Basic change in utility business and regulation is inevitable: Advanced energy is coming to all utilities, like it or not.

Photo credit: Sierra Club

Photo credit: Sierra Club

Occasionally I ask other people to write for this blog, not merely because I am lazy, but also because energy policy is such a broad topic that I sometimes overlook new developments and perspectives. This week guest blogger Jane Twitmyer takes a step back from the battle over our energy future to point out that the battlefield itself is shifting under our feet—a fact which, if ignored, could cost utility customers dearly.  –I.M.

A favorite utility narrative holds that the federal Clean Power Plan is the reason we must upgrade our electric utility system and reduce emissions from fossil fuels. Without it, we could continue to run our big coal and gas plants and leave unchanged the transmission grid that has served us so well. But the truth is, the EPA as ‘bully’ is a myth. A new report from the North American Electric Reliability Corporation (NERC) concludes “significant changes are occurring” in the way we generate and use electricity regardless of whether or not the Clean Power Plan, still under court challenge, is implemented. One change: NERC has tripled the amount of new renewable energy generation it predicts for next year.

NERC is just catching up with analysts and investment banks, who have been documenting the changes for several years. The Rocky Mountain Institute warns that grid-connected, solar-plus-battery-storage systems “will be economic within the next 10-15 years for many customers in many parts of the country,” undercutting utility sales and turning electricity markets “upside down.”

Investment analysts agree. CitiGroup predicts utilities could suffer a “50%+ decline in their addressable market.” Elon Musk, CEO of Tesla, just made an offer to buy SolarCity because he believes on-site generation will eventually supply a third of our total electricity, and will be accompanied by huge amounts of battery storage like Tesla’s Powerpack.

Musk believes electric cars will increase demand for electricity, but other analysts see energy efficiency lowering demand. Efficient buildings are given a central place in the new energy mix in the NERC report.

Using less energy, or increasing our energy intensity, will reduce demand significantly without creating the economic disaster we have been warned will occur. Minnesota found the state’s efficiency program returned $4 for every $1 invested, helping to create almost $6 billion in new economic output. One of Warren Buffet’s utilities expects to reduce demand enough to close a couple of old coal plants and still not need any new generation until 2028. The utility is financing those retrofits for its customers’ buildings.

E-Lab, a group at the Rocky Mountain Institute that works with all industry stakeholders to chart our electricity systems, also sees changes in grid management systems making delivery of electricity more efficient. Pilot projects using new technology with grid-regulating software and designed with a variety of regulatory changes and financing models are being tested all around the country.

Each kilowatt-hour supplied by a rooftop solar panel, stored in an on-site battery, or saved by an efficient building, means one less kilowatt-hour utilities must generate. This inevitable reduction in central grid demand is why the future isn’t just about switching resources, like burning gas instead of coal, or even building solar and wind farms. The future is about a re-imagined system that allows and encourages you and me and our local mall to make our own electricity on-site, feeding some of what we make into storage and some onto the grid, and allowing us to draw on the grid when we need to.

We have the technology to create the new system, and regardless of any new EPA rules, this is the right time to replace the old technology. In 2010, 70% of our coal plants and all of our nuclear facilities were more than 30 years old. Recently SNL Energy identified 21,357 MW of coal, gas and nuclear generation “at risk” of early closure through 2020, plants that are inefficient and no longer economic to run.

Here in Virginia, our utilities don’t seem to be getting the message. Dominion Virginia Power has chosen to put most of its new investment dollars into large-scale natural gas plants, not renewable energy. Five or six years ago natural gas was believed to be the ‘transition’ fuel that could take us from coal to renewables-based electricity. We now understand that methane, released when extracting and distributing gas, is 86 times more potent as a greenhouse gas than CO2 while it is in the atmosphere. In addition, methane emissions have been both underreported and inaccurately measured, raising concerns that the climate impact of natural gas may be far greater than originally thought. New methane rules are being developed that should give us a better picture of actual emission levels, but it is already clear that if natural gas is a bridge fuel, the bridge must be a short one.

