The SCC: An Emerald Palace?
The Emerald Palace or the SCC?

By Peter Galuszka

Last week, State Corporation Commission drew attention when its staff wrote to the U.S. Environmental Protection Agency, at the EPA’s request, to respond to one of the biggest proposed steps the nation has seen in cutting carbon dioxide emissions.

The report sparked considerable interest and confusion over what the SCC staff actually meant when it predicted that proposed EPA rules to cut carbon emissions 30 percent below 2005 levels by 2030.

The staff report, written by William H. Chambliss, SCC general counsel, said that EPA’s proposed limits would cost Virginia ratepayers from $5.5 billion to $6 billion extra. It claims that the state would have to shut down fossil-fuel, predominately coal-fired, plants producing 2,851 megawatts and replace it with only 351 megawatts of land-based wind power. This would badly impact the reliability of the state’s power supply, the staff said.

My immediate question was why so much and where, exactly? Precisely what power stations would have to be shut down? Where did the ratepayer increase numbers come from? Is there is a list of all the coal-fired plants affected? Dominion Virginia Power, the state’s largest utility, has long-standing plans to shut down two aging power stations at Yorktown and Chesapeake with about 920 megawatts of power? How does that factor in?

So, I contacted Ken Schrad, the spokesman for the SCC, by phone and email and asked some questions. He kindly provided the following answers (in italics):

Where are the affected plants precisely?

The numbers come directly from the EPA’s own spread sheets and the EPA does not identify the specific units.” 

How many plants are coal-fired?

Of the 2,851 MW, EPA predicts 2,803 MW of coal units and 48 MW of combustion turbines which could be natural gas or oil-fired CTs. Assuming Yorktown and Chesapeake are included in the EPA estimate, SCC staff knows that those planned retirements total approximately 920 MW.  The output of those units varies depending on when operating (summer or winter).”

Where does the 351 megawatt of land-based wind power, the only available replacement source for the lost fossil-fuel power, come from?

“The 351 MW figure is also direct from the EPA’s analysis which does not identify where EPA believes these undeveloped projects would ultimately materialize.  As staff noted in its comments, the SCC has approved the only request the Commission has received for a certificate for a wind project (Highland New Wind).  Approved in December 2007, the project envisioned up to 20 turbines with each turbine capable of producing up to 2MWs.  That project has not been built.   DEQ now has regulatory responsibility for permitting most solar and wind projects in Virginia. “

How do you answer criticism from environmental groups that Virginia has already attained 80 percent of the EPA’s carbon reduction already?

“Staff has no information regarding this assertion, the costs incurred to reach such a figure, how that attainment level was achieved, or the starting point from which such has materialized.”

The SCC staff recommends that the EPA adopt “an alternative carbon emission rate of 1,216 pounds of carbon dioxide per Megawatt hour of power. The EPA is proposing tighter limits of 843 of CO2/MWh for plants to attain by 2020 and levels of 810 pounds of CO2/MWh for plants to comply by 2030 because it would be more affordable. How much more affordable would the SCC’s suggested rate be?

” Staff recognizes there will be a considerable amount of expenditures to achieve the alternative emission rate.  It is a level envisioned in the integrated resource plan (IRP) filed by the utility company and reviewed every two years by the Commission.  The projected cost to achieve that level has not been quantified.  Instead, staff made a conservative analysis of the impact of the EPA proposed standards resulting in its determination that the alternate carbon emission rate would not require an additional expenditure of $5.5 to $6 billion.”

The SCC staff says that attaining EPA goals could cost ratepayers an extra $6 billion. Dominion is considering a third nuclear unit at North Anna that might cost from $10 billion to $14 billion. Wouldn’t the ratepayers have to pay for that, too?

“If built, the costs of another nuclear unit would be recovered over the expected life of the unit which could be 60-80 years.  There is a disconnect between taking a net present value figure (staff comments) and comparing it to something that is not.  Also, the added nuclear unit is envisioned in one of the IRP compliance plans. So, that was factored into the conservative analysis performed by staff which produced the projected additional $5.5 – $6 billion figure.”

I also asked Ken why the SCC did not issue a press release about the SCC reply to the EPA. He said that the SCC does not normally issue a press release when it responds to requests by federal agencies for comment.

