Tag Archives: Dominion

SCC Authority Over ACP Costs Reinforced In Bill

Sit down for this shocking news, but for the first time in recent memory a key energy subcommittee at the General Assembly has voted for the ratepayers, for the authority of the State Corporation Commission, and against protecting the stockholders of Dominion Energy Virginia.

The energy subcommittee of House Commerce and Labor Committee has approved a bill from Delegate Lee Ware (R-Powhatan) that reinforces the SCC’s authority to review the construction and operation costs for the Atlantic Coast Pipeline when Dominion starts using it.  If Dominion uses gas from the line in its power plants, as expected, ratepayers will be asked to pay both the commodity cost for the gas and a share of the transportation cost of using the new pipeline.

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A Third Way for Coal Ash Disposal

EnCAP-IT schematic shows how coal ash can be stored on-site above ground level in synthetically lined cells, or bunkers. Source: “Macroencapsulation: Obtaining on-site clean closure,” Geosynthetics magazine.

By Dominion Energy’s most recent estimate, it will cost between $2.77 billion and $3.36 billion to recycle the utility’s 30 million tons of coal ash or bury it in synthetically lined landfills — as much as $2 billion more than burying it in place. Environmental groups say the risk is justified to offset the risk that toxic levels of heavy metals might leak into nearby rivers and streams.

But what if it were possible to reduce the environmental risks while also slashing the cost to rate payers? Shouldn’t the General Assembly be considering that option?

John Swenson, founder and managing partner of Henrico-based EnCAP-IT Solutions of VA, has developed 12 patents around a coal-ash disposal process he calls macroencapsulation, which combines the cost-efficiency of cap in place with the risk reduction of removal to landfills. He’s frustrated because he can’t get either Dominion Energy or environmental groups to consider his approach. Now a compromise solution backed by Governor Ralph Northam effectively removes the option from consideration.

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SCC Rejects Most of Dominion Grid Proposal

The State Corporation Commission Thursday rejected in large part the highly-touted Dominion Energy Virginia proposal to rebuild its transmission grid, approving only the elements improving cyber and physical security.  Those were the least expensive and least controversial pieces of its application.

The 2018 legislation that stated major grid investments were in the public interest also re-stated the Commission’s charge to review them for prudence and reasonableness.

It did (here’s the order) and found this:

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Dominion Withdraws Renewable Tariff Effort

In the wake of the State Corporation Commission’s recent approval of a renewable energy tariff for residential customers of Appalachian Power Company, Dominion Energy Virginia has given up the application for its own more expensive proposal for a similar service to its residential and smaller business customers.

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Bacon Bits: Rider U Screws U Know Who

Now that the State Corporation Commission has finally approved Dominion Energy Virginia’s Rider U, mandated by the General Assembly to force us all to pay for underground lines serving just a few customers, let me explain how perfectly this scheme put the company ahead of its customers.  (For case details, the Richmond Times-Dispatch has this good story, picking up some themes from an earlier Bacon’s Rebellion post.)

Set aside discussions of the “Strategic Underground Program” because the merits do not matter for this illustration.  Start with the information that Rider U is a stand-alone line item on your bill, a financial silo on Dominion’s books, with a guarantee that the utility will recover in full the cost of construction with a profit margin over time.  No risk to the shareholders.

Any benefit to the customers, and there will be some certainly, shows up as reduced maintenance and repair costs and fewer interruptions.  Those maintenance and repair costs are covered by the main portion of your bill, the base rates, outside the Rider U silo.   Say it’s a one-to-one ratio, and the $70 million spent putting lines underground saves $70 million over five years in repair costs.  The fewer interruptions also add base rate revenue outside the silo.

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Clean Virginia: A Powerful Swing That Misses

The full list of elements covered by Clean Virginia’s so-called “Dominion Tax”.  Click to see a larger copy.

