Category Archives: Property rights

WTJU Podcast: COVID-19 and the Economy

By Peter Galuszka

Here’s is the twice-monthly podcast produced by WTJU, the official radio station of the University of Virginia. With me on this podcast  are Nathan Moore, the station general manager, and Sarah Vogelsong, who covers, labor, energy and environmental issues across the state for the Virginia Mercury, a fairly new and highly regarded non-profit news outlet. Our topic is how Virginia is handling the economic fallout from the COVID-19 pandemic.

Notes from the Right Wing Echo Chamber

By Peter Galuszka

On Wednesday, I was standing next to the Capitol grounds in Richmond watching brightly decorated cars and pickups drive on 9th Street, their horns blaring.

I was attending the drive by protest rally on assignment for Style Weekly and happened to speak to Jason Roberge, a Spotsylvania County resident who is one of several Republicans hoping to oust U.S. Rep. Abigail Spanberger, a former covert CIA officer who represents the 7th Congressional district.

Roberge was there to protest what he says is Gov. Ralph Northam’s “terrible job” in temporarily shutting down businesses to prevent the spread of the COVID 19 virus. The rally was part of a series of protests across the country that are being set up on cue from right-wing activists.

Roberge told me: ”I hear he’s (Northam’s) down on North Carolina beach while this is going on.” As he spoke the House of Delegates was holding a special session under an outdoor tent nearby while the Senate presided at the Science Museum of Virginia.

Northam at the beach? It turns out that the conservative echo chamber has been peddling a story, firmly denied by Northam’s office, that he was at his house in Manteo, N.C. not far from the beaches at Nags Head during the special General Assembly session. Continue reading

Dare County, N.C., closes its borders

By DJ Rippert

From Outer Banks to Outer Mongolia. Dare County, N.C. issued orders last week closing its borders to non-residents. Dare is a coastal county just south of Currituck County, N.C., which borders Virginia. Many Virginians know Dare County from Outer Banks vacations in towns such as Duck or fishing trips launched from Manteo. Checkpoints into and out of Dare County are apparently now manned by law enforcement officers who will check IDs to ensure that travelers are residents of Dare County or have pre-authorized transit permits issued by Dare County. As of last week there were no confirmed cases of COVID-19 in Dare County, and it seems county officials want to keep it that way.

Is it legal? Some are questioning whether officials in Dare County can legally enforce a prohibition against non-residents entering the county. Apparently they can. North Carolina law, specifically N.C. General Statute 166A-19.31, allows local officials to control access and ingress to their jurisdiction during times of emergency. Given the Coronavirus outbreak, local officials in Dare County have decided to invoke that law.

We want your taxes but not you. Dare County has many vacation homes owned by non-Dare County residents. These homes are typically expensive and generate a material amount of tax revenue for the county. Originally, non-resident owners of these homes were allowed entry into the county by showing their tax receipts for the property along with valid ID. Yesterday that changed. Dare County is now excluding non-resident property owners from entering the county.

Commentary. I was originally predisposed to giving Dare County officials the benefit of the doubt regarding the border closure. For one thing all those expensive and unoccupied beach homes could be targets for burglars taking advantage of the Coronavirus outbreak. However, my perception changed when those same officials decided to bar entry for non-resident property owners. These are people who have invested in the county, who pay taxes to the county and who should have every right to go to their properties. I have no idea if Virginia law would permit the same type of buffoonery from our local officials. Let’s hope not  However, even if such actions are allowed, I hope no Virginia jurisdiction would follow the selfish, arrogant and small minded actions of the officials in Dare County, N.C.

More Mobile Homes, Please

Smitty’s Mobile Home Park in Norfolk

by James A. Bacon

The good news is that the poverty lobby has recognized that mobile home parks provide a valuable source of affordable housing in Virginia. The bad news is that… the poverty lobby wants to help.