With analysts predicting the transition to renewable energy will happen sooner rather than later, investing heavily in new gas plants carries a significant economic risk as well as a climate risk. Investors like UBS Bank believe too many large plants will be “structural losers,” assets whose use is diminished before they are paid for. Going forward, we will still need to use some measure of natural gas, but natural gas can no longer be labeled the ‘transition’ fuel.

Our utility systems are at a crossroad. One road requires our utilities, our regulators and our legislators to re-imagine our electricity system, rethinking the old monopoly rate regulations that reward centralized fossil fuel generation. This reimagined system will require a grid that is no longer the rigid one-directional distributer of electricity, but rather one that finds value in resources that generate and store electricity where it is used. If we fail to take that road, the alternative path will lead to ‘grid defection’: customers choosing to leave the grid and provide their own electricity by installing solar with batteries and retrofitting their buildings to use less. One thing is certain: a top down, monopolistic, state-regulated system is NOT the future.

As NERC concluded, changes to the energy mix, and to the level of demand, are happening with or without the Clean Power Plan. They are happening because it is time to rebuild our aging energy infrastructure. They are happening because the technology is now available to create an energy system that protects our air and our water as well as our atmosphere. And the changes are happening because a rebuilt system, designed as an interactive network, not a one directional, top-down grid, will actually be a cheaper system. It will be a system that is more reliable and more resilient, as well as more secure from storms and attack. That rebuilt system will serve Virginia’s electricity customers better without risk to our air, our water or our climate.

Jane Twitmyer is a renewable energy consultant and advocate.

 

Sierra Club scorecard plumbs divisions among Virginia legislators

SC ScorecardBy and large, Virginia Republicans are still locked in a fossil fuel echo chamber, where “all of the above” and “war on coal” guide their votes. Virginia Democrats mostly acknowledge the damage climate change is doing to the commonwealth and around the planet and support a course correction. And regardless of ideology, large majorities from both parties vote for whatever Dominion Power wants.

These are the major takeaways from this year’s legislative session and the 2016 Climate and Energy Scorecard, just released by the Virginia Chapter of the Sierra Club. Constituents and clean energy advocates will want to look at not just the raw grades of individual legislators, but also the discussion provided in the report, to understand the dynamics of our General Assembly.

Twenty-eight Democrats earned perfect scores. All but a handful of Republicans earned failing grades. Sierra Club gave extra credit to legislators who introduced bills that advanced clean energy. This included several Republicans highlighted in the scorecard, but their bad votes on other bills dragged down their overall scores.

This is really a shame, since some Republicans have worked hard to advance clean energy legislation. Leesburg Delegate Randy Minchew comes to mind here for his dogged efforts on behalf of distributed solar energy, something you might not guess from his overall grade of D.

Often, it seems, reform-minded Republicans go along with their party’s more retrograde positions where they are pressured to do so by their party leaders, or where the votes are so lopsided that there is nothing to gain from breaking with the majority.

If party leaders have an outsize influence on voting, so too does Dominion Power. In fact, if you want to know who the true champions of the people are, don’t look at party affiliation. Look for the few legislators who will stand up to the most powerful political force in Richmond.

That assumes you can find votes to examine. In the introduction to the Sierra Club scorecard, Legislative Chair Susan Stillman noted with frustration this year’s paucity of recorded votes available to score:

The challenges of producing a fair and even scorecard are growing, as are the opportunities for Virginia citizens to have a clear and accurate picture of their elected representative’s voting record. Transparency in the General Assembly sunk to a new low this year: 95% of the bills defeated in the House of Delegates were done so on an unrecorded vote or no vote at all. This is not business-as-usual: just over a decade ago, nearly every bill that passed through the House received a recorded vote.

An ongoing problem, both for scorecard referees and for clean energy advocates, is that most bills that would advance the cause of renewable energy and energy efficiency never make it out of committee; in the House, the bills are heard in a tiny subcommittee. Not only do votes go unrecorded, but this approach deprives most of our elected representatives of the opportunity to vote on some of the most important energy policy issues facing Virginia.

And then there was this year, in which even the subcommittee members never got a chance to vote. A dozen or so of the most promising clean energy bills were never heard at all, but were sent to a newly-formed interim study subcommittee, ostensibly for the purpose of giving these bills the benefit of greater deliberation. The effect was to kill them quietly for the year.

