Category Archives: Energy

Severe Cold Is Messing with Texas

Frozen Texas wind turbine. Credit: Watts Up With That?

As I repeatedly remind people, you don’t build an electric power grid to handle routine weather conditions, you build them to survive rare but extreme weather events. Texas, which became enamored with wind power — wind accounted for between 22% of the state’s electricity in the first half of 2019 — has learned this lesson the hard way. In the midst of a bitter cold snap expected to last several days, ice storms knocked out nearly half the state’s wind-power generating supply. The spot price of electricity has surged to $9,000 per megawatt hour, compared to $100 per megawatt hour during periods of high summer demand. The Electric Reliability Council of Texas called on consumers and businesses to reduce electricity use as much as possible Feb. 14, through Feb. 16. Just imagine how bad the situation would be if Texas derived 100% of its electricity from renewable energy.

Meanwhile, the question Virginians need to be asking in anticipation of the commonwealth deriving much of its electricity from offshore wind power within a few years is this: What’s the freezing temperature for salt water?

Answer: 28.4° Fahrenheit. Continue reading

Your PIPP Tax Will Buy Heat Pumps For Poor

by Steve Haner

Lower-income Virginians who are customers of the two largest electricity providers may begin to receive subsidies on their residential bills in March 2022 under legislation moving forward in the General Assembly. The money for the subsidies will come from their fellow customers.  Continue reading

Dominion Electric Bus Scheme Back, With More

EV School bus? Storage battery? No, utility profit center.

by Steve Haner

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

The ultimate goal of the Transportation and Climate Initiative with its tax and rationing scheme is to eliminate fossil fuels for transportation and get us into electric vehicles. That is something advocates have admitted and critics have pointed out. While Virginia TCI participation is on hold in this statewide election year, the 2021 General Assembly is following other pathways to the utopian EV future.

The House of Delegates has sent the Virginia Senate a bill to create a state financial incentive of $2,500 for purchase of a new or used electric vehicle. An additional $2,000 rebate is offered to a low- and middle-income buyer of a new car and $500 if that buyer choses a used EV.

The House has also passed legislation empowering the state’s Air Pollution Control Board to adopt state regulations on vehicle fleet fuel economy and to model California’s existing program forcing manufacturers to offer more zero- and low-emission vehicle sales in the state. This bill sets no goals but puts an accelerated process in motion, bypassing the full regulatory review, with a goal of regulating the 2025 model year vehicles offered in the state. Continue reading

Is It Time to Say Goodbye to Virginia Coal Exports??

Norfolk Southern’s coal loading terminal at Lambert’s Point in Norfolk

By Peter Galuszka

Oilprice.com, a petroleum trade newsletter, has a story that could spell more bad news for the faltering Virginia coal industry.

For many years, the most valuable product from Virginia’s coal fields was coking or metallurgical coal that is exported to other countries for use in steel making.

China has been a crucial buyer of Virginia coal but recent pronouncements from the Communist Party leadership indicate that coal is on its way out after leader Xi Jinping outlined a far-reaching program that set a peak of carbon emissions in 2030 followed by net zero policy by 2060.

Correspondingly, steel companies are also setting net zero carbon goals including the world’s biggest steel makers ArcelorMittal of Europe, Baowu Steel of China and Nippon Steel of Japan.

The moves could erase Virginia’s coal experts because the demand for the steam coal used to generate electricity has already been undercut by the remarkable growth of renewable energy sources like solar and wind in China and India. As they expand, their costs go down – below those of coal.

Coking coal exports from Hampton Roads could get slammed as global steelmakers experiment with new manufacturing processes. Continue reading

Before There Was an Atlantic Gas Pipeline….

N&W coal train in West Virginia

…There Was the Coal Slurry Pipeline.

by James A. Bacon

The early 1980s were a momentous time for the U.S. coal industry, and for Virginia economic history and politics as well. As the world turned to coal in the wake of the Arab oil embargo, coal exports through Hampton Roads were surging. Loading terminals literally could not load the black rock fast enough, and dozens of ships were backing up in Hampton Roads waiting for their turn at dock. Meanwhile, the Norfolk & Western Railway (soon to become part of Norfolk Southern) and the C&O (soon to become part of CSX) exercised duopoly control over rail shipments to the ports, and, newly deregulated, they used their power to charge punishing tariffs. Thus commenced a years-long battle between railroads and coal operators over the spoils of a once-in-a-lifetime export boom.

