Category Archives: Planning

On the Fine Art of Forecasting Peak Load Demand

Posted on June 30, 2017 by James A. Bacon | 22 comments

Comparison of Dominion and PJM growth forecasts in peak load. Source: Dominion 2017 Integrated Resource Plan.

Billions of investment dollars ride on the long-range forecast of Dominion’s peak load electricity demand. But whose projections do we believe — Dominion’s or PJM’s?

In its 2017 Integrated Resource Plan (IRP), Dominion Energy forecasts the increase in its peak electric load and anticipates what combination of new gas, solar and nuclear facilities it will take to meet that demand. Although the IRP is a highly technical document, against the backdrop of the debate over the future of Virginia’s electric grid, it has major political implications. Environmentalists argue that Dominion overstates future electric load and, consequently, it overestimates the number of new combustion turbines (gas-fired turbines designed to generate electricity on call) or the amount of new nuclear capacity that it will need to add.

As evidence, Dominion’s opponents point to the 2017 peak load forecast by PJM Interconnection, the regional transmission organization of which Dominion is a part. Where Dominion’s IRP projects an average annual increase in summer peak load of 1.4%, PJM projects an increase of only 0.4%. Projected over the 15-year planning horizon of the IRP, that amounts to a tremendous difference in peak electric load, as can be seen in the graph above.

Needless to say, Dominion defends its forecast, and offers detailed reasoning in the IRP to support its position.

Which forecast is correct? That of Dominion, which has a more intimate, granular knowledge of its service territory, of that of PJM, which has no profit-maximizing agenda?

It might come as a surprise to outsiders, given the big gap between their projections, but Dominion and PJM coordinate their planning and forecasts very closely. In most ways, the two forecasts are closely aligned. In PJM’s estimation, the difference boils down to two main factors: (1) the assumptions that Dominion and PJM make about the growth in demand from energy-intensive data centers beyond 2021, and (2) assumptions about how to account for rapidly “behind-the-meter” electric generation by homeowners and businesses. To those two issues, Dominion adds two more arcane issues of methodology.

Data centers. Data centers figure largely in Dominion’s forecasts because Northern Virginia has emerged as one of the world’s leading clusters of energy-intensive server farms, drawing upon the region’s rich network of high-capacity fiber-optic cable, low-cost electricity, tech-savvy workforce, and friendly state-local policies. Having observed the success of Loudoun County, other Virginia localities from Virginia Beach to Wise County in far Southwest Virginia, are getting into the act.

Data centers are an anomaly for economic and electric-load forecasters. Because they are such big consumers of electricity to run thousands of servers and cool the heat they throw off, they skew the normal relationship between economic growth and energy consumption. Accordingly, Dominion and PJM have to make special adjustments to their economic models to take them into account.

“Each year Dominion comes to us with information about their projections of data center growth,” says Tom Falin, director of resource adequacy planning for PJM. “We do analysis to see if that growth is already embedded in our forecast. In general, it isn’t. [Data centers] put a drain on the energy grid that’s not normally associated with economic growth — there’s not a lot of employment and housing associated with it.”

Data-center loads reached more than 800 megawatts by 2016 and are projected to amount to 1,500 megawatts by 2021. That compares to a total peak load of about 20,000 megawatts for Dominion. PJM estimated that it needs to adjust Dominion’s peak load forecast upward by 500 megawatts by 2021 to account for the data centers. At that point, says Falin, PJM assumes that the growth in energy demand will be embedded in the historical load history and won’t require further adjustment. “Perhaps Dominion is assuming stronger growth in these data centers than we are.”

Indeed it is. As Dominion explains in its 2017 IRP:

PJM has eliminated new data center growth in the DOM Zone beginning in 2021 – in other words, it excluded incremental data center growth beyond what is captured in historic trends. This is a significant change from PJM’s 2016 peak demand forecast, which included new data center growth continuing for the balance of the forecast. In comparison, the Company utilizes historical trend data center load coupled with interconnect data from new and existing data center customers to forecast data center growth within its service territory. Over the longer term, the Company relies on data center forecasts that are included in a 2015 study prepared for the Company by Quanta Technology, LLC, entitled “Dominion Northern Virginia Load Forecast.”

The difference between the Dominion and PJM forecasts can be seen in this graph taken from the 2017 IRP:

Source: Dominion 2017 IRP.

The dotted line shows what PJM’s peak demand forecast would look like if adjusted for data-center growth. Continue reading →

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Posted in Energy, Planning

Tagged Dominion, James A. Bacon

Two More Signs that City of Richmond Is Kicking Donkey

Posted on June 28, 2017 by James A. Bacon | 1 comment

Kicking donkey

The City of Richmond is on a tear. Not only is it seeing more real estate investment than it has it decades, the city is laying the groundwork for future growth and re-development. Its competitive advantage over neighboring suburban counties seems to get stronger with every passing day.

Word has leaked to local media of a privately led plans to replace the aging Richmond Coliseum as part of a larger initiative to revitalize a critical piece of the downtown district. A small working group led by Dominion Energy CEO Thomas Farrell and including Virginia Commonwealth University and the Altria Group has confirmed its desire to replace the decrepit Coliseum civic arena, which suffers from major deficiencies and drains $1.6 million a year from city coffers. Plans include a hotel to serve visitors to the nearby convention center, and encompass the historical Blues Armory building.

The working group, which is so preliminary that it does not yet have a name, is not ready to release details on the scope of the project, its cost or its financing.

Normally, when I hear of civic leaders talking up a big downtown redevelopment project, I immediately reach for my wallet. Most schemes call upon city governments to make major financial contributions, which are justified on the basis of fantasy projections of jobs, tax revenue, and spin-off investment. All too often these projects experience cost overruns, or projections fall short. (Just ask the City of Norfolk, which had its “donkey” handed to it for cost overruns of the Tide light rail project, and more recently, the Virginian-Pilot reports today, experienced a $16 million cost overrun on the $105 million Main hotel and conference center project downtown.)

But the larger point is that downtown Richmond excites the interest of the city’s major institutions and business leaders. There is something to work with. The Biotechnology Research Park has transformed the area to the north and east of the Coliseum. The neighboring Jackson Ward district to the west has been gentrified. Broad Street to the south is roaring back. Developers are converting warehouses and obsolete office buildings into apartments and condos downtown. The Coliseum’s location is prime real estate, and it is under-utilized. Who knows, miracles do happen. Perhaps it will prove possible to re-develop the land around the Coliseum without massive subsidies.

A significant side benefit of a re-development project would be to improve connectivity downtown. As the Richmond Times-Dispatch reports: “The plan envisions a transformation of the traditional street grid, now partly sunken below grade in places and blocked entirely in others” to better connect the VCU health system, the government center around City Hall, and the biotechnology research park.