As Stillman notes, all these unrecorded votes make it hard to know where the vast majority of legislators stand:

Without a recorded vote, the public is deprived of the full measure of his or her elected official’s voting history. And the problem of unrecorded votes is growing worse. This year’s unprecedented rate of unrecorded votes in the House is up from 76% in 2015—a 25% jump in one year. Virginia legislators are killing more bills than ever without accountability for their actions. This practice is wrong, and it’s dangerous for our democracy.

Stillman gives a shout-out to the founding members of the new, bipartisan Transparency Caucus for its efforts to make all votes public and ensure every bill gets a hearing.

These would be modest reforms, but welcome. If sunlight is the best disinfectant, there’s a big, dirty House (and Senate) in Richmond that need cleaning.

Southeastern electric utilities find their way to higher profits through gas pipelines and captive consumers

Charlie Strickler of Harrisonburg, Virginia, was one of a dozen activists who fasted last September in protest of FERC's role in approving natural gas pipelines, citing their contribution to climate change and harm to communities in their path. Photo by Ivy Main.

Charlie Strickler of Harrisonburg, Virginia, was one of a dozen activists who fasted last September in protest of FERC’s role in approving natural gas pipelines, citing their contribution to climate change and harm to communities in their path. Photo by Ivy Main.

Duke Energy, Southern Company, NextEra Energy and Dominion Resources—four of the largest investor-owned utilities in the U.S., all headquartered in the Southeast—have simultaneously adopted a growth strategy reliant on large volumes of fracked gas. With the nation’s energy sector turning decisively away from coal and nuclear energy, these companies are betting natural gas will be the dominant fuel for at least the next several decades. All four are investing billions of dollars in gas pipelines and other gas infrastructure to profit from the fracking boom.

Pipelines are attractive investments because they are typically allowed rates of return of around 14%, compared with the average regulated utility return allowed by public utility commissions of about 10%.

For the southeastern utilities, however, that rate of return is only part of the attraction. In a strategy that ought to concern regulators and electricity consumers, Duke, Dominion and NextEra all plan to use their regulated electric power subsidiaries to guarantee demand for the pipelines they’re building. The subsidiaries will build natural gas generating plants, paid for by electricity consumers, to be supplied with gas carried through the pipelines owned by their sister companies.

Southern is also investing in pipelines, but it currently doesn’t need new generation beyond the coal and nuclear plants it is struggling to complete—themselves object lessons in why coal and nuclear are kaput.

Southern just announced completion of its $12 billion acquisition of AGL Resources, a natural gas pipeline and distribution company. The move makes Southern Company “the nation’s second-largest combined gas and electric utility by customer base,” according to Utility Dive.

Dominion Resources was already heavily invested in the natural gas sector before it announced a $4.4 billion purchase of Questar Corp. News reports say the acquisition will bring Dominion an additional 27,500 miles of gas distribution pipelines, 3,400 miles of gas transmission pipeline and 56 billion cubic feet of working gas storage.

Duke Energy is making a $4.9 billion purchase of Piedmont Natural Gas, a natural gas transmission and distribution company. And NextEra recently spent $2.1 billion to acquire Texas-based NET Midstream through the limited partnership it formed, NextEra Partners, LLC.

Moody’s Investor Services issued a report in March criticizing Dominion, Southern and Duke for their natural gas transmission buys, saying the added financial risks offset the benefits of diversifying their businesses.

Moody’s may not have known how the utilities plan to use electricity customers as a hedge for at least two planned pipelines, the Atlantic Coast Pipeline (ACP) and Sabal Trail.

Using electricity customers to pay for pipelines

Companies owned by Duke, Southern and Dominion are partners in the 550-mile ACP, which will carry fracked gas from West Virginia through Virginia to the North Carolina coast. Duke and NextEra are partners in Sabal Trail, a 515-mile pipeline proposed to run from an existing pipeline in Alabama through Georgia to Florida, where Duke says it will fuel gas plants owned by Duke Energy Florida and Florida Power and Light, a subsidiary of NextEra.

