Author Archives: Ivy Main

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Time to get serious about offshore wind

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Photo credit: Phil Holman

Photo credit: Phil Holman

A version of this article originally appeared in the Hampton Roads Virginian-Pilot on Sunday, December 15.

No doubt about it, Virginia is for lovers of offshore wind. It’s hugely popular with the public, and Virginia legislators passed a near-unanimous resolution in its favor. Governor McDonnell talked it up, and even tossed it some bucks. Governor-elect McAuliffe is such a fan that he made television commercials about it way back in 2009.

But all that love won’t get us turbines in the water unless Dominion Virginia Power decides to build them. Dominion is the key player after winning the exclusive right to develop the federal lease area 25 miles off Virginia Beach. The company has five years to study the area and come up with a construction and operations plan—or not. Right now the company is being coy about whether it will move forward come 2018.

Alas, Virginia, getting offshore wind turbines is going to take more than sweet talk: we have to start laying the groundwork now for that trip down the aisle. So here’s a to-do list to help get us there.

Governor McAuliffe should declare offshore wind a priority from the day he takes office. Only two test turbines are likely to be spinning before the end of his term, but he can make it clear he expects Dominion to meet all of the milestones in its federal lease, ensuring the next governor presides over the big buildout.

The governor and the General Assembly can also prove their ardor by funding ocean studies that have to be conducted before construction starts. The developer of Rhode Island’s wind energy area, Deepwater Wind, expects to have its turbines spinning only five years from now thanks to state-sponsored ocean studies that, Deepwater says, translated into a three-year head start. It’s an approach Virginia should emulate. The public will pay for these studies one way or another—either as taxpayers or as ratepayers—and footing the bill now will help us make up time.

The governor can also direct an analysis of workforce and port readiness so we begin to train workers and put in place the infrastructure needed for this huge new industry.

Of course, creating a skilled workforce is hard to do with no wind projects now in Virginia. Building land-based wind here would support the growth of the workforce and the supply chain, and give everyone experience with wind energy here. One project might be the wind farm proposed by Iberdrola in northeastern North Carolina, within commuting distance of Hampton Roads workers. Dominion turned down the chance to buy energy from the project a few years ago, and it hasn’t been built. The General Assembly could turn that around with legislation to require our investor-owned utilities to incorporate wind power into their energy mix.

Why support a project in North Carolina? The simple fact is that offshore wind is too big an industry for any one state to go it alone. Creating scale and keeping costs down demands a regional approach. Cooperation means both states win. In addition to North Carolina, the governor should partner with Maryland and Delaware, which also have federally-designated wind energy areas off their coasts.

Regulators, and the public, also need to see an analysis of what impact this energy will have on our electric bills. Harder to quantify, but just as important, is a full understanding of offshore wind’s benefits. Such a study might begin with a survey to identify those Virginia companies that could participate in the supply chain, what new businesses and jobs the state might attract, and how the economically distressed regions of the state can best participate.

When the time comes, the State Corporation Commission will have to do its part by approving both the two test turbines and, later, the full wind farm. The legislature can help by declaring an offshore wind farm in the public interest—a short step beyond its earlier resolution, but one with actual weight.

Virginia offshore wind may still seem to be off in the future, but now is the time for the incoming McAuliffe Administration and the General Assembly to prove their love. Otherwise, Virginia just might get left at the altar.

Unknown's avatar

Why standby charges are bogus

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Utilities want solar owners to pay for grid access. Photo credit: NREL.

Utilities want solar owners to pay for grid access. Photo credit: NREL.

Rooftop solar energy makes up a tiny fraction of the total electricity produced in America, but already utilities worry about a day when large numbers of their customers won’t need them any more. As renewable energy costs continue to tumble and the technology of battery storage improves, many residents and businesses may abandon their power utility to go it alone or form microgrids within their communities to control their own power.

Some utilities understand that this is the future and are looking for ways to turn these trends to their advantage. Others are doing everything they can to protect their turf, and progress (and the environment) be damned. They figure they can’t wind up on the wrong side of history if they stop history from happening.

Hence the attempt to throttle solar while it’s still little. Caps on system sizes, caps on total amounts of distributed generation, prohibitions against third-party power purchase agreements, restrictions on net metering: all of these are efforts to keep solar too small to matter, and too small to achieve the economies of scale that could lead to an upending of the central utility model.

The latest effort to squelch solar is through standby charges: fees imposed on net metering customers that compensate the utility for “standing by,” ready to sell grid-produced energy at night and on cloudy days. In 2012 in Virginia, Dominion Virginia Power won the right to charge customers with large residential systems (10-20 kilowatts) up to $60 per month—a charge that destroyed this market segment. This summer Dominion pressed its advantage, indicating in a submission to regulators that it will likely seek more standby charges on a broader class of solar customers.

Note that Virginia has less than 15 megawatts (MW) of solar installed across the state. Dominion Power alone has around 19,000 MW of coal, gas and nuclear. So the notion that net metering by solar customers has any perceptible effect on the grid or other customers is silly. The point of Dominion’s stand-by charges is to stifle the solar market, not cover costs.