An impetus behind the initiative was the city’s commitment to build Bus Rapid Transit along Broad Street. The draft Pulse Corridor Plan calls for exploiting the “opportunity area” in the vicinity of the Coliseum. As it happens, the Pulse also will serve the Scotts Addition district, which the city is in the process of rezoning to maximize re-development opportunities.

The Pulse is expected to commence operations in October. One of its ten stops serves Scotts Addition, a light manufacturing district that has been transformed by the conversion of brick industrial buildings into apartments, condos, offices, restaurants, and breweries. City planners call for two new zoning districts: transit-oriented development (TOD) along the Broad Street corridor, and mixed-use for the rest of Scotts Addition.

The city’s planning staff calls the draft TOD-1 district “unabashedly urban,” reports the McGuireWoods land use team. The recommended ordinance is “intended to encourage redevelopment and place-making, including adaptive reuse of underutilized buildings, to create a high-quality urban realm.” Zoning would require walkable streetscapes and allow buildings of up to 12 stories in height. Most buildings would have a maximum setback of 10 feet. Parking requirements would be lifted for all uses other than hotels and large, multifamily residential buildings.

Beyond the Broad Street corridor, Scott’s Addition would be rezoned from light industrial to a mixed-use business district. Zoning would encourage “street-oriented commercial” corridors, requiring street-front retail as part of any residential use, and prohibiting car-oriented uses like gas stations and parking decks. Amendments would permit “maker” light manufacturing uses of under 10,000 square feet, which, if approved, could extend the ongoing boom in breweries, cideries and distilleries.

If both rezonings are approved, says the McGuireWoods land use team, “there may be significant opportunities for RVA’s commercial real estate community to actualize the city’s vision for denser, more urban development in this area.”

The Pulse extends into Henrico County, terminating near the Willow Lawn mall. If county officials are planning to take advantage of the BRT service, there is no sign of it in my Google results. The only rezoning activity near Willow Lawn took place last year: approving a development and lighting plan for a Chick-fil-A.

One positive sign, however, is that Henrico has hired Clarion Associates to lead a comprehensive update of its zoning and subdivision ordinances — the first such effort in six decades. The revisions are expected to take two years, however, so even if the county commits to a vision of selective urbanization, the city of Richmond likely will continue to whup donkey.

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Posted in Economic development, Land use & development, Planning

Tagged James A. Bacon

Why Would Dominion Want a $19 Billion Nuclear Plant?

Posted on June 3, 2017 by James A. Bacon | 54 comments

North Anna Power Station

The Nuclear Regulatory Commission has indicated it will issue a license within the next few days to build a third nuclear reactor at Dominion Energy’s North Anna power station, the Richmond Times-Dispatch reported earlier this week.

Dominion has spent $600 million so far on planning, engineering and developing the 1,450-megawatt facility, which has been widely reported to cost an estimated $19 billion. While acknowledging the huge up-front expense, Dominion has argued that it needs to keep open the option of a third nuclear unit in case federal and state regulators impose strict carbon controls on Virginia’s electric utilities.

Robert Zullo has done a fine job of covering Dominion for the Richmond Times-Dispatch, and I rely upon his reporting to keep up with the energy and environmental issues the company is embroiled in. But I would not frame the North Anna 3 issue as he did:

Given the massive cost of the controversial project, which has been opposed by both consumer and environmental groups and has yet to be approved by the State Corporation Commission, it remains unclear whether the utility will actually build the reactor.

True, consumer and environmental groups do oppose the project, and, true, it is unclear whether the utility will build the reactor. But the driver isn’t the cost, which is horrendous. The driver is what kind of regulatory regime federal and state governments enact to reduce carbon dioxide emissions from Virginia power plants. If regulators choose a “mass-based” approach that caps CO2 emissions on existing power plants and all new generation units built in the future, Dominion argues, the only way to meet electricity demand, maintain federally mandated reliability standards and stay within the CO2 limits is to construct a new nuclear unit, which emits zero carbon.

Dominion is not advocating construction of North Anna 3. It is not recommending construction of North Anna 3. There is no indication that it even wants to build North Anna 3. Rather it is preserving the option should political and regulatory developments leave it no alternative.

The company lays out its logic in its 2017 Integrated Resource Report, a planning document that provides a 15-year look into the future. There is so much political and regulatory uncertainty that Dominion examines eight different scenarios predicated on different schemes for restricting CO2 emissions. Building North Anna 3 appears in only one of the eight options, which the IRP refers to as “Plan H.” Here’s how Dominion describes that plan:

Plan H is a Mass-Based program that limits the total CO2 emissions from both the existing fleet of fossil fuel-fired generating units and all new generation units in the future, but also includes the construction and operation of North Anna 3 in 2030. This Alternative Plan was developed assuming that the Company achieves [Clean Power Plan] compliance through portfolio modifications with no market purchase of CO2 allowances. This Alternative Plan limits the generation of [the Mt. Storm coal-fired power station] to a 40% capacity factor.

Key assumptions include:

Retirement of up to four coal-fired units at the Mecklenburg and Clover power stations, totaling 577 megawatts, by 2025.
3,360 megawatts of additional solar capacity;
2,290 MW of additional natural-gas, Combustion Turbine capacity;
A 20-year extension of the four existing nuclear units at the North Anna and Surry power stations.
Addition of 1,452 of nuclear capacity at North Anna 3.

Dominion acknowledges that the compliance costs of Plan H would be extremely expensive — $14.79 billion over the IRP study period compared to $5.71 billion for the next most expensive alternative and $2.3 billion compared to the least expensive alternative.

The impact of Plan H on residential consumers would be considerable. Dominion estimates that average monthly electric rates for a typical residential customer using 1,000 kilowatt hours per month would increase 29.44% by 2030 and subside to 19.01% higher by 2042. That would be more than five times the increase of the next most costly plan in 2030.

Source: Dominion Energy

A key assumption embedded in Dominion’s projections is that electricity demand will increase by an average of 1.5% annually over the next 15 years. The IRP forecasts a compound annual growth rate of 2.04% for the Virginia economy, based upon data supplied by Moody’s Analytics. Thus, a 1.5% load increase implies continued energy-efficiency gains that reduce the energy intensity of each unit of economic growth.

Virginia’s success in attracting energy-intensive data centers plays into the utility’s Virginia forecast. “The Company has seen significant interest in data centers locating in Virginia because of its proximity to fiber optic networks as well as low-cost, reliable power sources,” the IRP says. (See yesterday’s post, “Building on Virginia’s Data Center Boom.”)

Some observers argue that Dominion’s forecast overstates demand growth. Most notably, PJM Interconnection, the regional transmission organization of which Dominion is a part, provides a significantly lower growth forecast for the Dominion transmission zone, as seen here:

Source: Dominion Energy

The IRP addresses this forecast discrepancy at length. Dominion says four factors account for the gap in projected demand growth. First, PJM eliminated new data center growth from its forecast. Second, PJM makes assumptions about Distributed Energy Resources (primarily solar) that overestimate how they would perform during critical system conditions. Third, PJM bases its forecast of appliance saturation and efficiencies on Southeast regional data, while Dominion uses historical data from its own service territory. And fourth, Dominion uses a different methodology to account for public sector energy growth, which accounts for 13% of company sales.

