By Steve Haner
If the Virginia General Assembly orders Dominion Energy Virginia to fork over hundreds of millions of dollars in “excess profits” to cover unpaid family utility bills, who is really paying? We all are, of course. Don’t say you were not warned.
That apparently is the latest approach to help folks behind on their bills, as reported in this morning’s Richmond Times-Dispatch by Associated Press. Governor Ralph Northam is proposing a budget amendment to raid the presumed excess cash at Dominion, after legislative efforts to capture it were defeated in the special session.
Legislative manipulation of the regulatory process, bypassing the independent State Corporation Commission, created the opportunity for Virginia’s dominant electric utility to pile up a possible half billion dollars in excess profit. But the money came from every Dominion customer, a large portion of it from the giant industrial consumers. Only a small part came from those now behind on their monthly bills.
Some legislators see your electric bill as just another tax to be spent on their priorities, not yours. Now they want to use it to pay electric bills for customers who have fallen behind due to a recession (again, a recession in part of the government’s making.) Continue reading
Future Dominion price increases. Source: SCC. Actually, 1000 kWh per month is a bit low for the average residential customer, so many Virginians will be paying much more. Click for large view.
By Steve Haner
You will be shocked to learn that we customers of Dominion Energy Virginia did not pay it enough money in 2019. The shareholders did not get the profit margin they were due, the utility reported to the State Corporation Commission, which subsequently reported it to us on August 18.
Actually, these guys were not utility accountants, but they were on the right track.
We’ve entered the realm of energy comedy. The utility accounting process now mirrors the famous movie “The Producers,” with the goal being to book little or no actual profit so high rates can be maintained or even made higher. There is honest accounting, show-biz accounting, but for real whiz bang results there is utility accounting.
The SCC’s annual report to the General Assembly on utility accounting, now including projections of future rate costs, normally comes out closer to September. I was tipped to expect it early by a Dominion big wig, which should have told me it was a report they wanted publicized. This is Dominion playing the long game, preparing for the 2021 showdown on its rates and profits in a formal SCC audit and rate case.
The rules for this long game have been rigged in the utility’s favor over several years by a compliant General Assembly. This is not news to Bacon’s Rebellion readers. But here we go again. Continue reading
By Steve Haner
Virginia’s two major electric utilities estimate that as many as 150,000 of their poorest residential customers will see their monthly bills reduced next year using money extracted from all their other customers on their own power bills.
Appalachian Power Company projects about 30,000 of its low income customers will receive subsidies of $500-$600 per year. Dominion Energy Virginia projects bill subsidies to about 120,000 households of about $750 per year.
Both companies told the State Corporation Commission recently that to pay for this, about $1.12 will be added to the cost of every 1,000 kWh of electricity used by homes, businesses, and industries in Virginia. The cost per kWh is the same for all customer classes, and thus represents a larger percentage price increase for the commercial and industrial users. Continue reading
Warren Buffett, CEO of Berkshire Hathaway
by James A. Bacon
Before it sold off its national newspaper division to Lee Enterprises for a measly $140 million in March, Warren Buffett and Berkshire Hathaway owned most of the newspapers in western and central Virginia, including the Richmond Times-Dispatch, the Roanoke Times, the Daily Progress (in Charlottesville), and the News Virginian (in Waynesboro). Reporting by these newspapers dominated news coverage of the Atlantic Coast Pipeline and shaped the pro-environmental narrative that ultimately defeated it.
Earlier this month Dominion Energy, the pipeline’s managing partner, announced that it was abandoning the project and, indeed, was selling its multibillion-dollar gas distribution business to…. Berkshire Hathaway Energy. Upon consummation of the $4 billion transaction, Berkshire Hathaway’s energy subsidiary will carry 18% of all interstate natural gas transmission in the United States.
Charles Munger Jr., son of Berkshire Hathaway vice chairman Charles Munger.
Arthur Bloom, managing editor of the American Conservative website, doesn’t come right out and say that Berkshire Hathaway used its power of the press to force Dominion into abandoning the pipeline and unloading its gas distribution, but he does suggest that such a thing might be possible. In “The Great Virginia Pipeline Swindle,” he writes:
What is beyond dispute is the death of the Atlantic Coast Pipeline has now resulted in a substantial acquisition for Berkshire Hathaway, after various people connected to the company have worked to kill it.
Breaking news: Dominion Energy and Duke Energy have announced the cancellation of the Atlantic Coast Pipeline, citing ongoing delays and increasing cost uncertainty. The cost of the project had escalated from $5 billion to $8 billion, and, despite winning a victory in the United States Supreme Court, the power companies still have no certainty of gaining all the needed regulatory approvals.
Said Dominion CEO Thomas F. Farrell, II, and Duke CEO Lynn J. Good in a joint statement:
We regret that we will be unable to complete the Atlantic Coast Pipeline. For almost six years we have worked diligently and invested billions of dollars to complete the project and deliver the much-needed infrastructure to our customers and communities. Throughout we have engaged extensively with and incorporated feedback from local communities, labor and industrial leaders, government and permitting agencies, environmental interests and social justice organizations. … This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged.