This same debate played out this year in Arizona, which saw its solar industry install 719 MW in 2012—still a tiny percentage of that state’s total energy supply, but one that is growing fast enough to warrant the discussion. Last week the public utilities commission agreed to allow Arizona Public Service Company (APS) to charge its residential solar customers an average of $5 per month. The utility treated the ruling as a win, and indeed the charges might eventually add up to enough to cover APS’s attorney fees in the case. That’s more than can be said about Dominion’s standby charges.

Meanwhile the conservative American Legislative Exchange Council (ALEC) has gotten into the act, drafting a model resolution insisting that net metering customers should have to pay their “fair share” of utility costs through measures like standby charges. Not incidentally, Dominion Power is a member of ALEC and sits on the energy and environment task force next to the fossil fuel shills from Heartland Institute.

But the “fair share” argument is bogus. Utilities weren’t set up to ensure Americans all paid their “fair share” of the costs of the electric grid. If they were, there would still be mountain communities without power today. Residents of cities and towns subsidized the cost of running power lines to far-flung rural homes inhabited by people who could never have afforded their “fair share” of this infrastructure.

Even today, city dwellers pay more than their “fair share” of transmission costs to subsidize people like me who live in leafy, sprawling suburbs and less-populated parts of the state. Anybody voting for an ALEC-style resolution about “fair shares” had better be willing to stick it to suburban and rural consumers.

There are other ways electricity rates aren’t “fair.” Dominion’s residential rates are structured so people who use less electricity pay more per kilowatt hour than those who use more—again, making it roughly a transfer of wealth from urban apartment dwellers to those with larger or less efficient homes elsewhere. The utility’s goal is to encourage the use of electricity, and compete more effectively with the gas company for heating. People paying their “fair share” just doesn’t enter into it.

And while we’re at it, if we were serious about subsidies we’d slap a tax on electricity made from fossil fuels to reflect the costs they impose on society. Asthma, heart disease, mercury poisoning, groundwater contamination, and of course, the dumping of carbon into the atmosphere—these are all costs of fossil fuel that ought to be included in power bills to make sure everyone is paying their “fair share.” People who install solar panels deserve a thank-you for their service to society, not standby charges based on bogus “fair share” claims.

The argument for standby charges is, pure and simple, an attempt by entrenched monopolies to block competition. The “fair share” argument is a red herring from utilities that don’t want a fair fight. And with good reason: they’re going to lose.

Unknown's avatar

From Massachusetts to New York, offshore wind energy now ready to deliver

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Interior Secretary Sally Jewell addresses a packed ballroom

Interior Secretary Sally Jewell addresses a packed ballroom at the American Wind Energy Association offshore wind conference

The long-awaited Cape Wind offshore wind farm will finally begin construction off the coast of Massachusetts in 2014. So, too, will the much smaller Block Island Wind Farm off Rhode Island. When completed, Cape Wind’s 130 wind turbines will supply almost 75% of the power needs of Cape Cod, Martha’s Vineyard and Nantucket, while the 5-turbine Block Island Farm will supply enough clean energy to power over 17,000 homes.

2014 also seems likely to see a power purchase agreement for some of the energy to be generated by a 900 MW wind farm off the tip of Long Island that would feed power to a growing and hungry New York market, at a cost that’s economic now.

And with a second round of grants from the Department of Energy expected next spring, demonstration projects of 12-25 MW will also go forward in three more locations, producing power in 2017 and helping set the stage for rapid growth in the industry. The first-round grants went to projects in Oregon, Texas, Ohio, Maine, New Jersey and Virginia.

These were a few of the highlights from the American Wind Energy Association 2013 offshore wind conference, held October 22 and 23 in Providence, Rhode Island. More than 700 attendees packed a ballroom to hear Secretary of Interior Sally Jewell, Rhode Island Governor Lincoln Chafee, U.S. Senator Sheldon Whitehouse and others make the case for why offshore wind energy will play a growing role in the U.S., starting in the Northeast.

Five years have passed since the American Wind Energy Association, the University of Delaware and the Sierra Club brought together researchers and wind developers for America’s first-ever conference on offshore wind energy, in Dover, Delaware. Since then, the conference has grown in scope and attendance, but the only wind turbine to make it to U.S. waters is a one-eighth-scale test model off the coast of Maine.

While Europe surged ahead and now has more than fifty offshore wind farms, the U.S. has been hampered by a slow federal leasing process, uncertainty about tax credits, and a political process ill-suited to the long-range planning and regional cooperation needed to realize the potential of this industry.

But as this year’s conference showed, the industry is moving ahead. The Obama Administration and several states identify offshore wind as a critical part of the response to climate change, as well as an opportunity to develop jobs. As many speakers explained, there is also a strong business case to be made for it. Given the price spikes that have plagued natural gas in New England and elsewhere, it makes sense to diversify power sources. In addition to providing price stability, wind energy has been shown to suppress wholesale energy prices, saving consumers money.

Perhaps most significantly, offshore wind power is likely to be the least-cost option in locations where demand is high, energy is expensive, and alternatives are few. This describes much of the Northeast, especially the densely populated area from northern New Jersey up to Massachusetts.