Another unknown is the likelihood that a Plan H scenario will materialize.

The Trump administration has expressed a desire to scrap the Clean Power Plan. Even if it succeeds in neutering the CO2 regulations, though, a future administration could reinstate them. Meanwhile, the Virginia environmental lobby is pushing hard for the CO2 caps contemplated in Plan H, and the McAuliffe administration will announce its own plan later this month to combat CO2. Furthermore, several environmental groups have gone on the record in opposition to extending the life of the existing Surry and North Anna nuclear plants. Should Dominion fail to renew those licenses, it would have to make up nearly 3,400 megawatts of capacity elsewhere. Unable to add fossil fuel capacity under a Plan H scenario, it would be limited to renewables or nuclear. An all-renewables approach could create an unstable grid with major reliability issues. That would leave North Anna 3 as the only alternative.

Many possibilities might obviate the necessity of building North Anna 3 under a Plan H scenario. The electricity load might increase at a slower pace than Dominion forecasts. The utility might succeed in extending the life of its existing nuclear units. Battery storage technology might advance to the point where it is feasible store massive amounts of sunlight-generated energy. There is no way to know at this time what will happen. But as the entity responsible for keeping the lights on, now and far into the future, Dominion is taking no chances. Despite the jaw-breaking cost, it is not taking the North Anna 3 option off the table.

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Posted in Energy, Environment, Planning, Regulation

Tagged Dominion, James A. Bacon

Building on Virginia’s Data-Center Boom

Posted on June 2, 2017 by James A. Bacon | 25 comments

Map credit: “Intertubes: A Study of the US Long-haul Fiber Optic Infrastructure“

Data centers are the hottest trend in Virginia economic development these days. But the state is only beginning to think through the implications.

Loudoun County, home to 75 facilities, has developed the largest cluster of data centers in the country (and perhaps the world), and next-door-neighbor Prince William County is rising fast. Rural Mecklenburg County has attracted nearly $2 billion in investment as the location of Microsoft’s East Coast hub for online services. QTS has retrofitted an old microchip factory in Henrico County to open a data center, while DP Facilities, Inc., opened a $65 project center in Wise County. Soon, Virginia Beach will enter the data-center sweepstakes when construction is complete on a 4,000-mile transatlantic cable connecting Virginia to Europe.

According to Paula Squires writing in Virginia Business magazine, Virginia boasts more than 650 data processing, hosting and related establishments that employ more than 13,900 people. Since 2006, the industry has announced more than $11.8 million in new investment and 6,600 jobs. The jobs, while relatively few in number, pay well (more than $100,000 a year in Northern Virginia), and generate a gusher of local taxes.

Billions of dollars are flowing into the sector as the global economy embraces cloud computing to handle the massive surge in data collection and storage. A Markets and Markets research report estimates that the cloud storage market will grow from $23.76 billion in 2016 to $74.94 billion by 2021 — a compounded annual growth rate of 25.8%.

Loudoun County was one of the first localities anywhere to see the economic development potential. The county had a built-in advantage — a massive network of fiber-optic cable built by AOL and WorldCom during the heyday of the 1990s Internet bubble. WorldCom went bust and AOL has a much-diminished presence, but the cable infrastructure remained — and high-capacity connectivity is an essential prerequisite for a data center. Loudoun claims that 70% of the world’s Internet traffic passes through the county. The concentration of data centers is so pronounced that economic developers refers to a six-mile radius around Waxpool Road and Loudoun County Parkway as “data center alley.”

The county has built on its infrastructure advantage by learning how to expedite zoning, permitting and construction. CyrusOne completed construction of a 220,000-square-foot data center in Sterling in 180 days — reputedly the shortest construction time fever for a center that size, reports Squires.

To incentivize investment, the state exempts computer equipment bought or leased for a data center from the retail sales and use tax. Henrico County has dropped its business property tax rate on computers and related equipment from $3.50 to $.40 per $100 of assessed value.

Also, Dominion Energy has emerged as a significant partner. The endless racks of servers inside data centers consume electricity and generate heat, which must be cooled by massive HVAC systems. Dominion charges 5.2 cents per kilowatt hour for large facilities, and a slightly higher rate for small ones. “We’re very competitive,” says Stan Blackwell, director of customer service and strategic partnerships for Dominion. “We have some of the lowest data-center rates in the nation.”

Bacon’s bottom line: The rise of the data-center industry raises two pointed sets of public policy questions.

First, how can Virginia optimize this opportunity? What are the critical drivers? Obviously, the existence of high-capacity fiber networks is one consideration. It appears from the map atop this post that Virginia has one of the densest clusters of long-haul fiber capacity in the country. How crucial is that advantage? Does Virginia’s proximity to a relatively fiber-poor Southeastern U.S. give data centers serving that market an edge? Is the competitive advantage bequeathed by fiber-optic infrastructure such that Virginia should consider encouraging investment in more? Conversely, does it do any good for Virginia to invest in its own fiber infrastructure if connections to neighboring states are lacking? Many, many questions.

Source: “A Simple Model for Determining True Total Cost of Ownership for Data Centers.”

Electricity is one of the largest costs associated with operating a data center, accounting for roughly 10% of the total cost of ownership — and it is one of the largest costs that vary by location. Dominion’s electric rates confer a significant competitive edge for locations within its service territory.

Graph credit: Dominion Energy

One of the biggest challenges for Dominion — and the further expansion of the data-center industry — is delivering electricity to these data centers. In one particularly controversial case, the utility wants to build a 230 kV transmission line and substation from Gainesville to Haymarket to serve an Amazon data center. Locals have organized in opposition, claiming that the 100-foot-tall towers will disrupt views and harm property values to benefit a single industrial customer. They insist that Dominion bury the line at considerable expense. If Virginia wants to develop the data-center industry more fully, it may need to find ways to resolve the inevitable utility-landowner disputes fairly expeditiously. No company wants to wait years to find out whether a project will get the electric power it needs.

A second big public policy question centers on the implications of the data-center boom for electricity demand in Virginia. According to Virginia Business, data centers represent Dominion’s fastest-growing customer segment: About 7% of the company’s retail portfolio consists of data centers.

This feeds into the debate over Dominion’s future electric generating mix. Dominion’s 2017 Integrated Resource Plan (IRP) assumes that electric load will increase at a compounded rate of 1.5% over the next 15 years — considerably higher than PJM Interconnection’s forecast for the Dominion service territory. Dominion argues that PJM has not taken into account the phenomenal growth of demand by Virginia-based data centers. These projections matter because they influence how much new generating capacity — including nuclear, as I will explore in a forthcoming post — Dominion adds in the years ahead, with tremendous implications for rate payer and the environment.

