Watch Out, The General Assembly Wants to Help

According to the Richmond Times-Dispatch, Sen. William C. Wampler, R-Bristol, chairman of the Virginia Coal and Energy Commission, has named John Watkins, R-Powhatan, to lead the development of a “long-term energy policy” for the General Assembly’s consideration. (See story here.) Of special concern: price gouging after hurricanes and heating bills for poor people.

Gut reaction: If I’d put my mind to come up with the most short-term issues that I could think of, it would be those two. Now, it’s entirely possible that the state Senate will address matters other than those mentioned by reporter Greg Edwards, so I will withhold judgment.

My humble suggestion: Sen. Watkins should focus on ways to conserve energy and shift to more stable energy supplies. In contrast to the 1970s, when the old Virginia Electric Power Co. was every populist’s favorite bad guy, Dominion is supplying electricity at very stable and competitive rates. To the extent that Virginia can shift its energy consumption from gasoline to electricity — electric cars, anyone? — we benefit.

If this new study commission wants to tackle a real “long-term” issue, it ought to take a look at nuclear power. Nuclear energy has turned out to be quite a bargain. The more of it we can get, the cheaper and more stable our electric supplies. Dominion has made preliminary moves towards erecting two more nuclear-powered units in Virginia. This task force could act to remove the regulatory hurdles.

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  1. Nuclear Power? Cheerleading Dominion Power?

    I thought this blog would challenge, Jim.

    How about distributed, renewable power? Solar power has come a long way from the 70’s.
    California is doing it. Hell, even NJ is doing it.

  2. Anonymous Avatar

    Gas prices: $2.29 at WaWa this morning. The great, restless public will lose focus…

    Now really, why is anyone surprised that the senator from the coalfields would be interested in this, and would focus on hyrdocarbons? Not nuclear?

    Of greater concern: the idea that it is the state taxpayer’s responsibility to help the less fortunate with their heating bills. From such little acorns mighty oaks do grow….That is far more likely to be result of all this rather than a rational supply-based policy: new tax-funded entitlements to cover the cost of our poorly thought out demand based approach.

  3. Jim Bacon Avatar

    Scott, you make a valid point. We ought to be looking at distributed, renewable energy sources, too. Wind power. Solar power. Biomass. I’m in favor of all of it…. as long as it’s economically competitive or there’s some realistic prospect of making it economically competitive.

    As for Dominion, I’m no “cheerleader” for the power company. But facts are facts: Dominion has one of the best track records in the country of generating electricity from nuclear power plants. The power is cheap, stable and, assuming we can figure out what to do with the spent fuel rods, safe.

  4. Will Vehrs Avatar
    Will Vehrs

    I’ve not kept up with recent solar power developments, but in addition to any cost factors, solar has always suffered from the same problem that will probably doom wind turbine power in Highland County. If you want any scale, the collectors are large and are considered an eyesore. Just like our coal plants and nuclear plants, we want our energy produced in somebody else’s backyard where we can’t see it.

    And, BTW, here’s another real issue that you won’t see anybody ask the gubernatorial candidates about. Of course, even they were asked about it, they’d be in favor of cheap, renewable energy and would support more “study.”

  5. Ray Hyde Avatar

    Nuclear power is a marvel. Unfortunately, no political entity in history has had anything like the experience and longevity that will be required to oversee the nuclear waste problem. Maybe we can put Nuclear waste under the care of the Catholic Church: so much for separation of church and state.

    As a free market exponent, I think I will favor nuclear power as soon as they can buy insurance on the open market.

    Energy is pretty much of an international commodity, so any attempt to conserve energy in ways that are not truly cost effective probably amounts to a subsidy to foreign consumers. For example, last month US suppliers exported a record amount of home heating oil. We can conserve all we want and be cold so some Chinese family will be warm.

    In this regard, solar power works, but making it work cost effectively is not so easy. It may be cost effective as an augmentation and not a full source. It is easy and effective to use solar to raise the temperature of water going to your hot water heater, it is not easy or effective to rely solely on solar for all your hot water needs.

    In the long run, Virginia Coal isn’t any more renewable than Saudi Oil, and electricity is not primary energy but an energy delivery system. One way or another we are going to burn something to make electricity, whether it is Uranium or Peat.