There are about 600 mobile home parks in Virginia. The average sales price for a single-width mobile home is about $53,000 (not including lots), a fraction of the $280,000 median price for a single-family house. These parks provide affordable housing for tens of thousands of Virginians — more than 11,400 in Central Virginia alone.

One way to approach mobile homes in Virginia is to say, “Fantastic! A source of affordable housing. How can we open up more land for development of mobile home parks? How can we increase the supply and give poor people more options for where to live and whom to rent or buy land from?”

Another way to approach mobile homes is to look at the negatives. It turns out that many are in disrepair. Figure that — homes owned by poor people are in disrepair. Not only that, Christie Marra, director of housing advocacy at the Virginia Poverty Law Center, tells Virginia Public Media (VPM), many trailer parks have less than desirable surroundings. “They didn’t have street lights, they didn’t have paved roads, they didn’t have up-to-date electricity or sewer systems.” Continue reading

A Closer Look at those Tenant-Eviction Stats

Graphic credit: VPM

Virginia’s eviction-reform movement gained considerable momentum last year when the New York Times, citing data of the Princeton Eviction Lab, published a story asserting that four Virginia cities numbered in the top 10 cities with the highest eviction rates in the country. Richmond supposedly had an eviction rate five times the national average. Armed with this scandalous data, renters rights advocates pressed successfully for changes to state law that make it somewhat easier for tenants to avoid eviction.

Now a VPM (Virginia Public Media) investigation has revealed significant flaws in the data. The first problem is one that I identified shortly after the Times article was published: The reason Virginia cities stood out so prominently in the Top 10 list was not that Virginia laws are tougher on renters but because Virginia’s city/county form of government skewed the data.

A second problem is that Princeton Eviction Lab cobbled together different data sets for different states. The Lab was able to obtain court data directly from 12 states, including Virginia. For the others, they used data from private sources. Continue reading

Taking Some Pain Out of Eminent Domain

Senator Frank Ruff of Clarksville. Taking some of the pain out of eminent domain.

Four successful bills heading for Governor Ralph Northam’s desk may combine into a measurable shift in Virginia’s condemnation laws in favor of the targeted landowners.  They may also spark a race to the courthouse between now and when some go into effect July 1.

The biggest financial impact may come from Senator Frank Ruff’s Senate Bill 1256, which eliminates state tax on any capital gain resulting from the forced sale.  The subtraction for any capital gain applies to both individual and corporate landowners and applies to any transaction after January 1 of this year.  Too bad if you took that check in December.   Continue reading

SCC Examiner Recommends Shorter Transmission Line Towers for Augusta

Image source: Staunton News Leader

Dominion Energy wants to rebuild 17.7 miles of a 500 kV power line through Augusta County to meet the electricity load of its western Virginia customers, and as long as it’s rebuilding the line, increase the height to accommodate an additional 230 kV line should the need for it ever arise. Building a double-circuit structure would add $6.1 million to the project but save between $44 million and $55 million if the utility had to come back later to add the second transmission line.

Local landowners, distressed by the visual impact on their property, oppose the higher line, and they want Dominion to pay between $1.3 million and $2.5 million extra to add a coating that would give the bright galvanized steel a brown color.

In a ruling issued earlier this month, State Corporation Commission hearing examiner Ann Berkebile ruled that the rebuilding of the existing Dooms-Valley 500 kV line is justified by the public convenience and necessity but that spending the additional money for taller towers is not. Further, she found that the expenditure of additional money to chemically dull the towers is warranted. The case now goes to the SCC’s three judges for a final ruling. Wrote Berkebile:

The ability to address a need that could arise at some time in the future at an incremental increased cost (and at a lower cost than is likely to be incurred should a future need arise) does not outweigh the actual detrimental impacts of significantly taller towers upon the scenic and historic assets of August County. Under the circumstances, I conclude that the Commission should approve the use of less expensive, shorter lattice towers for the rebuild.

