Category Archives: Environment

Dominion Grid Plan Battered in Testimony

Caroline Golin, Ph.D., witness for Appalachian Voices, SELC

Two witnesses told the State Corporation Commission Tuesday that Dominion Energy Virginia’s proposed grid transformation program will not bring the utility’s customers into the modern energy economy.

Both Scott Norwood of Texas, an expert witness often used by the Office of the Attorney General, and Caroline Golin, an expert from Georgia hired by environmental groups, paralleled their written testimony reported on in an earlier post.

The commission must agree that the company’s $917 million first phase of its plan, which includes a roll out of new automated metering technology, is reasonable and prudent before the company can proceed. Just how customers will pay for this – either through a rate adjustment clause or the use of excess profits retained by the company – is not yet before the commission. With financing costs and profits the long-term revenue requirement for all phases of the plan is estimated at $6 billion by the SCC staff.

“The company is not proposing to operate the grid in any new way,” Golin said Tuesday. If it were moving aggressively to distributed energy, to more customer-driven demand management, to time-of-day pricing, to use of storage, “then I would agree they need more control of the grid. But right now, they are not proposing any of those.”

Norwood noted that a major part of the plan’s cost will be spent to reduce average outages by a few minutes per year. “I’m skeptical most customers will notice. It’s like the break we took at midmorning.” Benefits of that kind of reliability flow to larger, commercial and industrial customers but will be paid for by the residential customers.

Golin picked up on the same point: “There is a difference between reliable and perfect” and the company is now shooting for perfect. “This is something the commission needs to be very critical of. The average customer does not require perfect power.”

Support from some of the environmental groups, and a neutral stance taken by others, was crucial to passage of the 2018 legislation. Dominion Energy packaged it to the public it as a grid modernization effort, but its final version also included major incentives and directives to build more renewable generation. Now the environmental groups are leading the charge against the grid-related element of the bill, claiming it is a lost opportunity to truly transform the utility for a renewable energy future.

Golin, who has joined Google since being retained in this case, has been involved in grid redevelopment cases around the country and has also been especially critical of Duke Energy’s North Carolina plan.  Her statement that Dominion had no plans to operate the grid differently was vigorously challenged by Dominion and even an SCC staff witness later in the hearing.

Since the first round of written testimony was filed, Dominion’s leaders have supplemented the record with rebuttal testimony, but it was picked apart at the hearing as more evidence that no real cost-benefit analysis had been done, much of the engineering work is preliminary, cost estimates have little valid basis, and some obvious grid-related issues were flat ignored.

Dorothy Jaffe of the Sierra Club used questions to a Dominion witness to point out no real plans were made for the growth of electric vehicles, and the initial $3 billion plan would have to be supplemented – perhaps at additional cost – to support that expected transformation.

The Office of the Attorney General and the SCC staff have not asked for a total rejection of the proposal, but acceptance with conditions or acceptance of only the early pieces that involve planning and engineering. 

As with most of the issues that have reached the commission growing out of that legislation, the key question is does the regulatory body have the power to say no. In some cases, such as the off-shore wind demonstration project, the legislative wording was a clear directive. In the case of the grid projects, however, the new language mandated a review for reasonableness and prudence. A separate hearing on the commission’s authority was held November 7.

“The new law does not require a single one of these projects to be implemented,” said Nate Benforado, an attorney for the Southern Environmental Law Center, who used his opening statement to dismiss the whole effort as “a plan to spend money” which “puts the customer last.”

“This is a huge issue for the coming decade,” Benforado said. Dominion really doesn’t need to build new generation. There is testimony in the current integrated resource plan case that demand is flat or dropping, with plenty of generation assets available through connection with other utilities. “Dominion is looking for ways to spend customer money and earn a rate of return.”

The decisions on this case and on the integrated resource plan will probably need to be viewed together to glimpse Virginia’s future. The IRP case appears ripe for a published opinion with no further hearings planned. The commission has until mid January to issue a decision on this matter.

Virginia’s Air Is Pretty Darn Clean

Air quality for Richmond, Va., on Nov. 25, 2018. (Click graphic for larger image.)

In the comments section on Steve Haner’s latest post, Reed Fawell provided an intriguing quote from Oren Cass, a senior fellow with the Manhattan Institute: Environmental Protection Agency regulations have grown so tight, he said, “that Brussels, the capital of the EU, would be the single dirtiest city in the US, if it were here.”

Really? I wondered if that were true. So I checked the AGICN.org website that maps air quality measurements globally, incorporating data for particulates, ozone, sulfur dioxide and nitrogen oxide. As a proxy for Virginia urban areas, I selected an air quality monitor in downtown Richmond (which turns out to be the second highest of 18 measuring Air Quality Index monitoring stations in Virginia.

Air Quality Index for Brussels, Belgium.

Lo and behold, it turns out that the AQI for Brussels for the past 48 hours is twice that of Richmond. That’s just a snapshot of one particular point in time. Air quality varies with air pressure, humidity, wind, and temperature, so the comparison may or may not be representative of air quality over a full year.

Recognizing that downtown Richmond may or may not be representative of American cities generally, and Brussels may or may not be representative of European cities, I captured a higher-altitude perspective by comparing maps of the Eastern U.S. and most of Europe. Note: The green markers stand for “good” levels of air pollution, yellow for “moderate,” and red for “unhealthy.”

Cass’s statement is almost literally true… but not quite. There are a handful of locations in the U.S. with higher air pollution than Brussels. In the Eastern U.S. only Albany New York had worse air quality, and only by a small margin. Out west, Denver, Colo.; Tacoma, Washington; Long Beach (Los Angeles), Calif.;  and Phoenix, Ariz. were somewhat higher. Iowa City, Iowa’s index was significantly higher — high enough to fall under the “unhealthy for sensitive groups” category.

While air quality varies considerably from country to country, there are large patches in Europe where air quality is problematic, especially in the Belgium-Netherlands area, northern Italy, and big chunks of formerly communist countries. Then, for purposes of comparison, here’s a look at Asia:

Here we get into the “very unhealthy” and “hazardous” air-quality categories. When air quality rates hazardous, “everyone may experience more serious health effects.” It’s almost (but not quite) fair to say that the U.S. city with the dirtiest air is cleaner than the Chinese city with the cleanest air.