An analysis from AWS Truepower showed several factors that make offshore wind energy a good option in these areas:

  • A growing demand for power, driven in part by new data centers;
  • An already-congested transmission grid, coupled with the difficulty of either building new generation close to the load center or adding new transmission lines to bring in power from outside the area;
  • The proximity of offshore wind energy areas to these load centers along the coast;
  • High localized marginal prices for electricity, making offshore wind competitively priced; and
  • The ability of offshore wind to provide power when demand is greatest.

This last element is especially compelling for utilities, which have to meet a demand for power that changes throughout the day. Unlike onshore wind, which blows most strongly at night, and solar energy, which peaks in the middle of the day, offshore wind picks up in the late morning and continues through the evening hours, matching times of highest demand. According to Bruce Bailey, CEO of AWS Truepower, this fact means that in the New York market, the revenues from offshore wind energy will be about two and a half times that of onshore wind energy.

Whitney Wilson, the engineer who conducted the analysis for AWS Truepower, told me that when they looked at all the factors and then at the potential locations for offshore wind farms, one location stood out: a tract of ocean thirty miles off the coast of Montauk Point on Long Island, within the southern section of the Massachusetts/Rhode Island Wind Energy Area. Building wind farms there, her analysis showed, would provide the biggest bang for the buck.

Developer Deepwater Wind, LLC, won the right to develop the lease area last summer in the U.S.’s first-ever offshore wind lease auction. One likely customer may be the Long Island Power Authority, which put out an RFP for 280 MW of renewable energy, specifically mentioning offshore wind.

Lisa Dix, a Senior Campaign Representative with the Sierra Club’s Beyond Coal Campaign in New York who was also at the conference, says offshore wind makes perfect sense for Long Island, and complements the Long Island utility’s recent approval of a feed-in tariff for solar energy.

Other utilities seem likely to follow suit as they assess the benefits of offshore wind for their own customers. A greater understanding of these benefits will lead to the full buildout of the RI/MA area and the soon-to-be-leased New Jersey area.

The experience of Deepwater, Cape Wind, and the developers of the DOE-funded demonstration projects will help build the industry supply chain and workforce, and will produce the kind of learning that leads to lower prices for future projects. One such project involves the 2000 MW of the Virginia Wind Energy Area, which Dominion Power now holds the right to develop. While the economics are not currently as compelling in the cheap-energy South, this would change if the early movers achieve the cost reductions they are aiming for.

If states work together, these cost reductions and the development of a robust, domestic supply chain and workforce will happen better, sooner and smarter. Coordinated regional planning will support rapid growth in the industry while driving down costs in a virtuous cycle.

Given the urgency of climate change and the need to move the electric grid beyond fossil fuels as quickly as possible, Congress also has to make the growth of the offshore wind industry a national priority. Passing a long-term extension of the investment tax credit is a critical first step to support the tremendous renewable resource just off our coast.

Unknown's avatar

What’s wrong with Dominion’s Green Power Program

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Better than Green Power: installing a solar system yourself. Photo credit: NREL

Better than Green Power: installing a solar system yourself. Photo credit: NREL

Renewable energy advocates in Virginia were astonished to learn a few weeks ago that the U.S. Environmental Protection Agency has given Dominion Virginia Power an award for its Green Power Program.

Dominion’s program is not, to put it mildly, a good one. Half of the money its customers contribute is siphoned off for overhead and “education.” The rest goes to buy renewable energy certificates from out of state. Over the years Dominion has collected millions of dollars in these voluntary contributions without building a single wind or solar facility to supply the program. Surely the only green award this merits is one for greenwashing.

So I called the EPA to find out what criteria they use in determining who gets an award. It turns out the agency only measures the growth of a green power program, and Dominion has signed up more customers than other utility programs have.

I had to laugh. Customers of utilities in most other states have real options to buy wind and solar. If you can buy wind energy from an alternative supplier or participate in a community solar project, or if your utility is aggressively incorporating renewables into its power supply, you don’t need a green power program.

But Dominion has never built more than token amounts of renewable energy, and it continues to use its monopoly position to erect barriers to competition from others. The utility has signed up 19,000 Green Power participants only because it has effectively denied its Virginia customers any meaningful way of participating in the renewable energy market.

News of this award will surely lure more people in. Yet even if every one of Dominion’s customers signed up for the program, it wouldn’t shrink Virginia’s carbon footprint. Instead, Dominion’s latest integrated resource plan reveals plans for more fossil fuel generation and increasing greenhouse gas emissions over the next fifteen years.

And it’s worse than that. As of this year, Dominion is actually using the Green Power Program to bankroll an attack on renewable energy—one the State Corporation Commission shamefully endorsed when it approved the company’s 3-megawatt “solar purchase program.”

In this charade, Dominion buys solar power from homeowners and businesses to resell to the Green Power Program. The deal nets sellers a few cents over the retail price of electricity, but costs the Green Power Program almost three times as much. This overcharging of the Green Power Program would be bad enough. But the more insidious problem lies in Dominion’s justification for the high charge. It claims that rooftop solar energy is no more valuable than power from fossil fuels that it can buy at wholesale.

Dominion’s position flies in the face of recent studies demonstrating the benefits of solar energy to the grid, including generating power where demand is, providing power during peak hours when energy is most expensive, avoiding the need for transmission upgrades, eliminating line losses, and reducing the need for new generation.

