Category Archives: Infrastructure

Why Does King William Need a $11 Million Cash Reserve?

King William County cash reserves — how much is too much?

by Bob Shannon

We often listen to Pols cite the “gouging” we poor rubes are being subjected to. Members of Congress & our state legislative bodies –even local Pols get in on the game — tell us that big banks, big insurance companies, big brokerage firms, big pharmaceutical companies, big this or that are gouging us … and, by golly, the Pols are going to do something about it. Absent our Pols’ intervention, we would be bowled over by institutions cheating us at every turn.  

What they don’t talk about is the gouging they do themselves. No better example of this is what we have happening right here in King William County. A theft of epic proportions is taking place right in front of us.

Local governments need a reserve fund for a  time when the economy contracts and the local government needs funds to continue operating. This fund is supposed to be for the purpose of paying the ongoing routine costs of local government.  Continue reading

Bacon Bits: Scandal, Scandal, Scandal… and Dental Care

The Old Dominion is looking a lot like the Ante-Bellum Dominion. So, how are Virginia’s political scandals playing out nationally? Not very well. Headline from the New York Post: “Virginia is for Losers.” Lead story in the Wall Street Journal: “Virginia Faces Leadership Crisis as Attorney General Apologizes for Using  Blackface.”

The PC police strike again. But there’s no let-up in the racial identity wars. A fraternity and a sorority at the University of Virginia have been criticized for holding parties in which people dressed up wearing Native American attire in one instance and sombreros and maracas in another, according to the University of Virginia’s Cavalier Daily. The Inter-Fraternity Council issued a statement condemning the attire as “prejudiced and culturally insensitive.” “The IFC condemns these actions and any others that appropriate cultures.” Continue reading

The Art of Streetscaping

Naples, Fla., a city of some 20,000 inhabitants, is one of the wealthiest communities in the United States. Reputedly, the jurisdiction has the second highest proportion of millionaires. Modest lots within walking distance of the beach sell for a couple million dollars, and tear-downs are common. The landscaping in residential neighborhoods is as manicured as the Japanese Imperial Palace. With a formidable tax base to spend upon public works, one would expect the public spaces in a place like this to be attractive — and the bits and pieces of Naples that I have seen in the past 24 hours do not disappoint.

We had occasion to stroll along 5th Avenue — less famous than its New York counterpart, but far friendlier. Indeed, Naples’ 5th Avenue is one of the most inviting streets I have seen anywhere in the United States. It compares favorably even to the great streets of Europe. The local authorities have done everything right. While Virginia communities are unlikely to have as much money to lavish upon brick crosswalks or the year-round sub-tropical climate to support such lush flowering plants, they can learn a lot.

First, look at the bones. 5th Avenue has four lanes, two of which are dedicated to on-street parking. The line of parked cars creates a barrier between moving automobiles and the sidewalk, separating pedestrians from motorists. Not that safety is a huge consideration — the lanes are fairly narrow, so the cars don’t drive very fast. Equally important, the street has a broad sidewalk, creating abundant space for plantings, benches, artwork, and outdoor restaurant seating. Continue reading

Virginia’s If-You-Don’t-Build-It-They-Won’t-Come Economic Development Strategy

Kevin Costner bet the farm in “Field of Dreams.” But “build it and they will come” is not a sound economic development strategy.

The City of Emporia, one of Virginia’s poorest cities, has poured $25 million into the 1,600-acre Mid-Atlantic Advanced Manufacturing Center. To date the industrial park has yet to attract a tenant. Over the past decade, Virginians have sunk more than $100 million into land acquisition and development for industrial “megasites” in the hope of luring major manufacturing investment, reports the Associated Press. So far, the Old Dominion has little to show for it. Continue reading

Hey, Let’s Ban New Fossil Fuel Projects

Sam Rasoul

This is what you get when the General Assembly usurps the State Corporation Commission and starts dictating energy policy. HB1635 by Del. Sam Rasoul, D-Roanoke, would impose a moratorium on “any new electric generating facility that generates fossil fuel energy through the combustion of any fossil fuel resources,” along with any fossil-fuel pipeline or export facility. The bill has been approved by the Committee on Commerce and Labor and is being considered by the full House.