Photo credit: Associated Press
Well, well, Virginia finally has an offshore wind turbine industry. The last 253-foot blade was attached Friday to a turbine and pylon off Virginia Beach. At a cost of $300 million, the two turbines owned by Dominion Energy will provide some of the world’s most expensive electricity, but they do pave the way for a $8 billion, 180-turbine wind farm that Dominion plans to build next. The wind farm, endorsed by Virginia’s major environmental groups, will be free of CO2 emissions. It will also generate the highest-cost electricity in Dominion’s energy portfolio. Governor Ralph Northam hopes the wind farm will stimulate development of a cluster of major wind-power fabricators and service companies in Hampton Roads. We’ll see how that works out. Early indicators could be better: The two towers were assembled in Nova Scotia and transported to Virginia on a special ship.
By Steve Haner
Anybody who closely read the so-called Virginia Clean Economy Act and had watched Dominion Energy Virginia’s previous manipulations of Virginia’s General Assembly could see what was coming. Despite its “billing,” that bill was never going to end the use of fossil fuels in Virginia.
As early as February 13, I reported that to readers of Bacon’s Rebellion, in “Energy Omnibus II: It Doesn’t Shut Gas Plants.” Later bill versions were even less restrictive. Continue reading
This Would Be You, Virginia
By Steve Haner
Mel Leonor reports in today’s Richmond Times-Dispatch that Dominion Energy Virginia and the Green Energy Oligarchs have used the Virginia General Assembly to empty your pockets with a false promise.
According to Dominion’s own information, the highly touted Virginia Clean Energy Act (1) will not result in a total end to fossil fuel generation feeding your homes and businesses and (2) will increase bills by amounts similar to or in excess of the warnings in February from the State Corporation Commission. She writes:
Either way, the company said, customers in Virginia should expect to see their bills rise by as much as 3% a year until 2030, in large part due to infrastructure investments to build solar, offshore wind and battery capacity.
For the average residential customer using 1,000 kilowatt-hours per month, that could mean an increase of $45.92 to their monthly bills, from the current $116.18 per month to $168.58 per month.
The SCC’s estimate of the new legislation’s rate impact was that it would cost residential customers about $28 a month (1,000 kWh) within five years, so Dominion’s projection over ten years is right in line. The SCCs claims have been validated and the false promises of lower costs from advocates exposed. Continue reading
by Jane Twitmyer
The South, including Virginia, has been slow to build clean, transformed utility systems. Last year, major corporations including Costco, Cox, Kroger, Sam’s Club, Target and Walmart petitioned Virginia regulators to allow them to meet their renewable energy goals by purchasing their electricity from third parties. Dominion Energy’s response was to commission a poll, according to PV magazine, asking which of two arguments was the most compelling: (1) the claim that ratepayer bills will go up $100 per month if corporations are allowed to procure their own renewables, or (2) that in the states where deregulation was introduced, that customer rates rose 39%.
The arguments are deeply questionable now that renewable technologies are cost competitive, but the “high cost” argument ignores the ongoing federal support for fossil fuel industries. A Forbes article in January warned all investors that “power sector decarbonization” is now an “imperative.” In almost all jurisdictions, utility-scale wind and solar are now the cheapest source of new electricity without subsidies. … New unsubsidized wind costs $28-54/megawatt-hour (MWh), and solar costs $32-44/MWh, while new combined cycle natural gas costs $44-68/MWh.
Comparing the real costs of generation resources is complicated. Subsidies, both direct and indirect, as well as “offloaded” costs, need to be included. Forbes said their cost comparisons were “without subsidies,” meaning without “direct subsidies” — or specific government funding meant to reduce the retail price of building or fueling a generation resource. The International Monetary Fund (IMF) describes these subsidies as “pre-tax subsidies”, which in 2017, globally amounted to roughly $500 billion a year. Continue reading
By Peter Galuszka
For more than a decade, hydraulic fracturing drilling for natural gas and oil has transformed the American energy picture, leading to big revivals in such energy fields such as Marcellus in West Virginia and Pennsylvania and the Bakken field in the Dakotas.
It has prompted Dominion Energy and its utility partners to push forward with an $8 billion or so Atlantic Coast Pipeline that will take Marcellus gas through Virginia all the way to South Carolina. The project, tied up in court fights, has been enormously divisive as property owners have protested the utilities’ strong arm methods of securing rights of way.
But now there’s clear evidence that the fracking boom is over, and that has huge implications for the ACL project. The reason? Oil and gas prices have dropped thanks to a perfect storm of issues. There’s the coronavirus pandemic tanking the U.S. economy, bitter energy wars between Russia and Saudi Arabia, and the fact that fracking gas and oil rigs are enormously expensive and wells can produce for only a short period.
The Hill reported last week: “Oil sank to $23 (a barrel) from a high of $53 in mid-February, far below the break even point that producers need to drill new wells to maintain supply, and with volumes rapidly diminishing at existing wells.”