Here’s one more map, this one showing how Virginia stacks up to neighboring states: Continue reading

SCC Staff: Convert A Dominion RAC Into A PPA

All-in lifetime revenue requirement for two solar projects related to Facebook. Key data is hidden. Operating and maintenance costs are also kept secret, perhaps to prevent simple math from disclosing the RECs. ARO stands for “asset retirement obligations” and ITC is the federal tax credits. Source: SCC staff testimony.

“Facts are facts, and the SCC does a really good job of compiling them.”  Former State Senator John Watkins of Chesterfield.

After demonstrating that two solar energy facilities Dominion Energy Virginia has proposed in a deal with Facebook leave ratepayers holding all risks, reported already in the Richmond Times-Dispatch, the State Corporation Commission staff suggested an interesting solution that shifts that burden.

“Should the Commission determine that the proposed US-3 Solar Projects are not prudent as filed, the Commission may want to condition approval on the implementation of cost recovery through a rate adjustment clause (“RAC”) based on the market index in lieu of the cost of service model proposed in this case,” wrote Gregory L. Abbott, deputy director of the utility division.  His and other documents are available online.

“This would reasonably protect the nonparticipating customers from performance risk as the customers would only pay for the actual MWhs that the proposed US-3 Solar Projects produce.  Implementing cost recovery through a RAC based on the beginning market index price of $31.82/MWh would also meet the Commission requirement in Case No. PUR-2017-00137 that Schedule RF should be implemented in a manner that holds nonparticipating customers harmless,” Abbott concluded.

So.  Instead of guaranteeing the utility a full return of its capital costs with profit, the SCC might instead charge ratepayers no more than the market value of the power produced.  On this deal, Dominion would be no better protected than an independent merchant power producer.

This little case, involving only 240 megawatts of production and $410 million of construction cost, is important because after Facebook come others with similar or larger appetites.  This is the first of many such arrangements the company expects under its experimental special rate for customers demanding the appearance of green energy virtue.  Any new plants need SCC certificates of public necessity and convenience.

The Commission last year approved the experimental “RF” tariff designed to serve the new Facebook facility and others like it, but included this in the order:  “As acknowledged by the Company, however, our approval herein does not represent a presumption or pre-approval of any subsequent proposals related to Schedule RF….We agree with Consumer Counsel that Schedule RF should be implemented in a manner that holds non-participating customers harmless.”

Here is how it appears to work:  Facebook will buy the same “tainted” power including from fossil fuels and nuclear from the grid as everybody else, but to keep its green cred intact also promises to buy 100 percent of the renewable energy credits and other “environmental attributes”  for a comparable amount of power from solar.  Those contracted payments are applied to the capital pay-off for 20 years and lower the cost of the project for other ratepayers, who will still see a rate adjustment clause (US-3) on their bills.

Dominion is not building solar to connect directly to Facebook, and should a third party try to do that in Dominion’s monopoly territory, heads would roll.  That monopoly is the most valuable asset its stockholders enjoy.  The only difference between this and any other solar project appears to be the sale of the RECs to Facebook instead of into some other market.  I’m open to correction on that point.

One point the SCC staff makes is it didn’t have to be a company-built project.  Staff witness Earnest J. White said Dominion could have met Facebook’s needs by purchasing an existing solar facility. “This option would have permitted the Company to know, rather than estimate, the benefits to customers before exposure to risk of performance,” he wrote.  (Unmentioned by him – that option does not produce 9.2 percent annual return on equity for the utility. )

Another instance of redactions rendering SCC data useless to the ratepayers and reporters.

The revenues from the renewable energy credits at the two plants, along with the tax credits, are applied to the 35-year payoff on the two new solar facilities, reducing costs to ratepayers.  But as the SCC testimony makes clear, two variables then become crucial.  The first is the capacity factor of the project (what percentage of the time power is produced) and the second is the market value of those renewable energy credits.  The two are interrelated because the RECS are based on actual output, not 100 percent capacity – less output, less REC revenue.

Complicating reporting on this case, as usual, are all the key data covered up with black ink or entire memos withheld from public scrutiny.  The projected REC revenue is kept confidential.

Continue reading

Yes, “Blatant Fear Mongering” Is a Fair Description

Waterway in Dutch Gap Conservation Area depicted in SELC report. If you were a thirsty hiker, would you dip your canteen into this water? Would you drink water like this all year long?

A new report by the Southern Environmental Law Center finds that pollution from Dominion Energy’s Chesterfield Power Station may be leading to an increased health risk for some of the 200,000 visitors to the nearby Dutch Gap Conservation Area. States a press release announcing the release of the study:

There are elevated noncancer hazards and cancer risks for recreational visitors who interact with areas where contamination from the coal ash ponds is migrating into Dutch Gap Conservation Area. … Within these contaminated areas, cancer risks may be up to 10 times higher than the upper limit of what EPA considers “acceptable” cancer risk from polluted sites, and nearly 1,000 times higher than target risk levels.

Or, as summarized by the Richmond Times-Dispatch:

The consultant estimated that elevated levels of toxins such as arsenic in the park could result in an additional 700 to 900 cases of cancer per 1 million people. The standard for pollution remediation set by the Environmental Protection Agency sets the limit at 100 cases per 1 million people.

“It is time to move beyond this claim that there is no health or environmental risk at Chesterfield,” said Nate Benforado, attorney at the Southern Environmental Law Center. “This report raises some serious red flags about the long-term safety of leaving ash in leaking, unlined pits next to a popular park.”

The Times-Dispatch does quote Dominion spokesman Robert Richardson as criticizing the study. The SELC, said Richardson, “should be ashamed of itself for blatant fear mongering. They have taken our data that we shared with state and local officials, our customers, and the general public and compared it to a standard that has no legal or scientific relevance to water suitable for recreational use.”

Let’s take a closer look at the study. Unfortunately, the T-D article does not explain what standards Richardson is referring to. A reading of the study, prepared by Terra Technologies Environmental Services, makes it obvious. The report uses drinking water standards as a measure to assess the risk to recreational visitors to the park. To quote from the study:

Several water quality criteria (WQC) were selected as screening levels. The public water supply (PWS), risk-based tapwater screening levels (tapwater RSLs), and maximum contaminant levels (MCLs) were used as screening levels, in addition to the VA Other Surface Waters (OSW) criteria on the assumption that if the waters were acceptable as a long term drinking water source, all potentially relevant contaminants of concern (COPCs) would be identified.