ACP and Sabal Trail are only two of 15 new pipelines proposed on the East Coast competing to carry fracked gas flowing out of the Marcellus shale in Pennsylvania and West Virginia. So many pipelines are in development that analysts say there simply isn’t enough gas to fill them all. At the 2016 Marcellus-Utica Midstream Conference in February, attendees were warned that pipeline capacity “will be largely overbuilt by the 2016-2017 timeframe.”

But the ACP and Sabal Trail have an advantage most of the competition lacks. The utility partners all own electric power subsidiaries that use fracked gas to generate electricity. If the subsidiaries build new gas plants, these pipelines will be guaranteed a customer base. That means they can be profitable for their investors even when other pipelines struggle to find customers.

Indeed, Duke and Dominion’s electricity subsidiaries are making the kinds of investments you’d expect to see if the success of the pipelines were their top priority. Dominion Virginia Power is in the middle of a three-plant, 4,300 MW gas generation build-out. In the ACP’s application to the Federal Energy Regulatory Commission (FERC), Dominion Resources justifies the ACP in part by saying it will supply the newer of these plants. And the utility is just getting started with new gas generation; Dominion Virginia Power told Virginia officials last fall it expects to build another 9,000 MW of gas plants by 2040.

Meanwhile, Duke’s regulated subsidiaries, Duke Energy Carolinas and Duke Energy Progress, filed integrated resource plans in North and South Carolina that call for up to nine new natural gas generating units, totaling 8,300 MW. In February of this year, Duke received approval to build two 280 MW gas units in Asheville, NC, and sought approval for a third.

Bigger investments, greater risks

Linking pipelines to captive customers should prove a profitable arrangement for the utilities. For the customers who bear the costs and risks, it’s much more problematic. But state law gives them no say in the matter. In these southern states, the electric power subsidiaries hold legal monopolies in their designated territories. Once federal regulators approve the pipelines and state regulators approve the gas plants, the captive customers bear the loss if the bet turns sour.

Any one of several scenarios would make the gas investments a bad bet. The age of plentiful shale gas could end almost as quickly as it started, as some analysts predict, or gas prices could resume their historic volatility for other reasons. The U.S. could adopt newer, tighter carbon rules to meet international climate obligations, or enact a carbon tax that increases the cost of fossil fuels. Alternatives like wind, solar and energy storage seem likely to continue their astonishing march towards domination of the electric sector. As they become increasingly competitive, much new gas infrastructure is destined to become stranded investments.

And finally, the demand for natural gas, and for the pipelines themselves, may simply not be there; Americans are using less electricity, and generating more of it themselves through rooftop solar systems. The vertically-integrated, monopoly utility model that prevails in the Southeast relies on ever-increasing sales, which means it doesn’t require much of a change in consumer behavior to turn black ink red.

So while environmentalists are enraged by the recklessness of the southeastern utilities’ natural gas strategy in an age of climate change, customers who only care about the bottom line on their utility bills have reason to be just as upset. Capitalism is supposed to ensure that corporate shareholders bear the costs as well as receive the benefits of risky bets. With the risks of their gas gamble shifted onto captive customers, the utilities won’t be punished for not choosing clean energy instead.

Bucking the trend towards renewables and efficiency

It’s worth noting that the plans of Dominion, Duke and their fellow monopoly utilities run counter to the expressed desires of their customers. Natural gas companies work to brand their product as “clean,” but polls show Americans overwhelmingly believe the U.S. should emphasize wind and solar over oil and gas production, and oppose the use of fracking to extract oil and gas. Major corporations now threaten to vote with their feet, refusing to locate where they can’t access electricity from renewable sources.

It is not a coincidence that Duke and Dominion fall near the bottom of a just-released survey conducted by Ceres that ranks major utilities by their performance on energy efficiency and renewable energy. NextEra and Southern do no better. NextEra’s electricity subsidiary, Florida Power and Light, came in dead last for renewable energy sales. Ceres says it was unable to include Southern this year because it did not respond to requests for data, but in 2014 Southern ranked 31 out of 32 on renewable energy sales.

The southeastern utilities stand in marked contrast to utilities like Berkshire Hathaway’s Mid-American, which has announced a goal of meeting 85% of its customers’ needs with wind power. Even Dominion’s Virginia rival, Appalachian Power Company, filed an integrated resource plan last year with more new wind and solar generation projected than new natural gas. Perhaps that’s because neither Appalachian Power nor its parent company, American Electric Power, own any gas pipelines.

