gridby James A. Bacon

Step aside Medicaid expansion. The big uproar in the General Assembly this year is over who gets the final say over the shape of Virginia’s Clean Power Plan: General Assembly Republicans or Democratic Governor Terry McAuliffe.

At stake is the future of Virginia’s electric grid. Democrats and their allies are pushing for 30% renewable energy by 2030 compared to 2005 levels. Republicans and their constituencies fear that excessive investment in intermittent energy sources like solar and wind would saddle rate payers with billions of dollars in unnecessary costs.

In a straight party-line vote earlier this week, the House of Delegates passed House Bill 2, which would require both the House and the Senate to approve any plan developed by Department of Environmental Quality (DEQ) to regulate carbon-dioxide emissions from electric power sources before submitting it to the Environmental Protection Agency.

After the bill’s passage, House Speaker William J. Howell, R-Stafford, said the energy plan will have a “devastating impact” on Virginia’s economy, according to the Richmond Times-Dispatch. “It is critical that the people have a say in the energy policy of the commonwealth through their elected representatives, not by unelected bureaucrats in Washington and Richmond.”

The bill likely faces a veto by McAuliffe, who has said that he would combat any effort to limit the state’s ability to respond to climate change and sea level rise.

The state faces two strategic decisions on how to reach Clean Power Plan emission goals.

The first decision is whether to go with an “emission standards” plan or a “state measures” plan. An “emission standards” plan would apply EPA standards to coal- and gas-fired power plants in the state. A “state measures” plan would include a mix of measures, not just focusing on power plant emissions but allowing other elements such as renewable energy standards and residential energy efficiency. A stakeholders group advising the DEQ reached a consensus, according to the meeting minutes, “that the emission standard approach was preferred.”

The second decision is whether to adopt a “mass”-based approach or a “rate”-based approach for reducing CO2 emissions. A mass-based approach sets targets based on the absolute volume of CO2 emissions by electricity producers within a state. A rate-based approach sets targets based on CO2 emissions per kilowatt hour of electricity generated. The stakeholders group started tackling this issue in December and will resume the discussion in its February meeting.

Meanwhile, in an open letter to McAuliffe, 50 Virginia environmentalists and progressives pushed for an aggressive implementation of the Clean Power Plan. States the letter: “Virginia can and should reduce its total carbon pollution from power plants at least 30% by the year 2030, by applying the same emissions limit to all plants (existing and new) and increasing our use of energy efficiency and renewable energy. With this strategy, Virginia’s Clean Power Plan will reduce electricity bills and grow our economy, while helping to meet our obligation to future generations.”

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19 responses to “Sparks Will Fly”

  1. Says Speaker Howell, “It is critical that the people have a say in the energy policy of the commonwealth through their elected representatives, not by unelected bureaucrats in Washington and Richmond.”

    Those unelected bureaucrats in Washington have issued a preliminary rule mandating emissions limits that is proposed to become binding on the State of Virginia in accordance with federal law. So, What’cha gonna do, Mr. Howell? It’s all very well to challenge federal laws and federal rules in the courts, as many have done in this case, but Speaker Howell makes it sound like he is talking GA-mandated defiance of those darned federal bureaucrats. That would make his recommendation tantamount to “interposition,” the Virginia brand of States-Rights made infamous by Massive Resistance.

    Now, if on the other hand we are talking how to comply with the federal Clean Power Plan mandate — balancing lowest utility rate impact against environmental benefits meeting or exceeding federal CPP minimums — don’t we have enough cooks in that kitchen already? DVP and PJM, among others, were supposed to come up with recommendations to the VSCC, and the VSCC was supposed to coordinate somehow with DEQ, wasn’t it? And now we’ll subscribe in advance to another level of review by the GA itself? And whatever sausage comes out of that legislative meat grinder will nevertheless comply with the federal rule (not place DVP’s planners between inconsisent, even contradictory, mandates)? Thanks a lot, Mr. Howell!