Clean Virginia’s recent report accusing Virginia’s two investor-owned electric utilities of annually “taxing” their customers $254 or $89 respectively has a strong basis in fact, and beautifully packages the information, but ultimately is flawed and unfair.

Which is a shame, because the basic premise is correct.  The utility regulation process in Virginia has been badly subverted, the regulators disabled, enriching utility shareholders at the cost of shareholders.   Reading the entire report tells the story of how every well, and I endorse (and recognize) many of their recommendations.   But be very wary of that “tax” figure.

Read the Washington Post’s account and others uncritically and you will assume that you, average residential customer, could be paying $20 a month less to Dominion Virginia Energy or $7 less to Appalachian Power Company.  Those figures might be used in political conversation (such as by somebody’s opponent in a primary) or regularly cited by Dominion opponents in legislative debate.

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Fools Rush In: Coal Ash Scene Setter

Coal ash pond at Bremo Power Station. Photo credit: CBS 19

“I hate to give out directions without knowing what the cost is going to be.  There’s far too much of that in government.” 

That was Senator Frank Wagner of Virginia Beach expressing his deep reservations about various proposals to deal with the 27 million cubic yards of coal ash that Dominion Energy Virginia has collected over decades near its major power plants.  Wagner, who chairs the Senate Commerce and Labor Committee, was part of a joint subcommittee of that committee and its House counterpart that heard testimony  Monday but took no actions.

Legislation is coming.  Coal ash disposal in 2019 might turn into a replay of grid transformation in 2018, an omnibus electric utility regulation bill that takes on epic and expensive proportions as it moves through the legislative process.  It will also be a textbook example of what happens when legislators jump in to make billion-dollar decisions that could be made a better way.

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IRP Rejection Part of a Pattern of Trouble

The State Corporation Commission’s decision Friday to reject the Dominion Energy Virginia integrated resource plan is just the latest sign the energy package sold by the utility to a compliant General Assembly in early 2018 still has an uncertain future.

Two headline elements of the legislation – the promised massive renewable projects and a rebuild of the grid — are in limbo as the 2019 General Assembly looms.  Another headline element, the ability of the utility to use excess profits it is holding to pay for both and thus eliminate risk of rate cuts or refunds, won’t even be tested in front of the SCC until at the earliest 2021, when the utility might (might) undergo its next rate review. Continue reading

“Incomplete!” SCC Sends Back Dominion IRP

SCC Offices on Richmond’s Main Street

The State Corporation Commission today rejected the 2018 integrated resource plan (IRP) filed by Dominion Energy Virginia, stamping it “incomplete” and asking the utility for additional information in a supplemental submission.

The IRP is only a planning document, and the one for 2017 was just approved by the Commission a few months ago.  But in response to the 2017 plan and the massive revision to utility laws by the 2018 General Assembly, several specific directives were imposed for this next plan, which is supposed to have a longer shelf life.  The SCC asserts Dominion failed to comply with some of those directives.

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Updates: Deadly Road Diet? Rider T1 Case

The Powerful Law of Unintended Consequences

A raging forest fire is hard to imagine in Northside Richmond, but there could be other emergencies where the city and its residents would come to regret the loss of vehicle travel lanes on Brook Road. A recent deadly fire in California we all watched on television may be giving us a warning.

Apparently, evacuations from the lightning-quick brush fire around Paradise, California, were complicated by a 2014 decision there to impose a “road diet” on a four-lane road that became the escape route.  The push for “road diets” is also behind the argument for creating new bike lanes in both directions of several miles of Brook Road, a topic of earlier Bacon’s Rebellion posts and furious local debate.

A description of the bottleneck created by the highway adjustments in Paradise, and its impact on the fire evacuation, was published on wattsupwiththat.com, an interesting blog I only found because it linked to one of my posts on Dominion Energy.

The bottom line problem is that people just like building in dangerous places in California, including fire-prone areas.   When I lived in Southern California in the 60’s there were regular local stories about houses sliding into the ocean or homes destroyed by brush fires, only to be quickly rebuilt.  The population has grown, development has pushed further into countryside and mountains, and now there are regular national stories.