Effects on competition and consumers trigger an antitrust complaint

Customers may be the biggest losers when utilities use their electricity subsidiaries to guarantee the success of their gas subsidiaries, but the arrangement also harms other business interests. These include pipeline operators who don’t have the same self-dealing opportunity; non-utility electricity generators who can’t sell their product to utilities because the utilities now prefer to build their own gas generation; and companies that build wind and solar projects, who find themselves boxed out.

Already one non-utility generator is crying foul: Columbia Energy LLC, an operator of a 523 MW independent combined cycle gas generating plant that wants to sell electricity to Duke Power but finds itself left out in the cold. Columbia is challenging both Duke’s application for approval of a new gas plant in Ashville and the merger of Duke with Piedmont Natural Gas, another partner in the Atlantic Coast Pipeline.

The potential of the ACP to harm consumers and competition led to the filing in May of a complaint with the Federal Trade Commission (FTC). The complainant, retired Department of Justice antitrust lawyer Michael Hirrel, believes the utilities’ abuse of their legitimate monopoly power violates federal antitrust laws, and he is urging the FTC to investigate.

The Virginia Chapter of the Sierra Club, which opposes both the ACP and Dominion’s gas build-out, followed up with its own letter delving more deeply into the facts of Duke and Dominion’s self-dealing. (The letter and supporting documents, including Hirrel’s complaint, can be found at http://wp.vasierraclub.org/LetterInFull.pdf. Note that it’s a big file and may take time to load.) Hirrel has added both documents to the FERC file on the ACP application.

(Full disclosure: I led the team compiling the information for the Sierra Club submission. I’ve never met Mr. Hirrel and only learned about his complaint weeks after it was filed. However, I had been doing my own complaining—though evidently not to the proper authorities—about the utilities’ conflict of interest.)

But is anyone listening?

Aside from the FTC filing, opponents of the gas plants have pinned their hopes on state public utility commissions, while pipeline opponents are focused on the Federal Energy Regulatory Commission (FERC). Neither venue offers grounds for optimism. Virginia’s State Corporation Commission (SCC) has approved three of Dominion’s new gas plants in a row over the objections of environmental advocates, and North Carolina’s Utility Commission recently approved Duke’s new gas units in Asheville (though for now it has turned down a request for a third).

FERC poses its own challenge. Activists want FERC to review gas transmission proposals collectively instead of singly, to avoid overbuilding and the unnecessary damage to the environment and local communities that would result. This would be a departure for the agency, which traditionally reviews proposals individually, and has approved nearly every pipeline proposal that has come before it.

So far FERC has resisted arguments of this nature, as well as objections based on climate concerns. But in a possible sign that the agency recognizes times are changing, it has recently slowed the approval process for some proposed new pipelines, apparently to conduct more thorough environmental reviews.

There is no sign yet that the public utility commissions and FERC are communicating with each other or with the FTC. That leaves anti-pipeline groups and environmental activists in a difficult position. They can make a strong case the utilities are taking unfair advantage of captive ratepayers for a purpose that harms both the environment and the public. But is anyone listening?

Northern Virginia activists are ready for 100% renewable energy future

 

Ready for 100 Community Outreach Coordinator Taylor Bennett, Mount Vernon Group of the Sierra Club Chair Dean Amel, and Virginia Chapter Sierra Club Chair Seth Heald.

Ready for 100 Community Outreach Coordinator Taylor Bennett, Mount Vernon Group of the Sierra Club Chair Dean Amel, and Virginia Chapter Sierra Club Chair Seth Heald at Alexandria’s Earth Day celebration in April.

Clean energy advocates in Virginia know we are engaged in a steep uphill climb, and are still so far from the top that we have only a general idea of what it will look like. But activists in Arlington and Alexandria believe it’s time for bold leadership. They are calling on their communities to set a goal of 100% clean and renewable electricity by 2035.