E. Morgan Massey, president of the Richmond-based A.T. Massey Coal Co., took the lead in taking on the railroads. Not only did he build new terminals in Newport News and Charleston, S.C., to bust the railroad monopoly on loading facilities, he helped orchestrate a bid to build a 350-mile coal slurry pipeline across Virginia to bypass the railroads. Just one hitch: A coal slurry pipeline had to cross railroad rights-of-way, and only the General Assembly could grant the eminent domain. Thus began one of the greatest lobbying battles between business lobbies – VEPCO, the Transco pipeline company, and coal industry interests on the one hand, and the railroads on the other — that Richmond had ever seen.

Chapter 8, “Rails and Pipes,” of my new book, “Maverick Miner” tells the story of the clash between business titans from Massey’s perspective. Here, for the joy and delight of Bacon’s Rebellion readers, I excerpt the section that focuses on the coal slurry pipeline debate. There is no coal slurry pipeline in Virginia today, so it is not a spoiler to reveal that the railroads won the legislative battle. But Morgan and his allies, VEPCO and Transco, felt like they squeaked out a victory in the business war. Continue reading

Hey, APCo, Let Schools Build Rooftop Solar

Photo courtesy Secure Futures LLC

by Aaron Sutch

In another life, I was a middle school teacher. I taught for four years at a public school. It’s a hard age group. But I found the antics of my 7th and 8th grade students more amusing than frustrating. Perhaps I was well-prepared, having worked at a zoo before entering the classroom.

As a teacher, I enjoyed working with students, but was constantly frustrated as we faced shrinking budgets. Administrators were forced to decide between paying for rising energy costs or investing in resources for my students.

It broke my heart to see tight funds diverted from students to cover rising electricity bills. It happened all the time.

So it’s exciting that Virginia schools are installing solar power to generate electricity and save on energy costs. The Commonwealth now ranks among the top 10 states for solar on K-12 schools with more than 34,000 KW of installed solar capacity. This is enough to power 3,700 Virginia homes. Continue reading

Dominion VCEA Plan Review Ends with Questions

by Steve Haner

A near year-long review of Dominion Energy Virginia’s plans to meet service obligations while abandoning fossil-fueled energy has ended with a pile of data, a list of unanswered questions, no real decision and plenty of reason to fear future electricity cost increases.

The review of Dominion’s Integrated Resource Plan (IRP) started March 9, 2020, and the State Corporation Commission issued a final order February 1:  The Commission, however, cannot conclude … that Dominion’s 2020 IRP, as filed, is reasonable and in the public interest for purposes of a planning document.”   Continue reading

One Third of House GOP Backs Stronger SCC

Delegate Carrie Coyner, R-Chesterfield

by Steve Haner

Five interrelated bills that will strengthen the State Corporation Commission’s oversight during Dominion Energy Virginia’s next rate case advanced out of the House of Delegates Friday, with the two strongest receiving either 12 or 10 Republican aye votes.

All received at least some Republican votes, and four of the five had Democrats voting in opposition. After I made a pitch (elsewhere) for Republicans to do this, a report on the outcome is in order. A major Dominion rate case begins in April and may be reaching a conclusion around Election Day, and by then the impact of all the restraints put on the SCC in past years may be painfully clear to millions of Dominion customers.  Continue reading

A Great First Inning: Reformers 6, Utilities 0

by Steve Haner

Six bills which reverse 15 years of Dominion Energy Virginia legislative dominance advanced out of a House of Delegates subcommittee today, setting up the strongest challenge to the utility’s profits and power in decades.

Most in one form or another restore authority to the State Corporation Commission to use its own discretion in reviewing the company’s earnings, profits, and accounting decisions in a rate case due to begin in April. It will be the first such review since 2015 and will cover four years of company operations, 2017 through 2020.  Continue reading

The Political Economy of Solar Farms

by James A. Bacon

I have consistently supported the expansion of solar energy in Virginia, at least up to a point where it doesn’t compromise the reliability of the electric grid. When up-front capital costs and fuel costs are taken into account, solar is the lowest cost source of electricity in Virginia. Furthermore, as a supporter of property rights, I believe that rural landowners should be free to contract with developers to build solar farms on parcels that might otherwise lie fallow or go underutilized. Building solar farms potentially could put hundreds of millions of dollars in the pockets of rural landowners.