Bottlenecks have already developed on Franklin Street because of its seldom-used bike lane.  Just about any activity (parked or parking delivery trucks, leaf removal) in the one remaining travel lane causes a backup.  Similar bottlenecks will happen if the Brook Road project proceeds.  In both cases there are parallel streets that were not available to evacuees in the High Sierra, but it still calls into question whether safety ever trumps ideology with some people.

Next Step, Supreme Court of Virginia?

The State Corporation Commission issued an opinion Friday reaffirming its earlier decision that Dominion Energy Virginia must include payments it receives from the PJM regional transmission authority along with the payments it makes to PJM in the separate Rider T1 it puts on all our bills.

Following the commission’s August decision the utility filed for reconsideration.  The next step, should it decide to take it, is to the Virginia Supreme Court.

The amount of money in dispute is minor, so the precedent must be the point.  Dominion Energy is seeking to book the payments it is getting back from PJM into base rates, which increases the amount customers must pay in Rider T1 (for transmission) and increases the profit the company earns (and keeps) in base rates – base rates that seemingly will never be adjusted downward again and profits which may never be shared as rate credits again.

“Put simply, Dominion seeks to charge customers dollar-for-dollar for these transmission costs through Rider Tl but opposes crediting customers in the same manner for transmission revenues received for the exact same service,” the order reads.

Since 2007, more and more of the company’s operations are being paid for with stand-alone rate adjustment clauses outside of base rates.  New renewable generation may be funded that way, and the coming rebuild of the distribution grid might be as well.  If there are to be silos keeping all the costs in one place, the same silos should hold any and all related revenues to offset those costs.

Dominion Grid Plan Battered in Testimony

Caroline Golin, Ph.D., witness for Appalachian Voices, SELC

Two witnesses told the State Corporation Commission Tuesday that Dominion Energy Virginia’s proposed grid transformation program will not bring the utility’s customers into the modern energy economy.

Both Scott Norwood of Texas, an expert witness often used by the Office of the Attorney General, and Caroline Golin, an expert from Georgia hired by environmental groups, paralleled their written testimony reported on in an earlier post.

The commission must agree that the company’s $917 million first phase of its plan, which includes a roll out of new automated metering technology, is reasonable and prudent before the company can proceed. Just how customers will pay for this – either through a rate adjustment clause or the use of excess profits retained by the company – is not yet before the commission. With financing costs and profits the long-term revenue requirement for all phases of the plan is estimated at $6 billion by the SCC staff.

“The company is not proposing to operate the grid in any new way,” Golin said Tuesday. If it were moving aggressively to distributed energy, to more customer-driven demand management, to time-of-day pricing, to use of storage, “then I would agree they need more control of the grid. But right now, they are not proposing any of those.”

Norwood noted that a major part of the plan’s cost will be spent to reduce average outages by a few minutes per year. “I’m skeptical most customers will notice. It’s like the break we took at midmorning.” Benefits of that kind of reliability flow to larger, commercial and industrial customers but will be paid for by the residential customers.

Golin picked up on the same point: “There is a difference between reliable and perfect” and the company is now shooting for perfect. “This is something the commission needs to be very critical of. The average customer does not require perfect power.”

Support from some of the environmental groups, and a neutral stance taken by others, was crucial to passage of the 2018 legislation. Dominion Energy packaged it to the public it as a grid modernization effort, but its final version also included major incentives and directives to build more renewable generation. Now the environmental groups are leading the charge against the grid-related element of the bill, claiming it is a lost opportunity to truly transform the utility for a renewable energy future.

Golin, who has joined Google since being retained in this case, has been involved in grid redevelopment cases around the country and has also been especially critical of Duke Energy’s North Carolina plan.  Her statement that Dominion had no plans to operate the grid differently was vigorously challenged by Dominion and even an SCC staff witness later in the hearing.