It also runs counter to trends in states like Georgia, where Georgia Power has put a higher–than-retail value on the solar distributed generation it plans to buy, and says that paying the extra won’t put upward pressure on rates.

This makes it especially difficult to understand why Virginia’s State Corporation Commission approved Dominion’s Green Power rip-off. And predictably, Dominion has followed up its win with a deeply flawed study it plans to use as a basis for a new round of standby charges on customers who net meter. (The case is PUE-2012-00064, available on the SCC web site.)

So what is a dedicated renewable energy advocate to do?

There are options. If you are determined to buy RECs, you don’t have to go through Dominion. Buy from another source. But better yet, install solar yourself if you can. The price of solar panels has dropped so precipitously over the past few years (down 60% since the start of 2011) that you may find it worth taking out a home equity loan.

If you don’t have a sunny roof yourself or can’t afford the whole upfront cost, you can work with your school, community center or place of worship to install solar panels in your neighborhood. Interest in solar is very high among Virginia faith congregations, driving large turnouts for presentations on the topic given by Sierra Club and others in cooperation with the solar industry.

Or you can take the money you were spending on Dominion’s program and give it to a charity that will use it to install renewable energy here in Virginia; this may even get you a tax deduction. Low-income housing providers like Richmond’s Better Housing Coalition now put solar panels on many of their facilities, and will accept donations specifically for that purpose.

The Virginia Center for Wind Energy at James Madison University accepts donations to its Wind for Schools program, which helps public schools across the commonwealth install wind turbines for educational purposes.

A new non-profit, Three Birds Foundation, is working to put solar on public schools that serve low-income children in Virginia and elsewhere.

All these charities are committed to doing what Dominion, apparently, doesn’t want to do: install solar and wind energy in Virginia.

Unknown's avatar

McDonnell administration set to fail Virginians on building codes

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Everyone agrees that cutting energy waste is the most cost-effective way to meet our energy needs while reducing reliance on fossil fuels. And making new buildings efficient from the start is the surest way to achieve energy savings. Energy efficiency is the Mom-and-apple-pie part of our energy policy. Who could oppose it?

The Home Builders Association of Virginia, for one. They would rather build cheap housing than efficient housing, even when high utility bills turn cheap housing into expensive housing.

Bowing to aggressive lobbying from the home builders, the Board of Housing and Community Development (BHCD) has backed away from the national model building code provisions that would have improved the efficiency of Virginia residences by as much as 27.4%, according to a U.S. Department of Energy analysis. And, the McDonnell administration has signed off on the weak regulations. Virginia’s Department of Housing and Community Development has proposed a watered-down code that is currently open to public comment until September 29.

The McDonnell administration prides itself on fiscal prudence and its love for the business community. Here is a case where fiscal prudence demands tough love. A watered-down code means money wasted.

The model code provisions would have required higher “R” values in ceiling and wall insulation, resulting in homes that cost less to heat and cool. It would also have required builders to check for leaks mechanically, rather than just eyeballing it, to catch air leaks while they can still be fixed. The code that Virginia is set to pass jettisons these improvements, and others.

It’s cheaper for builders to skimp on insulation and not worry about air leakage, but the result is a home of lower quality and value. Owners and tenants end up having to pay more to keep warm in winter, and cool in the summer. These higher utility costs paid by occupants quickly eclipse the savings to builders.

What’s more, the cost of fixing defects later is much greater than building the house right to start with. Drafty houses are a classic example of the need for strong building codes, because sealing and insulation aren’t visible to buyers, and trying to add them later is difficult and expensive.

Customers who are buying brand-new homes have the right to expect a quality product. Virginians should tell the Department not to waste this opportunity to improve our housing stock for years to come.

A strong building code will also reduce Virginia’s reliance on fossil fuels and help low and moderate-income residents in one of the most cost-effective ways possible. Housing built for the low-end market is particularly vulnerable to poor construction. Buyers usually don’t know where corners have been cut, or don’t care because they plan to rent out the buildings and won’t themselves shoulder the high utility bills.

Some builders do cater to sophisticated buyers with homes that meet higher standards, but the vast majority stick only to what the code requires. Utility bills consume a disproportionate share of the income of residents with low and moderate incomes, and can also be a particular burden for seniors and others on fixed incomes. The failure to keep pace with the national model code means a missed opportunity to help homeowners across the state, as well as future owners and tenants.

The more rigorous model code standards would result in some additional upfront cost to buyers, but the Department of Energy calculates that savings on utility bills would more than cover the additional payment on a mortgage. Over 30 years, the average consumer would see more than $5,000 in savings.

Unfortunately, the pressure from the home builder lobby has resulted in a proposal with greatly weakened provisions that mean most new homes will remain unnecessarily expensive to heat and cool.

Virginians should not have to live with leaky, inefficient homes. The Department of Housing and Community Development should restore and adopt the full 2012 model building code standards, to improve our housing stock now and for the future.

Unknown's avatar

Dominion wins Virginia offshore wind lease: well, duh

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And the winner is . . . Dominion Power!

Okay, you knew that. Dominion had the deck so stacked in its favor for Wednesday’s Virginia offshore wind lease auction that the question everyone was asking at the end wasn’t “who won?” but “who bid against Dominion, and why did they bother?”

