In Praise of 15-Year, Non-Exclusive Licenses for Power Companies

Cayman Brac, a Caribbean island with a population of 1,822 residents, is installing a pay-as-you-go metering system, Smart Meter, that allows homeowners to monitor their electric charges real time. The goal is to equip consumers with data that will enable them to conserve energy. Reports Cayman Net News:

This initiative is driven by efforts to conserve and reduce electricity consumption, and [Jonathan] Tibbetts, [General Manager of Cayman Brac Power and Light,] maintained that consumers gain valuable insight as to their energy usage, which in turn empowers them to take control of their consumption and ultimately save money.

“Energy conservation is an important global issue that needs to be brought to the forefront of all consumers worldwide,” said Tibbets, who has a Smart Meter installed in his own home. “This has saved me as much as thirty percent off my current bill,” he claimed.

If a tiny Caribbean island can equip homeowners with this conservation technology — manufactured by an American company, APMY Metering, incidentally — you’d think that a comparable initiative would be within the grasp of Virginia utility companies more than 1,000 times larger.

Dominion anticipates that economic/population growth in Northern Virginia will lead to scattered electric power shortages within five years. Dominion’s answer: build a 240-mile electric transmission line of 150-foot tall towers to wheel in surplus electricity from the Midwest — against the vehement objections of the communities whose lands would be traversed and landscapes despoiled.

Why isn’t Dominion actively exploring the conservation option? Smart Meters combined with pricing that charged higher rates during periods of peak demand would encourage homeowners (a) to invest in energy-saving appliances, and (b) shift electric demand to off-peak periods of time. Dominion could save multi-millions in transmission-line construction costs.

Perhaps one reason is that the electric utility industry in Virginia isn’t kept on a short leash like it is in the Cayman Islands. This comes from a December 2003 article in Cayman Net News:

The Cayman Islands Government and Cayman Brac Power & Light Co. Ltd (CBPL) signed a 15-year non-exclusive licence to generate, transmit, distribute and supply electricity to Cayman Brac and Little Cayman, on Wednesday. …

The terms of the agreement are in keeping with the policy announced by government earlier this year that no more exclusive licences would be issued in the electricity sector, and that new licences would not exceed 15 years in duration. (My italics.)

Maybe 15-year, non-exclusive licenses would encourage Virginia power companies to be a little more creative in their thinking.

(Hat tip to Larry Gross for pointing me to the Cayman Net News.)

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11 responses to “In Praise of 15-Year, Non-Exclusive Licenses for Power Companies”

  1. I strongly dislike Dominion Power.
    Fortunately, just how much longer can they hold us back?

    Good news for replacing noisy, polluting generators, at least reducing the points of pollution, if not pollution itself. When will we see it for the home market? :

    Fuel cell designed specifically for business continuity market

    Less than a year after the first prototype, Turin-based Electro Power Systems SpA has started industrial production of Electro7, one of the first European fuel cell systems designed for back-up applications and the business continuity market. The product has just obtained CE certification, a very important achievement as the CE mark enables sales under internationally recognized safety and quality standards.

    Electro7 uses pure hydrogen to generate clean power and, in the case of a power-outage, it starts up in 7 milliseconds. A single hydrogen cylinder offers up to 2 hours of autonomy (for longer autonomy just add one or more cylinders). This makes it a very efficient and cost-effective business continuity solution for companies needing reliable and long-running back-up power.

    Electro7 is available in various versions with three different voltage outputs; it can be controlled via the Internet or GSM, can be installed indoor or outdoor and can be grid-connected or stand-alone. In operation it is noiseless and clean, is not affected by temperature, has low maintenance costs, and doesn’t create problems of recycling or disposal.

  2. Ray Hyde Avatar

    Because the Caymans have such a small base, generating electricity is expensive. Since they mostly don;t have Air conditioning (or capital), co generation is not a real option. Therefore the energy saving meters are far more cost effective than they are here in the States.

