California’s giant Pacific Gas and Electric has a major program providing energy audits for its customers, and recently retained an outside firm to study the results. While quite a few customers did reduce their energy usage after the audits, it turned out a larger number increased demand.
The report, dated December 2018, noted 19 percent of PG&E electricity customers reduced usage but 27 percent of them increased it following the audit. On the natural gas side, 25 percent reduced usage and 31 percent increased. Continue reading
Continued expansion of data centers in Virginia is driving demand for electricity, which gives Dominion Energy the justification for expanding its gas-fired generating fleet and building the Atlantic Coast Pipeline, according to a new report by Greenpeace, “Clicking Clean Virginia: The Dirty Energy Powering Data Center Alley.”
While several major providers of cloud services — Amazon, Facebook, and Microsoft most prominently — have committed to deriving their electricity from renewable energy sources, the boom in data centers has outpaced the ability of the data center industry, Amazon in particular, to line up renewable energy contracts.
“While electricity demand for utilities is flat or declining, electricity demand from data centers in Virginia has grown sharply, between 9 and 11 percent year year, offsetting declines elsewhere, with data center demand regularly touted by Dominion to its investors as a sign of continued growth,” states Greenpeace.
Ironically, although the Greenpeace opposes the Atlantic Coast Pipeline, information in the report undercuts an argument the environmental group’s Virginia allies use against the Atlantic Coast Pipeline: that Dominion forecasts have consistently overstated future electric load. While electricity load has plateaued or even declined in many states, demand from data centers continues to push demand incrementally higher in Virginia. Continue reading
The people who make the real decisions about what we pay for electricity in Virginia, which would be the members of the General Assembly, have just cut electricity costs for large Dominion Energy Virginia customers by up to $10 million and shifted those costs over to other customer classes, including residential.
This is yet another small but significant gift to you from the 2018 Ratepayer Bill Transformation Act, which really had little to do with transforming Virginia’s electricity distribution grid. Dominion’s plans for the grid remain stalled, but this little add-on provision from the same legislation just got approved by the State Corporation Commission on February 8. Continue reading
Mapping gas pipeline leaks.
Dominion Energy has announced a plan to reduce methane emissions from its natural gas infrastructure by 50% from 2010 levels over the next decade. The voluntary initiative will prevent more than 430,000 metric tons of methane from entering the atmosphere, the equivalent of taking 2.3 million cars off the road or planting nearly 180 million new trees.
“We recognize we need to do more to reduce greenhouse gas emissions to further combat climate change,” said Diane Leopold, President and CEO of Dominion Energy’s Gas Infrastructure Group. “We’ve made significant progress, but we’re determined to go much further..” Continue reading
An illustration of the coal ash de-watering and treatment process at Bremo Bluff power station, which is now out of favor. Source: DEQ website.
The cost to Dominion Energy Virginia customers for recycling coal ash or moving it into more secure landfills is growing, because the proposed bill now recognizes that Dominion’s North Carolina electricity customers cannot be forced to pay by the Virginia General Assembly or the State Corporation Commission.
This phrase has been added to the current substitutes for House Bill 2786 and Senate Bill 1355: (v) any such costs that are allocated to the utility’s system customers outside of the Commonwealth that are not actually recovered from such customers shall be included for cost recovery from jurisdictional customers in the Commonwealth through the rate adjustment clause.
Dominion Energy North Carolina’s customers in the northeastern part of that state depend on Virginia-based generation, including those coal plants, but the General Assembly so far seems fine with billing us for their share of these costs. Why? Absent that the company’s shareholders might have to pay it. Continue reading
Virginia’s participation in the Regional Greenhouse Gas Initiative (RGGI), which would require the state’s utilities to pay a carbon tax on their fossil fuel power plants and to reduce operation of those plants, might cost the ratepayers of Dominion Energy Virginia $3.3 to $5.9 billion over the first decade, according to a State Corporation Commission staff estimate.
During a House of Delegates subcommittee hearing a week ago, a member of the SCC staff told legislators that joining RGGI would add $7 to $12 to the monthly bill of residential customers. He provided no details that day and a request to the SCC’s communications staff didn’t produce clarity. Continue reading
PG&E Corp., California’s largest electric utility, has filed for bankruptcy protection after incurring billions of dollars in liabilities and potential liabilities in wildfire damages. The California legislature, totally controlled by Democrats, is giving the utility no succor, reports the Wall Street Journal. Writes the Journal:
A company that was once one of the most influential in Sacramento and regularly got its way on legislation and regulation now has few defenders left. The reason, Sacramento veterans say, is that years of bad news related to deadly fires and other disasters have made the company unpopular among the public.
That sentiment now outweighs the goodwill PG&E had amassed from years of lobbying, donations and other close ties to key leaders, they say.
What brought about this turnabout? Decades of strict zoning in metropolitan areas pushed up housing prices to stratospheric levels, impelling hundreds of thousands (millions?) of Californians to seek housing in cheap land and housing in the boonies. PG&E was required as part of its mandate to serve the public to extend electric power lines to these scattered developments. Meanwhile, state policy overturned the previous practice of clear cutting and controlled burns in woodlands, resulting in the accumulation of a massive amount of fuel. Then nature intervened in the form of an extended drought. When power lines failed, as they periodically do, they sparked massive wildfires. Continue reading
Coal ash at the Chesterfield Power Station. Photo credit: Richmond Times-Dispatch
A deal cooked up between Governor Ralph Northam and legislative leaders, with the support of environmental groups and the acquiescence of Dominion Energy, will require Dominion to excavate coal ash ponds at four of its power plants, recycle at least 6.8 million cubic yards, and move the rest to modern landfills. The requirement, according to the Washington Post, will add about $1 billion to the $1.7 billion cost of Dominion’s preferred approach. The cost to ratepayers is not to exceed $225 million a year (the Richmond Times-Dispatch figure) or $5 per month per typical retail customer (Washington Post).
What I find disturbing is the totally false premise upon which the legislation is based: that landfilling of coal ash is necessary because existing coal ash ponds are leaking heavy metals. This assertion, made endlessly over the past year, provides the justification for the legislation. If you want proof that Virginia politically is becoming New Jersey, now you’ve got it.
Here are just a few recent examples of misleading rhetoric:
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.
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.
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:
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.
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.
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.
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.