The data center surge could prove to be an economic development boon for Virginia. But the industry’s growth impacts local zoning and land-use practices, tax policy, fiber-optic infrastructure development, and energy policy. The McAuliffe administration would be well advised to pull together a conclave to determine how to sort through these issues.

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Posted in Economic development, Energy, Environment, Infrastructure, Planning

Tagged Dominion, James A. Bacon

Please, Norge, Don’t Go NIMBY on Solar Project

Posted on May 5, 2017 by James A. Bacon | 15 comments

Norge residents gather to learn more about a proposed solar farm in their neighborhood. Photo credit: Virginia Gazette.

Report from today’s Virginia Gazette: Members of the Norge community of James City County are “concerned” that a proposed solar farm will impact their neighborhood negatively.

The James City County planning commission approved in April an application to build a solar farm on a 225-acre property on Farmville Lane. The developer, California-based SunPower, said that the lane would have to be widened and trees removed in order for trucks to be able to turn properly.

Residents expressed concerns about traffic and noise said Amanda Beringer, who organized a neighborhood meeting to educate neighbors. “As we did more research and watched the planning commission meeting we realized a lot of people didn’t know about the proposal.”

Bacon’s bottom line: Well, if someone proposed a major construction project near where I lived, I’d want to know more about it, too. So the Norge neighbors can’t be criticized for wanting to learn more about the project. But if concern morphs into opposition, I’ll have “concerns” of my own, but entirely different ones. I’ll be concerned how NIMBYs inevitably arise to block any kind of energy-related project in Virginia, be it electric transmission lines, gas pipelines, wind turbines or even solar farms that hum quietly behind hedges while — outside the construction phase — creating little traffic or human activity of any kind. Some energy projects are intrusive and resistance is understandable. But opposition to solar projects is incomprehensible to me.

Look, people, solar energy is coming. Dominion and Appalachian Power have both announced commitments to massive increases in solar generation over the next 25 years. While some of that solar capacity will be small-scale, distributed rooftop solar panels, most of it will be utility-scale solar farms like the one SunPower wants to build. Leasing land to a power company is great news for suburban and exurban landowners struggling to make ends meet in farming, and the tax benefits to localities are significant — even after taking into account the 80% discount on property tax assessments.

Local governments across Virginia need to get proactive and update their zoning codes and comprehensive plans to prepare for the upcoming solar bonanza. They need to work out potentially conflicting issues ahead of time. The quicker solar projects sail through the regulatory process, the more that will get built to the benefit of all.

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Posted in Energy, Planning, Regulation

Tagged James A. Bacon, Solar energy

Yeah, It’s Probably a Good Idea to Update Your Zoning Code Every Half Century or So

Posted on August 22, 2016 by James A. Bacon | 21 comments

Pouring whale oil. At long last, Henrico zoning code will leave the 19th century behind.

Pouring whale oil. At long last, Henrico’s zoning code will leave the 19th century behind.

News flash: Henrico County officials see the need to bring the county zoning code into the 21st century. Although the zoning code has been amended 240 times, it was adopted in 1960 and has never seen a systematic overhaul since.

The code, Randy Silber, deputy county manager for community development, tells the Richmond Times-Dispatch, is “over 55 years old. It’s antiquated. … There’s disconnect in the uses in the zoning ordinance and the economic development that is being put before us.”

Regulations governing sperm whale oil and poison manufacturing remain on the books, notes Silber. The code also refers to bone distilleries. “I don’t even know what that is,” he says.

The 1960 zoning code shaped the “suburban sprawl” model that propelled Henrico County growth in the 56 years since. But the model has run its course, having saddled the county with vast expanses of low-density land use patterns that are costly to maintain and are beset by intractable road congestion issues. Moreover, businesses are reversing a decades-long migration from the central city to the suburbs as Millennials and Empty Nesters seek walkable, mixed-use communities found in the urban core, along with easy access to the city’s museums, festivals and cultural events. To avoid the same kind of hollowing out that central cities experienced a half century ago, Henrico must create walkable, urban places as well.

While Henrico has permitted a few such places, growth continues to be dominated by old-fashioned sprawl. An outdated zoning code is, in effect, mandating the county’s premature obsolescence.

The fact that county professionals see the need for change is encouraging — although the examples cited in the Times-Dispatch article suggest that they may be in more of a mind to tinker with the code than to embrace an alternative paradigm for development and re-development. It’s also unclear whether the citizenry, which is terrified of any change that might affect their homes’ property values, sees the need for change. But at least it’s a start.

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Posted in Land use & development, Planning, Regulation

Tagged James A. Bacon

Bikes, Bees, Beauty

Posted on June 20, 2016 by James A. Bacon | 6 comments

by James A. Bacon

New York City has its High Line park built upon an abandoned, elevated freight rail line. The City of Richmond has its Low Line park, built underneath CSX Corp. railroad trestles.

In the seven years since opening to great fanfare, Manhattan’s High Line has attracted millions of visitors and inspired the construction of nearly 1,400 housing units along its two-mile route. By contrast, the opening of Richmond’s Low Line has been decidedly low key, and no one is expecting it to become a magnet for real estate development. But the Low Line could well become an integral part of Richmond’s park system and spur reclamation of the riverfront.

The vision for the $6 million project calls for flower plots with benches, covered walkways beneath the trestles, rain gardens along the Kanawha Canal, and trees shading HOW MANY?? hundred yards of bike path. Capital Trees, a not-for-profit organized to promote urban greening, has committed to fund the ongoing maintenance.

A year ago, the area was an overgrown ruin, neglected by CSX and the City of Richmond, which shared ownership of the land for more than a century. Located in the flood plain, the property had little value. No one had reason to invest in it or even care about it.

“There was no advocate for this area. It was blighted,” says Susan Robertson, co-chair of Capital Trees. “People would ride on the canal boats from the manicured, renovated canal walk [in Shockoe Bottom] and encounter a scene with invasive weeds and trees. From June through November, you couldn’t see the canal [from the land].”

When the Low Line is complete, it will knit together a cluster of recreational assets including the Richmond terminus of the 52-mile Capital Trail, the Great Shiplock Park, the Kanawha Canal, and Chapel Island with its trails and kayak launch. The Low Line also will provide an amenity for the 1,500 residents of Tobacco Row apartments and condominiums on the far side of the flood wall.

“It’s so great,” Victoria Hedegger, a Tobacco Row resident, said recently while walking her new-born in a stroller. “It was nice before. Now it’s even nicer. [The gardens] make the trail so much more attractive.”

Before Capital Trees got involved, this was the view from the Capital Trails bike path.

Capital Trees originated as a collaboration between the Richmond region’s four garden clubs in the expectation that they could undertake projects with greater impact if they worked together. The new generation of garden club leaders aren’t content with traditional beautification projects. They are exploring the intersection of beautification, conservation, storm water management and urban place making.