The Ready for 100 Campaign launched today as part of a push by the Sierra Club to show that a future without fossil fuels is achievable. Sierra Club volunteers are working with community groups and other leaders to promote the benefits of clean energy locally. According to Seth Heald, Chair of the Virginia Chapter of the Sierra Club, fifteen U.S. cities, including San Diego, CA, Georgetown, TX, and Columbia, MD, have already committed to 100% clean energy.

Arlington County already has a reputation for its leadership in the energy sector, with a commitment to reduce its greenhouse gas emissions by 80% by 2050 and a number of innovative programs to reduce energy consumption. Now, says Heald, it is time for Arlington to take the next step to “eliminate the fossil-fuel generated pollution that comes from electricity production and is damaging our health and undermining our quality of life.”

Arlingtonians for a Clean Environment (ACE) has signed on as a partner in the effort. “Arlington County has already set a high bar for Virginia, but we can do even better,” said Executive Director Elenor Hodges. “I think this is an effort many residents will get behind.”

Copy of Copy of 1168 ReadyFor100_Logo_Color“Our current dependence on fossil fuels means that my generation will be dealing with the impact of climate change for our entire lives,” said Helene Turvene a junior at Washington-Lee High School. “A commitment now to 100% renewable energy not only will help to begin reversing those impacts, but it will position our community for a more sustainable future. Students want to know that local leaders are acting with us, and future generations, in mind.”

Alexandria residents are also behind the effort. Samantha Adhoot is an Alexandria-based pediatrician who has often sounded the alarm about the effects of climate change and fossil fuel pollution on children’s health. “By transitioning to 100% clean energy, our city could prevent thousands of asthma attacks and dozens of premature deaths every year,” she said. “This would be a big step in the right direction toward allowing our kids to breathe easier.”

Although the 2035 goal is long-term, the campaign’s benefits could be immediate. The solar industry now employs over 200,000 people nationwide, and with fewer than 1% of them in Virginia, we have tremendous room for growth. And of course, investments in energy efficiency mean savings on utility bills that keep adding up. Stanford scientists say the transition to 100% renewable energy will save the average American family $260 dollars per year in energy costs, and another $1,500 per year in health care costs.

Taylor Bennett, Community Outreach Coordinator for the Ready for 100 Campaign, is hoping to hear from others who want to join the effort. She can be reached at Taylor.Bennett@SierraClub.org.

Complaint: utilities’ role in Atlantic Coast Pipeline violates antitrust laws

pipelinemadnessDominion Resources’ plan to use the captive ratepayers of its electricity subsidiary to guarantee a customer base for its Atlantic Coast Pipeline venture has caused critics—including me—to complain that the scheme presents a clear conflict of interest. According to a complaint filed with the Federal Trade Commission (FTC), it’s also a violation of federal antitrust laws.

Lawyer Michael Hirrel, who retired last year from the Antitrust Division of the U.S. Department of Justice, has asked the FTC to investigate “whether ACP’s project constitutes a prohibited monopolization by Dominion, Duke and Piedmont, under Section 2 of the Sherman Act, and an unfair method of competition, under Section 5 of the Federal Trade Commission Act.”

Dominion Virginia Power is currently engaged in an aggressive build-out of natural gas generating plants, with three new units representing 4,300 megawatts of generating capacity, coming online between 2014 and 2019. The company’s latest integrated resource plan and presentations to stakeholders reveal plans for over 9,000 megawatts more. By comparison, the company has promised a mere 400 megawatts of solar.

Where there are gas plants, there must be gas, and this massive build-out means a guaranteed stream of income for the lucky owners of gas transmission pipelines. The fact that one such pipeline is partly owned by Dominion Virginia Power’s parent corporation is clearly a conflict of interest. Because Dominion holds a monopoly on electricity sales, its customers will be stuck paying for gas—and guaranteeing a revenue stream for pipeline owners—for decades to come.

This is a bad deal for customers and the climate, but according to Hirrel, it is also anticompetitive and warps the normal decision-making of the companies involved.

(In addition to Dominion Resources, the other owners of the Atlantic Coast Pipeline are Duke Energy, Piedmont Natural Gas and AGL Resources. AGL is being acquired by Southern Company, meaning three of the four partners own electricity subsidiaries that are regulated monopolies that can stick ratepayers with the cost of paying for gas. As for the fourth partner, Piedmont is a regulated monopoly distributor of natural gas. Just to make things even more cozy, Piedmont is being acquired by Duke.)