Since the first round of written testimony was filed, Dominion’s leaders have supplemented the record with rebuttal testimony, but it was picked apart at the hearing as more evidence that no real cost-benefit analysis had been done, much of the engineering work is preliminary, cost estimates have little valid basis, and some obvious grid-related issues were flat ignored.

Dorothy Jaffe of the Sierra Club used questions to a Dominion witness to point out no real plans were made for the growth of electric vehicles, and the initial $3 billion plan would have to be supplemented – perhaps at additional cost – to support that expected transformation.

The Office of the Attorney General and the SCC staff have not asked for a total rejection of the proposal, but acceptance with conditions or acceptance of only the early pieces that involve planning and engineering. 

As with most of the issues that have reached the commission growing out of that legislation, the key question is does the regulatory body have the power to say no. In some cases, such as the off-shore wind demonstration project, the legislative wording was a clear directive. In the case of the grid projects, however, the new language mandated a review for reasonableness and prudence. A separate hearing on the commission’s authority was held November 7.

“The new law does not require a single one of these projects to be implemented,” said Nate Benforado, an attorney for the Southern Environmental Law Center, who used his opening statement to dismiss the whole effort as “a plan to spend money” which “puts the customer last.”

“This is a huge issue for the coming decade,” Benforado said. Dominion really doesn’t need to build new generation. There is testimony in the current integrated resource plan case that demand is flat or dropping, with plenty of generation assets available through connection with other utilities. “Dominion is looking for ways to spend customer money and earn a rate of return.”

The decisions on this case and on the integrated resource plan will probably need to be viewed together to glimpse Virginia’s future. The IRP case appears ripe for a published opinion with no further hearings planned. The commission has until mid January to issue a decision on this matter.

SCC Staff: Convert A Dominion RAC Into A PPA

All-in lifetime revenue requirement for two solar projects related to Facebook. Key data is hidden. Operating and maintenance costs are also kept secret, perhaps to prevent simple math from disclosing the RECs. ARO stands for “asset retirement obligations” and ITC is the federal tax credits. Source: SCC staff testimony.

“Facts are facts, and the SCC does a really good job of compiling them.”  Former State Senator John Watkins of Chesterfield.

After demonstrating that two solar energy facilities Dominion Energy Virginia has proposed in a deal with Facebook leave ratepayers holding all risks, reported already in the Richmond Times-Dispatch, the State Corporation Commission staff suggested an interesting solution that shifts that burden.

“Should the Commission determine that the proposed US-3 Solar Projects are not prudent as filed, the Commission may want to condition approval on the implementation of cost recovery through a rate adjustment clause (“RAC”) based on the market index in lieu of the cost of service model proposed in this case,” wrote Gregory L. Abbott, deputy director of the utility division.  His and other documents are available online.

“This would reasonably protect the nonparticipating customers from performance risk as the customers would only pay for the actual MWhs that the proposed US-3 Solar Projects produce.  Implementing cost recovery through a RAC based on the beginning market index price of $31.82/MWh would also meet the Commission requirement in Case No. PUR-2017-00137 that Schedule RF should be implemented in a manner that holds nonparticipating customers harmless,” Abbott concluded.

So.  Instead of guaranteeing the utility a full return of its capital costs with profit, the SCC might instead charge ratepayers no more than the market value of the power produced.  On this deal, Dominion would be no better protected than an independent merchant power producer.

This little case, involving only 240 megawatts of production and $410 million of construction cost, is important because after Facebook come others with similar or larger appetites.  This is the first of many such arrangements the company expects under its experimental special rate for customers demanding the appearance of green energy virtue.  Any new plants need SCC certificates of public necessity and convenience.

The Commission last year approved the experimental “RF” tariff designed to serve the new Facebook facility and others like it, but included this in the order:  “As acknowledged by the Company, however, our approval herein does not represent a presumption or pre-approval of any subsequent proposals related to Schedule RF….We agree with Consumer Counsel that Schedule RF should be implemented in a manner that holds non-participating customers harmless.”