Rasoul seems to be under the impression that it is possible for Virginia to transition to a 100% clean energy economy — in other words, one dominated by renewable energy sources such as solar, wind, and (a trivial contributor in Virginia) hydro. I don’t know what he thinks about nuclear, but if he agrees with the Sierra Club, he’s against that, too. The problem, as every reader of Bacon’s Rebellion knows, is that wind and solar are not dispatchable — that is, electric utilities cannot turn them on and off to meet fluctuations in demand. Continue reading

I-66 Rush-Hour Travel Speeds Up 12%

Source: Nick Donohue, Deputy Secretary of Transportation

Did the implementation of tolls on Interstate 66 inside the Beltway hurt or harm rush-hour travel times? I addressed that issue yesterday based on data from a Washington Post article. Now I supplement that post with data direct from Deputy Secretary Transportation Nick Donohue.

The tolls have been widely criticized by commuters, many of whom recoil at charges that have exceeded $40 for a one-way trip during rush hour. However, average eastbound travel speeds improved 12.2% for all lanes in the year since the tolls were implemented, according to Virginia Department of Transportation data that Donohue cited in a presentation to the Joint Commission on Transportation Accountability last week. The greatest gains occurred between 6:00 and 6:30 a.m. and around 9:30 a.m. Continue reading

Transportation Revenue Focus of Concern Again

U.S. retail gasoline prices adjusted for inflation. Source: EIA . The blue line is the adjusted price, looking back into the 1970s. Note the peak just about when Virginia thought it wiser to tax a percentage of price rather than a fixed tax per gallon. Find the interactive version here: https://www.eia.gov/outlooks/steo/realprices/

In the middle of a booming economy, with many state revenue sources surging, flat transportation revenues were the focus of warnings Monday in presentations by Virginia Secretary of Finance Aubrey Layne and Secretary of Transportation Shannon Valentine.

“I think we are heading for a cliff,” Layne told the House Appropriations Committee.  “For the first time in our history, we’re seeing no increase in fuel tax revenue while vehicle miles traveled goes up.”

Continue reading

No Quick Fix for I-66

Image credit: Washington Post

When the Interstate 66 Express Lanes opened a year ago, they triggered a maelstrom of controversy as Northern Virginia commuters encountered new driving patterns. Motorists were particularly irate at peak rush-hour tolls rising as high as $47.50 to drive just a few miles on I-66 inside the Beltway. Virginia transportation officials said, never fear, people would adapt and the picture would improve.

So… Has it? The Washington Post has taken a close look at the numbers. And the newspaper’s verdict is: The express lanes have caused shifts in driving behavior — shifting more people to carpooling, more to mass transit — but for the most part commuters are as miserable as ever. Continue reading

At Last, a Green Tariff for APCo Customers

Western Virginians paying APCo’s renewable energy tariff will receive electricity from, among other sources, the Beech Ridge wind farm in West Virginia.

The State Corporation Commission has approved a proposal allowing Appalachian Power Company (APCo) customers to purchase electricity generated 100% from renewable energy. An average residential customer using 1,000 kilowatt hours of electricity would pay a premium of $4.25 a month.

The Commission had rejected two previous APCo proposals for a 100% renewable energy tariff. In an order issued Monday, however, the Commission found that under the latest iteration of the plan (1) the participating customer is receiving 100% renewable energy, (2) the tariff includes safeguards that do not offload costs to customers who do not participate, and (3) the rate is reasonable for the purposes of the renewable energy product being supplied. Continue reading

Who’s Got Broadband and Who Doesn’t?

Percentage of households with broadband by locality. Source: Virginia Public Access Project based on the 2013-2017 American Community Survey.

This map, published today by the Virginia Public Access Project, shows clearly the metropolitan/rural divide in access to broadband Internet access. Some rural areas obviously enjoy better broadband service than others. Look at the cluster of counties to the south and west of the Washington metropolitan area. Look at the cities and counties running down the I-81 corridor from Winchester to Blacksburg. Many are low-density localities, but somehow they have higher broadband penetration. Continue reading

Virginia’s economy continues to sputter

Blue state blues.  The Associated Press is summarizing Virginia’s latest Comprehensive Annual Financial Report regarding the economic health of The Old Dominion.  The news is bleak.

