to a bipartisan fondness among legislators for accounting rules that favor Dominion, there may no way the SCC can order the company to pay rebates to us or cut our rates, excess profits notwithstanding. Continue reading

SCC Starts Review of Dominion Wind Proposal

by Steve Haner

Acting on its own initiative, the State Corporation Commission has established a docket to consider the coming application from Dominion Energy Virginia for its massive offshore wind proposal, the centerpiece of Virginia Democrats’ plan to save us all from catastrophic climate change.

Earlier this month, the utility started the federal review process with a notice of intent to prepare an environmental impact statement for the project. The clock on the first round of comments to the Bureau of Ocean Energy Management runs out August 2.

If Dominion builds all future planned phases, a full 5,200 megawatts, the sticker price is more than $17 billion, which with profit and financing costs will ding customers in total $37 billion over a few decades.

In its July 26 order establishing the case, the SCC outlined a series of questions the utility will need to answer in its application when it comes. The questions provide just a glimpse into the issues that will develop in what may soon be recognized as the Second Battle of the Virginia Capes.

Cost is front and center:

What is the total cost and the lifetime revenue requirement of the transmission necessary to bring the energy generated by the OSW Project to shore? Of this total lifetime revenue requirement, how much is investment, and how much is the Company’s projected return on equity? Identify the rate recovery mechanism(s) Dominion proposes or will propose to use to recover such costs from eligible customers…. Continue reading

A Cautionary Tale

Dominion’s experimental wind turbines off the Virginia coast.

by Bill O’Keefe

The General Assembly, Governor Ralph Northam, and Dominion Energy are proud of their commitment to achieve zero carbon emissions by 2050.  Dominion routinely showcases its planned wind farm 27 miles off of the Virginia coast. Before Dominion and the Commonwealth get beyond the point of no return — governments don’t acknowledge sunk costs, opportunity costs or terminate failed programs — they would do well to closely examine the experience with wind power in Germany.

Germany is a leader in the green energy movement and has installed over 30,000 windmills. The German renewable energy program started in 2000. After 20 years, there is a problem. The German wind power industry is suffering setbacks. Hardly any new turbines are being built, and more and more old wind turbines are being phased out. Some of the problems don’t apply to Virginia since they concern on-shore wind mills but there are lessons to be learned.

Many German wind farms are threatened with shutdown. The German Renewable Energy Act, which has been in force since 2000, guarantees wind turbine operators secure subsidies for twenty years. Without subsidies they are no longer profitable. By 2025, there is a risk of 15,000 MW of wind projects will be lost corresponding to over a quarter of Germany’s onshore wind power. Continue reading

Wind Power Is Beautiful But Expensive

by James A. Bacon

Offshore wind turbines are works of engineering beauty. Soaring as high as the Washington Monument, they are a magnificent sight to behold, as I saw for myself on an excursion Wednesday to view Dominion Energy’s two experimental wind turbines up close. The towers are also very expensive — not just the two pilot turbines, which no one pretended at $300 million for the pair would produce economical electricity, but the fully built-out wind farm with 180 turbines at a cost currently estimated at $7.8 billion.

If the only cost you consider is the expense of erecting a turbine itself, offshore wind can look competitive with solar and combined-cycle natural gas. Dominion officials estimate their wind turbines will generate electricity at a cost of 8 cents to 9 cents per kilowatt hour. That’s less than the average rate of $10.83 cents per kilowatt hour Dominion charges its customers.

But the turbines don’t generate electricity in a vacuum. They are part of an electrical-generating system. And you can’t build a system around turbines that generate electricity only when the wind blows. Dominion must build a major transmission line to plug into the grid and maintain backup power sources to kick in when the winds fall still. Continue reading

Still an Open Question: Will Virginia Become Supply Chain Hub for East-Coast Wind Farms?

The Luxembourg-flagged Vole Au Vent is seen here installing one of Dominion Energy’s two experimental wind turbines 27 miles off the Virginia coast last year. Photo credit: Dominion. An American-made vessel will install the next 180 or so turbines.

by James A. Bacon

The primary justification for spending $7.8 billion to build a wind farm off the Virginia coast at a significantly higher cost per kilowatt than other energy sources is to advance Virginia’s goal of achieving a zero-carbon electric grid by 2050. But an important secondary consideration is the hope that the project will jump-start the creation of a new industry in Hampton Roads serving the emerging East Coast offshore wind industry.