Fair enough, but I have a few takeaways on the other answers. I am still not exactly sure where the 2,851 megawatts-to-be-shut-down figure comes from.

Next, the SCC staff complains that when this amount of generation goes offline (assuming it actually does), there will be pitifully little left on the renewable side to replace it. The only plant sited is a 40 megawatt one in Highland County that was approved by the SCC in 2007 (a lifetime in renewable energy terms) and has yet to be built.

What about plants for offshore wind farms, not to mention Dominion’s own plans for an experimental offshore wind station? The answer seems to be that we don’t know because another agency (DEQ) now licenses that sort of thing. If that’s the case, one wonders why the SCC staff didn’t give the DEQ a ring on their phone and ask for a seven-year update on what’s doing in wind and solar? Instead, they used seven-year old figures, apparently to minimize the importance of renewable power in rather sweeping terms.

One reason why Virginia’s renewable percent is a low 6 percent, compared to its neighbors, is that the General Assembly has refused to set mandatory renewable portfolio standards that require 20 percent or so of future generation to come from renewables.

Why so? The first ones to ask are the utilities – Dominion, Appalachian Power and the cooperatives. It seems that they don’t want any threat to their grids that they have poured billions into over the decades. Talk renewable and they’re like babies crying for the base-loaded bottles.

In any event, Virginia is not the only state to question the EPA rules. Oklahoma has as well. Big industry doesn’t like the proposed rules either. And the EPA is asking regulators like the SCC for input. One can’t blame them for responding. Forgive me if I don’t understand their response.

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6 responses to “EPA Carbon Rules: Ask the SCC”

  1. re: Press Release –

    how come the RTD had it as well as Bill Howell and no other papers and not the public?

    how come – even without a pRess release the document is not available on the SCC website?

    how many other times has the EPA made comments on a proposed govt rule from the EPA and where are those comments on the SCC website?

    where is the analysis referenced in the response?

    where did the 5.5 – 6 billion come from?

    how does it break down into monthly cost per household?

    you cannot write this kind of CRAP as a govt agency. This is grade A partisan hackery …. in my view..

    if the SCC is going to make these comments, they need to provide a copy on their website and also provide a copy of the referenced analysis.

    otherwise they should admit that rogue staff are the authors.

    by the time 2030 comes around – Dominion and the SCC are not going to be worrying about coal plant closures the result of EPA rules – they are going to be trying to get the Virginia General Assembly to make laws that have the effect of penalizing citizens using solar… mark my words.

    I am LIVID over this. Until this point – I knew the SCC was primarily staffed by industrial professionals but I was okay with it as long as they conducted themselves in a fair and transparent and reasonably unbiased fashion.

    now it’s broke .. and all it took was a couple of guys and the commissioners looking the other way.. and they destroy the hard-earned reputation of an agency that had the trust of citizens. now – we know – they’ve joined the ranks of the partisans.. and it’s TRULY a disservice to the citizens and consumers of Virginia who have a right to expect to be able to install solar – and have a smart grid and what we have instead in a state agency that is more rightly an arm of the Fossil Fuel industry.

  2. ANY utility worth their salt as a utility – will have to be able to chew gum and walk at the same time-

    in other words – there will be a grid with a diverse input of energy sources that will vary dynamically – and a properly designed grid will not only acommodate all these sources – but it will be able to modulate them and add power to the mix if needed – or not.

    right now – we have really DUMB power generators – coal and nukes who take hours – days to ramp up or done to variations in the demand in the grid – and instead of Dominion working to modernize their grid t be able to efficiently response to the dynamics – they – assisted by the SEC are choosing instead to engage in political skirmishes with the EPA.

    No matter what one thinks of the EPA or Obama or global warming – one should want Dominion to modernize their grid to deal with the reality not only of site-specific wind/solar – but the undeniable reality of solar deployed on millions of rooftops.

    Dominion has chosen to NOT do that – and the SCC is basically running interference for them but diverting the focus to the EPA and whether Co2 should be regulated.

    No matter what happens to the EPA proposal – you can bet more advances to solar are going to continue – and that the likelihood that people put solar on their rooftops is a high probability – and yet Dominion wants to stay in the site-specific power plant business.

    this is like VDOT wanting to build more roads rather than use computer technology to synchronize stop lights and capture data to inform travelers of traffic conditions.