“Personal income grew 4.1 percent in Virginia compared to 4.5 percent in the U.S. Housing prices in Virginia rose 5 percent compared to 6.8 percent nationally. Virginia also lagged behind the national average in employment growth and the number of new building permits for privately owned housing.”

It sees that as Virginia continues to turn from red to blue politically it is also turning from red hot to icy blue economically.  Coincidence?  Perhaps.  However, to the victors go both the spoils and accountability for results.  Democrats have won every state wide race in Virginia since 2009.  Perhaps it’s time to start asking the Democratic politicians some hard economic questions. Continue reading

2019 General Assembly Session – Privatizing Public Roads in McLean, Va

Judge Dillon’s revenge.  Development vs transportation has been a long running battle in Virginia. Northern Virginia’s local government  politicians never met a developer (or developer’s campaign contribution) they didn’t love. Virginia’s state legislators love NoVa growth since it provides more state tax money to spread around like party favors to their downstate constituencies. However, those same state legislators loathe the idea of repatriating many of those tax dollars back to Northern Virginia to fund needed transportation improvements. The local pols blame the state pols for failing to fund transportation in NoVa. The state pols blame the locals for ineffective land use planning. Meanwhile, both localities and the state are throwing their shoulders out of joint patting themselves on the back over winning half of the new Amazon HQ2 deal. There have even been rumors that Apple may be looking at NoVa for another 20,000 jobs. What could possibly go wrong?

No need to wait for chaos. While Amazon HQ2, Apple and the “densificiation” of Tysons are all largely future events, the chaos of underfunded transportation is already here. Loudoun County’s population grew 97% between 1990 and 2000, 84% from 2000 to 2010 and 27.5% from 2010 to 2017.  Meanwhile, over 50% of Loudoun workers commute to work outside of Loudoun County (hint: they are not working in West Virginia). At the same time, a veritable caravan of immigrants from The Socialist Republic of Maryland cross the Virginia border every morning seeking a better life through employment in Virginia. The predictable result is that the American Legion Bridge has become a chokepoint that backs up the Beltway for miles, especially in the evening.

Adding insult to injury. The same kind of advanced technology that so enthralls Virginia’s politicians in the HQ2 deal creates nightmares for McLean residents. Navigation apps like Waze and Google Maps are being blamed for showing Loudon commuters and Maryland economic refugees how to bypass Beltway traffic by using the surface streets of McLean. The resulting backups on streets that are often narrow and shoulder-less wreak havoc on the daily lives of those living in the affected neighborhoods. One can only wonder how much worse this will get once the new construction in Tysons is completed and Amazon HQ2 starts adding traffic to Arlington, Alexandria and Tysons.

It’s good to be Queen. Del. Kathleen Murphy, D-McLean, has a plan.  Privatize McLean’s public streets for the exclusive use of McLean residents, at least during rush hour. Murphy’s HB295 has been carried over from the 2018 session. The bill is summarized as follows …

“Allows counties that operate under the urban county executive form of government (Fairfax County) by ordinance to develop a program to issue permits to residents of a designated area that will allow such residents to make turns into or out of the neighborhood during certain times of the day where such turns would otherwise be restricted.”

It seems Del. Murphy will protect herself and her well-heeled neighbors in McLean by simply banning traffic she finds inconvenient. Let the commuters eat cake. It’s easy to feel sympathy for the residents of the many areas in Northern Virginia being ruined by clogged streets full of cut through traffic. However, it’s hard to see where this ends. Will the far less affluent citizens of the Route 1 corridor be able to ban cut through traffic on their streets too? Or will this remedy be reserved for Del. Murphy and her wealthy neighbors in McLean?  Limousine liberalism anyone?

Correction: HB295 was incorrectly described as pre-filed in the original version of this article. In fact, it was carried over from the 2018 session.  The content has been changed to reflect this correction.  

— Don Rippert

Delayed, ACP Price Tag Reaches $7 Billion

Delays mainly caused by continuing regulatory battles have added another half a billion dollars to the price tag for the Atlantic Coast Pipeline project now crossing Virginia.  Dominion Resources CEO Thomas Farrell used a new top figure of $7 billion in a discussion of the project with investors and analysts on November 1.