Berkebile’s findings come at a time in which Dominion and other electric utilities are investing massive sums to upgrade their electric grids. Over the next 15 years, Virginia likely will see the retirement of more coal-fired plants and the construction of more solar farms and gas combustion-turbine plants. An open question is whether Dominion will be able to re-license its four nuclear power units. The grid, designed for a traditional configuration of electric-power generation also will need to be upgraded to meet a new configuration in which intermittent solar and wind sources play a role.

Dominion consulting engineer Peter Nedwick identified three scenarios that would support the need for the additional 230 kV line through Augusta County, according to Berkebile’s summary of the testimony. In her report, however, Berkebile did not discuss the scenarios or assess how likely any one of them was to occur. SCC staff, she stated, was “unable to verify” a need for taller towers to accommodate a 230 kV line.

In his testimony, Nedwick also cited three instances in which single-circuit structures proved inadequate and Dominion was required to come back and rebuild transmission lines within a double-circuit structure. Given the relatively low cost of preserving the flexibility, summarized Berkebile, “he continued to support the double circuit option as a means of maximizing the use of existing [Right of Way] while maintaining flexibility to meet future demands and changes in [North American Electric Reliability Corporation] Reliability Standards.

The SCC staff supported the chemical dulling option to reduce the visual impact of the pipelines on the Augusta County landscape. A relatively new product, Natina, gives galvanized steel a brown color. According to a Dominion engineer, testing shows that the coating will not maintain a uniform appearance over time. Also, it will increase rust, be difficult to paint over, and hinder the natural development of a patina on the steel girders. Alternatives include COR-TEN weathering steel, hot-dipped galvanized steel, a chemically dulled (pre-dulled) steel.

Oyster Wars, Viewsheds and Property Rights

An oysterman at work in Virginia Beach’s Lynnhaven River. Photo credit: Associated Press

One might think all Virginians would be delighted by the resurgence of the oyster population in the Chesapeake Bay. But more oysters means more oystermen, and more oystermen means more strange men trudging around the shallows and dragging around ugly cages within the sight of wealthy waterfront property owners.

The resurgence has led to resistance from coastal homeowners who want to maintain picturesque views and has fueled a debate over access to public waterways, reports the Associated Press.

Homeowners say the growing number of oystermen — dressed in waders and often tending cages of shellfish — spoil their views and invade their privacy. Residents also worry about less access to the water and the safety of boaters and swimmers.

Low tides often expose oyster cages, usually accompanied by markers or warning signs that protrude from the surface. In some places, cages float.

“All of sudden you have people working in your backyard like it was some industrial area,” said John Korte, a retired NASA aerospace engineer. “They may be a hundred feet away from someone’s yard.”

In a 2012 lawsuit in York County focused on the right of two oystermen to use property in a residential neighborhood for industrial-scale harvesting and cleaning operations. The new trend goes much further. In Virginia, Maryland and Delaware, homeowners are seeking greater restrictions against oystermen activities that offend their sensibilities. But the oystermen aren’t rolling over.

“Oftentimes, affluent and new members of the community have the point of view that they own the water in front of them, which is really not true,” said Bob Rheault, executive director of the East Coast Shellfish Growers Association. “We need to win back our social license to farm.”

Bacon’s bottom line: The fate of oysters, which are making a comeback in large part to the efforts of oystermen who have an economic incentive to create oyster reefs. Oysters are a keystone species in the Chesapeake Bay. As a matter of public policy, this socially beneficial activity should be encouraged, not discouraged.

But recovery of the oyster population is being stymied, in part, by a massive redefinition of property rights — in the popular culture, if not yet in the law. Owners of waterfront property are effectively trying to extend their property rights into public waterways. They are asserting a right to an undefiled viewshed. When they purchased their property, they paid a premium for pristine water views. When oyster populations revived and oystermen began working shallows in public waters that their forebears had abandoned decades ago, property owners perceived them as interlopers.