Here is how it appears to work:  Facebook will buy the same “tainted” power including from fossil fuels and nuclear from the grid as everybody else, but to keep its green cred intact also promises to buy 100 percent of the renewable energy credits and other “environmental attributes”  for a comparable amount of power from solar.  Those contracted payments are applied to the capital pay-off for 20 years and lower the cost of the project for other ratepayers, who will still see a rate adjustment clause (US-3) on their bills.

Dominion is not building solar to connect directly to Facebook, and should a third party try to do that in Dominion’s monopoly territory, heads would roll.  That monopoly is the most valuable asset its stockholders enjoy.  The only difference between this and any other solar project appears to be the sale of the RECs to Facebook instead of into some other market.  I’m open to correction on that point.

One point the SCC staff makes is it didn’t have to be a company-built project.  Staff witness Earnest J. White said Dominion could have met Facebook’s needs by purchasing an existing solar facility. “This option would have permitted the Company to know, rather than estimate, the benefits to customers before exposure to risk of performance,” he wrote.  (Unmentioned by him – that option does not produce 9.2 percent annual return on equity for the utility. )

Another instance of redactions rendering SCC data useless to the ratepayers and reporters.

The revenues from the renewable energy credits at the two plants, along with the tax credits, are applied to the 35-year payoff on the two new solar facilities, reducing costs to ratepayers.  But as the SCC testimony makes clear, two variables then become crucial.  The first is the capacity factor of the project (what percentage of the time power is produced) and the second is the market value of those renewable energy credits.  The two are interrelated because the RECS are based on actual output, not 100 percent capacity – less output, less REC revenue.

Complicating reporting on this case, as usual, are all the key data covered up with black ink or entire memos withheld from public scrutiny.  The projected REC revenue is kept confidential.

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Delayed, ACP Price Tag Reaches $7 Billion

Delays mainly caused by continuing regulatory battles have added another half a billion dollars to the price tag for the Atlantic Coast Pipeline project now crossing Virginia.  Dominion Resources CEO Thomas Farrell used a new top figure of $7 billion in a discussion of the project with investors and analysts on November 1.

Back in February it was the Duke Energy CEO who first floated a figure of $6.5 billion for a project that started out with a $5 billion or less advertised price.  Those costs do not include financing, which will add to the amount customers pay for the gas in coming years.  Dominion is the lead partner in the pipeline, along with Duke Energy and Southern Company, but owns slightly less than 50 percent of the project.

The transcript is rough in places, the fault of the transcriber I’m sure, so I may add some suggested translations here and there.

“The FERC stop work order in (and?) delays obtaining permits necessary for construction have impacted the cost and schedule for the project. As a result, project cost actions have increased the range of $6 billion to $6.5 billion to a range of $6.5 billion to $7 billion excluding financing costs,” Farrell told those assembled on a conference call to discuss the company’s third quarter results. The most recent dispute involves the proposed compressor station in Buckingham County, with its permit decision delayed at the last Air Pollution Control Board meeting.

“The Atlantic Coast Pipeline is pursuing a phase in service approach with its customers whereby we maintain a late 2019 in-service date for key segments of the project to meet peak winter demand in critically constrained regions. ACP will be pursuing a mid-2020 in-service date for the remaining segments.  Farrell said later their profits are not threatened if they don’t start pumping gas in 2019 because the are guaranteed to recover funds used during construction.

“Through this process, we’ve already been through one process with customers on the rates, and we’ll continue to work with them. The returns are going to be very adequate and comments (commensurate?) with the normal returns we get in projects like this in our midstream business,” Farrell said.

Dominion Energy Virginia, through another arm of the company, is one of those customers, meaning of course its millions of Virginia ratepayers will ultimately pay off the portion of the pipeline serving Dominion generation plants.

