Category Archives: Regulation

What? More Solar Means More NOx? No One Saw that Coming!

Duke Energy solar farm

by James A. Bacon

The surge in solar power production in North Carolina has caused an increase in nitrogen oxide (NOx), a serious air pollutant, North Carolina’s Duke Energy has concluded. Without changes to state regulatory policy, according to a report by North State Journal, carbon dioxide (CO2) emissions also could increase.

These counter-intuitive findings stem from the fact that solar power is an intermittent source of power, which must be offset by on-again, off-again generation from fossil fuel sources, primarily natural gas. The on-and-off cycling of power stations leads to inefficient combustion and higher NOx emissions. The effect on CO2 emissions is less clear, although utility officials raised the prospect of a “slight increase” in CO2 at the plant level under certain conditions.

I have no idea if Duke’s conclusions will stand up to close scrutiny. For sure, they will be attacked by those who are committed to intermittent renewable energy sources at any cost. But the debate in North Carolina is highly relevant to Virginia. North Carolina has the largest installed base of solar power of any state outside of California. But Virginia is adding solar capacity rapidly, and the Northam administration has set a goal of attaining a zero-carbon electric grid by 2050.

Let me be very clear. I am not advocating a dial-back in Virginia’s commitment to solar. But I do say, if we are going to aggressively expand our reliance upon an intermittent energy source, we need to know what we’re getting into. Continue reading

Environmental Balderdash: Exporting CO2 to EU

Source: Rachel Carson Council, cited by Cindy Elmore in RTD. Click for larger view.

by Steve Haner

In parts of Virginia, conservation groups are being paid by California to preserve forest land because trees capture the CO2 considered the culprit in global warming. In other parts of Virginia, large swaths of trees are being cut to convert into biomass fuel for European power plants, based on a claim that is a way to reduce CO2 in the atmosphere.

It would be so much easier to accept the climate crisis doomsday scenario if the proponents were not so contradictory and hypocritical. In both cases, the Californians and Europeans are doing this so they can keep pumping CO2-rich emissions into their atmosphere. They obviously don’t really fear CO2.  Continue reading

Dueling Crises: Unaffordable Housing vs. Flammable Housing

by James A. Bacon

Citing housing affordability as the key issue, the Virginia Board of Housing and Community Development has voted down an update to the state building code that would have mandated the installation of sprinklers in all new single-family homes and townhouses.

Virginia home builders have said that the sprinkler requirement would add between $15,000 and $25,000 to the construction cost of a new residence, according to reporting by WAMU, American University Radio. Keith Brower, a former Loudoun County fire chief has countered that the cost would be significantly less, about $5,000 for a 2,000-square-foot house. Whatever the case, there is no debate that the mandate would have added thousands of dollars to the cost of a dwelling unit.

WAMU summarized the home builders’ arguments this way:

Home-builders hailed the 10-4 vote taken Monday, saying that requiring sprinklers would only throw another obstacle in the way of the new housing construction that is needed to help close what officials say is a 75,000-home gap between what’s currently expected to be built across the region and what’s actually needed to keep pace with estimated job growth.

Continue reading

Dominion Has Lost the Dems. What’s Next?

Susan Swecker, chair of the Democratic Party of Virginia. Photo credit: Richmond Times-Dispatch

Dominion Energy is fast losing the Democratic Party. Following the lead of dozens of Democratic candidates and elected officials, the Democratic Party of Virginia has declared that it will no long accept political contributions from the electric utility. Reports the Richmond Times-Dispatch:

Party Chairwoman Susan Swecker said Dominion’s contributions are a “very contentious issue with a lot of folks all across the commonwealth, and we thought it was time for us to just step up and say this is where we are,” according to an interview published on the left-leaning blog Blue Virginia.

Party spokesman Jake Rubenstein confirmed the decision but would not comment further. DPVA’s pledge also includes Appalachian Power, the state’s other electric monopoly.

The House Democratic Caucus and Gov. Ralph Northam’s political arm The Way Ahead are still accepting Dominion money, but it’s clear which way the party is heading. Virginia Democrats increasingly embrace a progressive/left ideology along with an apocalyptic view of climate change and a thorough-going hostility toward fossil fuels. Although Dominion is moving aggressively toward renewable energy, including a just-announced $7.8 billion offshore wind project as well as billions of dollars in solar projects, the utility still remains committed to natural gas, as highlighted by its Atlantic Coast Pipeline project, and nuclear power, which is also unpopular with the Left, as supplementary energy sources. Continue reading

Dominion’s Move Against Green Competitors Fails

by Steve Haner

The verdict is in and green energy virtue in Virginia’s electricity market remains available in monthly increments. You do not need to be green twenty-four hours a day, seven days a week, tracking every change of demand.