Virginia has deep channels, no bridge obstructions, an active  maritime community, and perhaps the nation’s largest shipbuilding industry. Dominion Energy’s Coastal Virginia Offshore Wind Project, it is hoped, will catalyze development of a multibillion-dollar offshore wind-energy industry in Virginia.

That case is a little harder to make these days. When Dominion decided to invest $500 million in building an offshore wind-turbine installation vessel, none of Virginia’s shipbuilding companies was interested. All were booked up with Navy contracts. The vessel, named after the mythical Greek sea monster Charybdis, is being constructed in Brownsville, Texas. Continue reading

What Dominion Has Learned From Its Experimental Wind Turbines


by James A. Bacon

Dominion Energy spent $300 million to erect the two wind turbines now standing about 27 miles off the Virginia coast, a sum that could never be justified by the 12 megawatts of generating capacity they add to the grid— enough to power only 3,000 homes. The real benefit will come later, when Dominion builds a proposed 180-turbine wind farm expected to generate 2,640 megawatts of capacity, enough to power up to 600,000 homes, at a projected cost of $7.8 billion.

Thanks to the data gathered from the two experimental turbines, Dominion officials say it will need 40 fewer of the multimillion-dollar turbines than it had originally anticipated, a savings of hundreds of millions of dollars. Also, from the experience of leasing an expensive, hard-to-book installation vessel, Dominion is investing $500 million, risking shareholders’ money not ratepayers’ money, which will serve other East Coast windfarm projects as well as Dominion’s at a lower cost than chartering a European vessel.

Company officials say they have learned other odds and ends from the experimental turbines that will inform their safety and environmental efforts going forward. Continue reading

From Farming Corn to Electrons

Dominion solar farm. Photo credit: Dominion.

By Dick Hall-Sizemore

In light of recent denials by local governing bodies, there has been some skepticism expressed on this blog as to whether the Commonwealth could meet its goals on solar energy. Going against recent trends, however, has been the city of Chesapeake.

According to the Virginian-Pilot, the city council recently approved an application to build a 900-acre solar farm. This most recent approval about doubles the size of three previously-approved projects. It is estimated the project will cost $100 million. The company anticipates generating 118 megawatts, enough to power about 20,000 homes.

The land involved is now prime farmland. An interesting aspect of this project is that is an amalgamation of acreage from multiple owners. Continue reading

With Defeat in Connecticut, Will Virginia Drop TCI?

By Steve Haner

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

Why do Virginia’s leaders run away from the Transportation and Climate Initiative? Could it be because the first state legislature to consider it, in reliably Democratic Connecticut, just adjourned without even taking a vote on the proposed carbon tax compact, despite strong support from Democratic Governor Ned Lamont?

The Virginia Department of Environmental Quality has called a June 24 public meeting to discuss efforts to ramp down carbon dioxide emissions from transportation sources, but it made no mention of the pending TCI interstate compact. Instead it focused on the General Assembly’s approved 2045 goal of “net zero” emissions in all sectors of the economy, including transportation. Continue reading

Getting Electricity from Government

By Dick Hall-Sizemore

More than 300,000 Virginia residents and numerous commercial enterprises are not subject to the monopolistic electric rates of Dominion, APCO, or the electric cooperatives. They get their electric service from their local governments.

There are 16 municipalities in which electric service is provided by a governmental entity. Primarily, they are small towns (some surprisingly so) and small cities. They include the towns of Bedford, Blackstone, Culpeper, Elkton, Front Royal, Richlands, and Wakefield and the cities of Bristol, Danville, Franklin, Harrisonburg, Manassas, Martinsville, Radford, and Salem. Most intriguing of all is the Virginia Tech Electric Service, established by the university to provide electric service to the campus and the residents and businesses of Blacksburg.

These municipalities purchase most of their electricity from private companies such as American Electric Power Company. Several, such as Martinsville and Bedford, also use hydroelectric power for a portion of their needs. Continue reading

Democrats Fight Back as Boss Bills Cracks Whip

Michael Bills

by Steve Haner

Two Virginia Democrats who have been loyal soldiers in the army to turn Virginia green as well as blue are under attack in the June 8 primary for the sin of accepting campaign donations from Dominion Energy. It doesn’t matter to the attacker – our old friend Clean Virginia — that Dominion is moving in lockstep with the Democrats to undermine Virginia’s reliable generation mix and replace it with expensive and unreliable renewable power.