Hirrel’s complaint notes: “If Dominion, Duke and Piedmont were to acquire their gas and its transportation, plus electricity generation, in competitive markets, they would, the Commission must suppose, engage in a very different decision making process. But that process will be rendered moot when they acquire and transport their own natural gas, and generate their own electricity. They will distribute the electricity and gas to their own monopoly retail customers, who have no alternative. Those customers must pay the costs of Dominion, Duke and Piedmont’s decisions, whether the costs were efficiently assumed or not.”

Hirrel also points out that in a truly competitive market, Dominion and Duke might not pursue a natural gas strategy at all, because of the economic risks involved. They might, for example, consider whether investments in wind and solar would be more economical and avoid the potential for stranded investments.

“But in the present universe,” he concludes, “the one in which Dominion, Duke and Piedmont propose to become the monopoly suppliers of the inputs for their own monopoly customers, they need not engage in any such economically efficient decision making process. If they make bad decisions, they will not suffer. The costs of those bad decisions will be borne by the monopoly customers of their retail electricity and natural gas distribution systems.”

I called Mr. Hirrel to ask what action he expects the FTC to take. He says the Commission typically takes anywhere from two weeks to two months to determine whether to open an investigation when it receives a complaint like this. If it chooses to investigate, it may also ask the Federal Energy Regulatory Commission (FERC) to delay its approval process for the ACP pending conclusion of the FTC investigation.

Hirrel copied FERC on his complaint, making it a public document within the ACP docket (CP15-554).

Does McAuliffe deserve that bad grade on climate and energy?

Protesters at an anti-pipeline rally aim their message at Governor McAuliffe

Protesters at an anti-pipeline rally aim their message at Governor McAuliffe

Clean energy advocates who scrutinize Virginia Governor Terry McAuliffe’s record see different things. Chesapeake Climate Action Network (CCAN), the Virginia Student Environmental Coalition (VSEC) and other groups recently released a mid-season “report card” that gave McAuliffe a D-plus on climate and energy. The bad grades primarily stem from his support of massive fracked-gas pipelines and offshore oil drilling, as well as Department of Environmental Quality’s (DEQ’s) approval of Dominion Virginia Power’s plans to “close” coal ash ponds by leaving toxic waste in unlined pits next to rivers.

Meanwhile, though, other environmental leaders are praising the governor for speaking out about the reality of climate change and promising to forge ahead with implementation of the EPA’s Clean Power Plan in spite of the current judicial stay. They also say McAuliffe should get more credit for his vetoes of bills attacking the Clean Power Plan and extending subsidies to coal companies.

It is possible to agree with both the criticism and the defense. McAuliffe’s enthusiastic support for Dominion’s Atlantic Coast Pipeline has been an enduring irritant to climate activists as well as to landowners along the planned routes of the ACP and other natural gas pipelines. A Sierra Club analysis concluded that the pipelines would increase the Commonwealth’s greenhouse gas footprint by more than twice the total emissions of all power plant generation in the state.

He is also rightly criticized for supporting off-shore drilling, which would increase climate pollution and sea level rise and threaten the Navy’s and tourism’s contributions to Hampton Roads’ economy—a potential double whammy for residents and businesses.

And the Virginia DEQ has begun to look a lot like its North Carolina counterpart, a captured agency incapable of defending our air and water from the corporate polluters it is supposed to regulate. Sure, the problem has festered through several administrations, but McAuliffe’s failure to intervene is impossible to reconcile with his pro-environment rhetoric.

The problem goes beyond DEQ. In response to a detailed petition to the Governor for an interagency review to modernize the state’s fracking regulations, McAuliffe’s Secretary of Commerce and Labor announced a plan to limit the issues and refer them to an industry-dominated organization funded by the American Petroleum Institute for decision. This is hardly a sign of a Governor committed to protecting the environment, safety and health.

Yet messaging matters, and McAuliffe is a vocal messenger on the topic of climate change. The governor points to the flooding that routinely shuts down streets in Norfolk as proof that human-caused sea level rise is already a problem right here in Virginia. And as a team player for the Democrats, he supports Obama’s Clean Power Plan even as he brags (superfluously and probably incorrectly) that he persuaded EPA to soften its Virginia targets to reduce our burden of compliance.

