Tag Archives: fossil fuels

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How Trump’s deal with Big Oil is raising your energy bills

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smokestack
Photo credit Stiller Beobachter

There is a principle in law that says someone intends the natural result of their actions. You cannot throw me out a window and say you didn’t mean for me to get hurt. 

By the same principle, if you block new solar and wind generation, you can’t say you didn’t intend to throttle energy production. 

President Trump has made it clear he wants to kill wind and solar, and his appointees have followed through. The Department of Interior is refusing leases and permits to wind and solar projects, even as it moves ahead on lease sales for oil and gas drilling.

Interior even issued a stop-work order on an offshore wind farm that is 80% complete. The project was on track to supply enough energy for 350,000 homes in Rhode Island and Connecticut, until the Trump administration stepped in. A judge later lifted the order, but not before the company building the project saw its share price drop to a record low. 

Reducing the amount of low-cost, clean electricity developers can add to the grid will have an enormous impact. Clean energy is so much less expensive and faster to build than fossils fuels that renewable energy and batteries made up over 90% of the energy capacity added in the U.S. last year. 

It’s fortunate for consumers that Trump won’t be able to stop all wind and solar projects, because the small number of fossil fuel plants under development won’t fill the gap. It takes years to develop a new gas plant, and gas turbines face an order backlog of up to 7 years.

The shortfall in new generation is happening at a time when the use of electricity is surging, mainly due to demand from data centers. Other customers, including ordinary residents, now have to compete with data centers for increasingly expensive electricity. Rates are going up as a result, and grid operators warn we may soon face power shortages. 

Trump’s only concession to the power crunch is to order a few fossil fuel plants to stay open that their owners had planned to close for economic reasons. Ordering an uneconomic plant to stay open means someone loses money. Trump hasn’t offered federal dollars to pay the difference. The utilities that own the plants will pass the cost on to consumers.

If throttling energy production and raising energy costs is the natural result of Trump’s actions, it’s reasonable to assume that’s his intent. So many experts have pointed out the damage his policy will do that the alternative explanation – that the president is deluded and foolishly thinks his actions will somehow result in more energy production and lower costs – doesn’t hold up.

But why would the president deliberately hamstring American energy production and raise electricity costs for consumers? 

Because that’s the deal he made with oil and gas industry leaders at a closed-door fundraiser at Mar-a-Lago last year, in exchange for the more than $200 million the industry spent to get him elected. Actually, Trump asked for a billion dollars, and in return promised to dismantle environmental regulations, go after the wind industry and scrap President Biden’s policies promoting electric vehicles. 

At a later fundraiser, he also promised to approve new natural gas exports, in spite of warnings from critics that these exports would drive U.S. prices higher – which is exactly what happened.

Promises made, promises kept, as Trump’s fans like to say. Trump’s appointees have gutted environmental protections and done their best to keep wind and solar off the grid. Most people know the “One Big Beautiful Bill” revoked tax incentives for homes and businesses to install solar; less widely reported is that it included $18 billion in tax incentives for the oil and gas industry and lowered the amounts the industry must pay to lease federal lands for drilling, among other rewards. 

Less renewable energy and higher prices means more market share and higher profits for fossil fuels. The natural result is that the American consumer will have to pay through the nose for energy. 

Too bad, folks, but that was the deal.

This article was originally published in the Richmond Times-Dispatch on September 30, 2025.

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Why are Dominion Energy’s customers footing the bill for Virginia’s data center buildout?

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Dominion Energy headquarters, Richmond, VA


Virginia’s embrace of the data center industry produced new fallout this spring when Dominion Energy Virginia released its latest Integrated Resource Plan (IRP). With data center growth the “key driver,” Dominion projects a massive increase in the demand for electricity. As a result, the utility claims the state-mandated transition to clean energy is now impossible to achieve. 

Jettisoning its commitment to the Virginia Clean Economy Act (VCEA), Dominion proposes to keep running uneconomic coal and biomass plants that were previously slated for closure, build a new fossil gas plant and pay penalties instead of meeting state renewable energy targets, all of which mean higher costs for customers.