The report justified the application of drinking water criteria to park visitors on the following grounds:

During swimming, boating, fishing, and other water contact activities — activities that are all offered at Dutch Gap — small amounts of water can be ingested and skin exposure can allow uptake of some contaminants as well. In addition, people visiting or camping in the area could wash their hands, bodies, or camp dishes using the surface water. Therefore, using the PWS to assess potential screening level risks due to incidental contact is appropriate.

Here’s the problem: Drinking-water standards such as Public Water Supply (PWS) standards, are based on the assumption that people drinking the water do so on a continual basis throughout the year. The SELC study is applying those standards to campers, hikers, and kayakers who visit Dutch Gap episodically and may or may not imbibe any water at all. Indeed, common sense suggests that almost no one drinks water straight out of the river. The idea that minute quantities of toxins and carcinogens might enter the body as the result of the water’s contact to the skin has no medical basis. And the volume of toxins and carcinogens that might enter the body after river water has been used to clean dishes, is likely too small to even measure. If there is evidence to suggest otherwise, it is not presented in the report.

So, Richardson’s umbrage, to my mind, is entirely justified.

Comparing apples to oranges. There is one more important point to be made here. While the level of contaminants is, in fact, elevated (although not to the point to represent a threat to recreational visitors to Dutch Gap) and arguably does pose a threat to aquatic wildlife (a point the SELC could legitimately point to), it arises from a decades-old system for storing coal ash. But SELC is not using the elevated contaminant levels merely to criticize the legacy storage system, which Dominion has proposed replacing by de-watering the coal ash, consolidating it into a single impoundment, and capping it with a synthetic liner to prevent rain water from migrating through. SELC wants Dominion to recycle the coal ash, remove it far from the river, and place it in a lined landfill at a potential additional cost of a billion dollars or more.

Maybe Dominion’s proposal will prove effective at eliminating all water contamination, maybe it won’t. SELC has argued plausibly that ground water might migrate through a small portion of the impoundment and leach minute quantities of heavy metals from the ash. But the potential for water contamination from Dominion’s proposed cap-in-place remedy indisputably would reduce the risk of contamination reaching the James River. It is irresponsible and reckless to stoke fears of hundreds of cancer deaths — wildly hyped fears, at that — based on contamination resulting from the aging coal ash storage system that is being phased out.

I have always considered SELC to be one of the more reliable environmental organizations whose attorneys and spokespersons are careful with the facts and shun hyperbole and unsubstantiated statements. This study is a sad departure from the group’s usual standards. The SELC’s hyping of this report can be fairly described as fear mongering. The SELC can do better.

Update: The SELC objects to my characterization of the study. The application of drinking water standards occurs only as a first step of the report as a way to screen out contaminants that need not be considered and focus on the ones that pose a threat to health and the environment. The second step adopts a standard EPA methodology. Read more about their reaction here.

Yeah, Recycling, Landfilling Coal Ash Will Cost Billions

Coal ash at the Chesterfield Power Station. Photo credit: Richmond Times-Dispatch

Under the gun to clean up its coal ash ponds, Dominion Energy hired a consulting firm to develop estimates of what various alternatives would cost. The alternatives preferred by environmentalists and activists — recycling the combustion residue and burying the rest in lined landfills far from rivers and streams — would cost billions of dollars, the study concluded. The environmentalists and activists said the study was flawed. The General Assembly ordered Dominion to issue an RFP to deliver a verdict from the marketplace. The verdict of the marketplace has come in. The alternatives preferred by environmentalists and activists will cost billions of dollars — but maybe not as many billions as Dominion’s worst-case scenario.

To be precise, the cost would range between $2.77 billion and $3.36 billion, according to a statement issued by the company today. The bids, if implemented would recycle about 45% of the ash into cement, wallboard and other products. The rest of the ash would be placed in a landfill over a 15-year period.

Dominion has accumulated millions of tons of coal ash, which can leak heavy metals that are toxic in sufficient concentrations, in ash ponds at its Chesterfield, Possum Point, Chesapeake, and Bremo power stations. To meet Environmental Protection Agency guidelines, the utility has de-watered the coal ash at Possum Point and Bremo but has been prevented from consolidating and capping the material on site, as it originally proposed. Environmentalists are concerned that groundwater might migrate through the impoundments and leach heavy metals that could reach rivers, streams, or well water.

Dominion already recycles 500,000 tons of coal combustion byproducts each year, but critics have argued that it could process more — Virginia actually imports coal ash from other states and overseas.

The company received 12 proposals for recycling ash for each of the four power stations. The total cost in the $3 billion range is somewhat less expensive than the $2.6 billion to $6.5 billion indicated by Dominion’s earlier study, but it is significantly more costly than critics had hoped for.

Dominion will report its bids to the General Assembly for follow-up.

In other coal ash action, Dominion announced that it had reached a Memorandum of Understanding with the state to close and monitor the coal ash ponds at the Chesapeake Energy Center. Also, groundwater monitoring at six power stations — Chesterfield, Possum Point, Bremo, Yorktown, Clover and Virginia City Hybrid Center — have been found to have no impact on drinking water or public health. Further, Dominion said it would submit a regulatory filing to recover costs associated with “managing coal ash at several power stations.”

“We plan to take a close look at this report and hope that it provides a more realistic take on recycling options in Virginia than the assessment Dominion provided last year,” said the Southern Environmental Law Center (SELC) in a statement today. “We know that coal ash can pose risks to our health and environment, and recycling offers a smart, cost-effective solution. It’s time Virginia joins the other states that are turning coal ash closure into a win-win.”

The SELC also lauded the Chesapeake Energy Center agreement, which it said will require the facility to meet the same standards as all coal ash facilities across the state. Said Deborah Murray, senior attorney, Southern Environmental Law Center: “This agreement is a strong signal that the administration is taking coal ash remediation in Virginia seriously. Dominion tried to keep most of the coal ash at the Chesapeake site—roughly 2.1 million tons of ash in leaking, unlined pits—off the radar, but under this agreement the company’s closure plan must deal with this ash in accordance with the standards set forth in the EPA’s Coal Combustion Residuals Rule.”