    In Virginia, my vote might be for pelletized Elanthia trees: they don’t have much energy but they grow (convert solar) like crazy.

    The poor are likely to live in the most poorly built, draftiest, least insulated, poorly heated structures. Rather than subsidize their heating bill we need to expand housing enough to make better options available at the bottom of the ladder. EMR is right in saying that trickle down housing is not working, but that is because there is not enough new housing to cause a trickle.

  6. Anonymous Avatar

    I heard an interesting concept the other day regarding power. Someone suggested that our entire system is backwards and that instead of developing huge power generating facilities, each home/office/customer should have solar or wind components in their homes that are then plugged into the grid as supplemental supports. The proponents contend that while the infrastructure costs are huge, this type of generational shift could result in lower energy costs and a more efficient system negating the need for some of the huge transcontinental transmission lines.

    I’m not an electical engineer, nor did I stay at a Holiday Inn Express last night, but I found it to be an interesting idea. I’m always drawn to concepts that turn paradigms on their head and look at things backwards. Just a thought.

  7. Ray Hyde Avatar

    Local co-generation is a real option. If you burn fuel to generate your own electricity, you can use almost all the waste heat, for water heating, space heating, and even air conditioning. Some apartment buildings do this because scale and capital factors work in their favor more than for individeual homeowners.

    Individual units are for sale in Florida where air conditioning costs are high. New laws mean that power companies must buy back excess power your system generates AT THEIR HIGHEST MARGINAL COST.

    One advantage of local generation is that it distributes pollution over a wide area, the disadvantage is that smaller units may not have the best pollution abatement equipment or it may not be properly monitored and maintained.

    This concept is possible because modern small engines are much more efficient and reliable than previously, and microprocessor control systems can divert heat and energy where it is needed seamlessly, and reduce the need for human monitoring.

    You will still need the transmission lines for the same reasons you will still need interstates: you cannot allow a situation where a city is totally reliant on its own resources, whether that means cogeneration or local mass transit.

  8. Anonymous Avatar

    The main problem with distributed generation is economics. Most of the units have, until recently, been developed to run on natural gas. Base load electric generation is now using a lot of natural gas, and hence demand (and prices) are up. Distributed generation is price-competitive with retail electric rates when natural gas sells in the $4-$5 range, according to some analysts. Today’s market prices are in the $14 range.

    Now, IF distributed gen could efficiently and cleanly run on an alternate fuel, it has big potential.

  9. I am not interested in debating giant wind/solar farms. I am talking about distributed, renewable, micropower.

    Distributed power makes sense (cents) for security/disaster recovery plans as well. The first places that should be allowed to put up roof solar panels with net metering/distribution are public school/municiple buildings. The cost savings are huge.

    Of course, it may take more investment and time to get from fossil to renewable. But that is where fuel cells come in. Fuel cells can store power from natural gas or solar. Every house should have its own.

    Amory Lovins documents a dramatic and little-known development: worldwide, efficient use of electricity plus decentralized low- or no-carbon electric generation are already at least twice as big as nuclear power and growing an order of magnitude faster, simply because they cost far less. New nuclear plants not only can’t compete with central coal and gas plants, but also can’t compete by hopelessly wide margins with these cheaper decentralized alternatives. Nuclear investments would only reduce and retard the reduction of carbon dioxide emissions, because they’d save far less carbon per dollar and provide less new electricity per year. These differences, once hypothetical, are now richly confirmed by actual market behavior.

    What’s the blockage to distributed, renewable micropower in Virginia? – Dominion lobbyists and the nuclear power industry.

  10. Ray Hyde Avatar

    Scott and anonymous both make useful (and correct) points.

  11. Anonymous Avatar

    This all brings up an interesting, slightly unrelated fact of business. Virginia counties served by American – now Appalachian (again) Power enjoy a substantial rate advantage over counties served by Dominion. Why isn’t this more reflected in economic development recruitment efforts by VEDP?

  12. James Atticus Bowden Avatar
    James Atticus Bowden

    Scott: Do you have numbers on how much energy a single fuel cell (describe) stores? How much energy does one solar panel (describe) create? Thanks.