    On the other hand, the Caymans are in the trade winds and have miles of shallow water around them, perfect for wind generation farms. They may be a net energy exporter some day.

  3. Ray Hyde Avatar

    How about a fifteen year none exclusive license for th e power line they are going to plop in my back yard. Let’s make those towers portable and we can move the power line around every few years to share the wealth.

  4. Larry Gross Avatar
    Larry Gross

    or how about this…

    Dominion does an EIS level document that shows the cost/benefit of new power lines vs smart meters to meet the projected higher demands.

    or… a private group has their own study done… and challenges Dominion on the merits…

    If one thinks about it – these new power lines are NOT for power needs at 2 a.m. – they for peak hour usage – and the issue is very similiar to whether new lanes should be built for rush hour traffic – or demand management be used to blunt the spikes.

    You gotta admit – building hugely expensive infrastructure that also damages the viewshed and the environment – simply to supply power to those of us who want the air conditioning on at the same time their dishwasher is on… rather than defer their dishwashers until bedtime .. that says something about us…

    From Dominion Power’s perspective – it’s clear – since ratepayers will ultimately pay for all the additional infrastructure and then some (called profit) – Dominion LIKES this path better than a path where folks will use LESS power which probably would result in static profits for them.

    This is an excellent insight into what option benefits Dominion and what option benefits the public and how the decision is made by State Regulators – who are paid by taxpayers to represent THEIR interests.

    The Caymans by the way are not the only jurisdiction using smart meters. Canada and California as well as European countries … and the point is – EXACTLY – that power IS Expensive – not only to produce but in damage to the environment.

  5. Ray Hyde Avatar

    Conservation, vehicle sharing, and other alternatives will dealy the need for more infrastructure, but not replace it.

    Sooner or later, we will have to face the prospect of providing more infrastructure, unless we agree on a way of having fewer people.

    What is needed is a fair and equitable means of paying for it. At present, this boils down to saying “Hell no, we won’t glow.” and similar nonsense. This boils down to “Put it in someone else’s back yard.”, a system which benefits those that have the most money and power and those that scream most vehemently.

    At this point, the situation is that those with conservation easements have sucessfully argued that they have more property rights than those that don’t. Once again, those that have preserved their land the longest, with the least government help, are going to be the ones punished for their own personal conservation efforts.

    I’ve said before that one way to deal with this kind of thing is to have a reverse auction. Let everyone in the pathway put up a bid for how much they are willing to pay not to have the power line in their back yard. The route would be chosen to include most of the low bidders. EVeryone who got stuck with the power line would then share all the money that was bid by everyone else.

    The drawback to this is that it concedes that the power line will be built. Unfortunately, that is most likely the case. Our air pollution laws make it unlikely that local power generation or co-generation will be possible, even if it is more environmentally friendly.

    Handwringing and wishful thinking about what might be done differently is of little use. When those rolling blackouts hit, people will start demanding that something be done, just as they are now demanding that something be done about clogged highway capacity, as long as it is built in someone else’s back yard.

    When this power line is built, there will be millions of dollars invested, and billions of dollars worth of power will be delivered over decades of service. If it goes through, the land owners will each get paid a few thousand dollars, and they will not be compensated for the loss in value to the remainder of the property.

    The nearby landowners will get nothing, and they will also lose property value. But landowners hundreds of miles away will continue to be able to run their air conditioners and dishwshers at a time convenient to themselves.

    I’m all in favor of smart meters, but they do nothing to adress the problem of fair and adequate payment when property is taken, not for public use, but for economic gain.

    Surely part of the equation ought to be that those that provide the property should share in the economic gain.

    This is true whether the property is taken for a power line, or whether it is “taken” to provide other public benefits such as clean watersheds, or viewscapes.

    Most of the potential value of my property has already been taken this way. Some of the actual property has been taken as well. My wife’s family has already lost their beach property and waterfront cottage to development under eminent domain. Then they lost 60 acres for highway development. Then the county took away most of the building rights, then they took away some more of what remained, then they made what building rights remained impossible to use – unless I agree to place a conservation easement on what I am already prohibited from using.