Update: The Richmond Times-Dispatch is reporting a larger number for the potential cost of recycling/landfilling than I did.  I should have made clear that the cost I reported, up to $3.36 billion, applies if all the work is given to a single bidder. The higher figure reported by the Times-Dispatch, $5.642 billion, applies if material at all four sites is recycled by individual bidders. I reported the lower number because I could see no reason why anyone would go with the higher-cost approach.

Smart Cities Council Comes to Virginia

The Smart Cities Council recently held a “Readiness Challenge” workshop in Virginia. I’ve banged the Smart Cities drum on and off over the years, but gave up when I saw so little reader interest. But I’ll take one more whack with a percussion mallet because the “smart cities” concept seems to be gaining momentum. The fact that several high-level people in the Northam administration attended the workshop signals more official interest than in the past.

A big focus of the workshop was universal broadband — bringing the benefits of high-speed Internet access to rural communities and the inner city. News that I had missed: Virginia now has a “chief broadband advisor” — Evan Feinman, who had served previously as executive director of the Virginia Tobacco Commission.

Other topics discussed:

  • Mobility options. Use smart mobility to reduce carbon emissions.
  • Energy planning. Deploy smart technologies to accelerate the adoption of electric vehicles.
  • Public safety. Improve data coordination between state agencies to address more complex public safety threats.
  • Standardize data. Improve data governance, develop a common architecture and data platform, and create incentives for data owners to work together. Also, prepare the next generation of data workers.

Information technology is not a silver bullet for Virginia’s immense challenges. But it is a potentially useful tool. Hopefully, some of the ideas spawned by this workshop will percolate through the impermeable strata of politics and bureaucracy to be adopted in the real world.

Read the Smart Cities Council account of the workshop here.

Global Climate Catastrophe (in 1501?)

Low water creates islands in the Danube at Budapest last week. The normal waterline is visible on the bridge above their heads and the gap equals the draft of Viking’s boats.

Once the Viking Cruise people have your mailing and email address the marketing is relentless, and the fog from 11 hours on two legs of Lufthansa had barely lifted before the email arrived with a fabulously attractive deal on a Rhine cruise in early 2019.

Ah, but I know now why the price is so low.  Drought and low water in central Europe have disrupted cruising all summer and fall.  That iconic sail past the Hungarian Parliament in Budapest so prominent in Viking ads turned into a slow roll on a motor coach.  The one Viking boat docked in Budapest hadn’t moved in weeks and was described as a ghost ship.  We stayed in a below-standard Budapest hotel far from the stunning night views (wash cloths?  Why would you want them?)

The low water on the Danube, Rhine and others is hardly Viking’s fault and they did their best.  One of the captains (we had to switch boats before reaching Vienna, where we left the second boat behind) said it was the worst sustained low water since 1947, and I heard others call it a 200-year drought.  Drought of course might not be the only problem as with low rainfall water draws for farm or human consumption also increase and have greater impact.

Meanwhile, back in the states, Evil-Human-Caused Climate Change created the opposite situation, with a nasty hurricane slamming the Florida Panhandle and matching Florence with its impact on Richmond.  Drought, storms – anything and everything can be blamed on warming temps (convenient), and the alarmists were out with another report that the end is nigh.

Flood levels recorded on Passau Rathaus (City Hall)

Then again, perhaps its all just normal variations.  Neither droughts or hurricanes are new and with a scale that goes up to five we’ve yet to see a hurricane that hits Spinal Tap’s eleven.  While the Dunube is low now, at Passau we were shown dramatic evidence of past floods, the most recent and second highest in 2013.

The fault of industrialization and fossil fuels?  Check out the year for the highest recorded, 1501, and the many others of similar impact during pre- or early-industrial times.  For North America, of course, there are at best only 200 years of records and perhaps 100 years of good ones.  Thomas Jefferson’s personal records pick up the ending of the so-called Little Ice Age.  Nasty hurricanes plagued the Jamestown settlement.

Getting off the river to drive for hours on the autobahns gave me a chance to see the extensive solar panels in Germany and the massive wind turbine installations in Hungary, visible again from the air during our departure.  Their addition to the landscape did not reduce the beauty of the scenery.

Turbines visible from a rest stop along the highway inside Hungary.

There is no question we need to move quickly away from burning filthy coal and increase the percentage of energy generated from sun and wind.  I still consider natural gas a good substitute for coal and a necessary part of the mix.   But do everything the environmentalists want and the hurricanes will continue, the floods and droughts will continue, and You Know Who provided excellent advice 2,100 years ago about building on rock, not sand, as recorded by Saint Matthew.

Viking is moving more emphasis onto its ocean cruise business, perhaps as a hedge against continued challenges on the rivers.  Odds are the rivers will be back up in a year or so and the concern will shift back to floods.  If indeed the climate is changing, and it seems to be, I just don’t buy that human activity is the single or dominant cause, or that adjustments now will make much difference down the road.

Coal Ash Lessons from Hurricane Florence

Flood waters from Hurricane Florence spilled over an earthen dike at Sutton Lake at the L.V. Sutton Power Station.

Last month pounding rains from Hurricane Florence eroded a Duke Energy landfill, releasing some 2,000 cubic yards of soil and coal ash. Although Duke declared that the majority of displaced ash was collected in a ditch and haul road surrounding the landfill, North Carolina news media reported the “possible release” of material into the L.V. Sutton Power Plant cooling lake. Later, floodwaters from the Cape Fear River inundated the power station with a foot of water in places.

Environmentalists emphasized the danger of Duke’s practice of disposing of coal ash near waterways throughout North and South Carolina. “After this storm, we hope that Duke Energy will commit itself to removing its ash from all its unlined waterfront pits and, if it refuses, that the state of North Carolina will require it to remove the ash from these unlined pits,” said a Southern Environmental Law Center spokesman.

As I predicted here, the incident was sure to impact the debate over coal ash disposal in Virginia. And it has. The headline to a Richmond Times-Dispatch article today tells the tale: “Hurricane’s lessons add pressure for solution to Dominion coal-ash storage.”