This is similar to a trend in other places, most notably in rural areas with gorgeous views of mountains, hills, woodlands, farms, rivers and streams. Once upon a time, Virginians purchased rural property for their productive value as farms or timberland. Over the years, people began buying property for the scenery. They paid a premium price for their views, and they objected to anything — be it a cell tower, transmission line, gas pipeline, or industrial facility — that diminished those views.

Here is a photo of the view I observed last month while dining on the porch of the Pippin Hill Farm winery. The owners had built the winery to take full advantage of the beautiful view. Gauging by the large number of people who visited that Saturday to enjoy meals and indulge in wine tastings, the enterprise is highly successful. Now, imagine someone proposing to disrupt that image. I can guarantee that the winery owners would rise up in opposition — not merely for aesthetic reasons but because their livelihood would be threatened.

I’m not taking sides in the dispute between landowners and energy companies, or property owners and oystermen. I am not even drawing a moral equivalence. Oystermen are working in public waters, while inland landowners object to energy companies using eminent domain to cross their land. I am saying that the rise of viewsheds as a determinant of property value is fueling conflict that did not previously occur. I’m not sure that our system of laws and regulations has caught up.

Will NIMBYs Thwart SolUnesco Solar Plan?

SolUnesco CEO Francis Hodsoll addresses the Albemarle County Board of Supervisors

SolUnesco CEO Francis Hodsoll addresses the Albemarle County Board of Supervisors. Photo credit: Charlottesville Tomorrow.

Not all barriers to solar energy emanate from Richmond. Take Albemarle County, for example. The county zoning code outlaws solar farms, we learn from Charlottesville Tomorrow.

“The current zoning ordinance allows for the transmission and distribution of energy, but not the generation of energy,” said county planner Margaret Maliszewski at Wednesday’s Board of Supervisors meeting.

The issue arose because Reston-based SolUnesco wants to submit an application to develop an 11-megawatt photovoltaic solar energy generation system in southern Albemarle. “Our project is for the wholesale supply of energy that goes onto a wholesale network of transmission and distribution lines and that allows people to buy energy from our project or for a utility to buy energy directly from us,” said SolUnesco CEO Francis Hodsoll.

Albemarle Supervisors directed the planning department to study the issue. But, while the Charlottesville-Albemarle area may be home to many solar-loving greenies, don’t take it for granted that county planners will roll over for SolUnesco.

“As a member of a rural neighborhood, the first thing that comes to mind is protection of the rural areas,” said Phillip Fassieux at the board meeting. “We all love solar power, but at what cost? … “How will residents of Albemarle benefit specifically from turning over part of our rural county to its use? Will we see reductions in electricity rates?”

Everyone loves solar in theory, but opposition frequently surfaces locally when someone proposes building a solar farm near them. Others object to the idea of vast solar farms displacing agricultural uses of the land. SolUnesco’s proposed 11-megawatt solar farm, big enough to supply demand for about 2,000 households, would require between 70 and 80 acres of land. Typically, solar farms include vegetated buffer zones to screen the solar panels from view.

(Another potential objection to solar is that, given the state formula for distributing school aid, a big capital investment in solar could actually hurt a county financially. I’ll deal with that issue in a separate post.)

Bacon’s bottom line: Call me a Neanderthal, but I support private property rights. I see no justification for Albemarle County — or any county — to impose zoning restrictions prohibiting solar farms. If a property owner decides that installing solar panels represents a use of land preferable to agriculture or timber, that should be his decision to make. Counties have no business intervening unless the land use creates a nuisance to neighbors. Unlike wind turbines, solar panels create no noise, are easily hidden from view, and don’t harm wildlife. NIMBYs need to get a life.

And one more thing… The SolUnesco pitch to landowners asserts that its 25-year leases will generate above-market returns for landowners with an inflation escalator. The company assumes all costs and risks associated with developing the project — the landowner just collects checks for 25 years.