    Today, I was approached by neighbors who want me to place a conservation easement on the land, as a means to help block the power line. I think this is a futile effort to try to capitalize on what appears to be a new and unwritten law that says those with conservation easements have more property rights than those without.

    The power company has already made the decision to shift the proposed line south, and around those powerful and wealthy intersts farther north. I think it is unlikely they will unmake that decision.

    So, once again I am being pressured to do something with the land that I don’t want to do, by people who don’t own it, and who are unwilling to pay, or pay adequately, for what it is they want me to do.

    Those people include my immediate neighbors, the powerful interests farther north, the power company, and the power companies customers as far away as New England. It seems to me that among them there ought to be plenty of money on the table.

    But, as I pointed out to my neighbor today, the only people with money showing is the power company. I am already forbidden from doing anything profitable with the land. The power line will grossly reduce the value of what is left, but since it isn’t going to be sold anyway, the price is mostly irrelevant.

    Had my neighbors been fighting for my property rights thirty years ago, I might be more sympathetic. And we might have a law that guarantees adequte compensation. But as it stands now, all they want is for me to give up more, for their benefit, and little value to me.

    Granting a conservation easement does have some tax value, and I could then stop losing money farming and do something more productive, but I would still be paying taxes on land I can’t use.

    As I pointed out to my neighbor, under these circumstances, I’m inclined to let the power company come, and take what little they offer, and just give the rest to Habitat for Humanity.

    At least that way it will go to people who are willing to work for what they get.

  6. I’m amused that the property rights people and the conservationists are on the same side for once…

  7. Ray Hyde Avatar

    Unfortunately, it is a little late.

    The real killer is that the power line was allegedly sited to avoid both houses and conservation easements. Had the county allowed more houses around here, they might have avoided the power line.

    The power company apparently hasn’t considered designation as a Virginia Century Farm as one of their criteria for avoidance, since two of the three proposed routes cross the farm. After a hundred and seventy years it is going to come down to this.

    Dominion recently put a peaking power plant here in the county. There was such a stink about it, and the county exacted such a toll for building it, that the power company apparently decided that local power wasn’t worth the cost.

    I am highly misunderstood around here. People think I am in favor of building this place out, more housing and all the rest. It is true that pwople will need more places to live, but that isn’t the point I have been trying to make.

    At present, I am effectively working to fulfill the desires of PEC and people like them. I lose a little money every year, with no hope of compensation, ever. I provide valuable goods and services that people claim to want, but which they are unwilling to pay for. To me, Dominion is no different from the other powers that control me: they want something that benefits others, at my expense, for which they are willing to pay little or nothing, and they will do it to me with my government’s help.

    I’m going to be FUBAR beyond all recognition either way. Either way I don’t get to do what I want to do in a free country. Either way I am out (literally) millions. Left to my own devices, I probably would forgo them anyway: I don’t need the money, at present. If you have enough, more is not necessarily better.

    But it is a big difference to decide not to go after the money than to have it taken from you. If Dominion raided my bank account for a couple of million in order to build their towers, that would clearly be against the law. To me what they are doing is no different.

    All I wanted was to retire and work the farm as a full time retirement job as long as I can. As my neighbor said to me, if we had a heart attack and needed money last week, we could probably get it, but now we are condemned.

    I like the farm a lot, but unlike many, I’m not overly sentimental. I watched what happened on Martha’s Vineyard and other desireable places. I know that desirable places become valuable, and then someone who can afford them will get them.

    I just hate to see the governmet help them (or anyone else) get it at far below what it is worth or have it maintained at no expense.

    If Dominion is going to do this, they can’t do it without the unwilling participation of thousands of people. Even Dominion employees get profit sharing, and they get paid every week. It seems to me that those of us who are going to effectively become new and unpaid, not to say dispaid, employees should deserve no less.