Hurricane Florence “punished North Carolina and swamped at least one utility coal ash storage pond in its path next to the Cape Fear River,” stated the article. Then followed a quote from SELC attorney Nathan Benforado during a hearing of a General Assembly Labor and Commerce subcommittee: “Hurricane Florence is a wake-up call.”

A wake-up call? Benforado does have a point. Regulators need to consider the dangers of rare but recurring extreme weather events for coal ash disposal just as they do for electric grid planning. But a lot of relevant material didn’t make it into the Times-Dispatch article. Virginians need to know… the rest of the story.

First the background: The General Assembly subcommittee is studying how Dominion Energy Virginia should dispose of 27 million cubic yards of coal ash buried in ponds and pits at four of its coal-fired power plants: Possum Point, Bremo, Chesterfield, and Chesapeake. Under old Environmental Protection Agency (EPA) regulations, Dominion had dumped the coal combustion residue into large pits and mixed the material with water to keep down fugitive dust. After two major spills at other locations, including one at a Duke facility, the EPA wrote new regulations designed to prevent more spills. Dominion proposed de-watering its coal ash, consolidating the material into a single pit at each facility, and capping the pits with a synthetic liner to keep off rainwater.

SELC has raised at least two sets of concerns about the Dominion proposal. First, says the environmental group, there is nothing to prevent underground water from migrating through the ash pits, collecting heavy metals leached from the ash, and reaching public waters. Second, the proposed pits are located close to public waterways, hence they are vulnerable to erosion or inundation during extreme weather events like Hurricane Florence. SELC wants Dominion to remove the coal ash by truck or rail and bury it in lined landfills on higher ground. Dominion has said that the SELC proposal could cost billions of dollars. SELC has responded that recycling the ash into cement and cinderblocks could cut the cost dramatically. Dominion is now evaluating that alternative.

So, what exactly happened at Duke’s Sutton plant? Did the spillage and inundation create a human or environmental hazard? And knowing that conditions at each power plant are unique, is Sutton comparable to any of Dominion’s power plants? What lessons can we extract?

Duke spokesman Bill Norton told me that the hurricane caused incidents at two power plants — Sutton and, less publicized, H.F. Lee.

At Sutton the company had extracted four million tons of coal ash for placement in a landfill — precisely the solution the SELC and other environmental groups had called for. About three million tons remained when the hurricane hit. Norton described the scene as an “active construction site” and, thus, more vulnerable than the cap-in-place arrangement it has proposed for some of its other facilities. Pounding hurricane rain eroded the containment berm, releasing coal ash equivalent in volume to two-thirds that of an Olympic swimming pool. Flood waters from a swollen Cape Fear River also inundated the cooling lake  and overtopped a steel wall erected as a temporary structure. Other than the landfill erosion, however, the coal ash remained stable and the waters receded.

Water samples taken from the Cape Fear River showed that the floodwaters had washed away some “cenospheres,” lightweight, hollow beads comprised of alumina and silica that are environmentally benign, but not the heavier combustion residue which contains potentially toxic heavy metals. None of Duke’s tests found heavy metals in the water that exceeded state safety standards. Independent tests conducted by the North Carolina Department of Environmental Quality came to the same conclusion.

At the H.F. Lee power plant site, the coal ash basins had been inactive so long that they had grown over with forest. These basins also were inundated by floodwaters but Duke and NCDEQ tests have shown no heavy metal levels exceeding state safety standards. Continue reading

How Will the SCC Approach Energy-Efficiency Investments?

The 2018 Grid Transformation and Security Act requires Dominion Energy Virginia to propose at least $870 million in energy-efficiency investments over the next ten years. Yesterday Dominion submitted the first wave of proposals, eleven projects totaling $280 million.

The company estimates that it would spend $215 million on new initiatives and $46.7 million on reconstituting existing programs, reports the Richmond Times-Dispatch. The proposals must be approved by the State Corporation Commission, which in the past has applied a skeptical eye toward energy-efficiency and conservation programs. Under the 2018 legislation, however, the General Assembly declared energy-efficiency to be in the public interest, presumably lowering the bar for approval.

The proposed programs include:

Residential:
1. Recycling older fridges and freezers
2. Gaining insights into energy usage to make suggestions on how to save
3. Rebates on purchases of specific energy-efficient appliances
4. Installation of energy-saving measures following a home-energy assessment
5. Management of heat pumps and air-conditioning units using smart thermostats to reduce peak demand
6. Rebates on qualifying smart thermostats coupled with energy saving recommendations

Non-residential:
1. Implementation of more efficient lighting
2. Upgrades to or implementation of more efficient HVAC technology
3. Installation of solar reduction window film
4. Energy efficiency improvements to small manufacturing facilities
5. Energy-efficiency improvements at smaller offices

In the past, the SCC has balked on energy-efficiency proposals for at least two reasons. First, proposed programs offered a poor return on financial investment — they cost more to implement than they provided in savings to rate payers. Second, some programs benefited narrow groups while loading the cost on rate payers generally. It’s not clear yet how the three SCC judges will reconcile their previous logic with the General Assembly’s declaration that energy efficiency and conservation are in the public interest.

A third question, which I have yet to see raised, is whether electric utilities are the logical entities to implement energy-efficiency measures. The free-market environmentalist Rocky Mountain Institute (RMI) has just released an analysis concluding that zero-energy homes — homes that literally produce as much energy as they consume over the course of a year — are reaching cost parity with normal homes in many parts of the country.

While there is no one-size-fits-all solution, RMI says, “In all climates, the cost optimal solution … included 100-percent LED lighting, low-flow water fixtures, and ENERGY STAR appliances, all of which reduce load at a very minimal cost premium. In addition, heat pumps were used for both space heating and water heating.”

This raises a fundamental question: Should Virginia spend arbitrarily determined amounts of money on utility investments or should it rely upon developers and home builders driven by market forces? Or a third option: Should Dominion and Appalachian Power tailor programs to incentivize home builders to install energy-efficiency measures, making the construction of energy-efficient new homes, which, if RMI is to be believed, a no-brainer?

New Virginia Energy Plan Ramps Up Commitment to Carbon-Free Future

The Northam administration’s 2018 Virginia Energy Plan is the environmental movement’s dream come true. The administration is going “all in” for solar power, offshore wind energy, distributed energy resources, energy efficiency, and electric vehicles. Under the plan, Virginia won’t be as aggressive as California, which has set a goal of a 100% carbon-free electric grid by 2045, but it would follow the same trajectory.