The answer to the first question proved to be Charlottesville-based Apex Energy, a far more experienced player in the wind industry—but one without Dominion’s lock on the Virginia power market.

There was much to criticize about the auction format and the process that led inevitably to Dominion’s win, but this historic step is still hugely exciting for offshore wind advocates. If Dominion follows through on the commitment it just made to develop offshore wind, Virginia will be a winner, too.

That “if” has a lot of people worried, given that Dominion is both a participant in the offshore wind industry and one of its loudest detractors. Company executives talk about their desire to develop the lease area, and also their opinion that offshore wind energy is way too expensive to succeed. Often they make both points in the same conversation.

Observers can’t help wondering why a company would pour money into a venture if it doesn’t believe it can sell its own product. Two possible reasons come to mind: one, because it is willing to gamble on political and market changes that will make its venture successful after all; or two, because by spending the money to win the lease, the company prevents any competitor from occupying the space. One is gutsy, the other is evil. It is possible for both to be true.

So what did Dominion win? The lease area, a 112,800-acre swath of ocean beginning more than 23 miles off Virginia Beach, is expected to support at least 2,000 megawatts of wind turbines—enough to power about 700,000 homes. It’s the second Wind Energy Area to be auctioned off in the U.S.; the first lies off Rhode Island and Massachusetts, and was auctioned off in August.

Under rules set by the Bureau of Ocean Energy Management (BOEM), the entire Virginia area was treated as one tract (a bad idea, in the view of advocates and industry members who aren’t Dominion, because it further reduced competition). Dominion won with a high bid of $1.6 million.

A formal announcement of the winning bid is expected in October, following federal antitrust review. As the winning bidder, Dominion will have five years to conduct the studies required for development of the area, with interim deadlines including submission of a Site Assessment Plan next summer.

After the five years is up, Dominion could decide not to proceed, releasing the area for BOEM to offer in a new auction. That result would be an unqualified disaster for Virginia’s ability to develop an offshore wind industry here. With states to the north proceeding, we would lose not just construction jobs, but the entire supply chain, and likely the marine services as well. Many thousands of jobs now ride on Dominion following through.

If Dominion decides to proceed, it will have to submit a Construction and Operations Plan at least six months before the expiration of the five-year site assessment period—that is, by the summer of 2018. BOEM will then evaluate the plan in accordance with the National Environmental Policy Act, producing an Environmental Impact Statement in 18-24 months, before construction can begin. That timeline puts construction underway no later than 2020, with electricity from the first turbines flowing by 2022.

The process doesn’t have to take as long as this; Deepwater Wind, which won the two leases in the Rhode Island/Massachusetts area last month, says construction there “could begin as early as 2017, with commercial operations by 2018.”

But Dominion had previously indicated its preference for the slowest possible approach. The company’s original idea was to build some wind turbines, think about it for a while, and five years later start all over again. Then five years later, round three. Another five years, round four. So 20 years on, if Dominion liked what it saw each time, Virginia would finally have its 2,000 megawatts.

In accordance with this plan, Dominion’s surrogate, the Virginia government, asked BOEM to make the lease term for Virginia’s Wind Energy Area 45 years instead of 25.

Other developers and the environmental community cried foul, pointing out that such an approach would mean a generation would be born, grow up and go off to college before we had all our wind turbines—hardly the way to build an industry or stave off climate change.

BOEM conceded half a loaf and agreed to a 33-year term that allows time for a phased approach, but a faster one. The agency expects the construction plan will consist of four, two-year phases, ensuring completion of the build-out in 8 years—or by 2028, to be followed by 25 years of operation.

We can only hope that BOEM’s confidence is not misplaced. Dominion employees have said candidly that right now, under current market conditions, the company has no intention of actually building offshore wind turbines.

What will it take to change its mind? The company talks about costs and the difficulty of getting approval from Virginia regulators. It seems likely that the company will follow through with construction only if some combination of events happens in the next few years:

  • Continuing advancements in technology bring the cost of offshore wind energy down. Already the latest cost estimates put offshore wind power well below the sky-high figures Dominion cites.
  • Congress or the EPA tackles climate change through incentives for renewable energy (or disincentives for fossil fuels);
  • The Virginia government passes legislation to create a market in Virginia for offshore wind power;
  • Virginia’s State Corporation Commission (SCC), which regulates utilities, alters the way it views renewable energy.

Of these contingencies, the last might be the hardest. The SCC seems to believe the public interest is served only by providing the cheapest possible electricity available today. It shows no interest in climate change, or the pollution costs of fossil fuels, or long-term price stability, or job creation, or asthma rates. Ignoring the actual language of the Virginia Code, it declared this summer that Virginia law doesn’t require it to consider the environment in evaluating a new electric generation facility.

But the offshore wind industry is now off and running in the U.S., and the only question is whether Virginia wants to be part of it. On that answer depend thousands of jobs for our residents, an abundant source of stably-priced energy, and Virginia’s ability to move beyond fossil fuels in the face of climate change.

Virginians overwhelmingly want to move forward on offshore wind; now our challenge will be to make it happen.