In its early incarnation, the group worked with city officials to reform the urban tree-planting program. Then it spear-headed the building of rain gardens on 14th street in Richmond’s downtown to control storm water runoff. With each success, Capital Trees’ projects became more ambitious.

In 2011 Lynda Miller, head of New York City’s Central Park Conservancy, visited Richmond to describe how volunteers had reclaimed part of Central Park. “She told use we could tackle big, important projects that can make our lives better, recalls Clare Osdene Schapiro, a Richmond Times-Dispatch writer active in the organization. Continue reading →

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Posted in Economic development, Infrastructure, Not-for-profits, Planning, Water-waste water

Tagged James A. Bacon

Pulse Has a Pulse after All

Posted on May 11, 2016 by James A. Bacon | 2 comments

Click for larger image.

by James A. Bacon

When last I blogged about Richmond Pulse, the Bus Rapid Transit plan for the city’s Broad Street corridor, the projected cost had leaped $11.5 million over its original $50 million estimate. While I support mass transit in the right circumstances, I saw little good coming from this project, in which state and federal authorities had helicoptered dollars upon the Greater Richmond Transit Company (GRTC) and the city had done little to create the conditions — zoning for appropriate land use, funding streetscaping and planning for intermodal connectivity — needed to make the project a success.

I was worried that I might have offended my old buddies in the local Smart Growth community by my unsparing criticism of the transit project. As it turns out, I need not have worried. They shared the same concerns. Indeed, they have been working feverishly through the planning process to correct the obvious deficiencies.

“Typically plans for transit projects sit on the shelf for years while agencies try to find funding,” says Trip Pollard, an attorney with the Southern Environmental Law Center, “but in this case, while some planning certainly had been done, the funding got ahead of the planning.”

The project, which runs 7.6 miles from Rocketts Landing at the east end of the city to the Willow Lawn mall at the west end, is scheduled for completion in the fall of 2017. Planners have moved into high gear trying to catch up. Two important studies should be complete this fall.

The Richmond Regional Transit Vision Plan will create a regional transit vision plan to stakeholders and the public that will guide transit development in the region through 2040. The idea is for Pulse to be part of a more comprehensive regional transit system.

The Broad and East Main Street Corridor Plan will focus on the Pulse corridor, identifying where development should occur, what development should look like and how it should happen.

Meanwhile, the Richmond Transit Network Plan will rethink the design of the city’s bus network in the context of Pulse. For example, will Pulse free up GRTC resources to improve service on other routes? How can regular bus routes interface with Pulse? Can GRTC optimize its bus service in other ways? Jarrett Walker + Associates, renowned for its re-engineering of the Houston bus system, will conduct the study. That should be complete next year.

As a bonus, the U.S Department of Transportation is providing technical assistance in the Ladders of Opportunity Transportation Empowerment Pilot Initiative to promote Transit-Oriented Development in the low-income Fulton community, whose residents are expected to use the BRT to reach jobs in the West End.

While implementation of the Pulse project has not exactly risen to a top-of-mind issue in Richmond’s highly competitive mayoral race, “there is a mobilized civic community,” says Stewart Schwartz, executive director of the Coalition for Smarter Growth. Civic leaders are determined to make sure the project is done right.

The Smart Growth community has a lot riding on this project. If Pulse crashes and burns, it will undermine political support for more mass transit funding in the Richmond region. Conversely, if the project is successful, it could pave the way for a regional system.

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Posted in Labor & workforce, Planning, Transportation

Tagged James A. Bacon, mass transit, smart growth

Here, Piggy Piggy Piggy!

Posted on April 8, 2016 by James A. Bacon | 28 comments

Woo hoo! GO Virginia!

by James A. Bacon

Any time business leaders, university presidents and legislators agree on a great new spending initiative, I put my hand on my pants pocket to make sure my wallet is still there. When their brilliant idea slides through the General Assembly without a dissenting voice, or even a word of skepticism from the news media, I take out my wallet to make sure my cash hasn’t disappeared. The GO Virginia initiative — $36 million allocated over two years to incentivize regional cooperation in economic development — inspires that reaction.

I don’t adamantly oppose GO Virginia — I don’t know enough to form a strong opinion. What worries me is that the proposal has been subjected to so little critical analysis.

Thankfully, Attorney General Mark R. Herring issued a legal opinion yesterday finding that the Virginia Growth and Opportunity Act faces a “significant risk” of being found unconstitutional on the grounds that it violates the separation-of-powers doctrine by giving the General Assembly the power to appoint a majority of the board’s 22 members as well as a legislative veto over its grants. (See the Richmond Times-Dispatch reporting here.) Gov. Terry McAuliffe has until Sunday to amend or veto the legislation, which he originally supported.

It’s nice to see that someone has taken a serious look at the bill. Herring raises a critical point. If anyone needs an example of what can happen when legislators insert themselves into the executive function, one need look no further than the shenanigans of the Tobacco Indemnification and Community Revitalization Commission.

According to the GOVirginia website, the project was the brainchild of the Virginia Business Higher Education Council (VBHEC) and the Council on Virginia’s Future “to foster private-sector growth and job creation through state incentives for regional collaboration by business, education, and government.”

Why is the program needed? Backers argue the following:

Because Virginia is a large and diverse state, the opportunities for private-sector growth vary significantly from one part of our state to another, requiring collaborative innovation among employers, entrepreneurs, investors, researchers, educators, governments, and other leaders in each region. Too often this cooperation has been lacking, causing Virginia to lag behind other states.

State government can solve the problem:

The State can and must do more to encourage strategic, job-focused collaboration in each region. Significant state funds currently flow to localities, schools, and higher education institutions; the Commonwealth should use such resources to promote joint efforts on economic and workforce development and to encourage collaboration that can improve performance and reduce costs.

The original concept behind GOVirginia was to fund the program through “use of growth revenues, re-purposed dollars, and efficiency savings” — not new taxes, mandates or layers of government. Somewhere along the way, the initiative morphed into a program supported by $36 million in state funds over the two-year budget. The concept may well have morphed in other ways beyond its original formulation, although, judging from Travis Fain’s reporting for this Daily Press article, the legislative package of four bills has stayed fairly true to the original vision.

Here is how the money would be distributed:

The plan includes $5.5 million a year for the first two years to stand up the regional councils, vet project proposals and study various aspects of regional economies, particularly the gaps in education and skills training needed to support desired industries.

Beyond that, $15 million would be up for grabs, with regional councils competing to get the state board to fund their projects. The remaining $12.4 million would also go toward project-specific grants, but it would be broken down between the regions based on population.

Bacon’s bottom line: It’s a little late in the game, I’ll concede, but let’s get the conversation going. Is this a worthwhile expenditure of $18 million a year?

Let’s start by looking at the new overhead created: $11 million, or 30% of the funds allocated, would go to setting up the administrative structure for the program. That’s pretty much a waste. Don’t higher-ed institutions have mechanisms for discerning the job-training needs of local industry already? What can these new studies possibly add?