    As for this equally foolish proposal to mandate a percentage of renewable resources, whatever happened to common sense? The argument a few years ago was, we had to have a mandated requirement to bring down manufacturing costs through volume, and to give utilities experience working with renewable resource generation. Now, you’ve got half the nation looking aggressively at both wind and solar power, and mandating a “starter” volume is no longer necessary. On the contrary, we run the risk of mandating an arbitrary amount that exceeds what the grid can or should absorb economically. We’ve crossed the threshold of familiarity; there is solar and wind generation scattered all over PJM’s grid and on economics alone DVP (and many of its customers) are planning to build more of it. Governor, don’t force the market’s hand and demand more of something for ideological, externality, reasons.

    1. Here is what I think the situation is:

      The enviros asking for Virginia adopt a carbon mass target, and they want to choose the strictest option, which is to place all future plants under a strict CO2 cap. Then presumably Virginia could enter into a cap and trade program to buy the renewable credits for any in-state renewable shortfall.

      As you know, we currently import about 30% of our power, mostly coal based. Dominion is heading towards replacing the imports with natural gas. If we adopt a strict carbon mass based target, including all new plants under the cap, EPA has the power to veto future natural gas plants proposed by Dominion. Since Dominion indeed does plan future natural gas power plants, this strict option essentially calls for rejection of some of Dominion’s future plans.

      Dominion is asking for an alternate CPP option, either rate based, or mass based not including new plants, that gives them more freedom to continue with their plans to replace imports with natural gas power and maybe some renewables. Actually Jim and I saw one article that specifically said Dominion wants the rate based CPP target.

      There is nothing inherently wrong with the rate based (CO2/MWkr) approach. According to the projections I’ve seen, if all states adopted the rate based approach, the U.S. CO2 reduction would be greater than the mass based approach. As far as I can see, the rate based approach makes good sense for Virginia as we are currently headed. If you want to throw a monkey wrench into Dominion’s plans, then pick a strict mass based target.

  2. First of all, we need to realize the Clean Power Plan is an extraordinarily ambitious EPA mandate. It seeks 32% U.S. CO2 reduction between 2005-2030, during which period, the U.S. population will increase about 22%. So in round numbers we’re talking 45% CO2 reduction per person, relatively quickly. Thanks to low natural gas prices, some progress has been made, but much of the hard work is still ahead.

    Meanwhile, the EPA gave states much flexibility to meet the CO2 targets in numerous optional ways. All of the options that the EPA gave us are extremely difficult, and consistent with the 32% national CO2 reduction target.

    Now enter the Va. dems and enviro groups advising the public that, of the options that the EPA gave us to meet the targets, the only acceptable solution to them is for Virginia to self-nominate for the most severe imaginable CO2 reduction targets. EPA is looking like saints here in comparison.

    Meanwhile 27 other states representing 75% of the nation’s CO2 emissions are suing EPA over the Clean Power Plan.

    Despite all of the bad-mouthing that Dominion gets, one pleasant surprise last year is that Virginia already seems to be moving in right direction re: reducing its carbon footprint. Under the circumstances, If Virginia cannot get its political act together, it does not bode well for the long term feasibility of the Clean Power Plan.

  3. LarrytheG Avatar

    Here’s the CPP Fact sheet:

    I hear the arguments against it – but when I look at the fact sheet – and other CPP info – I do not see what folks are claiming it says.

    can someone provide a non-partisan – explanation ?

    1. Can you say what “folks are claiming it says”?

      What’s happening in Virginia is some folks would like to adopt strictest possible CO2 standards, and presumably some folks on the other side of the aisle want to weaken or eliminate the plan (but that position is less well documented as far as I know). The EPA plan gives us options, so it is possible some options are harder than others given state-specific factors, which is why EPA gave us alternate options.

  4. LarrytheG Avatar

    basically that we can’t meet the targets without wind/solar…

    can someone lay that out with numbers and confirm that it also means using demand-side strategies…..and buying wind/solar back….etc

    seems like the current opposition is more along the lines of ” we cannot do this so we choose to not even provide numbers”.

    and how would the GA obtain the calibre of DEQ professional expertise to effectively review the DEQ response?

    this sounds like all politics – with absolutely no real intent to provide a response – with numbers that may or may not meet the targets .

    and if the GA is so spun-up on this – why don’t they also refuse to close down Yorktown?