The newspaper points out that a fracking well can cost more than $10 million while a traditional well is only $2 million. As price pressure mounts, the number of wells nationally has plummeted from 790 to 772 in one week. At the Bakken field, reports The Washington Post, producers are cutting costs.
The situation has clear implications for the ACL project which was conceived at the height of the Marcellus boom. Dominion claimed that the gas would be badly needed in coming years while others claimed there isn’t enough demand. Continue reading
Posted in Budgets, Business and Economy, Courts and law, Economic development, Energy, Environment, Federal, Infrastructure, Planning
Tagged Atlantic Coast Pipeline, Dominion, Peter Galuszka
by Jane Twitmyer
In the 2019 election, Virginia voters finally figured out the one weird trick that allows any jurisdiction to pass good climate and clean-energy legislation, according to Dave Roberts at VOX. “They put Democrats in charge.”
Virginia is the first southern state in the U.S. to set a goal of sourcing 100% of its electricity from renewables by 2050. The recently passed “Clean Economy Act” mandates major change. All coal, oil burning and wood pellet plants must be retired, and all in-state power plant carbon emissions eliminated by 2050. Going forward, renewable resources such as energy efficiency, battery storage and expanded solar are now required. Net-metered solar will expand from 1% to 6%. The state’s commitment for offshore wind is the third largest in the country.
These new CEA requirements are being celebrated by the newly elected Democratic majority and the climate activists who all worked vigorously to pass them. During the Session, 53 House bills and 29 Senate bills were introduced relating to creating clean energy. So, although Virginia’s utilities and the South’s two other major utilities have lagged the rest of the country in developing their energy efficiency and renewable strategies, Virginia is now on the way to building a system resourced with clean energy. Continue reading
By Steve Haner
Having voted to give Dominion Energy Virginia a blank check to spend billions of your money on offshore wind turbines, the Virginia House of Delegates will vote today to provide hundreds of millions more from your pockets for electric school buses.
Last week the House defeated a similar bill, twice. It received only 35 votes the first time and 44 votes the second. The response from the utility and the Senate patron was to introduce a new bill “Thursday,” after she received unanimous consent from her fellow senators. Continue reading
The Main Clean Energy Bill. Both General Assembly chambers have now approved a single substitute version of the omnibus clean energy bill, on largely (but not totally) party line votes. In a further compromise on their plan to save the world, proponents decided not to force closure of a Southwest Virginia coal-burning plant and were rewarded with the votes of one Southwest Virginia Republican: Del. Terry Kilgore. (Correction: The initial post incorrectly reported Sen. Ben Chafin as having voted aye. It was Republican Sen. Jill Vogel.)
Kilgore’s vote mattered as the House had only 51 aye’s. The House roll calls are not posted yet, just the vote totals. Senate Bill 851 is now on its way to Governor Ralph Northam. Odds are further changes will be coming and another vote will be taken at the Reconvened Session on April 22. The House version was heading for a conference committee which is now not needed. Continue reading
By Steve Haner
The 2020 effort to bring Dominion Energy Virginia back under full State Corporation Commission regulation failed because too many of the loudest advocates are two-faced hypocrites. If they truly cared about ratepayers and the proper balance in utility regulation, they wouldn’t be pushing that other bill, the one that further guts the SCC and adds substantial customer costs in the name of green virtue.
During the hearing Monday night State Sen. Steve Newman, R-Bedford, was quite open in chastising the various environmental advocates for talking out of both sides of their mouths, worrying about the ratepayer in one discussion but not the other. He was right. If you want Virginia energy regulation done correctly, it needs to be done correctly in all instances. Continue reading
Three of the six electric utilities charging customers to provide others with Ohio PIPP subsidies. Per 1,000 kWh the surcharge to customers is $3.19 for Toledo Edison, $3.34 for Ohio Edison and $2.37 for The Illuminating Company.
by Steve Haner
Both the Virginia House of Delegates and Senate have voted to increase the price of electricity to most Virginians in order to subsidize the bills of low-income utility customers. How much? They have no idea. But the program in Ohio being copied adds from $1 to $3.66 to the price of 1,000 kilowatt hours for those not subsidized.
The Virginia version is even borrowing the name and acronym from Ohio, the Percentage of Income Payment Program (PIPP). The charge in both is called a “universal service fee.” In 2020, the Ohio program will cost ratepayers $301 million to subsidize the power bills of about 275,000 low-income households. The Public Utility Commission of Ohio (PUCO) sets the amount charged in each utility’s service territory and the Ohio Development Services Area transfers the necessary funds to the various electricity providers.
The largest electricity provider in that state of 11.7 million people, Ohio Power, has the highest “adder” on its rates, $3.66 per 1,000 kilowatt hours used. That works out to $44 per year for a residential customer using exactly that amount monthly. A large industrial or commercial user would pay the same rate until monthly consumption hit 833,000 kilowatt hours, when a reduced rate kicks in on additional consumption. The first 833,000 kilowatt hours of usage in Ohio Power’s territory is hit with a $3,050 monthly surcharge. Continue reading