The Virginia Energy Plan embraces the same carbon-reduction goals incorporated into the 2018 Grid Transformation and Security Act (SB 966) but treats them as a starting point. The plan calls for an overhaul of the regulatory process and state priorities to advance goals in five broad areas:

  • Solar and onshore wind. Of the 5,000 MW of solar and wind resources deemed in the public interest under Senate Bill 966, 3,000 MW should come from solar and onshore wind. Specific proposals include expanding corporate clean energy offerings; enhancing collaboration on the siting of large solar and wind facilities; and expanding the net metering program, the power purchase agreement program, and the community solar program. The Energy Plan recommends increasing the Commonwealth’s renewable energy procurement target to 16% by 2022.
  • Offshore wind. The Energy Plan calls for building the 12 MW offshore wind demonstration project — two test turbines to show how well novel designs can withstand hurricane conditions — and then to develop 2,000 MW of offshore wind potential by 2028.
  • Energy efficiency. The plan calls for increasing utility-funded energy-efficiency programs to $100 million per year for Dominion Energy and $15 million per hear for Appalachian Power Co., as well as expanding state-sponsored energy-efficiency programs. The Commonwealth should set a goal of reducing retail electricity consumption by 10% by 2022 (using 2006 as a baseline) and consumption in state buildings by 20%.
  • Energy storage. Recognizing that intermittent wind and solar energy sources pose threats to the stability and reliability of the electric grid, the Energy Plan discusses pumped hydroelectric storage, lithium-ion batteries, and solid-state batteries. However, the plan makes no specific recommendations on which technologies or approaches should be adopted.
  • Electric vehicles. The Energy Plan calls for promoting the deployment of electric vehicles and using their battery storage capabilities to shift electric load to times that better align with solar and wind output. The state should adopt the Advanced Clean Cars program, develop a comprehensive electric-vehicle transportation plan, and set targets for building an electric-vehicle charging infrastructure.

The Energy Plan provides no estimate of what the sum total of these initiatives would cost nor who would pay for them. While the plan does address the challenge of matching solar and wind output with daily electric load, it does not explore how the system would hold up under rare-but-recurring extreme weather events such as hurricanes or the Polar Vortex.  The document can best be seen as a roadmap for where the Northam administration and its allies in the environmental movement would like to take the state.

The Eagles Have Landed


In 1975 bald eagles were extinct on the James River. Today, after years of effort by naturalists and conservationists, 280 nesting couples have made the river their home. The revival of the James River eagles is one of Virginia’s great environmental success stories.

I had the good fortune to be invited by my friends Linda and Steve Nash to accompany them and their out-of-town guests on a river trip to view the eagles. I have to say, it was a peak life experience — an expedition I will remember always. I am amazed that such a wealth of wildlife is accessible to Virginians just a few miles southeast of Richmond. Hardly anyone knows about it… which may be just as well, because no good can come of dozens of tour boats cruising up and down this near-wilderness river.

Captain Mike Ostrander has been boating this stretch of the James — downstream from the fall line in Richmond and upstream from where the river widens into an arm of the Chesapeake Bay — for years. He has tracked the eagles week by week, year by year, observing their most intimate habits. He knows the birds well enough to give them names, and he spins stories of their lives — how long they have mated, whether the male or the female builds nests and cares for the young, how many eagle chicks have survived to maturity, how interlopers have intruded upon their territories, how their territorial ranges have expanded and contracted in response, and even the eccentricities in how they fly.

One cannot call the river pristine — we entered the water, after all, at a small marina near the Henricus Historical Park. The Interstate 295 bridge spans the river, and in a few places houses peek through the trees. We saw perhaps a half dozen docks and encountered three other boats over three hours or so. But the signs of civilization were few. The riverbanks are lined with trees and reeds for mile after unbroken mile. We saw sturgeon leap from the water and smaller fish break the surface and flop around. We saw white ospreys, snowy egrets, blue herons, and, far overhead, flights of honking geese. And, of course, we saw the magnificent gold-beaked, white-maned bald eagles.

The eagles perch atop the tallest trees and scan the river with uncanny eyes. The bird has perhaps the keenest vision of the animal kingdom — roughly four to eight times sharper than that of humans — and it misses nothing that occurs within its domain. It can spot a small fish floating on the river. We saw an eagle swoop down from its aerie, stretch out its talons, snatch the fish from the water, and settle upon the branch of a nearby tree to pick it apart.

The eagle’s magnificent plumage and noble visage inspired Americans to make it a national symbol, and we expect the bird to display the virtues we expect of human greatness. But the eagle is a scavenger, not a hunter. If you want a bird that epitomizes martial prowess, go find a hawk. Like vultures, eagles eat carrion. They might dive down and grab a fish stranded in a mud flat, but they are just as likely to steal their prey as capture it themselves.

We witnessed such a theft as we approached our dock at the end of our trip. We saw an osprey, a true hunting bird about half the size of an eagle, gracefully scoop a fish from the water and then beat its wings furiously heading upstream, presumably looking for a spot where it could eat its catch in peace. Then, out of nowhere, an eagle descended from the sky in fast pursuit. The osprey dodged and waved, but it could not evade the larger, faster bird. At last the osprey dropped the fish into the water, yielding its prey to the eagle.

Poor osprey, we thought as we watched transfixed. Shortly after, the osprey spotted another fish. The bird descended, snatched the fish from the water, and headed upstream again. This time, the first eagle’s mate plunged from the sky and took after the poor osprey. The smaller bird careened around but could not shake the eagle. It dropped the fish, and the second eagle fed at the osprey’s expense.

The eagles, it appears, make a good living snatching the catch of ospreys. Such is the law of nature. Our human hearts sympathized with the smaller predator, but the eagles rule the river. What a tremendous experience it was to witness them in action.

If you’d like to view the eagles, visit Captain Mike’s website at DiscoverTheJames.com. (And, yeah, we got close enough to the eagle for me to take the photo atop this blog post.)

This Certainly Demonstrates Something (Don’t Ask)

Under normal circumstances, building two wind turbines 27 miles off the coast of Virginia at a cost of $300 million would  be neither reasonable nor prudent.  They may produce the most expensive 12 megawatts of electricity in Virginia history. The only rational reason to go forward is to test technology which is becoming more common around the world but is still untested in hurricane territory.