Besides which, if he’s no Jerry Brown or Jay Inslee leading his state towards a fossil-free future, McAuliffe is also not Ken Cuccinelli, hounding climate scientists out of state. Given a Republican majority in Virginia’s General Assembly that is dedicated to propping up the coal industry and blocking anything EPA does, it could have been so much worse.

So perhaps CCAN is letting the perfect be the enemy of the good—or in this case, letting the good be the enemy of the “meh.”

Regardless of how they feel about McAuliffe’s record, both the glass-half-full folks and the glass-half-empty folks agree there’s an “incomplete” on his report card that could make an enormous difference to his legacy. The ultimate test of the Governor’s climate credentials, they say, is whether he pushes DEQ to write a Clean Power Plan that puts a firm cap on total carbon emissions from the electric sector in Virginia. Though the General Assembly found a way to stop DEQ from completing work on the state implementation plan temporarily, nothing stops McAuliffe from taking a public stand on this most critical point.

That sounds like a no-brainer for a Democrat who is serious about reining in CO2. Unfortunately, it doesn’t meet with the approval of Tom Farrell, CEO of Dominion Resources, or Bob Blue, President of Dominion’s electric utility subsidiary, Dominion Virginia Power. They want DEQ to write a plan that leaves out new sources of emissions. That would let them continue building lots of big, new natural gas generating plants that, Blue assures us, will be capable of spewing carbon for at least another half century. All that burning of fracked gas would be lousy for the climate, but it would guarantee profits for Dominion’s utility and pipeline affiliate.

So on the one hand, the Governor can choose to be a climate hero, fighting sea level rise and deadly heat waves, creating tens of thousands of clean energy jobs and attracting forward-looking companies to the state, building his national reputation, doing what’s right for all our children and grandchildren, —

Or he can make Dominion happy.

It will be very interesting to see what becomes of that “incomplete” on his report card.

Virginia’s energy future is up for discussion this Wednesday in Arlington

Visitors tour the solar installation on the roof of Wakefield HS in Arlington. Photo credit Phil Duncan

Visitors tour the solar installation on the roof of Wakefield HS in Arlington. Photo credit Phil Duncan

Those of you in Northern Virginia might be interested in attending a screening of the film “The Future of Energy” at the Arlington Cinema and Drafthouse on Wednesday, May 25 at 7:30 p.m. I will be leading a discussion of energy issues and the future of renewable energy in Virginia following the movie.

“The Future of Energy: Lateral Power to the People” is billed as “a positive film about the renewable energy revolution,” and “the people and communities leading the way towards a renewable energy future.” You can watch the trailer on the website of the Arlington Cinema and Drafthouse.

Arlingtonians for a Clean Environment (ACE) is hosting the screening. Tickets are $10, or $5 for students at the door. Doors open at 6:30, which is a good time to arrive if you want to order dinner and drinks and talk to some of the local environmental leaders who are attending.

ACE and the Sierra Club have teamed up on a campaign called “Ready for 100,” with a goal of leading Arlington and the city of Alexandria towards a goal of 100% renewable energy for the electric sector by 2035. ACE’s director, Elenor Hodges, and Dean Amel, Chair of the Mount Vernon Group of the Sierra Club, will be on hand to provide more information about the “Ready for 100” campaign. Arlington Energy Manager John Morrill will also be there to answer questions.

ACE is also working with VA-SUN on a new solar bulk-purchasing cooperative for Northern Virginia residents and businesses called the Potomac Solar Co-op and will have information available about it on Wednesday. An information session for the co-op is planned for June 8.

Arlington is already recognized for its leadership on clean energy, with groundbreaking projects like a net-zero-energy elementary school. But getting to 100% will take a truly determined, collective effort on the part of homeowners, businesses and local government. We will also likely need to see reforms to state policies and laws that currently present barriers to renewable energy. These state barriers affect all Virginians, so while Wednesday’s focus will be on Arlington, the discussion will be relevant to everyone who wants to see a clean energy future in Virginia.