Opponents tend to focus on the top line number ignoring the fact that there will be other customers sharing the cost along the line.  Opponents are quite right when they point out that new pipelines cost more than old pipelines built at lower cost.  Those issues will be debated in future State Corporation Commission cases, where the higher transportation charges will be compared to cheaper alternatives. 

In speaking to the analysts, Farrell was positive about the prospects of another huge capital expense coming at ratepayers like a train – license extensions to add another 20 years of life for its four nuclear reactors.  In some recent State Corporation Commission testimony, the company has been equivocal on its plans.  Who’s getting the real story, the SCC or the stock analysts?

“Now, on October 16, we filed with the regulatory commission for subsequent license renewable (renewal?) for the [indiscernible] power station reactors. This is an important first step in which we expect will be a multiyear $4 billion investment program that will extend the lives of both the [indiscernible] (Surry?) and North Arizona (North Anna) nuclear stations by an additional 20 years. We expect to submit the North license suspension (extension?) application in 2020. As a result of this initiative, our customers will continue to benefit from clean, reliable and low-cost generation from these best-in-class facilities,” Farrell is quoted in the transcript.

And on a related note…..

Former State Senator John Watkins was actively promoted this past winter as a candidate to fill an opening on the State Corporation Commission.  He was apparently derailed by concerns about his votes on key utility regulation issues and his ties to various legislators who have shown little interest in protecting ratepayers when the utility was rewriting the law to its benefit.  Yesterday’s Wall Street Journal took note of how things work in Virginia.

Apparently that Clean Virginia group published something pointing to relatively high electricity bills in Virginia, and Senator Watkins rose to the company’s defense in a guest column in The Roanoke Times, a paper far from his Chesterfield County home.  Read it and form your own opinion of his fitness for the Commission job, which is still open after all.

One line of his did inspire me.  “Facts are facts, and the SCC does a really good job of compiling them. Legislators and the public count on the SCC to provide that information to make sound decisions,” he wrote.   My mission at Bacon’s Rebellion to report on the Commission process and the facts that drive its decisions will continue.

Environmental Racism and Conservation Easements

Farmland real estate values of conservation easements granted to African-American landowners between 2011 and 2015, as tracked by the Black Family Land Trust.

I have to give Governor Ralph Northam credit: It took a lot of guts to remove two members from the State Air Pollution Control Board knowing full well that it would open himself to charges of indifference to environmental racism.

Earlier this week, Northam informed Rebecca Rubin and Samuel Bleicher that they would be removed from the seven-member board, reports the Richmond Times-Dispatch. Environmental groups immediately connected the decision with concerns they had expressed about “environmental justice” in the Union Hill community of Buckingham County, where a predominantly African-American community would be exposed to low levels of pollution from an Atlantic Coast Pipeline compressor station. Northam has denied that his decision to replace the two air board members is tied to an upcoming vote on the compressor, but that hasn’t stopped some foes from doubling down on the race card as a way to halt construction of the compressor station and pipeline.

“Governor Northam has now officially taken ownership of the Atlantic Coast Pipeline and ownership of this compressor station, a facility which involves strong elements of environmental racism,” said Harrison Wallace, Virginia director of the Chesapeake Climate Action Network & CCAN Action Fund.

Apparently, Northam isn’t buying that argument, although it’s hard to know what he thinks because he has not spoken publicly about the environmental-racism issue. The issue can be boiled down to this: About 80% of Union Hill residents are African-American. While Dominion says that the compressor station will have state-of-the-art pollution controls meeting the strictest standards in the state, foes say residents will be exposed to elevated levels of carbon monoxide and nitrogen oxide, putting their health at risk. You can read a detailed explanation of the allegations in a Southern Environmental Law Center letter to Michael Dowd with Virginia’s Department of Environmental Quality.