On that basis the proposed Dominion Energy Virginia project now pending approval at the State Corporation Commission received a lukewarm blessing from the SCC’s staff, mainly because Dominion continues to talk about quickly following up with a far more extensive turbine project in the same location.  Before building the big project, perhaps 2,000 MW, some testing is a good idea.

But the staff commentary also noted it would make sense to give the test project (known as Coastal Virginia Offshore Wind or CVOW) time to prove itself before building a multi-billion-dollar expansion.

“Should the Company decide to move forward with a larger scale offshore wind project before the CVOW Project is in service and the demonstration is complete, or before the CVOW Project has demonstrated that it can survive a hurricane type storm, the Commission may want to consider requiring the risk of such a decision be borne or shared by shareholders,” wrote Gregory L. Abbott of the Division of Public Utility Regulation in pre-filed testimony.  He also suggested the SCC put a hard cap on the cost.

He added: “…it appears unlikely that the CVOW Project will demonstrate that large-scale offshore wind will be economic compared to either the least-cost traditional generation option or to the least-cost carbon-free renewable generation option.”

The staff filed several sets of testimony, parts which are kept confidential at the request of Dominion.  There will be two hearings, the first and perhaps most important next week dealing with questions about the SCC’s authority when the General Assembly has deemed that a project is “in the public interest” based on lobbyist assurances.

The General Assembly used that phrase in connection with CVOW.  Does that reduce or even eliminate the Commission’s authority to reject things based on outrageous cost or imprudence?  Of all the many things to win that valued legislative endorsement, this is by far the worst use of your money.

It is your money.  In effect, Dominion will pay for the project with those excess profits it is not using to pay customer refunds.  There will not be a separate (and easy to track) rate adjustment clause.  When the accounting for this project finally comes up for SCC review in 2021, assuming the General Assembly doesn’t change the rules for the umpteenth time, whatever Dominion has spent on this will reduce the amount of potential profit for refund.

SCC staff witness Carol Myers dives into that, in a document replete with redaction.  The company hotly disputes her estimate of the real cost of the project at almost $700 million over 25 years, but it will have the incentive to prove a high cost in the next review because that prevents refunds or (the thought causes them to shiver) rate reductions.

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A Thumb On The Scale for ACP?

Weather normalized summer peaks for Dominion compared to earlier and current projections by the company. Source: Southern Environmental Law Center

A witness to whom Dominion Energy Virginia had vehemently objected, Gregory Lander of a company called Skipping Stone, had his time on the stand anyway at the State Corporation Commission Tuesday. His testimony might still be stricken, but the two commissioners and everybody else in the room heard it and then a lengthy cross-examination underlined it.

If he is correct the entire integrated resource plan filed by the giant utility, a process ordered by the General Assembly to plan the utility’s future, had a fundamental flaw. One single input in a model had a ripple effect in its choices for future generation, some of which it hopes to support with the controversial Atlantic Coast Pipeline.

The three-day hearing on the integrated resource plan, which will stand for two years, opened with SCC Chairman Mark Christie deferring a ruling on the motion to exclude some of Lander’s testimony. He said the decision on the ruling would be announced with the full decision.

Christie also repeated what has become a standard SCC disclaimer on IRP cases. It is just a planning document, any future plants will need a full commission review, “and just because you admit evidence does not mean it’s a finding of fact.”  He also added that before the ratepayers are billed for gas from the ACP the cost will need to be judged reasonable and prudent in its own case.

A little background: Dominion uses a modeling system called Plexos that uses information such as the expected new demand, generating units which might need to retire, various types of generation and their costs and environmental expectations to design its future system. As engineers say, and it was said again this week at the SCC, all models are wrong but some of them are useful.

The five future generation configurations included in the integrated resource plan used the model with different inputs, many of the variations dealing with future carbon regulation. According to Lander, and this was apparently confirmed in interrogatories, the cost of transporting natural gas through the ACP to Dominion generators was simply left out. SCC staff witnesses pointed to the same omission.

The commodity cost for gas was plugged in, but the cost of getting that gas to the plant was not. This omission made the choice of natural gas more cost-competitive and perhaps skewed the model in favor of gas. It put a huge thumb on the scale.

It is the transportation charge for the gas which will include the cost recovery, plus profit, for the construction of the project. Lander claims that will add up to $3 billion to ratepayer costs over 20 years. Opponents claim gas from the ACP will be more expensive than from existing pipelines. Lander was an expert witness hired by Appalachian Voices, an anti-pipeline group.

The IRP cannot be found reasonable and prudent, Lander told the judges, if an important cost like fuel logistics is set at zero. “The model is making choices that are not reflective of total costs.” He said that instead of building new gas combustion turbine units, included in the plan to complement all the intermittent solar also planned, the company should just keep some of the other fossil fuel units it plans to retire early and run them less often.

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BVG Makes Case for Virginia as Offshore Wind Supply-Chain Hub

Manufacturing job-creation potential for the offshore wind industry. Source: BVG.

Virginia is very well positioned to establish a supply-chain hub for an East Coast wind-power industry, says a report written by offshore-wind consulting firm BVG Associates and underwritten by the Virginia chapter of the Sierra Club.

Although Virginia will not participate in the “first wave” of  East Coast offshore wind projects, which is ramping up now in northern coastal states, Virginia-based businesses could supply key components to those pioneering efforts if the Commonwealth acts quickly, concludes the newly published report, “Offshore Wind in Virginia: a Vision.”

The report lays out the following scenario for wind farm-driven economic development:

Virginia will derive immediate economic benefits while maturing its offshore wind supply chain, ensure development of its own 2 GW [gigawatt] offshore wind by 2028, and provide the tipping point for a second wave of lower-cost projects off Dominion Energy’s service territories, notably the Kitty Hawk lease area in North Carolina.

The study should be read with the understanding that Sierra Club-Virginia is promoting Virginia offshore wind generation to advance its long-term goal of eliminating fossil fuels and nuclear power from Virginia’s energy mix. Even with that caveat in mind, the study provides the most detailed analysis yet published of how Virginia can leverage offshore wind into a major economic-development boon for the Hampton Roads maritime sector. The Northam administration has hired a BVG associate to help the state fashion a strategy to build an offshore wind supply chain.