  13. Jim Bacon Avatar

    Scott, I can well see how Dominion would regard micro-power as a threat, but can you cite any instances of regulations that hamper the adoption of micropower in Virginia? As one who believes in free markets, I would favor creating a level playing field that would allow micro-power to compete. (The only complicating factor that I can think of is to make sure that the system, however configured, could be counted upon to deliver a reliable supply of electricity.) Also, I would ask, like JAB, if you have any numbers of the economics of micro-power energy sources.

    Now that I think of it, there is one other aspect to Virginia fuel policy that legislators could consider: bio diesel fuel. I’ve talked to one Western Virginia producer who insists that soy-based bio diesel fuels are economically competitive today. The market isn’t huge… yet. But it’s not insignificant either. And it could create income for a lot of small farmers. A proliferation of small energy producers relying upon co-op like distilleries should appeal to you, should it not?

  14. Anonymous Avatar

    I have seen data recently suggesting that it takes more energy to create biodiesel (natural gas for fertilizer, fuel for tractors, fuel for process, etc.) than the biodiesel product contains.

  15. Ray Hyde Avatar

    As I understand it, the whole idea of micro-power is NOT to compete, but co-operate. Because of the shifting economics it might not pay to operate a micro plant all the time: under modest loads in spring and fall it might be better to shut down and buy power from Dominion.

    On the other hand, at peak load periods Dominion should be glad to have the help. And, if your micro power system is not needed at the moment (weekends or evenings) then it might pay to run it anyway, just to sell power back to Dominion. (I’m not sure if Virginia has a max marginal cost rule.)

    Usually, the power companies argue it is a safety issue: you would hate to have someone pushing power out on the grid that is out of phase. Like solar, the idea is not to create a system that offers a complete or reliable source of power but to relieve strain and offer alternatives.

    The complete and reliable part is Dominion’s job. As I see it, the tricky part of micro power is to balance the large investment Dominion has in power generation and distribution with the needs of micro systems to share the grid.

    Originally power companies would not let you connect to the grid, then they would only pay you the lowest price. Clearly the micro power systems are best at relieving peak load, but arguing that they should be paid at the maximum marginal price might be a little extreme because of their co-dependence on the larger system.

    The last time I studied it, the deal on co-generation was that if you could connect as few as twenty living units and capture the waste heat, then co-generation made sense. Most groups of this size do not use co-generation, probably because of the high capital costs, skill level, and maintenance, but there may be other obstacles as well.

    What happens if you have a New England power black out on a grid of micro stations? When all those units trip off it seems like it would be a logistics nightmare to get them all started again.

    As for corn based ethanol or biodiesel beans – if the economics play out, then sign me up: it has got to be better than having open space for the sake of scenery.

  16. Scott Leake Avatar
    Scott Leake

    Jim – On first read of your headline, I feared you and your readers would jump to conclusions. I’m glad to see you will “withhold judgment” rather than be satisfied with your “gut reaction.”

    I encourage you and others to read to the end of the news account where it quotes Sen. Wagner: “Hurricane Katrina exposed the vulnerability of the state’s energy supplies and energy is the top issue on Virginians’ minds, he said.

    “The state, Wagner said, needs to develop fully its own energy resources, including coal, natural gas, nuclear and renewables such as wind power. While the environment has been a concern in energy development, Wagner contended that failure to develop an energy plan could hurt the environment by promoting harmful energy uses.”

    Any emphasis on home heating assistence and price gouging was in the news reporting, not in the substance of what the Senators said.

    Stay tuned…

  17. James Atticus Bowden Avatar
    James Atticus Bowden

    Sen Wagner has a point I’ve tried to make face to face with several of our elected politicians. Virginia is a state. (Used to be a more sovereign state under our Constitution – but that is the subject of another discussion). Our population and wealth are equal to some of our NATO allied countries. Start thinking about what we can do for ourselves not look to Washington for everything – like energy programs and plans.

    The study group on healthcare that Del. Phil Hamilton is leading is a good example of right thinking about ourselves.

    Virginia has a destiny.

  18. Anonymous Avatar

    JAB — I’m with you. I am happy to see our elected officials focusing beyond today or the next media cycle. This is the kind of stuff Virginia used to be known for. Bravo.

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