    Seven states passed anti Kelo laws last month, and where was Virginia?

    Promoting a good business climate.

    EMR has come out as saying that Kelo is not a bad thing, and I suppose that is because he has an overarching desire to see more people living in town. I have argued that those of us out here are providing valuable services to those in town. Rather than being taxed 10x, as he proposes, we should be rewarded for what we do, somehow.

    This would seem to be a case in point. All those people living in town are going to have to get power from somewhere, and preferably NIMBY.

    I wonder if he ever considered that at one swoop an action using eminent domain in favor of urban dwellers could wipe out and devalue so much open space.

    At least the birds will have plenty of space to perch.

  8. Larry Gross Avatar
    Larry Gross

    “When those rolling blackouts hit, people will start demanding that something be done, just as they are now demanding that something be done about clogged highway capacity, as long as it is built in someone else’s back yard.”

    right.. and the “something” will be exactly as we do when we have droughts… everyone will have to cut back especially at peak hour… and Smart Meters will become mandatory…and extravagant users will have to pay quite a bit more especially at peak hour.

  9. Larry Gross Avatar
    Larry Gross

    methinks this is NOT a Dominion power line “need”.

    read on (excerpts):

    Allegheny Power planning new transmission line

    CUMBERLAND, Md. – Allegheny Power has begun preliminary work on planning a 240-mile, 500-kilovolt transmission line it proposed last February.

    The line, which would extend through parts of Pennsylvania, West Virginia, Maryland and Virginia, was proposed at a cost of $1.4 billion after predictions were made that some of the current electrical transmission lines could be overloaded by 2011.

    Allen Staggers, manager of corporate communication for Allegheny Power, told The (Cumberland) Times News that the current electrical infrastructure in place shows there are enough generating plants in the region, but the power can’t get exactly from where it’s generated to where it’s needed.

    The project, the Trans-Allegheny Interstate Line, would extend from southwestern Pennsylvania to existing substations in Mount Storm, W.Va., and Meadow Brook, Va., along with an interconnection with Dominion Virginia Power and continuing east to Dominion’s LOUDOUN Substation.

    “A couple of those areas are within PJM range, particularly along the corridor between the New York border, going down to Maryland, Washington, and Northern Virginia.” DuPont-Kidd said. “We’ve done planning and have determined where the congestion areas are and have concurred with the Department of Energy reports.”

    so .. I’m wondering if this power line is Solely about Dominion and NoVa.

    In other words.. why does NoVa need to tap into a transmission line that extends to Pennsylvania and Ohio vice extending to say one of Dominion’s Va Nukes – since issue is being promoted as NOT a shortage of power but peak load transmission redundancy.

    and remember.. the whole time this is going on – Dominion is seeking to build another nuke at North Anna.

    PEC is going to need some heavy-duty experts if they want to delve into what is really going on …

    … and the really cool thing about this… Ray might actually donate money to support that work.


  10. Larry Gross Avatar
    Larry Gross

    There ARE other options besides the power line but the power line is Dominion’s preferred method to deal with the issue.

    I would think that some folks would choose Smart Meters if it would result in the need for the power line to be put off for a few years.

    Why not OFFER that as an option to folks rather than boxing them into essentially a NIMBY position?

    or offer them more local GREEN or cleaner (not coal) power even if it costs more…??

    My point is that if citizens are ALLOWED to actually participate in choices that opposition often becomes muted or at least it becomes quite clear that those that oppose are probably opposed no matter what… rather than interested in actual solutions.

    The first community meeting is Thursday night and I understand that Dominion will have 5 separate tables.. one of them devoted to current conservation efforts by Dominion and another to environmental concerns.

    I’m willing to bet that if PEC comes with both barrels loaded that it will be a very interesting affair.

  11. Ray Hyde Avatar

    Larry, I don’t have any doubt that we will eventually have to cut back. But by then I and many others will be out a couple of million apiece that is uncompensated by Dominion.