Unknown's avatar

Dominion’s giant concrete paperweight

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Fracking_Site_in_Warren_Center,_PA_04

A natural gas fracking site in Warren Center, PA. Photo credit: Ostroff Law

The State Corporation Commission has approved Dominion Virginia Power’s proposal for a new gas-fired power plant in Brunswick County, rejecting arguments from the Sierra Club and others that ratepayers would be better served by a combination of low-cost energy efficiency and price-stable renewable energy.

The decision in the case (PUE-2012-00128) reflects the same discouraging themes we have seen from our regulators before: a tendency to believe everything Dominion tells them, coupled with an absolute refusal to acknowledge the climate crisis bearing down upon us and the changes in the energy market that make fossil fuels increasingly risky.

As the SCC put it in its order, “The relevant statutes… do not require the Commission to find any particular level of environmental benefit, or an absence of environmental harm, as a precondition to approval.” (Note to legislators: How about fixing that?)

The SCC’s state of denial is not just about the future. Since at least the 1980s, Dominion has consistently overestimated future demand growth.

A little skepticism might be in order when Dominion projects the same level of demand growth that keeps not materializing.

But the SCC is not skeptical. Its order declares Dominion’s load forecasts “reasonable.”

Evidently one can be both reasonable and wrong. Demonstrating this in real time, only a few days after the SCC issued its order in early August, Dominion CEO Tom Farrell had to explain to shareholders why electricity demand has not grown this year in line with company predictions.

Amnesia was also in evidence at the public hearing on the case, where proponents of the gas plant – everyone from Dominion employees to the SCC staff – kept insisting on the environmental advantages of natural gas.

But congratulating each other that at least it wasn’t a coal plant seemed odd to those of us who recall the fanfare surrounding the opening of Dominion’s newest Virginia coal plant, all of one year ago.

My, how quickly things change. No one is proposing to build coal plants any more. Now that natural gas costs half what coal does, people have suddenly noticed that burning dirty black rocks to make electricity is a terrible idea. “Look at all that pollution!” they say in wonderment. “How last century!”

Hydraulic_Fracturing_Marcellus_Shale USGS

A natural gas fracking operation in the Marcellus Shale. Photo credit: U.S. Geologic Survey

But in this century, natural gas is already wearing out its welcome – and not just among unhappy landowners who say fracking has spoiled their drinking water. Scientists measuring methane escaping from extraction wells warn that high levels of “fugitive emissions” may make natural gas a major contributor to climate change.

The SCC takes no notice of climate change, but it ought to consider that others do, presenting a financial risk for any fossil fuel plant. A national plan to reduce carbon emissions could make gas very expensive.

Yet building the Brunswick plant commits Dominion ratepayers to paying whatever the market price is for natural gas for the next three decades. Worse, it’s effectively a baseload plant, designed to burn gas 24/7; it can’t ramp up and down quickly to supply power when needed on a short-term basis, such as to fill in around the power supplied by wind and solar.

Analysts predict wind and solar will increasingly become the first choice for new generation, as these renewables get steadily cheaper and offer long-term price stability as well as environmental benefits.

Indeed, wind turbines beat out natural gas plants as the largest source of new generating capacity nationwide last year. Companies are designing natural gas turbines now that integrate with renewable energy, allowing utilities to hedge their bets on gas.

Well before the end of its 36-year life, a 24/7 baseload plant like Brunswick may be reduced to a giant concrete paperweight.

It would seem wise to hold off on building this gas plant, and we could. Investments in energy efficiency would more than meet the demand the Brunswick plant is supposed to serve, at a lower cost.

The SCC brushed aside this argument, pointing out that it consistently swats down good energy efficiency proposals – and intends to continue doing it.

So Virginia ratepayers, prepare yourselves: You’ve already been stuck with one of the last coal plants to be built in America. Now get ready for 30 years of paying for a natural gas plant. As for your dreams of wind and solar, keep dreaming.

Originally published in the Hampton Roads Virginian-Pilot on August 29, 2013. 

Unknown's avatar

Nuclear power: lessons from Japan (and Murphy)

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Dominion Virginia Power said Monday that it intends to move forward with plans for a third reactor at its North Anna Power Station as the international nuclear energy industry reels from the disaster at the Dai-ichi nuclear plant in Japan.—WSLS10, March 15, 2011

The operator of Japan’s tsunami-hit nuclear power plant sounded the alarm on the gravity of the deepening crisis of containment at the coastal site on Friday, saying that there are more than 200,000 tons of radioactive water in makeshift tanks vulnerable to leaks, with no reliable way to check on them or anywhere to transfer the water. –The New York Times, August 23, 2013

A friend asked me recently whether I thought the ongoing disaster at the Fukishima nuclear plant in Japan would have repercussions here in Virginia, where Dominion Power operates four nuclear reactors at two plants and wants to build another. I feel pretty sure the answer is no. Economics will kill Dominion’s nuclear dream, but not risk. We just don’t think that way.

We think like this: Fukishima was taken out by a tsunami. There are no tsunamis in central Virginia. Ergo, there is no risk to Virginia’s nuclear plants from a tsunami, so Japan’s sudden revulsion against nuclear power shouldn’t put us off our feed half a world away.

So why did countries like Germany, which also has no tsunamis, freak out and swear off nuclear for good?