    In both cases, you have two govt-funded or govt-enabled institutions who are shielded from the free market and feel no need to do any more than what is forced on them.

    To have the SCC be Dominions hired gun to go after the EPA instead of modernizing their grid – should be an insult to all of us – no matter our personal politics – and mark my words – Bill Howell and allies will be generating more legislation to penalize Virginias who want to use solar and use less energy.

    forget Obama and forget the EPA and forget climate politics – focus on what happens in Virginia..

    1. Peter was much too easy on them although I give him credit for doing what the RTD did nothing at all of.. and no other media could ask the tough questions because the SCC chose to only provide their comments to one selected paper.

      The SCC’s approach to this is totally bogus and a disservice to all Virginians – even those who hate Obama and the EPA.. this is the wrong way for a State Agency to act.

      ” Under the draft rule, the EPA would let states and utilities meet the new standard with different approaches mixing four options including energy efficiency, shifting from coal to natural gas, investing in renewable energy and making power plant upgrades. Other compliance methods could include offering discounts to encourage consumers to shift electricity use to off-peak hours.”

      ” The EPA estimates that the new rule would cut traditional air pollutants such as sulfur dioxide, nitrogen oxides and soot by 25 percent, according to those who have been briefed, yielding a public health benefit of between $55 billion to $93 billion when it is fully implemented with 2,700 to 6600 premature deaths avoided and 140,000 to 150,000 asthma attacks a year avoided. The cost, by contrast, would be $7.3 billion to $8.8 billion.

      EPA said that for every $1 invested, Americans would reap $7 in health benefits.”

      where in the SCC”s calculations did they consider the benefits to Virginians?

      all along – the folks who support coal – including the SCC have discounted and ignored the real costs to people’s health from the current power plant pollution.

      this has been the problem from the beginning – the SCC does not consider health costs but basically considers the pollution to be already accepted and approved and that money is the only determinant.

      the EPA uses the word “invest” , SCC uses the word “cost” . That alone should inform folks.

      when you propose policies that result in less damage to people’s health – you do not call it a “cost” unless you are taking an industry position because people with less health problems spend less on health care pollution controls – actually do create jobs.

      We’ve gone through this with Kepone, PCBs, and other toxics in our rivers.. that industry fought the same way – tooth and nail and now we have industry fight the Chesapeake Bay cleanup to remove phosphorous and nitrogen – we have the same basic cast of characters like the Farm Bureau and Chamber of Commerce opposing cleanup of the Bay.

      When did the SCC weigh in on the above issues citing costs to Virginia citizens?

      Would we now expect the SCC to come out and claim that rules requiring stricter standards for municipal sewage treatment will “cost” Virginians, billions of dollars?

  3. billsblots Avatar

    Working in a field in which I often scheme electric power production at “off-grid” or remote locations, I can tell you that Virginia is one of the poorest locations for wind energy on the North American continent, especially if wind energy must be “land-based”. Average and consistent wind speeds in Virginia are some of the weakest in the country. Government planning and wind equipment specs both cite a figure of 12 mph average wind speed to achieve useful energy production and return on investment. Most of the land mass of Virginia has average wind speeds of 6 – 7 mph. Now, if they allow for using coastal areas such as around the Chesapeake Bay Bridge Tunnel we’ve got some real potential there, considering both wind speed and consistency.

    1. @billblots – are you familiar with the Appalachian and Allegheny mountains?

      Pennsylvania, Maryland and West Virginia have many large turbines along those ridges..

      the thing about wind and solar is that they are indeed not as constant as coal and nukes but natural gas can ramp up and down much faster than coal and nukes and is the perfect complement to wind/solar – if Dominion Resources would modernize their grid – and not just for wind/solar but for overall bettr efficiency which would reduce the need to run as much base load coal if you had enough quick start nat gas dispatch …

      Dominion needs stop blaming coal and climate change and modernize their grid or people – individuals are going to do it for them as the price of solar comes down.

      They keep talking about what they can’t do – with wind/solar but it’s at best flimsy excuses for NOT investing in a modern grid.

      And as far as the SCC goes – when I see them weigh in on other environmental issues – like the cleanup cost of the Chesapeake Bay – I’ll start to believe they are doing something more than playing political games with the EPA.

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