That was the requirement demanded by Dominion Energy Virginia in its recent effort to block competitive service providers who are taking away customers who want 100% renewable power. In a 22-page opinion issued today (here), the State Corporation Commission rejected every Dominion assertion across the board. It said the two companies, Calpine Energy Solutions and Direct Energy Business, are operating within Virginia law.  Continue reading

GOP Also Concerned About Electricity Consumers

The RGGI states, with New Jersey, which rejoined in June.

by Steve Haner

With an eye on November 5, Virginia’s Republican legislators are expressing their concern for Virginia’s electricity customers and warning that their Democratic competitors will support a new energy carbon tax if they gain the majority. The carbon tax is a key element of the Regional Greenhouse Gas Initiative (RGGI).

In media releases and, of course, Tweets, the simple message is “Higher Taxes on Energy. Democrats Say Yes.  Republicans Say No.” The key evidence provided is State Corporation Commission staff testimony (here), first made generally available on Bacon’s Rebellion, and a recent summary on the issue I wrote for the Thomas Jefferson Institute for Public Policy (here). We took a stand against joining RGGI.

That RGGI white paper has been in process all summer, and it was pure coincidence that it surfaced just as many Democrats were showing their concern for consumers by opposing a higher profit margin for Dominion Energy Virginia.  Continue reading

Tweet First, Check Your Notes Later

by Steve Haner

It doesn’t matter what you say, only what they say you said. This was demonstrated once again this morning as the State Corporation Commission’s hearing on Dominion Energy Virginia’s profit margin unfolded in Richmond courtroom.

While Dominion’s lead attorney droned on in his opening statement, Sarah Vogelsong of Virginia Mercury – doing running commentary on Twitter – posted this: “He also seems to be taking a swipe at “half the Democrats in the General Assembly” and what they think about utility rates, which seems unusually political for these hearings.”    Continue reading

Just Pretending To Protect Ratepayers Won’t Cut It

by Steve Haner

If you have nothing substantive to offer, try some meaningless virtue signaling. That’s the only way to interpret a claim from 36 General Assembly Democrats that they are taking steps to oppose “Dominion raising Virginian’s energy bills by $147 million,” to quote a Blue Virginia headline today.

The story reports on a letter to the State Corporation Commission signed by three state senators and 33 delegates, asking the SCC to support a lower authorized return on equity for Dominion Energy Virginia for 2019 and 2020.  Here is the “so what” paragraph:  Continue reading

Dominion: Two Reports, Four Predictions

Dominion Energy Virginia bill breakdown, for 1,000 kWh of residential service. Base rates were recently reduced by the federal tax cuts, and fuel fluctuates, but rate adjustment clauses (RACs) proliferate and grow, with more to come. Source: SCC

by Steve Haner

There is no sign, nine weeks out from the big General Assembly election, that the arcane and obscure field of electricity regulation is going to change any votes or win any elections in Virginia in 2019. There is plenty to debate if anybody wanted to in two recent reports now public at the SCC and linked below.

The State Corporation Commission just issued yet another report that Dominion Energy Virginia is reaping massive excess profits, more than half a billion dollars in 2017 and 2018 combined. There is very little chance that the company’s 2.45 million customer accounts (about two thirds of Virginia customers) will see any refunds or price reductions as a result. Prediction number one: The company keeps it all come the 2021 review and base rates do not change.   Continue reading

SCC Reports $277 Million in Excess Dominion Earnings

Dominion Energy Virginia made $277 million in excess profits last year, according to a just-released State Corporation Commission report. Instead of returning the excess earnings to rate payers, the utility will apply those funds toward construction of a demonstration wind-turbine project off the coast of Virginia Beach and upgrades to smart meters in concert with its sweeping overhaul of the electric grid.

You can read the Richmond Times-Dispatch account here, and the Daily News account here.

Normally, Steve would write about the latest report about Dominion over-earnings, but he’s on vacation. And I’ll be out of the office all day. So, I’ll just throw open the topic to general discussion in the comments.