The House Democratic Caucus is responding by attacking the “dark money billionaires” who are going after their colleagues. Who? By that they would have to mean that same Clean Virginia, funded mainly by the personal fortune of hedge fund mogul Michael Bills and his wife. The same two people who did more than anybody to give Democrats that majority in the first place.

More proof, in case you needed it, that it is not your enemies you need to watch in politics but your friends. The Democrats started to lose their grip on this state 20-30 years ago because in their lust for power they fell out among themselves, and here we go again. Bring popcorn.

The basics: Delegates Steve Heretick, D-Portsmouth and Candi Mundon King, D-Prince William, face primary challengers. The primary challengers have received major funding from something new called Commonwealth Forward PAC. But as The Virginia Star reported this morning, its money actually comes from Bills and Clean Virginia.  Continue reading

The Electrification of Everything

by James A. Bacon

The world economy is rapidly electrifying. Driven by new technologies and the environmentalist push to decarbonize the economy, an increasing share of the energy Americans consume will come out of the electric socket, reports the Wall Street Journal in a special report. “Instead of having fuels like natural gas or oil or gasoline flow directly into our homes, offices, manufacturing facilities and cars, those fuels — and other sources of energy — will increasingly be converted to electricity first.”

A Princeton University study finds that electrifying buildings and transportation could double the amount of electricity used in the United States by 2050, lifting electricity’s share of total energy from about 20% today to close to 50%.

Electrification offers the ability to harness renewable power sources, primarily wind and solar, to displace carbon fuels that contribute to global warming. But it does present the challenge of maintaining the integrity of the electric grid in the face of natural disasters, cyber attacks, and other challenges. While many environmentalists consider global warming to be an existential threat to humanity, a collapse of the electric grid accounting for 50% of all energy consumption would pose an equally existential threat to human well being — within the next two or three decades, not by the end of the century. Continue reading

Another One Bites the Dust

Utility-scale solar projects are getting shot down like Hamas rockets.

by James A. Bacon

From today’s news dump courtesy of VA News:

The Fauquier County Board of Supervisors unanimously rejected an application by Dynamic Energy LLC to build a five-megawatt solar facility on 40 acres of farmland near Bealeton, reports Fauquier Now. “When I looked at this,” said Supervisor Rick Gerhardt, “I didn’t want to take solid farmland out of production. Those are good soils on that property. For me, I do not want to see that removed from farming.” The county planning commission had rejected it previously by a 3 to 2 vote.

Meanwhile, Round Hill Solar LLC has withdrawn a plan to develop 560 acres of solar panels from the Augusta County Board of Supervisor. The planning commission had already determined that the plan conflicted with the county’s comprehensive plan that took location, character, and extent of the project into consideration, reports the News Leader. Continue reading

Gas Shortages: Deja Vu All Over Again

Photo credit: New York Post

by Kerry Dougherty

It’s like old times. 1979 to be exact.

Just 3 1/2 months into the Biden administration and we’ve gone from energy independence to gas lines.

What’s next, 18% percent mortgages? Or will Joe borrow Jimmy Carter’s old cardigan and urge us all to turn down the thermostats?

Yep, everywhere I went yesterday it looked a lot like it did 32 years ago. Long lines of cars snaking around gas stations. Exasperated drivers pounding their steering wheels.

I remember 1979 well because I was living in Northern Virginia and the odd/even gas rationing was chaotic. I became so desperate for fuel for my diesel VW Rabbit that I actually siphoned gallons out of the heating oil tank at my house one day.

I can still taste it.

Yes, I know that’s illegal. I believe the statute has run on that crime. Continue reading

Bacon Bits Does Electric Grid

Source: “Electricity Sales Forecast for Virginia: 2020-2050”

Boom times ahead for electricity. Electricity demand in Virginia will grow 30%, give or take, over the next 15 years as more energy-consuming data centers are built and more Virginians drive electric vehicles, writes Bill Shobe, a University of Virginia professor who supports the transition to a net-zero-carbon electric grid, in a new report. Electricity use could grow by more than 78% by 2050, the state’s deadline for achieving net zero. The increase will occur despite gains in energy efficiency that have flattened electricity demand growth in recent years.

Where will all that power come from?

Relicensing the nukes. Dominion Energy’s four nuclear units at the Surry and North Anna power stations produce about one-third of the utility’s electricity. The units, originally designed to last 40 years, are licensed to operate another 20 years. Dominion is seeking regulatory approval to extend the licenses yet another 20 years. The Nuclear Regulatory Commission staff has recommended granting that approval for the two Surry units. But some environmentalists are opposed. Continue reading