Then consider the how the money is distributed geographically. Funds will be distributed amongst a number of regional councils reflecting the diversity of the state’s economy. Let’s assume that roughly $15 million a year would be made available for actual grants. How would the sum be divvied up? By the merits of the projects? What if all the high-ROI projects were located in, say, Northern Virginia? Would the other councils feel short-changed? Conversely, what if the money were distributed evenly between regions, would some high-ROI projects be denied funding?

Next, consider the pork barrel aspects. Fain quotes House Majority Leader Kirk Cox, R-Colonial Heights, a local project – the Aviation Academy at Denbigh High School – as a good example of projects that would get funding.

The Newport News school system runs the school at the Newport News/ Williamsburg International Airport. It would get $100,000 a year under Gov. Terry McAuliffe’s proposed budget, but Del. David Yancey, R-Newport News, wants another $2 million next year and $1.5 million the year after that to expand the school.

Yancey will go before the House Appropriations Committee to ask for that funding, but with limited time during session to vet these proposals, Cox said he’d rather see projects like this bubble up through the regional councils.

Pork by any other name still smells like pork.

There is a vast gap between the airy and idealistic justification of GOVirginia and the ugly implementation guided by legislators toward their pet projects. If the Newport News project is a good example of what would get funding, I hate to see a bad example. I foresee GOVirginia funding projects that couldn’t raise the money from either the private sector or existing government programs, thus creating new programs of marginal value that will be dependent upon government for funding, and creating new constituents that lobby for government hand-outs year after year.

To some degree, I’m playing devil’s advocate — filling a role that no one else has seen fit to play. I’m open to arguments in favor of the program. But so far, I haven’t seen anything that persuades me and a lot to make me keep checking my wallet.

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Posted in Economic development, Planning, Politics

Tagged James A. Bacon

VLDS Big Data Just Got Bigger

Posted on February 18, 2016 by James A. Bacon | 1 comment

by James A. Bacon

This blog post is geeky, but it’s important — so stick with me! If you favor public policy based on what works as opposed to public policy based on ideology or political muscle, then you should be very encouraged by the progress made by the Virginia Longitudinal Data Survey (VLDS) in incorporating new government data sets.

The VLDS started as a master database of mainly educational and employment data. Now it is adding poverty-related data from the SNAP (food stamp), TANF (Temporary Assistance for Needy Families) and VIEW (Virginia Initiative for Employment not Welfare) programs from 2005 to 2014. Coming up: data sets for foster care, child care, child protective services.

Combining all this data will allow researchers to provide more authoritative answers to a host of public policy questions.

For example, writes Jeff Price in a recent VLDS blog post, “We have never been able to evaluate the impact food security, as provided by the SNAP program, has on the academic success of young children. Do children whose family receives food stamps miss fewer days of school and do better on standardized tests than children from other low income families that do not participate in the SNAP program?”

Previously, it was a bureaucratic nightmare for researchers to obtain this data. VLDS eliminates many of the obstacles by anonymizing the data, that is, stripping out personal identifiers. Price continues:

We now have the opportunity to describe the entire population of citizens we serve in ways we never could before. This will provide insight into patterns and relationships we either knew existed but couldn’t quantify, or never knew existed. It will allow agencies to better evaluate their program policies and the approaches and strategies used in the past to determine what works best. In some cases current assumptions will be confirmed. In others prevailing assumptions will be shown to be incorrect.

The value of the VLDS cannot be overstated. For population studies it is a game changer.

Bacon’s bottom line: VLDS has enormous potential. My only beef is that the research conducted so far has addressed extremely narrow-bore topics, and I have yet to see any eye-opening findings. (Click here and scroll down to “VLDS Research” to view the research projects based on VLDS data.) Hopefully, that will change as new data sets are added and researchers are able to address an ever wider array of questions.

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Posted in Education (K-12), Labor & workforce, Planning, Politics, Poverty & income gap

Tagged James A. Bacon

A Humble Proposal for Addressing Recurrent Flooding

Posted on January 22, 2016 by James A. Bacon | 3 comments

Flooding in Portsmouth. Image credit: Virginia Newsletter

By James A. Bacon

The recurrence of tidal/surge flooding in Hampton Roads has increased from 1.7 days of “nuisance” flooding yearly in 1960 to 7.3 days in 2o14, and with continued land subsidence and sea-level rise, the flooding will become even more common. So say the authors of “Building Resiliency in Response to Sea Level Rise and Recurrent Flooding: Comprehensive Planning in Hampton Roads,” published in the January 2016 issue of the Virginia News Letter.

Of all the region’s localities, according to the paper, the City of Portsmouth has moved the fastest to incorporate adaptive strategies into its comprehensive planning. The low-lying city of about 100,000 citizens is extremely vulnerable, with 38% of households lying within AE Flood Zones and approximately 50 miles of roadway located less than 4.5 feet above mean high water.

Last year the city interviewed nearly 2,000 households to ask about the frequency of flooding, flood-related loss, risk perception and mitigation behavior. Nearly half the residents surveyed reported being unable to get in or our of their neighborhoods in the past year due to flooding; more than a quarter reported being unable to get to work. More than 18% report suffering some form of damage to vehicles.

“There is strong perception among residents that future economic opportunities will be curtailed by changing sea levels; this view is even more strongly held by residents who experience difficulty getting in or out of their neighborhoods due to flood in or out of their neighborhoods due to flood,” the authors write. “About 30 percent of residents agree that flooding specifically has negatively impacted the value of their homes.”

The authors are less clear about what can be done. They allude to three broad strategies for dealing with flooding: retreat, protection and accommodation. Retreat might entail restricting development in low-lying areas. Protection might include sea walls, living shorelines, improvement storm water drains, better street drainage or ditch maintenance. Accommodation might mean accepting inconvenience, disruption and property loss as the “new normal.” But the paper provides little guidance as to when and where these strategies might be appropriate or how they might be paid for.

Bacon’s bottom line: The authors note that households can adapt by installing pumps and drains, relocating HVA systems or buying higher-riding automobiles. But, other than relocating their residences to higher land, there doesn’t seem much else that individual households can do to protect themselves. Some kind of collective action is necessary.

Here’s the problem: In some areas, improvements will be too costly. In others, the real estate is of such low value, it’s not worth saving even at modest cost. But if local governments spend money on one neighborhood, every other neighborhood in the political jurisdiction will want their piece of the pie. And why not? Their residents pay taxes, too.

Flooding hot spots in Portsmouth. Image credit: Virginia Newsletter.

Here’s an idea I throw out for discussion: Create community development authorities that encompass those areas (such as the yellow-red islands shown in map of Portsmouth to the right) that are most prone to flooding. A flood-mitigation plan is developed for each district, with improvements to be paid for with taxes raised from property owners in that district. Then put it to a vote of the residents of the district. Let those closest to the situation weigh the costs (a higher tax) versus the benefits (less property damage, flood-free streets, etc.) and decide for themselves.