According to the report, Virginia has five big competitive advantages:

  • An industrial coastal infrastructure, with large areas for laydown and storage, quayside length for load-out, and direct access to the open ocean with unlimited vertical clearance.
  • A large workforce with competitive pay scales and experience in shipbuilding, ship repair, ports, logistics, and vessel operation.
  • Highway, rail, and inland waterway connections linking Virginia’s ports to industrial centers throughout the Southeast, Mid-Atlantic, and Midwest.
  • Eastern population centers with high and growing electricity demand, particularly for the Internet economy. Northern Virginia has a large and growing data-center corridor, and two new data centers are being built in Virginia Beach.
  • High-voltage interconnection capability in Virginia Beach sufficient to handle the anticipated commercial wind-lease area after “moderate investment.”

The first two advantages make Hampton Roads an attractive location for the fabrication and assembly of jacket foundations and offshore substation platforms. Two sites in the region could be made ready for a steel fabricator within 20 to 29 months at a cost of $5 million to $15 million. Jacket and substation production could create more than 2,000 new direct and indirect jobs.

The first phase of offshore wind production will be expensive. Wind supply chains in Europe like to see an annual market of at least 1 gigawatt, the equivalent of 80 to 125 turbine nacelles, turbine towers, blades, or foundations. A factory owner would look to produce 200 kilometers of cable per year, a volume needed to apply lean manufacturing strategies. Lacking U.S.-based investment, first movers in offshore wind would have to pay premium prices. Another complication is the Jones Act, which prohibits European-built and based vessels from transporting components between U.S. harbors. Offshore wind-service companies cannot yet justify building state-of-the-art jack-up vessels in the U.S. in compliance with the Jones Act.

First-mover states — Massachusetts, Rhode Island, Connecticut, New York, New Jersey, and Maryland — have committed to build more than 3 gigawatts of offshore capacity. Virginia has committed to build 5 gigawatts of renewable energy, including a substantial component from wind, by 2028. Dominion Energy has proposed to build two turbines with experimental designs to ensure that a larger wind farm could stand up to hurricane conditions frequently experienced in the Mid-Atlantic.

Writes BVG:

By the middle of the next decade, Virginia could be a leading U.S. market for offshore wind, driven by the ability to benefit from the lessons learned from northeast coast states and the maturing U.S. supply chain, complemented by Virginia’s strong infrastructure, location benefits, and deployment of offshore wind at scale.

Suppliers to the wind industry, such as turbine, foundation and cable manufacturers, like to see a regular run-rate for installed capacity. This allows easier investment planning and more efficient facilities. Manufacturers also need projects of a certain size to achieve economies of scale. … The Virginia market in our scenario is … not big enough by itself to attract investment, so the Atlantic Coast market as a whole is crucial. In our scenario, Virginia provides the tipping point, creating the demand needed to support an investment decision.

Some infrastructure investment in Hampton Roads may be necessary. Given the inevitable time lags in gaining regulatory approvals, BVG says, Virginia needs to act quickly. Portsmouth Marine Terminal would need between $11 million and $25 million to upgrade the port for major offshore use, with “additional costs in the facilities themselves.”

The report provides no estimate of how much it would cost to upgrade Virginia’s electric grid to accommodate a massive supply of offshore wind, nor, beyond general statements that wind power is complementary with solar power, does it discuss the impact of intermittent wind power on reliability. Fossil fuel advocates argue that wind and solar provide no surge capacity in extreme, polar vortex-like weather events.

The BVG study make no policy recommendations. It cedes that task to the Department of Mines, Minerals and Energy, which is developing a strategic plant to identify supply-chain businesses and how to market Virginia as a hub for the industry.

Bacon Bits: In with the New, Out with the Old

In with the new…

Data Center Alley too hot to handle. The Metropolitan Washington Airports Authority (MWAA) has sold 424 acres west of Dulles International Airport to data-center developer Digital Realty Trust for an eye-popping $236.5 million — $558,000 per acre. MWAA will place $207 million in a segregated account used to reduce costs that airlines pay to do business at the airport. The transaction expands the large and growing data-center presence of Digital Realty in Loudoun County, reports the Washington Business Journal.

Virginia’s next big solar project? Solar developer Community Energy has applied to build 125-megawatts in solar capacity in Augusta County, reports PV magazine. To offset concerns about neighborhood impact, Community Energy plans to surround the facility with a buffer of vegetation and put into place measures to diminish the limited audio output. Instead of purchasing the land, the power company is leasing it from landowners, providing farmers an ongoing revenue stream rather than a lump-sum payment.

Out with the old..

Gutted newsrooms. Ned Oliver with the Virginia Mercury has quantified the shrinkage of news staff at Virginia’s largest daily newspapers in recent years. After quietly laying off another eight newspaper employees at the beginning of the month, the Richmond Times-Dispatch newsroom has gone from 42 news and sports reporters in 2010 to 26 today, from nine to six photographers, and from 20 to 13 editors. The Virginian-Pilot has dropped from 67 reporters to 33, 35 editors from to 22, and eight photographers to five. Newsroom staff at the Roanoke Times has eroded by 35% to 25 reporters, 11 editors, and three photographers.

“Meanwhile,” writes Oliver, “there is still no clear model for metro and community newspapers to make up for the loss of all that ad money to digital giants like Google and Facebook.”

Tarheel coal ash overflow. In an event sure to impact the debate over coal ash in Virginia, heavy rains from Hurricane Florence eroded a coal ash facility at a Duke Energy power plant near Wilmington, N.C. The utility is investigating the possible release of about 2,000 cubic yards of the material — enough to fill two-thirds of an Olympic-size swimming pool, according to the Herald-Sun. It was not clear whether any of the ash, which contains traces of heavy metals, reached public waterways.

The release reinforces the necessity of removing coal ash from unlined, uncapped containment ponds where electric utilities have been restoring the coal-combustion residue for decades. Environmental Protection Agency regulations were designed to prevent incidents like this by consolidating and capping coal ash ponds. While environmentalists, regulators and utilities haggle over whether it’s better to store the material in lined landfills, a process that could take two to three decades, existing containment ponds remain vulnerable to extreme weather events like Florence.