As I said at the time, this IRP is primarily a political document aimed at currying favor with a gas-loving governor. It is not a serious plan. For example, a Sierra Club filing with the State Corporation Commission describes how Dominion put artificial constraints into its computer modeling (including limits on new solar) to ensure the plan came out fossil-friendly. Moreover, Dominion’s demand projections are inflated, according to the clean energy industry group Advanced Energy United.

But for the sake of discussion, let’s take the IRP at face value. And in that case, I have some questions. How did Dominion let itself get blindsided by the data center growth spurt? Why are the rest of us expected to pay for infrastructure that’s only needed for data centers? Does the Governor understand that his deal to bring another $35 billion worth of new Amazon data centers to Virginia  is driving up energy rates for everyone else? 

Oh, and while I’m at it, are tech company commitments to sourcing renewable energy just a pack of lies?

Virginia’s data center problem is well known. Northern Virginia has the largest concentration of data centers in the world, by far. Data centers are Dominion’s single largest category of commercial power users, already consuming more than 21% of total electricity supply and slated to hit 50% by 2038. In addition to the new generation that will be required, data centers need grid upgrades including new transmission lines, transformers and breakers, with the costs spread to all ratepayers. 

Residents are not happy. Controversy around data centers’ diesel generators, their water use, noise and visual impacts have spread outward from Loudoun County into Prince William, Fauquier, and even other parts of Virginia as massive new developments are proposed. 

Data center developers don’t build without assurance they will have access to the huge amount of electricity they need for their operations, so they have to start discussions with their utility early. Yet in July of 2022, Dominion stunned the data center industry by warning it would not be able to meet new demand in Loudoun County until 2025 or 2026. The utility said, however, that the problem was not generating capacity, but transmission. So, what gives?

Not that it would be better if Dominion anticipated the oncoming tsunami but kept it secret until this spring. You have to wonder whether the General Assembly would have approved hundreds of millions of dollars in grants and tax subsidies for new Amazon data centers in February if legislators understood the effect would be to upend the VCEA and drive up energy costs for residents. 

Some Republicans are no doubt pleased that Dominion’s IRP undermines the VCEA, but they shouldn’t be. Dominion proposes keeping coal plants open not for economic reasons, but in spite of them. These plants were slated for closure in previous IRPs because they were costing ratepayers too much money. Now Dominion says it needs more generating capacity and can’t (or rather, won’t) build enough low-cost solar to keep up with new data center demand.

Dominion also proposes to build a new methane gas combustion “peaker” plant that wasn’t in its last IRP, and again the company points to data center growth as the reason. Peaker plants are an expensive way to generate power; on average, the cost of energy from gas combustion is about double that of a solar/storage combination, or even triple once you factor in federal clean energy incentives.

Keeping the fossil fuel party going instead of embracing more solar isn’t the only way this IRP drives rates higher for customers. Limiting its solar investments means Dominion expects to miss the VCEA’s renewable energy percentage targets by a mile. The shortfall would subject Dominion to significant penalties. The kicker is, Dominion can pass the cost of those penalties  on to ratepayers, too. 

Regardless of your political persuasion, then, this IRP is bad news for Virginia consumers. 

It’s also concerning that the driver of all these higher costs and carbon emissions is the high-tech industry that is so eager to be seen as a leader in sustainability. If these tech companies were meeting their power needs with renewable energy, Dominion wouldn’t be able to claim a “need” to keep its old coal plants belching away.  

Amazon, the number one beneficiary of state data center largesse, says it is the leading corporate purchaser of renewable energy globally. Its website claims the company is “on a path to powering our operations with 100% renewable energy by 2025.” A map shows it has developed around 16 solar projects in Virginia, adding up to over 1,100 megawatts. That’s great, but the company’s Virginia data centers are such energy hogs that they would need many times as much solar, plus a huge amount of battery storage to meet their 24/7 demand. And of course, Amazon’s demand will skyrocket with that next $35 billion in new data centers.

That same map, by the way, shows that Amazon has on-site solar at warehouses and Whole Foods stores all over the Northeast, but none in Virginia. Northeastern states have higher commercial power rates than Virginia does, so on-site solar means bigger bill savings in those states. One cannot help but suspect that Amazon’s commitment to renewable energy is really just a commitment to cheap energy.  