    If Dominion is allowed to steal land and use the savings to provide power at low cost, then where is the incentive for saving electricity? PEC is right, Dominion is not paying the true cost of this exercise.

    Unfortunately PEC doesn’t realize that the exact same argument holds for many of their own activities.

    And this is a gold mine for PEC. This is the best thing that has happened to them since Disney, where they won the battle and lost the war. Just because PEC is a non-profit doesn’t mean they aren’t a business.

    Whether conservation delays this for five or ten years is beside the point. Sooner or later someone, somewhere is going to get screwed over about their land, with the help of the government, or by the government.

    That part of their argument is trivial, and unlikely to make any difference as far as the powe rline is concerned. As are several of their other shotgun arguments. But they are right about Dominion paying the true costs.

    If the true costs are charged to Dominion, and everbody else who plays by Dominion rules, then we will all be better off because ALL of our investments will be more secure. And there will be a real argument that can be used to help others, the next time this happens.

    However, if Dominion had to pay full costs, then guess what? They are still guaranteed a 12 percent return on their investment. So the costs of playing fair would be distributed back to you and I and everybody else, and there is therefore no reason for the public to argue for fair play, when they know it will cost them.

    I don’t see much of a market for dominion to offer higher cost electricity that is both “green” and “fair”. Those are hard attributes to recognize in an electron.

    Dominion is not only not paying for all the collateral damage, but they will pay only for the value at the current usages, and not for the value they actually get.

    The current usage is measured as individual farms, and those people will get farmland prices, paid individually. But what Dominion is getting is an aggregate property that is worth much more by virtue of the profits it can generate.

    Those profits would be impossible without using the previous owners land, and they should be compensated at the new value, not the old. And preferably as a continuing stream of cash that goes with the deed to the remaining property. After all, those people are going to have to live with the power line forever, not just as a lump sum.

    I can easily imagine that with the qamount of electricity going through that line, and the number of families it serves, that line will generate enough cash to pay for the land under it every month. It is outrageous that the owners will get paid farm rates, once.

    At the very least, Fauquier should look at this like their own version of the Alaska Pipeline. They should zone that property industrial and slap it with the highest tax they can think of. After all, the county is losing a lot of land taxed at three times what it costs in services.

    Just as those landowners previously supplied unpaid services in terms of clean water, viewscape, and other things that the government thinks enough of to “Protect” but not pay for they are once again being required to do do something at the behest of others. Either live next to a power line, provided for the benefit of others, or sell out at a loss to someone who doesn’t mind, if the price is right.

    As I see it, this isn’t a matter of property rights, really. It is a matter of uncompensated personal servitude. But the only way you can prevent that from happening is to make sure that the property rights are strong enough so that when this happens the owner can walk away smiling.

    It is only a deal if both sides come out ahead, otherwise it is stealing.

    A few years ago, I described what happened on Marthas’ Vineyard. The modest house my family lived in and rented for (no kidding) $75 a month was recently sold for $6.5 million. What will you do, I asked her when someone walks up and offer $10 million for your place?

    “I’m outta here”, she said. Today her position is that no amount of money is sufficient, and that I am “selling out” because I suggest that there really is a fair price out there, somewhere.

    The property she bought had certan attributes, and it had a price. Dominion will pay here something proportionate to the price she paid (or would pay in today’s market) per acre. But the remainder of the property will have no where near the same attributes.

    Just as your property no longer has the same attributes as it had when you bought it, because it now has one less building right.

    I believe tht in either case the owner should be compensated, and compensated well. It prevents government or big business from making moves that are trivial to them but disaster for individuals. Yet it allows truly necessary changes to be made, if we are willing to pay the price rather than stooping to stealing.

    And, no, PEC isn’t getting a dime out of me. I’ve been working for them, pro bono, for long enough. If they win, I’ll call it even. Then maybe we can renegotiate the terms of our future engagements.

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