But I understand why people in rural Virginia get up in arms when big solar developers want to blanket thousands of acres with solar panels. I don’t necessarily agree with their proposed remedies, but I do understand.

Virginia’s urban/rural divide is becoming more pronounced than ever. That divide is most visible in voting results and electoral maps that show a vast geographic expanse of “red” Virginia compared to concentrated, highly populated clusters in “blue” Virginia. Views differ on a wide range of issues from gun rights and abortion to taxes and climate change. Continue reading

Dominion $$ Overwhelm Clean VA’s in Committees

Click for clear view. Dominion Energy Virginia donations to legislators on the House Labor and Commerce Committee, compiled by Energy and Policy Institute from VPAP reports.

by Steve Haner

The first major showdown over last-ditch efforts to change the rules on the coming Dominion Energy Virginia rate case occurs Monday in a subcommittee where six delegates received a total of $80,000 from the utility in 2020, and four received $67,500 from its self-appointed watchdog Clean Virginia.

The chair of the subcommittee, Del. Richard “Rip” Sullivan of Arlington, received $15,000 from Clean Virginia, but the chair of the full Labor and Commerce Committee, Del. Jeion Ward of Newport News, might sit in the meeting, as is within her authority. Dominion contributed $50,000 to her campaign in 2020. Both are Democrats. (If Ward is there, the total Dominion donations in the room will reach $130,000.)  Continue reading

In Defense of Solar Farms

Nick Freitas

by James A. Bacon

Two weeks ago Del. Nick Freitas submitted HB 2265 to repeal the Virginia Clean Economy Act on the grounds that it could jack up the electric bill of the average Virginia household by $800. “It is critical that the Commonwealth not add to the financial burdens of people trying to heat their homes by raising their rates as the VCEA clearly does,”  he said in a press release at the time.

I totally agree. The issue seems a bit academic today, as the bill did not make it out of committee. But the Virginia Clean Economy Act will take three decades to unfold, so the issue Freitas raised isn’t going away. I bring it up now because I think that Virginians who have problems with the Act need to get their story straight and work in unison. And there’s one important point where I differ with Freitas.

With the enactment of the 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. Continue reading

Industrial Escape from Green Energy Costs Blocked

by Steve Haner

Virginia’s major energy-intensive industries will not get a requested path to avoid some of the coming cost shock from the 2020 Virginia Clean Economy Act (VCEA). The bill that sought them a lifeline was tied to an anvil and sunk in a House of Delegates subcommittee today.

It didn’t even help when the Virginia Manufacturing Association’s president mentioned that California is seeing the same problem for its manufacturers and is working on similar relief. Virginia companies were admonished that “they don’t want to pay their fair share,” a phrase used by opponents more than once. A Dominion Energy lobbyist said that about her best customers. Continue reading

GE Sues Siemens Over Dominion Data Leak

by Steve Haner

General Electric (GE) has filed suit seeking major monetary damages from Siemens Energy in a Virginia federal court, alleging “willful and malicious misappropriation of GE trade secrets” as they competed to be suppliers to Dominion Energy Virginia. Dominion is not a named defendant, but an employee (reportedly now gone) is accused of sharing GE’s data with Siemens.

A copy of the petition is here, posted by Powermag.com in one of the many trade publication stories about the dispute. Here is one from Reuters and another from Barron’s, which has a paywall. General Electric is represented by the Richmond law firm Spotts Fain, P.C.   Continue reading

A Last-Ditch Effort to Improve Regulatory Balance

By Steve Haner

In a matter of weeks, Dominion Energy Virginia is expected to initiate the long-awaited review of its revenues, expenses, and profits in front of the State Corporation Commission, the first since 2015. A series of bills in recent years has set rules for that process which constrain the SCC’s discretion and fix the game in the utility’s favor.

Behind the smoke and mirrors, Dominion’s goals were clearly discernable: Despite growing profits, prevent any reduction in base rates. Keep the base rates unchanged even though more and more operating costs were being moved over to activity-specific rate adjustment clauses. Limit or eliminate the threat of major refunds to customers. Somehow, every bill ended up accomplishing those things for the utility.    Continue reading