The New Childcare Crisis: Affordability

Virginia Child Care Costs as a Percentage of Women’s Median Earnings, 2009-2017. Gray line: Infant center costs. Blue: line: four-year-old center costs. Source: National Women’s Law Center

by James A. Bacon

The cost of full-time infant care in Virginia has increased by 37% in inflation-adjusted dollars between 2008 and 2017, while women’s wages in the state have grown by only 5%, finds a new report by the National Women’s Law Center, “From Shortchanged to Empowered: A Pathway to Improving Women’s Well-Being in Virginia.” As a percentage of income, the cost of infant-center care has surged from 24% of women’s median earnings to 31%.

The study suffers from the usual victimhood rhetoric regarding women’s income — asserting that Virginia women earn only 80.9% of what men earn without adjusting for occupations, education and length of time in the workforce — which makes me wonder if the child-care data is similarly subject to tendentious analysis. With that caveat in mind, there does appear to be a problem, and it’s one that is especially devastating for poor women who see an ever large share of their income consumed by child care.

What the study doesn’t do is inquire into why the cost of child care has risen so precipitously in the past decade. For that information, we must turn to Adele Uphaus-Conner with the Free Lance-Star who, while dutifully and uncritically reporting the study’s findings, actually went out and interviewed someone in the community who knew something about the topic! Continue reading

Dominion Must Move Customers To Competitors

by Steve Haner

The State Corporation Commission Wednesday granted motions by two competitive service providers and ordered Dominion Energy Virginia to hand over various customers.  The two companies, Direct Energy Business LLC and Calpine Energy Solutions LLC, offer a 100 percent renewable energy option in the monopoly utility’s territory.

“The Commission has found that: (a) absent the instant order, Direct Energy and Calpine will suffer irreparable harm; (b) Direct Energy and Calpine have no adequate remedy at law; and (c) the Commission is satisfied of Direct Energy’s and Calpine’s equity,” reads a footnote in the order (here). Continue reading

Best Gun Violence Idea Not Proposed in VA?

Grandstanding with guns on the House of Delegates floor. (AP Photo/Richmond Times-Dispatch, Bob Brown)

by Steve Haner

The most effective gun violence prevention idea presented to the Virginia State Crime Commission Monday was one seldom discussed in the state:  Add violent misdemeanors to the list of convictions that prevent gun purchases from a licensed dealer.

Four states, including Maryland, have that provision and a Boston University study found it has lowered the firearms homicide rate better than 25 percent in those states. Right now, extending the ban from felons to violent misdemeanants is not among the scores of bills pending at Virginia’s special session on gun violence.

One of the least effective proposals, but one always at the top of many lists?  Prohibiting the sale of so-called assault or assault-style rifles.  The research on that is clear, Boston University research fellow Claire Boine said in one of the most useful evidence-based presentations from the long day. You can see her slides here and the full study hereContinue reading

Fungible (and Vintage?) Green Virtue, For A Fee

Renewable energy certificates can have a vintage? Some might prefer fresh solar or wind power.

by Steve Haner

Like most major electric utilities now, Dominion Energy Virginia has a certain amount of energy generated by processes now designated “renewable.”  Hydro power has been around for a long time, and now that is supplemented by a growing number of solar generators – owned by the company or under contract to it.

All Dominion customers are getting some of their electricity from those sources.  Everyone is a little bit green.  But for an extra $4.21 per 1,000 kilowatt hours, some other customer can take away your green power and leave you less green or totally not green, at least on paper.  Overall the utility’s output stays the same, but it might pick up a few more dollars per month from up to 50,000 of its customers.  Continue reading

What Does Dominion Lose When Customers Leave?

With a competitive service provider, you pay it and not the utility for generation, transmission and fuel – the elements of electricity supply service.

When you use a competitive service provider (CSP) instead of the monopoly electricity company, what does the monopoly provider stop collecting?  Just what part of the electric bill are big customers such as Costco and Kroger and Walmart seeking to avoid by leaving Dominion Energy Virginia?

The answer is most of it, everything covered under the bill heading “Electricity Supply Service” on the sample bill illustrated above.  With a CSP, customers would stop paying Dominion for generation, transmission and fuel.  If future legislation makes retail choice the rule in Virginia, customers could leave the utility and pay a CSP for their energy and the cost to make or buy it and get it to Virginia’s local grid.  Continue reading