Rural Virginia is hurting. It has few resources of value in the knowledge economy. One thing it does have is land. Solar energy represents a rare opportunity for Virginia’s rural economy. There are many complex issues surrounding the integration of solar into the electric grid that need to be resolved before we see widespread deployment, but land use should not be one of them.

Hundreds Seek Pipeline Construction Jobs

Atlantic Coast Pipeline construction will create 7,200 temporary jobs.

Pipeline construction.

The proposed Atlantic Coast Pipeline (ACP) is highly controversial in Augusta County, where property owners fear pipeline construction will jeopardize water supplies, create a safety hazard for nearby residents, and drive down property values. But hundreds of mechanics, welders, electricians and other blue-collar workers see the $5 billion project as a potential boon.

By noon Thursday, 157 people had signed up at the Augusta Expo put on by the ACP to inform local vendors and workers of opportunities to work on the 600-mile pipeline, according to the News Virginian.

At peak construction in 2018, said ACP spokesman Aaron Ruby, the pipeline will employ 7,220 workers.

Wrote the News Virginian:

Scott Bazzarre, the founder and president of Budget Electrical & Mechanical in Palmyra, wants to be considered for electrical work on the pipeline. He calls the pipeline a boon for workers like him and for the economy. “It’s a no-brainer, not just for the tax base but for a struggling economy.”

Unlike landowners, who will have to live with the pipeline as a permanent fixture on their property, construction workers will benefit only for the duration of the construction project. But there are undoubtedly thousands of workers who think like Bazarre: “We have to have good-paying jobs for my kids and grandkids.”

Bacon’s bottom line: Is it a stretch to suggest that the ACP pipeline controversy reflects the same societal schisms as the 2016 election: the propertied, educated class versus blue collar workers struggling to survive economically? Such a framework over-simplifies a complex reality, but I think there’s something to it. Even though Virginia’s unemployment rate stands at 3.7%, theoretically full employment, rural/small town Virginia has a higher jobless rate, and the “unemployment” figures don’t take into account discouraged workers who have dropped out of the workforce. Pipeline construction would throw construction workers a lifeline.

On the other hand, property owners can’t be blamed for wanting to be left alone. The value of land in the Shenandoah Valley is determined increasingly by aesthetics — bucolic rural landscapes, mountain views, wildlife habitats — not by farming/timbering income streams that traditionally determine compensation for land taken by eminent domain. One can argue that Virginia’s eminent-domain laws do not provide fair compensation for lost value.

In any case, Virginia’s blue collar workers have been largely invisible in the pipeline debate until now. Don’t be surprised to see ACP maximize their exposure.

Pipelines Offer Hope, Provoke Despair

Fern and Earl Echols stand near a pipeline marker on their property in Giles County. Photo credit: Roanoke Times

Fern and Earl Echols stand near a pipeline market on their property in Giles County. Photo credit: Roanoke Times

Recent articles have highlighted rural communities that stand to win and lose from proposed natural gas pipeline mega-projects crossing the state.

On the hopeful side, the Daily Press reports that Isle of Wight County economic development director Tom Elder would like to build a lateral line off the proposed Atlantic Coast Pipeline (ACP) to supply gas to the county’s intermodal industrial park. Gas from the interstate pipeline would supplement supplies made available by local gas distributor Columbia Natural Gas.

“If we had a heavy user, there’s some stipulations that Columbia couldn’t provide at this point,” Elder told the Isle of Wight Board of Supervisors.

Said County spokesman Don Robertson: “We’d love to have a gas line at the intermodal park — it’s going to make that park more marketable. … How and when that happens is obviously going to be determined by the amount of funding and the board’s willingness to do that.”

Isle of Wight joins Brunswick County, Buckingham County and others that view natural gas as a potential boon to their industrial development efforts.

By contrast, residents of Newport in Giles County worry that the economy of their small town will suffer from the Mountain Valley Pipeline. “Newport, more than any community in the pipeline’s proposed path, is potentially going to take a direct hit in the heart of our historic district, while avoiding more affluent communities and homes,” lifelong resident Perry Martin told the Roanoke Times.