The result would be a public-improvement plan more tightly aligned with the local circumstances and less vulnerable to political log-rolling than anything a city-wide effort could pull off and far easier to sell politically.

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Posted in Disaster planning, Economic development, Environment, Infrastructure, Planning, Resilience

Tagged Climate change, James A. Bacon

Alpha Natural Resources: Running Wrong

Posted on July 24, 2015 by Peter Galuszka | Leave a comment

Alpha miners in Southwest Virginia
(Photo by Scott Elmquist)

By Peter Galuszka

Four years ago, coal titan Alpha Natural Resources, one of Virginia’s biggest political donors, was riding high.

It was spending $7.1 billion to buy Massey Energy, a renegade coal firm based in Richmond that had compiled an extraordinary record for safety and environmental violations and fines. Its management practices culminated in a huge mine blast on April 5, 2010 that killed 29 miners in West Virginia, according to three investigations.

Bristol-based Alpha, founded in 2002, had coveted Massey’s rich troves of metallurgical and steam coal as the industry was undergoing a boom phase. It would get about 1,400 Massey workers to add to its workforce of 6,600 but would have to retrain them in safety procedures through Alpha’s “Running Right” program.

Now, four years later, Alpha is in a fight for its life. Its stock – trading at a paltry 55 cents per share — has been delisted by the New York Stock Exchange. After months of layoffs, the firm is preparing for a bankruptcy filing. It is negotiating with its loan holders and senior bondholders to help restructure its debt.

Alpha is the victim of a severe downturn in the coal industry as cheap natural gas from hydraulic fracturing drilling has flooded the market and become a favorite of electric utilities. Alpha had banked on Masset’s huge reserves of met coal to sustain it, but global economic strife, especially in China, has dramatically cut demand for steel. Some claim there is a “War on Coal” in the form of tough new regulations, although others claim the real reason is that coal can’t face competition from other fuel sources.

Alpha’s big fall has big implications for Virginia in several arenas:

(1) Alpha is one of the largest political donors in the state, favoring Republicans. In recent years, it has spent $2,256,617 on GOP politicians and PACS, notably on such influential politicians and Jerry Kilgore and Tommy Norment, according to the Virginia Public Access Project. It also has spent $626,558 on Democrats.

In 2014-2015, it was the ninth largest donor in the state. Dominion was ahead among corporations, but Alpha beat out such top drawer bankrollers as Altria, Comcast and Verizon. The question now is whether a bankruptcy trustee will allow Alpha to continue its funding efforts.

(2) How will Alpha handle its pension and other benefits for its workers? If it goes bankrupt, it will be in the same company as Patriot Coal which is in bankruptcy for the second time in the past several years. Patriot was spun off by Peabody, the nation’s largest coal producer, which wanted to get out of the troubled Central Appalachian market to concentrate on more profitable coalfields in Wyoming’s Powder River Basin and the Midwest.

Critics say that Patriot was a shell firm set up by Peabody so it could skip out of paying health, pension and other benefits to the retired workers it used to employ. The United Mine Workers of America has criticized a Patriot plan to pay its top five executives $6.4 million as it reorganizes its finances.

(3) Coal firms that have large surface mines, as Alpha does, may not be able to meet the financial requirements to clean up the pits as required by law. Alpha has used mountaintop removal practices in the Appalachians in which hundreds of feet of mountains are ripped apart by explosives and huge drag lines to get at coal. They also have mines in Wyoming that also involve removing millions of tons of overburden.

Like many coal firms, Alpha has used “self-bonding” practices to guarantee mine reclamation. In this, the companies use their finances as insurance that they will clean up. If not, they must post cash. Wyoming has given Alpha until Aug. 24 to prove it has $411 million for reclamation.

(4) The health problems of coalfield residents continue unabated. According to a Newsweek report, Kentucky has more cancer rates than any other state. Tobacco smoking as a lot to do with it, but so does exposure to carcinogenic compounds that are released into the environment by mountaintop removal. This also affects people living in Virginia and West Virginia. In 2014, Alpha was fined $27.5 million by federal regulators for illegal discharges of toxic materials into hundreds of streams. It also must pay $200 million to clean up the streams.

The trials of coal companies mean bad news for Virginia and its sister states whose residents living near shut-down mines will still be at risk from them. As more go bust or bankrupt, the bill for their destructive practices will have to borne by someone else.

After digging out the Appalachians for about 150 years, the coal firms have never left coalfield residents well off. Despite its coal riches, Kentucky ranks 45^th in the country for wealth. King Coal could have helped alleviate that earlier, but is in a much more difficult position to do much now. Everyday folks with be the ones paying for their legacy.

Renewable Energy: A Tale of Two Virginias

Posted on July 22, 2015 by Peter Galuszka | Leave a comment

Apologies to Mr. Dickens

By Peter Galuszka

Call it a tale of two Virginias – at least when it comes to renewable energy.

One is the state’s traditional political and business elite, including Dominion Resources and large manufacturers, the State Corporation Commission and others.

They insist that the state must stick with big, base-loaded electricity generating plants like nuclear and natural gas – not so much solar and wind –to ensure that prices for business are kept low. Without this, recruiting firms may be difficult.

The other is a collection of huge, Web-based firms that state recruiters would give an eyetooth to snag. They include Amazon, Google, Facebook and others that tend to have roots on the West Coast where thinking about energy is a bit different.

Besides the Internet, what they have in common is that they all vow to use 100 per cent of their electricity from renewable sources. What’s more, to achieve this goal, all are investing millions in their own renewable power plants. They are bypassing traditional utilities like Dominion which have been sluggish in moving to wind and solar.

So, you have a strange dichotomy. Older business groups are saying that the proposed federal Clean Power Plan should be throttled because it would rely on expensive renewables that would drive away new business. Meanwhile, the most successful and younger Web-based firms obviously aren’t buying that argument.

I have a story about this in this week’s Style Weekly.

In Virginia, the trend is evidenced by Amazon Web Services, which sells time on its cloud-computing network to other firms. It is joining a Spanish company, Iberdola Renewables LLC, in building a 208-megawatt wind farm on 22,000 acres in northeastern North Carolina, just as few miles from the Virginia border. Three weeks earlier, on June 18, Amazon announced it plans a 170-megawatt solar farm in Accomack County on the Eastern Shore.

Dominion, which has renewable projects in California, Utah and Indiana and the beginnings of some small ones in Virginia, says it is not part of the projects. It could possibly get electricity indirectly from them. Amazon’s power will be sold on regional power grids to business and utilities.

When they complete such sales, the Net-focused firms will get renewable energy certificates that can be used to show that they have put as much renewable energy into the electricity grid as they have used, says Glen Besa, director of the Virginia chapter of the Sierra Club.

