by Steve Haner
BE IT FURTHER RESOLVED: That the (Richmond) Council hereby commits to working with the City’s Administration on an equitable plan to phase out reliance on gas and shift to accelerated investment in City-owned renewable energy and hereby recognizes that the continued operation of the City’s gas utility is an obstacle to the City’s goal of Net-Zero emissions in accordance Resolution No. 2020-R024, adopted June 8, 2020.
Translation: The Richmond Gas Works, a municipal owned public service utility, is targeted for closure. Council sees its continued operation as “an obstacle.” The 117,600 customers (as of 2018) will need to run their lives and businesses without natural gas. Those customers are not confined to the city itself but are also located in Henrico and Chesterfield counties.
Disclosure: The neighborhood where Jim Bacon and I live, miles from the city line, is served by Richmond Gas Works. Just last year at some expense I converted a traditional 80 gallon electric water heater to a tankless gas unit. The goal was to save energy (it did), but if this happens, I’m back to the less efficient approach and my least favorite power company digs deeper into my pocket.
Every single candidate for the legislature in Richmond, Henrico or Chesterfield needs to tell the voters whether they will let this stand or oppose this effort to kill natural gas options. It will end up before the General Assembly or the State Corporation Commission or the courts or all three. The resolution itself contemplates needing legislation to accomplish its goals. The city probably has a legal (and enforceable) obligation to continue service under current law.
Here is a map of the current service territory. The city is probably less than half the full area. Think of all the industries around the airport and south along Interstate 95. Be prepared to say goodbye to some.
Incumbent candidates who voted for the Virginia Clean Economy Act and the similar bills in 2020 and 2021 should further explain if they understood this to be the ultimate goal. When you talk about an economy that is 100 percent carbon free, in all aspects, that basically means no natural gas. Period.
So, I ask my delegate, Democrat Schuyler VanValkenburg, will you (did you) vote to force me to convert my furnace and hot water heater to gas at the whim of Richmond City Council? Will you do the same to thousands upon thousands of your constituents, residential and business? I ask the same of your challenger, Republican Chris Holmes.
The council resolution (full text here) was adopted during the September 13 council meeting, having been introduced by Second District Councilwoman Katherine Jordan back in July. The online meeting notes do not reflect a roll call vote, and the agenda item may have been adopted in a bloc with others. The only place I saw the action reported was on Twitter, with green activists all excited. They are dead serious about this happening.
The city gas company serves homes, small businesses, and even huge industrial operations. Those big firms with an industrial process tied to natural gas will simply consider relocating. Restaurants will need to dump gas ovens. Residential customers, of course, will need to convert to electric heat pumps and stoves at a substantial costs already outlined in previous Bacon’s Rebellion post.
That earlier post and the report it was based on were dismissed by some as not credible. The Richmond City Council dream is also not credible, but that doesn’t mean the city will not try.
According to a 2018 city annual report on its utility operations, the gas operation had gross revenue of about $155 million in 2018 and gross operating profits of $20 million. After debt payments and other adjustments, the net profit was $10 million. On top of that, of course, the city also collects consumer use taxes directly from the consumers of the gas. It makes money both ways.
The financial benefits to the city would largely continue, of course, if the intent is to simply let a private entity buy the assets (actual capital value unknown) and operate as public service companies do elsewhere in Virginia. But that is not the intent. That does not advance the city’s and the state’s goal of net zero or zero emissions.
I have no idea what bonds or other debt stands behind the gas system. Another provision of the resolution calls for the city to stop dealing with any banks that invest in fossil fuels in any way. In other words, to stop working with banks investing in the City of Richmond itself, since it owns and profits off a gas company. There is a chicken and egg problem. (And maybe a problem for the city’s bond rating.)
As to the idea of city-owned renewable energy assets to serve those customers, again, not possible under current law. The existing electricity monopoly belongs to Dominion Energy Virginia, and it is already planning more wind and solar than we will ever use.
There is a check box on the resolution form noting whether or not a fiscal impact statement was prepared. You get one guess which of the two boxes was checked, yes or no.
These are not serious people. They should not be allowed to handle money or manage large complex operations. Even if this particular effort fails, the gas operation now need to move to safer private hands. But this outcome was predictable and predicted, and other progressive-dominated local governments share exactly the same goals. This is your seven a.m. wake up call (most of you having ignored the wake ups at six and six thirty.)