Back in February it was the Duke Energy CEO who first floated a figure of $6.5 billion for a project that started out with a $5 billion or less advertised price.  Those costs do not include financing, which will add to the amount customers pay for the gas in coming years.  Dominion is the lead partner in the pipeline, along with Duke Energy and Southern Company, but owns slightly less than 50 percent of the project.

The transcript is rough in places, the fault of the transcriber I’m sure, so I may add some suggested translations here and there.

“The FERC stop work order in (and?) delays obtaining permits necessary for construction have impacted the cost and schedule for the project. As a result, project cost actions have increased the range of $6 billion to $6.5 billion to a range of $6.5 billion to $7 billion excluding financing costs,” Farrell told those assembled on a conference call to discuss the company’s third quarter results. The most recent dispute involves the proposed compressor station in Buckingham County, with its permit decision delayed at the last Air Pollution Control Board meeting.

“The Atlantic Coast Pipeline is pursuing a phase in service approach with its customers whereby we maintain a late 2019 in-service date for key segments of the project to meet peak winter demand in critically constrained regions. ACP will be pursuing a mid-2020 in-service date for the remaining segments.  Farrell said later their profits are not threatened if they don’t start pumping gas in 2019 because the are guaranteed to recover funds used during construction.

“Through this process, we’ve already been through one process with customers on the rates, and we’ll continue to work with them. The returns are going to be very adequate and comments (commensurate?) with the normal returns we get in projects like this in our midstream business,” Farrell said.

Dominion Energy Virginia, through another arm of the company, is one of those customers, meaning of course its millions of Virginia ratepayers will ultimately pay off the portion of the pipeline serving Dominion generation plants.

Opponents tend to focus on the top line number ignoring the fact that there will be other customers sharing the cost along the line.  Opponents are quite right when they point out that new pipelines cost more than old pipelines built at lower cost.  Those issues will be debated in future State Corporation Commission cases, where the higher transportation charges will be compared to cheaper alternatives. 

In speaking to the analysts, Farrell was positive about the prospects of another huge capital expense coming at ratepayers like a train – license extensions to add another 20 years of life for its four nuclear reactors.  In some recent State Corporation Commission testimony, the company has been equivocal on its plans.  Who’s getting the real story, the SCC or the stock analysts?

“Now, on October 16, we filed with the regulatory commission for subsequent license renewable (renewal?) for the [indiscernible] power station reactors. This is an important first step in which we expect will be a multiyear $4 billion investment program that will extend the lives of both the [indiscernible] (Surry?) and North Arizona (North Anna) nuclear stations by an additional 20 years. We expect to submit the North license suspension (extension?) application in 2020. As a result of this initiative, our customers will continue to benefit from clean, reliable and low-cost generation from these best-in-class facilities,” Farrell is quoted in the transcript.

And on a related note…..

Former State Senator John Watkins was actively promoted this past winter as a candidate to fill an opening on the State Corporation Commission.  He was apparently derailed by concerns about his votes on key utility regulation issues and his ties to various legislators who have shown little interest in protecting ratepayers when the utility was rewriting the law to its benefit.  Yesterday’s Wall Street Journal took note of how things work in Virginia.

Apparently that Clean Virginia group published something pointing to relatively high electricity bills in Virginia, and Senator Watkins rose to the company’s defense in a guest column in The Roanoke Times, a paper far from his Chesterfield County home.  Read it and form your own opinion of his fitness for the Commission job, which is still open after all.

One line of his did inspire me.  “Facts are facts, and the SCC does a really good job of compiling them. Legislators and the public count on the SCC to provide that information to make sound decisions,” he wrote.   My mission at Bacon’s Rebellion to report on the Commission process and the facts that drive its decisions will continue.