  5. LarrytheG Avatar

    I found this:

    Report on Appendix A-1 of the Virginia Energy Plan:
    Impacts of Proposed Regulations under
    Section 111(d) of the Clean Air Act

    it’s from the Cooper Center – it seems to be non-partisan and fact based

    seems like it would be hard to ignore it – if DEQ and the GA were actually serious about a substantiative response to CPP.

    1. Good report. I’ll have to read it more thoroughly. Anything new from this group? We seriously need somebody to map out various CPP options for Va. and these folks look like they could do it.

      I like the way they talk about Virginia’s imports of power and how that hurts our CPP compliance. That’s what I say.

      1. Rowinguy Avatar

        Bear in mind that the primary purpose of the Cooper report was to rebut a report prepared by the Center for Coal and Energy Research at Virginia Tech that estimated compliance costs with the draft rules.

        I don’t think it unreasonable to assume some tension between the approaches to the proposed rules taken by these different policy think tanks.

  6. LarrytheG Avatar

    I’m in favor of mapping out serious approaches with real numbers – validated numbers – from credentialed sources – and to work to get this out of a partisan war.

    the errors they pointed out sound really egregious and amateurish for a serious analysis of CPP and really bad for the GOP to latch onto without asking for validation.

    1. Keep in mind the Cooper report is dated July_2015 so that’s before the final CPP plan was announced. Therefore some of their comments (are still helpful) but must be viewed in the context of the date of report. There were quite some changes in the CPP plan between the draft and final version of 3-August-2015.

  7. LarrytheG Avatar

    Oh I agree but the Cooper report laid out some serious flaws that should be corrected in a revised report. Where is the revised report?

    Is the GA and other opponents relying on the older discredited report?

    I think the point is that there is some real expertise in-house in Va that really does know how to analyze the CPP – and apparently some still prefer to rely on what is clearly flawed analysis…

    why do we not get a better, correct analysis as the basis for views and opinions?

    This is where I seriously doubt the intentions of the opponents… who to me seem not interested at all in an objective analysis…

    we should not be doing public policy like this.

    1. Sounds like the Gov has the power right now?

  8. LarrytheG Avatar

    so does the GA… and they are the ones objecting… and claiming it’s unaffordable… the Gov believes CPP is not the big bad evil that uninformed folks spouting clearly flawed analyses are “proof”.

    do they really want to know the facts?

    1. That IS the question: do they really want to know the facts? Too often these days the first ‘consultant’ able to rush a sloppy, biased study into print will dominate the discussion with it even though its conclusions are easily rebutted, as long as it’s the answer people want to hear. As misleading as candidates’ answers in a presidential primary debate! Here, the GA majority clearly wants to blame the Coming Virginia Economic Catastrophe on the forces of the EPA’s Evil Empire. It would be nice, but probably won’t happen, if some committee over at the GA commissioned a thorough update of the Cooper Center/Batten School report to be presented not only to the GA itself but also the VSCC and VDEQ to serve as a reasonable baseline for discussion.

    2. I do not have clear read on the Repub position. I know my one and only local repub wants to go full out on maximizing renewables. I know there is some rhetoric out there, but as far as I am concerned both sides spinning it. Maybe they all want NA3 and that solves the CPP problem except for those of us not liking the nuclear option.

  9. VaConsumer Avatar

    The issue of Virginia being an importer of electricity is bogus. We have agreed for AEP to build generation located outside of Virginia that is completely designated for Virginia and always has been. More recently, Dominion was allowed to build generation outside of Virginia, also designated for Virginia. When the industry wants to create the illusion that we are in a dangerous position, they pull out the “net import” data. This is but one example of how everyone is regularly misled by the industry.

    1. However, the Clean Power Plan is extraordinary not just due to ambitious CO2 targets, but also because it fundamentally reshapes the management of CO2 from regional to state boundary lines. This has profound implications as far as re-organizing our approach. Fortunately or unfortunately, EPA gave us so many complex compliance options, it’ll could take several years just to explore the options. One of many options that should be explored in my opinion is a combined WV/Va approach – aka more or less our current approach.

    2. PS: Va Consumer-
      What was the more recent Dominion outside Va. case?

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