They drew an entirely different lesson: Japan is a smart, technologically-advanced nation. Japan did not anticipate the disaster that destroyed Fukishima. Ergo, unanticipated disasters happen even in smart, technologically-advanced nations.

Or put another way: Murphy’s Law also applies to nuclear plants. We ignore Murphy at our peril.

But ignore him we do. We had our own brush with nuclear disaster two years ago, when a rare, magnitude 5.8 earthquake shook central Virginia and led to a months-long shutdown of the two North Anna nuclear reactors. No one expected an earthquake of this strength there, least of all the plants’ designers. Fortunately, the reactors survived intact, but I don’t know of anyone who wants to repeat the experiment. Presumably Dominion intends the “next” North Anna reactor to be designed to withstand stronger earthquakes. Do you feel better about nuclear now, or worse?

Murphy’s Law operates with ferocity across the energy sector. An industry expert told me the BP oil spill in the Gulf happened in spite of four different safeguards in place on the drilling rig, each of which should have stopped the blowout from happening. And that spill was not an isolated incident; only the year before, a similar blowout off the coast of Australia created a 2,300 square mile oil slick—about the size of Delaware. U.S. papers largely ignored it. Spills are so common in oil drilling that they rarely warrant a headline. Yet somehow those who support offshore oil drilling off the coast of Virginia feel sure it won’t happen here.

Or take mountaintop removal coal mining (please). Right now powerful explosives are blasting away the tops of mountains in southwest Virginia and across Appalachia. The rubble is being dumped into stream valleys, while huge machines scrape off the thin seams of coal. Federal law provides that no streams should be harmed, and the mountains should afterwards be restored—requirements so fanciful that neither mining companies nor state officials take them seriously. So it’s not surprising that streams and rivers are polluted, species disappear, building foundations crack, and residents die young. That’s not the plan going wrong, it’s the plan.

In the past most Americans participated in an unspoken agreement to ignore the risks involved in producing energy, because we had no intention of stopping what we were doing. If it’s a choice between risky energy and no energy, we will go with risky every time. Denying the risks is a coping mechanism that lets us sleep at night. Not incidentally, this is also the strategy used by fossil fuel interests to keep the public from demanding action on climate change.

But the widespread availability of cleaner alternatives gives us energy options we didn’t feel we had before. Increases in energy efficiency and tumbling prices for wind and solar mean we can afford to look more honestly at the damage we do and the risks we run by powering our 21st century economy with 20th century fuels.

I like to think the Virginia legislature’s decision to maintain the ban on uranium mining—for now—shows that our ability to ignore risks has its limits. Mining anything hazardous is inherently risky in a climate like Virginia’s, where rainfall continually recharges the water table. Put nasty stuff between the rain and the water table, and you will find contamination downstream. The idea that water can be kept out of millions of tons of radioactive mine tailings for thousands of years strains credulity. The idea that this might be accomplished by a mining company whose sole purpose is to make money shatters credulity altogether.

The fact that a good many of Virginia’s politicians lined up on the side of the mining company anyway is not necessarily evidence of their capacity for ignoring risk. More likely, it simply demonstrates how extreme is the corrupting power of money in Virginia politics. Unfortunately, that shows no signs of changing.

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On-bill loans for energy upgrades: win-win

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This guest column by Seth Heald originally appeared in the Rappahannock News on July 18, 2013. 

A little-noticed announcement earlier this month about an energy-efficiency pilot project in South Carolina could mean good news for the hundreds of thousands of Virginians who get their power from electric cooperatives.

Both South Carolina and Virginia have numerous electric cooperatives that provide power to customers in rural areas (and these days some no-longer-rural areas). These co-ops date to the 1930s, when Congress passed the Rural Electrification Act to provide loans and establish co-ops to help bring electricity for the first time to people in areas where investor-owned utilities were unwilling to go.

South Carolina’s “Help My House!” program showed that a creative financing measure called on-bill financing can help co-op members pay for efficiency upgrades to their homes that reduce their electricity consumption by more than a third on average.  The program paid for contractors to upgrade heat pumps, add insulation, seal ducts, and take other common-sense measures to make customers’ homes more comfortable and energy-efficient.

With on-bill financing the South Carolina co-op members didn’t have to pay upfront for their home improvements. Instead they pay over time on their electric bills. And because electricity consumption was significantly down, customers’ total electric bills generally went down even with the loan-repayment charges tacked on.  Efficiency contractors benefited too, which can create good local jobs.

That’s about as win-win as you can get—home improvements and lower electric bills, and more jobs, with no sacrifice of convenience or comfort. And once the loans are paid off, electric bills go down even more. The co-ops win too, because reducing customers’ electricity consumption on a broad scale can postpone or eliminate the need to build expensive new generation plants.

Electric co-ops are owned by their customers, so the South Carolina co-op boards and managers deserve great credit for undertaking this new program, which promises so many benefits to their member-owners.

So why can’t we do this here in Virginia? The short answer is we can. And we should. Soon.

But some Virginia co-op managers and board members have been reluctant to move forward aggressively on efficiency programs, preferring the old-fashioned method of building more generation capacity rather than helping members make efficiency upgrades. And some Virginia co-op managers and boards seem to worry more about their total revenues than about helping their customers lower their bills. Some co-op boards apparently are unconvinced that efficiency measures on a broad scale can benefit not only customers but the co-ops themselves.