The Data Center Coalition’s filing in the IRP case does nothing to reassure us otherwise. Instead of chiding Dominion for reneging on its clean energy commitments, the Coalition’s Josh Levi essentially argues data centers are so important it doesn’t matter. 

I have no beef with data centers as a general proposition. They are an integral component of today’s economy, and the developments that now drive their explosive growth — machine learning and artificial intelligence — will also help us achieve a zero-carbon future.  

I just think data centers should try a little harder to be part of the solution instead of part of the problem.  

This article was first published in the Virginia Mercury on August 16, 2023.

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The other shoe drops: APCo follows Dominion in seeking rate increase due to high fossil fuel costs

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Virginia residents who buy electricity from Appalachian Power will see a rate increase of almost 16% this year if the State Corporation Commission approves the utility’s request to recover more than $361 million it has spent on higher-than-expected coal and natural gas prices. APCo proposes to recover the excess over two years, meaning rates will remain elevated even if fossil fuel prices drop. According to the filing, a customer who uses 1,000 kWh per month would see an increase of $20.17.

The SCC is likely to approve the request because it has little room to do otherwise. Virginia law allows utilities to recover their spending on fuel dollar-for-dollar, though they cannot tack on a profit for themselves. Last month, the SCC approved Dominion’s request to increase rates by an average of nearly $15 per month for the next three years to cover past excess fuel costs. 

The good news, says APCo, is that Virginia customers will see lower bills in the future because the utility is investing in renewable energy. “Incorporating more renewable sources of power into the company’s energy mix is another step in reducing customer fuel costs,” declares the company’s press release, issued the same day as its SCC filing. “As Appalachian Power adds more renewables, there is less need for coal and natural gas to generate power.”

Well, yes, but wouldn’t it have been nice if APCo had come to this conclusion before now? The current situation was entirely predictable. A supply glut kept natural gas prices low for almost a decade, but drilling companies weren’t making money. Today’s higher prices make it profitable to drill for gas, but oil and gas companies don’t trust that the market will stay strong, so they are returning profits to shareholders rather than investing in new wells. So tight supplies may keep prices high. Or not! Nobody knows. (As for coal, natural gas generation and coal are ready substitutes for each other, so coal prices track natural gas prices.) 

For years clean energy advocates like me have been urging utilities and the SCC to value price stability in generation planning, only to be ignored. Other states took the lead in installing price-stable renewable energy, while Virginia added more gas plants. When I dug into the data this summer, it became clear that the great majority of states with lower rates than Virginia also had higher amounts of renewable energy in their generation mix. I’ve reprinted a summary table here. 

StatePrice cents/kWh% REsource of RE
Virginia12.837biomass, hydro, solar
Idaho9.8674mostly hydro
Washington10.1275mostly hydro
North Dakota10.4840mostly wind
Utah10.6615mostly solar
Montana11.0052mostly hydro
Wyoming11.0619mostly wind
Nebraska11.1128mostly wind
Oregon11.2268mostly hydro, some wind
Missouri11.5412mostly wind
Arkansas11.7510mostly hydro
Louisiana11.984biomass
South Dakota12.0382wind, hydro
Iowa12.0960almost all wind
North Carolina12.2616mostly solar and hydro
Oklahoma12.3845mostly wind
Kentucky12.637hydro

I compiled this table in July, using then-current Energy Information Agency data. Now EIA has updated its data, and Virginia’s position is worse than ever. As of July 2022, Virginia’s average residential electricity rate has now hit 14.42 cents/kWh. This puts us above every state in the South Atlantic except Georgia. (Poor Georgia comes in at 16.02, but that’s what building nuclear plants will do for your rates.) Meanwhile, the states whose rates increased the least are those with high levels of wind, solar and hydro. 

This isn’t rocket science, folks. Wind and solar have lower levelized costs than coal and gas, and they insulate consumers from the volatility of the world oil and gas markets. You don’t have to be a climate advocate to understand this, but apparently it helps.