This will be especially important in Northern Virginia where there are masses of computer server farms used by Amazon and others. These centers used 500 megawatts of power in 2012 and demand is expected to double by 2017. Also, for years, the region has hosted such a large Internet infrastructure that at least half, perhaps 70 percent, of the Net’s traffic goes through there.

Part of the back story of this remarkable and utility-free push for renewables is that environmental groups are shaming modern, forward-looking firms like Amazon to do it.

Amazon Web Services was the target of criticism last year when Greenpeace surveyed how firms were embracing renewable energy. The report stated that the firm “provides the infrastructure for much of the Internet” but “remains among the dirtiest and least transparent companies” that is “far behind its major competitors.”

Dominion also got bashed in the report. Greenpeace says, “Unfortunately, Dominion’s generation mix is composed of almost entirely dirty energy sources.” Coal, nuclear and natural gas make up the vast majority of its power sources.

Its efforts to move to renewable sources have been modest at best. In regulatory filings, Dominion officials have complained that renewable energy, especially wind, is costly and unreliable although they include it in their long-term planning.

Dominion has plans for 20-megawatt solar farm near Remington in Fauquier County and is working on a wind farm on 2,600 acres the utility owns in southwestern Virginia. It has renewable projects out-of-state in California, Utah and Indiana. The output is a fraction of what Amazon plans in the region.

In a pilot offshore wind project, Dominion had planned on building two wind turbines capable of producing 12 megawatts of power in the waters of Virginia Beach. It later shut down the project, saying new studies revealed it would cost too much. It says it might continue with a scaled down project if it got extra funding, such as federal subsidies.

The utility says it must build more natural gas plants and perhaps build a third nuclear unit at its North Anna power plant to make sure that affordable electricity is always available for its customers.

As Amazon announced its new renewal projects, Greenpeace has changed its attitude about the company. Now it praises Amazon for its initiatives in Virginia and North Carolina. “I would like to think we have pushed Amazon in the right direction,” says David Pomerantz, a Greenpeace spokesman and analyst. He adds that Amazon has some work to do in making its energy policies “more transparent.”

One unresolved issue is that two neighboring states, North Carolina and Maryland, have “renewable portfolio standards” that require that set percentages of power produced there come from renewables. West Virginia had such a standard but has dropped it. In Virginia, the standard is voluntary, meaning that Dominion is under no legal obligation to move to solar or wind. It also gives the SCC, the power rate regulator, authority to nix new power proposals because they might cost consumers too much, providing Dominion with a handy excuse to move slowly on renewables.

Another matter, says Pomerantz, is whether Virginia’s legislators will enact “renewable energy friendly policies” or watch hundreds of millions of dollars in renewable project investments go to other states, such as North Carolina.

So, you have a separate reality. Traditionalists are saying that expensive renewables are driving away new business, while the most attractive new businesses are so unimpressed with traditionalist thinking that they are making big investments to promote renewable energy independently.

It isn’t the first like this has happened.

Why Can’t Dominion Do Big Wind Projects?

Posted on July 15, 2015 by Peter Galuszka | 26 comments

A wind farm in Texas

By Peter Galuszka

Down in the swamplands and farmlands of northeastern North Carolina, construction has begun on a huge new wind farm that will be the largest so far in the southeastern U.S.

Iberdrola Renewables LLC, a Spanish firm, has begun construction on the long-awaited $600 million project with financial help from Amazon, which also plans a solar farm on Virginia’s Eastern Shore. The Tar Heel project will stretch on 22,000 acres and could generate about 204 megawatts of power.

The curious part of this is that the farm is only about 12 miles of the Virginia line northwest of Elizabeth City, N.C.

That’s not far at all from the Old Dominion. But Dominion Resources, Virginia’s leading utility, has been sluggish in pushing ahead with wind, citing concerns about cost. It pulled the plug on an offshore pilot project involving only two wind turbines that would have a relatively tiny power output off of Virginia Beach.

So why were renewable energy firm executives and public officials celebrating yesterday in North Carolina and not Virginia?

That’s an easy one. North Carolina has a renewable portfolio standard that requires utilities to produce at least 12.5 percent of their power from renewables. Virginia has a similar plan, but being a “pro-business” state, Virginia has made it voluntary. So, Dominion doesn’t really have to do anything at the moment to push to wind, solar or other renewable.

It might have more incentive to do so when the U.S. Environmental Protection Agency finalizes rules on its Clean Power Plan later this year, but no one really knows what the final form will be.

Nonetheless, Dominion has marshaled its money and its lobbyists to change how regulators over see it in this regard. The General Assembly, some of whose members get huge contributions from Dominion, hurriedly passed a bill this session changing the rules in ways that Dominion wants.

To be sure, Dominion has some wind farms in other states. But here in Virginia, it is pitching the old saw that wind power is too expensive and unreliable and so on.

It may have been at one time. When Iberdrola pitched the plan to put 102 wind turbines on 22,000 acres in N .C., the common wisdom was that the southeast just doesn’t have the natural wind power. The winds are too light, usually.

But this changed when new technology allowed wind turbines to go from about 260 feet into the air to more than 460 feet or almost as much as the Washington Monument. Once that happened, the Carolina wind farm became a go. Of course, critics say that wind turbines have negatives such as their capacity to slice apart birds and be an eyesore.

What’s better for humanity, however? Coal or even natural gas plants or ones that have no pollution, especially carbon, footprint?

Another interesting aspect of this story is how Amazon is getting involved. The retailing giant is becoming an electric renewable utility in its own right. It wants to have renewable power run the massive servers that it relies upon to do business. But instead of screwing around with hidebound, traditional utilities like Dominion that are often reluctant to warmly embrace renewable energy, Amazon is doing it itself.

Amazon is also putting in a 170 megawatt solar farm in Virginia’s Accomack County which has terrain similar that of Perquimans and Pasquotank Counties in North Carolina that will host the wind farm.

To be fair to Dominion, the utility has a legal responsibility to supply its customers with electricity on a 24/7 basis. It needs a diverse energy mix to be able to do that.

But one wonders why Dominion keeps pushing this bugaboo about wind. Its sister utilities have raised the same cry. That could be why wind represents only 5 per cent of the electrical mix in the U.S., even though there are wind farms in 36 states.

It’s different in other countries. Denmark gets 28 percent of its power from wind. Spain, Portugal and Ireland each get 16 percent from wind.

Isn’t it time for Dominion to get off the dime and do more with wind, rather than using its deep pockets to get paid-for Virginia politicians to do its bidding and change regulatory rules at its whim?

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Posted in Courts and law, Demographics, Economic development, Economy, Energy, Entrepreneurialism, Environment, Infrastructure, Labor & workforce, Land use & development, Media, Money in politics, Planning, Politics, Property rights, Regulation

Tagged University of Virginia

Why Can't Dominion Do Big Wind Projects?

Posted on July 15, 2015 by Peter Galuszka | Leave a comment