That’s begun to change in Virginia. My co-op has launched an efficiency pilot program. But Virginia still has a lot of catching up to do to achieve the remarkable results that South Carolina co-ops have now shown are possible.

One thing essential to South Carolina’s success was 2010 state legislation that allowed on-bill financing, including having the loan obligation “stay with the meter” if a customer sells his home before paying off the loan.  The South Carolina co-ops pushed for that change and got it.

Virginia co-op members, and more importantly their influential managers and boards, should press our state legislators and regulators to make the changes needed to allow on-bill financing here. If anything can win bipartisan support in Virginia, it ought to be a simple measure that can help hundreds of thousands of hard-working electricity consumers improve their homes with no upfront costs while also reducing their power bills.

Seth Heald, of Rixeyville, is a lawyer and a member of Rappahannock Electric Cooperative, which is one of the Virginia co-ops that co-own Old Dominion Electric Cooperative.

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Workshops on renewable energy for Virginia non-profits draw large crowds

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Photo credit: Corrina Beall

Photo credit: Corrina Beall

Over 90 people packed the fellowship hall of the Mount Vernon Unitarian Church in Alexandria on the evening of June 23d for a presentation on solar power opportunities for houses of worship and other non-profits. Later in the week, more than 50 people attended a similar workshop at Virginia Union University in Richmond, designed primarily for colleges and universities.

In both places, the audience was there to learn about an opportunity provided by a new law that took effect in Virginia July 1. The law allows non-profits to use what are known as “third-party power purchase agreements,” or PPAs, to finance solar and wind installations. The PPAs let customers use clean, renewable energy for the same price—or even less-–as grid-delivered power produced from dirty fossil fuels. PPAs have been the driving force behind most small solar installations nationwide in recent years, and advocates hope they will now do the same in Virginia.

For-profit entities will also be able to use the new law, but only if they install a project of at least 50 kilowatts in size. Residential systems, which are typically in the 4-8 kilowatt range, are excluded. The law applies only within the territory of Dominion Virginia Power, and projects must be installed within the next two years, unless the program is extended.

The groups that organized the workshops—the Sierra Club, Interfaith Power & Light, National Wildlife Federation and the Virginia Conservation Network—view the new law as an opportunity for Virginia to begin ramping up its tiny solar and wind industries.

The Sierra Club has worked closely with the solar industry nationwide as a way to increase the use of renewable energy in the U.S., largely as a way to combat climate disruption. The club’s Beyond Coal Campaign seeks to ensure that as the dirtiest coal plants are retired, America’s energy needs can be met with clean energy rather than fossil fuels.

For the church workshop, Sierra Club partnered with Interfaith Power & Light (MD.DC.NoVa) because of its experience with congregations in Maryland and DC, helping them to go solar. Interfaith Power & Light has been a vigorous advocate for clean energy within area faith communities. Similarly, Sierra Club chose to partner with National Wildlife Federation for the college workshop because of its ongoing “green campuses” initiative nationwide.

Photo credit: Corrina Beall

Photo credit: Corrina Beall

Getting solar projects done in Virginia poses a challenge. Many states have encouraged the growth of solar and wind power through aggressive targets for renewable energy backed up by incentives and utility mandates, but Virginia offers neither. The state’s wind industry is essentially nonexistent, and with less than 10 megawatts (10,000 kilowatts) of solar installed statewide to date, Virginia produces less than one percent of the solar energy that New Jersey does. It also remains far behind neighboring states like Maryland and North Carolina, which both have solar policies and incentives that Virginia lacks.

Yet the price of solar has declined so steeply in recent years that it can now make economic sense in Virginia, especially for nonprofits. Nonprofits often can access low-interest loans or bring in investors from the community to help them prepay some of the PPA, allowing them to achieve greater overall savings. And churches, colleges, schools and other nonprofits typically own their buildings for many decades, so they are able to view energy savings over a longer time horizon than do many residential and commercial building owners.

For communities of faith, payback may not even be the top consideration. More and more congregations see addressing climate change and being better stewards of the earth as part of their core mission.

Educational institutions similarly see benefits beyond energy savings. Putting solar panels in a prominent location can be a symbol of an institution’s commitment to sustainability. When Eastern Mennonite University installed its solar array, enrollment increased ten percent, according to Tony Smith of Secure Futures LLC, the company that financed the system.

Smith, who also represents the solar industry trade group MDV-SEIA in Virginia, spoke at both the Alexandria and Richmond workshops. In Richmond he was joined by Jeff Ryan of Abakus Solar and Dave Stets of Richmond BySolar for a panel discussion about how PPAs can benefit nonprofits. A number of other solar and wind providers, as well as leaders from government and academia, also attended and contributed to the discussion.

Attendance at both workshops far exceeded organizers’ expectations. The audiences included a broad cross-section of faiths as well as representatives from eight universities and community colleges. Some attendees have already begun discussions with solar providers as a result of the workshops, leading many to hope that Virginia’s solar industry is at last poised to take off.

Additional workshops will likely be held in September; contact Corrina Beall at Corrina.Beall@sierraclub.org for more information.