Initially, Newport residents expressed concerns that the MVP route would run close to a school, recreation center and rescue squad building. When the pipeline company adjusted the route closer to the center of the town, foes said it threatened other assets such as an ante-bellum church and the historic C.A. Hardwick house. If the pipeline exploded — admittedly, an unlikely event — the potential impact zone would encompass those buildings and several others.

Pipeline companies attempt to negotiate with landowners to obtain the right to cross their land, and often adjust their routes if they can’t reach agreement. But sometimes altering the route is impractical, in which case they can invoke the power of eminent domain on the grounds that their projects are a public necessity. Communities along the route of the ACP in Augusta, Nelson and neighboring counties voice similar fears to the residents of Newport.

“I just don’t understand how people can come in and just take what you’ve worked your whole life for,” said resident Earl Echols. “Where’s 80-year-old people going to go and start over?”

The Cooter Controversy as Window into the New Class/Culture War


Cooter’s in the Country store in Sperryville

by James A. Bacon

Ben Jones, the former actor and Georgia congressman, has built a small retail empire around the character Cooter he played in the “Dukes of Hazzard” television series. In addition to his Cooter’s store in Rappahannock County, Va., he has opened stores in Nashville and Gatlinburg, Tenn. But Jones has to contend with a force more formidable and arbitrary than old Boss Hogg in his home town of Sperryville: zoning laws.

Jones has announced that the Cooter’s store in Sperryville will close because, according to a Wall Street Journal account, Rappahannock County “snobs,” many of whom are refugees from the Washington metropolitan area, won’t let his customers park behind the store, an area zoned agricultural.

“It has become a cause celebre for people who don’t like us,” Jones told the Journal. “They don’t like our store. They don’t like our people. They don’t like our flags. They don’t like our culture.”

Jones, whose politics can best be described as Southern blue dog Democrat, was born poor in Portsmouth, Va. He got his big break playing Cooter, a mechanic who helped the Duke boys and cousin Daisy outwit Hazzard County’s Boss Hogg. He parlayed his celebrity into two terms in Congress in Georgia, then, after losing to Newt Gingrich, he moved to Virginia and built a business on “Dukes of Hazzard” nostalgia. He dabbled in politics here, too, running unsuccessfully against former Congressman Eric Cantor. Tens of thousands of fans attend his show reunions every year.

The owner of the Sperryville land that Jones leases asked the planning commission to recommend rezoning the fields behind the store to allow parking and an eating area, according to the Journal’s account. A few neighbors objected, wondering what might come next. In July the commission urged the county to order Cooter’s to stop using the lot on the grounds that it was an unpermitted extension of a commercial use.

Parking outside Cooter's Place. Image source: RappNews.

Parking outside Cooter’s Place. Image source: RappNews.

Jones frames the issue as a culture clash between local elites who “stare down their noses” at other rednecks like him, and as an example of unresponsive and arrogant government.

Bacon’s bottom line: I find Jones’ argument highly plausible. Educated elites in this country do look down upon white, working class culture — especially that of Southern whites, who are widely considered to be Bible thumpers, gunhuggers and closet Klansmen. Just watch any edition of the Bill Maher show, and you’ll get the idea. Overlay upon that prejudice the Rappahannock zoning controversy in which the right of affluent landowners to live in an unspoiled environment trumps the right of Jones to grow a business and provide employment opportunities for locals. Cultural/economic elites protect their property values at the expense of income opportunities for the working class. (Don’t even get me started on the class implications of conservation easements in which big landowners unload their property tax liabilities while small landowners continue to pay the standard rate.)