For purposes of argument, let’s grant the proposition that the compressor station would pose a small but measurable health risk. (I don’t know that to be the case, but I want to set that issue aside to get to the meat of my argument.) In a 600-mile pipeline with three compressor stations routed through demographically mixed counties, it is inevitable that the pipeline will encounter minority communities. The standard under federal law is whether African-Americans are disproportionately impacted by the pipeline route. By focusing on the impact on Union Hill to the exclusion of many white communities along the route, pipeline foes have created a new standard: Does the pipeline route impact any African-American community? And if it does, some critics assert, it constitutes environmental racism.

I’ve made that point in past blog posts, but now I want to expand on it. The irony here is that one can make an argument that the system promotes social inequity — but not in the way pipeline foes suggest. If you’re looking for disproportionate impact, look at the racial distribution of conservation easements that protect landowners from pipelines, highways, transmission lines and other infrastructure projects from intruding on their land. It doesn’t take a planning Ph.D. to predict that conservation easements as well as the tax benefits and land protections they confer are rewarded overwhelmingly to white landowners — especially wealthy white landowners.

The tax benefits are substantial: federal income tax deductions, a state tax credit equal to 40% of the value of the easement, estate tax reductions, and property tax deductions. So generous are the tax deductions that the state has capped the value of tax credits that the Department of Conservation can grant in any one year at $75 million. Easements are in especially great demand by gentleman farmers — owners of horse farms, vineyards and the like — who have spectacular vistas to protect. Small farmers set amidst mundane corn fields and timberland have far less incentive to pursue obtaining the easements.

The Virginia Outdoors Foundation, which holds the conservation easements, does not track the race of landowners granted easements. But the Black Family Land Trust (BFLT), which works to conserve black-owned farmland in Virginia, North Carolina and South Carolina, does have data which, though not comprehensive, gives a sense of the number and value of easements granted to black landowners.

The BFLT website displays data of easements granted between 2011 and 2015 in 28 designated Strike Force counties, 12 of which are in Virginia. Clearly, that does not represent a complete inventory of all the conservation easements in Virginia granted to black landowners. But the targeting of key counties likely does account for a significant percentage.

The four-year total for black landowners in Virginia’s eight targeted counties amounts to $3,o45,000. That works out to an average of $750,000 per year. That’s 1% of the total land value of conservation easements allowed by Virginia law. If we assume that the BFLT captured only half the easements granted black landowners in those years, we can guesstimate that black landowners were granted 2% of the total value of conservation easements and reaped 2% of the tax benefits. African-Americans comprise roughly 20% of Virginia’s population — a disproportionate impact if I’ve ever seen one.

(I could find no figures detailing the percentage of rural landowners, or even farmers, who were black. Nationally, black farmers tend to own smaller farms than the national average. I don’t know if Virginia is in line with national averages or not.)

When plotting their pipeline routes, the Atlantic Coast Pipeline made great efforts to avoid crossing conservation easements (although in a handful of instances it did not manage to do so). If you’re looking for institutionalized white privilege, there you have it. But the privilege is not that of the pipelines, it’s that of the white landowners. Curiously, pipeline foes and their allies in the environmental movement have ignored this gaping disparity. Why would that be? Perhaps because they are among the primary beneficiaries of the system.

Cynics might conclude that the hoo-ha about social justice at Union Hill is purely tactical, not borne of a principled concern for African-American communities. If Virginia’s social justice warriors were truly committed to fighting environmental racism, one might argue, they would target a system of conservation easements that protects wealthy white landowners far more than it protects poor black landowners. But I won’t make that argument.

Here’s the argument I will make: I don’t think the racial disparity in the dispensing of conservation easements constitutes discrimination against African-Americans. And I don’t think that the Atlantic Coast Pipeline’s selection of a compressor site in Union Hill constitutes discrimination. The Union Hill community comprises only one of many groups affected by the pipeline. I do think the racial justice angle on Union Hill is ginned up by mostly white pipeline foes desperately seeking any weapon they can to defeat the pipeline project — even if it means aggravating already-tender race relations. And I’m betting that Governor Northam is canny enough to see through the ploy.