Dissecting Virginia’s Amazon Deal

Source: PROJECT COOPER: BRIEFING FOR THE
HOUSE APPROPRIATIONS COMMITTEE

Virginia has committed to investing a sum unprecedented for an economic development deal in the Commonwealth — roughly $2.5 billion in state and local dollars to bring Amazon, Inc. to Northern Virginia. In a presentation to the House Appropriations Committee yesterday, Stephen Moret, CEO of the Virginia Economic Development Partnership (VEDP) provided a detailed account of the incentives. Now that the numbers are out, the public has an opportunity to review the deal. At Bacon’s Rebellion, we love critiquing things, so here goes…

Cash flow positive for the state. The first point to note is that, while Virginia is making a massive public investment to the project, it will be cash-flow positive for the Commonwealth from Year One. If Amazon pays its projected 2,500 employees an average of $150,000 a year — the target number to qualify for state subsidies — the company’s Virginia workforce will generate a lot of new income taxes and sales tax revenue. By Year Ten, added state revenue from direct, indirect and induced employment will amount to $209 million. The sum could grow to $364 million within 30 years. That compares to a General Fund revenue forecast of about $20 billion in Fiscal Year 2019.

As Steve Haner explained in the previous post, the deal will have a minimal impact on the current budget cycle, and future expenditures on higher education, transportation and direct subsidies to Amazon will be phased in over time. The project is designed to ensure that new General Fund revenues will exceed project-related outlays. In other words, according to Moret’s numbers, the state will make a “profit” on the deal from which the entire state benefits.

Investing in competitiveness. A second key point is that 60% of the incentives will be invested in infrastructure and educational programs that don’t go into Amazon’s pocket. I have a huge philosophical problem with the state giving $550 million in Phase One (and another $200 million in a potential Phase Two) to one of the world’s richest companies. Talk about welfare capitalism! But Amazon could have located in Dallas, Texas, or a handful of other cities, so it has the power to play off one location against another. I don’t like it, but that’s the way the world works. The question for Virginians is whether or not the state comes out ahead.

Critical to the deal, Virginia will invest heavily in building its tech talent pipeline. According to Moret’s presentation, the state envisions producing approximately 25,000-35,000 new degrees (over and above baseline levels) in computer science and related programs over the next 20 years. That’s more than Amazon will require. So, labor-starved tech companies other than Amazon will benefit from the investment.

In an earlier post, I had expressed concern that the state would be subsidizing Amazon’s employee recruitment efforts to the tune of $22,000 per employee, giving the company an immense advantage over other Northern Virginia companies competing for talent. In his presentation, Moret acknowledged that there would be “short-term pressure” on Northern Virginia job markets, but that NoVa executives were mostly positive about the deal. His presentation includes a sampling of reactions back in February:

“The economic lift that we get in Virginia, the branding part of it, would be a strong positive for our recruiting efforts. Clearly we will be competing for talent, but that’s fine,” said a Fortune 500 CEO. “I think it’s important for regions to have a diversity of employment options. The economic lift and intellectual lift for the region is a strong, strong positive. I would like to see us get selected.”

“It would be a double-edged sword. Great for the economy. Great for the brand,” said the CEO of a successful tech company. “Long-term it would be good, but it’s another competitor to deal with for talent. … It would give cachet to our area.”

Said the C-level exec of a Fortune 500 company: “In the short run, it will entail some competition for talent. But it’s very powerful for the region for the long term. We’ve made Virginia our hub. The fastest growing part of our ecosystem
is tech – we hire thousands of associates [every year]. We want to have an ecosystem where new tech grads stay here and where there is a desire of folks from around the country to move here.”

The workforce worries are real. But the Virginia’s higher-ed investments will expand the local talent pipeline, Moret argues, while the presence of Amazon will help give the Northern Virginia tech sector a more positive brand nationally, aiding recruitment from other labor markets.

Meanwhile, the state, Arlington County, and the City of Alexandria will spend hundreds of millions of dollars building out transportation infrastructure serving the Crystal City/Potomac Yard area. The transportation initiatives, designed to complement walkable urbanism in the region’s urban core, will accommodate business and residential growth for more than just Amazon. The Metro bus and rail system is operating at significantly below capacity, notes Moret. This deal could boost ridership and revenues for the troubled mass transit system.

Projected share of Amazon commuters by transportation mode.

As Arlington and Alexandria re-develop the region as a walkable mixed-use community, Arlington projects that 77% of Amazon’s workers will walk, bike, car-share or take mass transit to work. That number, if accurate, is phenomenal. By creating a new template for Crystal City/Potomac Yard, Amazon could catalyze the development of even more transportation-efficient walkable urbanism that can soak up a lot of future transportation demand. Continue reading

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.