I might not have paid this controversy any mind had I not had the strange experience of being solicited twice this summer, a month apart, by different crews of tree cutters claiming to live in Rappahannock County. Both truckloads of mostly white, working class men (one individual was a woman) had traveled three hours to suburban Richmond to cruise neighborhoods and look for gigs. While the Rappahannock County unemployment rate is supposedly around 4%, I’m willing to bet from my singular anecdotal experiences that the rate of under-employment is much higher. I’m also willing to bet that a lot of working poor would jump at the chance to earn a few extra bucks helping Jones run his Dukes of Hazzard extravaganzas.

While it is unlikely that the economic fortunes of working-class Rappahannock residents will rise or fall upon Jones’s ability to expand his Sperryville activities, the symbolic value of the controversy is momentous. The white, rural working class is the bedrock of Donald Trump’s electoral support. Is there any doubt why they feel like the system is stacked against them? Whether their highly flawed candidate wins or loses the 2016 presidential election, is there any doubt that  cultural snobbery and class conflict will persist?

Haymarket Project More than Amazon’s “Extension Cord,” Dominion Says

electric_cordDominion Virginia Power would have to upgrade its electricity distribution system to the Haymarket area of Prince William County sooner or later, even without the development of a data-center campus, testified Mark R. Gill, an electric transmission planning engineer with Dominion, in State Corporation Commission testimony filed yesterday.

“Without the request for service to the Haymarket Campus the Project would not be needed at this time; however, the high likelihood for nearby load growth, as showed in Prince William County’s own Build-Out Analysis, indicates that the Project would be needed at some point in the future to maintain reliable service in the area,” said Gill.

According to the build-out analysis, 8.5 million square feet of non-residential development and at least 889 residential units could be developed in Dominion and Northern Virginia Electric Cooperative (NOVEC)’s service territory around Haymarket, Gill said.

Gill was responding to earlier testimony by SCC staff engineer Neil Joshipura that in the absence of data centers proposed by an electric customer widely presumed to be Amazon Web Services, the electric system upgrade “would not be needed.” Dominion’s estimate for the preferred upgrade is $50 million. An alternative that would entail burying part of the route is estimated to cost $166.7 million.

Neighbors have vociferously opposed the project, fearing that it will obstruct rural views and negatively impact home values. Describing the new line, new substation, and existing line upgrades as a giant “extension cord” for Amazon, project foes argue that the cost of the project should be charged to Amazon rather than Dominion ratepayers generally. By arguing that the improvements will serve homeowners and businesses other than the “customer” presumed to be Amazon, Gill’s testimony buttressed the position that the project should be rolled into the Dominion rate base.


Who Should Pay for Haymarket Transmission Project, Amazon or Ratepayers?

transmission_linesby James A. Bacon

Dominion Virginia Power wants to upgrade its electric grid to serve a new data center campus in the Haymarket area of Prince William County. Residents are up in arms about the potential loss to property values, and the cost of the project could range between $51 million for the least expensive alternative to $166.7 million for the lowest-impact alternative.

The Haymarket project is re-playing familiar controversies bubbling up around the state as Dominion undertakes a wave of improvements to its transmission and distribution system in response to the shift from coal toward natural gas and renewable sources. But this project has a twist. The justification for the project is to serve a single customer, widely believed to be Amazon Web Services (AWS). (Dominion is constrained by a confidentiality agreement not to identify the customer.)

The State Corporation Commission faces two big decisions: (a) Which alternative should it approve, and (b) who should pay for it — Amazon or Dominion rate payers?

Dominion has applied to the SCC for approval to construct a new substation in Haymarket, upgrade an existing distribution line from 115 kV to 230 kV, and construct a new 5.1-mile overhead line. The purpose is to deliver service to a proposed campus expected to house three data center buildings

According to testimony submitted by SCC utilities engineer Neil Joshipura last week, the data centers cannot be served reliably by the existing distribution system and connecting them to the grid would not comply with federal grid reliability standards. While Dominion has demonstrated a need for the project, noted Joshipura, “the Project is needed to serve a new customer, rather than to enhance overall system reliability, and the Staff notes that without the request for service to the Haymarket Campus, the Project would not be needed.”