Update: The Virginia Outdoor Foundation has responded that my view of landowners who take out conservation easements is out of date. Before 2000, a majority of easements were taken out by wealthy landowners who didn’t earn their income from farming/forestry. Today, a majority of landowners getting easements are working farmers. Read the full comment here.

Yeah, Recycling, Landfilling Coal Ash Will Cost Billions

Coal ash at the Chesterfield Power Station. Photo credit: Richmond Times-Dispatch

Under the gun to clean up its coal ash ponds, Dominion Energy hired a consulting firm to develop estimates of what various alternatives would cost. The alternatives preferred by environmentalists and activists — recycling the combustion residue and burying the rest in lined landfills far from rivers and streams — would cost billions of dollars, the study concluded. The environmentalists and activists said the study was flawed. The General Assembly ordered Dominion to issue an RFP to deliver a verdict from the marketplace. The verdict of the marketplace has come in. The alternatives preferred by environmentalists and activists will cost billions of dollars — but maybe not as many billions as Dominion’s worst-case scenario.

To be precise, the cost would range between $2.77 billion and $3.36 billion, according to a statement issued by the company today. The bids, if implemented would recycle about 45% of the ash into cement, wallboard and other products. The rest of the ash would be placed in a landfill over a 15-year period.

Dominion has accumulated millions of tons of coal ash, which can leak heavy metals that are toxic in sufficient concentrations, in ash ponds at its Chesterfield, Possum Point, Chesapeake, and Bremo power stations. To meet Environmental Protection Agency guidelines, the utility has de-watered the coal ash at Possum Point and Bremo but has been prevented from consolidating and capping the material on site, as it originally proposed. Environmentalists are concerned that groundwater might migrate through the impoundments and leach heavy metals that could reach rivers, streams, or well water.

Dominion already recycles 500,000 tons of coal combustion byproducts each year, but critics have argued that it could process more — Virginia actually imports coal ash from other states and overseas.

The company received 12 proposals for recycling ash for each of the four power stations. The total cost in the $3 billion range is somewhat less expensive than the $2.6 billion to $6.5 billion indicated by Dominion’s earlier study, but it is significantly more costly than critics had hoped for.

Dominion will report its bids to the General Assembly for follow-up.

In other coal ash action, Dominion announced that it had reached a Memorandum of Understanding with the state to close and monitor the coal ash ponds at the Chesapeake Energy Center. Also, groundwater monitoring at six power stations — Chesterfield, Possum Point, Bremo, Yorktown, Clover and Virginia City Hybrid Center — have been found to have no impact on drinking water or public health. Further, Dominion said it would submit a regulatory filing to recover costs associated with “managing coal ash at several power stations.”

“We plan to take a close look at this report and hope that it provides a more realistic take on recycling options in Virginia than the assessment Dominion provided last year,” said the Southern Environmental Law Center (SELC) in a statement today. “We know that coal ash can pose risks to our health and environment, and recycling offers a smart, cost-effective solution. It’s time Virginia joins the other states that are turning coal ash closure into a win-win.”

The SELC also lauded the Chesapeake Energy Center agreement, which it said will require the facility to meet the same standards as all coal ash facilities across the state. Said Deborah Murray, senior attorney, Southern Environmental Law Center: “This agreement is a strong signal that the administration is taking coal ash remediation in Virginia seriously. Dominion tried to keep most of the coal ash at the Chesapeake site—roughly 2.1 million tons of ash in leaking, unlined pits—off the radar, but under this agreement the company’s closure plan must deal with this ash in accordance with the standards set forth in the EPA’s Coal Combustion Residuals Rule.”

Update: The Richmond Times-Dispatch is reporting a larger number for the potential cost of recycling/landfilling than I did.  I should have made clear that the cost I reported, up to $3.36 billion, applies if all the work is given to a single bidder. The higher figure reported by the Times-Dispatch, $5.642 billion, applies if material at all four sites is recycled by individual bidders. I reported the lower number because I could see no reason why anyone would go with the higher-cost approach.