The SCC has received dozens of letters from Haymarket residents opposed to the project. The area is part of Prince William County’s “rural crescent” slated for lower density development, and residents have famously fought off efforts to develop land near the Manassas National Battlefield Park and, more recently, build the Bi-County Parkway through the area. Most letters express the fear that the power lines would be visually intrusive in a quiet, rural area and would impact property values.

“We did not move to Gainesville 13 years ago to have an eyesore in our back yard,” wrote Peter Menard in a typical statement filed with the SCC.

If a line must be built, citizens tend to favor the “hybrid” above ground/buried cable alternative, although it costs three times as much as Dominion’s preferred alternative.

Citizens also object to the idea of making Dominion ratepayers pay for AWS’s business decision to locate its data center campus in Haymarket rather than Prince William’s Innovation business park. Joseph Knight put it this way in a letter to the SCC:

Amazon chose to buy cheaper land elsewhere in the Haymarket area, knowing that data center expansion is a key factor in Amazon’s overall long-term growth plans and knowing full well that the power at the Haymarket site was totally inadequate to support such an expansion and would require a major power substation upgrade. … Amazon must have intended from the very beginning to lay the entire cost of the upgrade, the property destruction, and the immense loss of value in private property on a wide swath of Western Prince William County.

Dominion classifies the Haymarket improvements as transmission facilities, not distribution facilities, which would make the project subject to the control of PJM Inter-connection, which operates wholesale electricity markets in a 12-state region. As a transmission facility, the improvements would be paid for by ratepayers in the Dominion Transmission Zone, which extends into North Carolina. A residential customer using 1,000 kWh would see a bill increase of $0.09 under Dominion’s preferred proposal and $0.37 under the hybrid proposal, said Joshipura.

Dominion had no comment on Joshipura’s testimony. “We are aware of the SCC staff report, and it’s under internal review,” said Chuck Penn, Dominion spokesman. “We’ll address it in our rebuttal” to be filed tomorrow.

Pipelines Don’t Hurt Home Values, Study Says

pipeline_impactA month after foes of the Atlantic Coast Pipeline issued an economic study showing that the natural gas pipeline would diminish property values along the proposed 550-mile route by $141 million, Dominion Energy has fired back by citing a study claiming that gas pipelines have no impact on residential property values at all.

Analyzing property values in communities in Ohio, New Jersey, Virginia, Mississippi, and Pennsylvania, the report determined that “there is no measurable impact on the sales price of properties located along or in proximity to a natural gas pipeline versus properties which are not located along or in proximity to the same pipeline.”

“These findings might help property owners feel more confident about natural gas pipelines proposed in their communities,” said Don Santa, CEO of the INGAA Foundation in a press release. The foundation is associated with the Interstate Natural Gas Association of America. The bulk of the analysis was conducted by Integra Realty Resources.

The study identified residential neighborhoods that were bordered or bisected by at least one pipeline and compared 200 home sales of similar properties both on and off the pipelines. Study areas included suburban communities outside Cincinnati, Ohio, a rural neighborhood in Clinton, N.J., a master-planned residential community in Prince William County, Va., a suburb outside Jackson, Miss., and a small town subdivision in Dallastown, Pa. Houses were “normalized” by adjusting for gross living area, size, age and other factors.

The INGAA study employed a methodology that compared actual home sales. By contrast, the Key-Log Economics study underwritten by pipeline foes calculated the loss of what it called “ecosystem service values,” which incorporated such intangibles as the loss of viewsheds, air quality and protection from extreme events. Key-Log obtained its per-acre values primarily from a database of more than 1,300 estimates compiled as part of a global study known as “The Economics of Ecosystems and Biodiversity.”

Your assignment: compare and contrast the merits of the two reports.

Pipeline Impact to Property Value and Property Insurability, INGAA Foundation

Economic Costs of the Atlantic Coast Pipeline, Key-Log Economics