irginia Clean Economy Act Increases Costs In Both Expected and Unexpected Ways

Posted on August 12, 2024 by Stephen D. Haner
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The Virginia Clean Economy Act (VCEA), with its demand to eliminate hydrocarbon fuels for electricity in Virginia, will soon take a deeper bite out of bank accounts for many Virginia families and businesses.

As of September 1, Dominion Energy Virginia residential bills will rise 11%. Adding to that, next summer the cost of back-up generation from outside that utility’s network jumps 1400%. A previous article warned Virginia might run out of “other people’s power” to meet customer demand, and this sudden jump in the price of “other people’s power” proves the point.

The Dominion tariff will become more than $143 per 1,000 kilowatt hours for a residential customer. Before VCEA took effect in 2020, that was about $116, so the overall jump in four years exceeds 23%.  All those new energy costs were vetted and approved by the State Corporation Commission, but many would not be imposed but for VCEA. Commercial and industrial rates will rise as well.

The largest increases are for the Coastal Virginia Offshore Wind facility, now under construction but not due to produce electricity until 2026 (an extra $3.89 per 1,000 kwh), and for a separate charge collected for complying with VCEA’s renewable portfolio standard (an extra $3.48 per 1,000 kwh). Details and a full list of the changes to the bill can be found here.

It is worth noting they can only be found there. No major news media in the state has reported on these price increases, except for the added costs of the wind project. The numbers come from a presentation the State Corporation Commission made to the Virginia Manufacturers Association energy summit in late July.

Soon after passage of the VCEA, the State Corporation Commission staff projected its future bill impact and with this latest round of VCEA-driven costs, that projection is proving fairly accurate. The new bill in September would be even higher, closer to $148, had Governor Glenn Youngkin (R) not pulled Virginia out of the Regional Greenhouse Gas Initiative carbon tax. RGGI is something else VCEA sought to add to customer bills.

The changes to Dominion’s bill were planned and expected.  But when the regional transmission organization that Virginia belongs to held its most recent auction for future generation capacity, the totally unexpected result was nothing anybody had planned for.  The price for guaranteed access to a megawatt of electricity rose from the current $29 to $270 in most parts of PJM, but to $444 per megawatt within the Dominion Zone of PJM’s footprint.


The 14-fold increase can be blamed in part on the VCEA here in Virginia, but the elimination of coal and natural gas generation in the other PJM member states also played a role. The Dominion Zone, with its rapid growth in demand due to the data center industry, also has insufficient transmission connections to PJM and thus is considered constrained. That can be fixed, but the big power lines they require are often controversial and contested.

PJM Interconnection is a 13-state regional electricity pool that smoothly moves power around to balance fluctuating demand and supply. An electric grid must be constantly balanced to operate, and PJM is the largest such regional pool in North America. Utilities within PJM must also ensure that their own supply of power matches their expected peak demand, and if their own resources are short of that target, the utility must secure guaranteed supply from other generators in PJM.

In some states, the company that sells power retail does not own its own generators. Those companies will be highly vulnerable to the PJM capacity auction and when these new capacity prices kick in July 2025, their customers will feel it.

In Virginia, most electricity retailers do own generation and thus buy little or no outside capacity. Those include Dominion, Appalachian Power Company in the western part of the state, and the various rural electric cooperatives which belong to the Old Dominion Electric Cooperative. The Northern Virginia Electric Cooperative (NOVEC), however, is not part of ODEC and relies more heavily on purchased power.

Dominion insisted the higher capacity price would have little impact on its customers when it kicks in next summer. The utility pays for purchased capacity through base rates, and those are only adjusted after a full rate review case at the SCC. There are indications the higher capacity price will eventually find its way to customer bills.

In its own public planning documents, an integrated resource plan Dominion filed with the SCC, the utility projected it would be buying 1,100 megawatts of outside capacity in 2025. That would have cost $12 million at the old price but now would cost $178 million. That planning document predicted capacity purchases rising to 2,600 megawatts in about a decade.

A crucial question will be whether the price within the Dominion Zone remains that high in the next PJM auction, for summer 2026. If it does, expect the higher capacity prices to cause higher base rates.

The capacity auction price shock is another story mostly ignored by the media, except for the online Virginia Mercury. Dedicated to the green energy movement, it sought to blame the spike on extreme weather and the unreliability of natural gas plants, both easily disputed. The utility demand targets that must be balanced with outside capacity are usually winter peaks, thus not “global warming.”

In the Dominion Zone, the rapid expansion of demand from the data centers is a major factor. Yet another is PJM’s own evaluation of the reliability of various methods of generation, which ones can be called upon on short notice to meet any demand spike. The wind and solar projects at the heart of the VCEA’s mandates do not match the effective load carrying capability of natural gas, nuclear and the remaining coal plants within PJM.

Building those unreliable power plants is what is adding to your monthly utility bills. Now shutting down the remaining reliable hydrocarbon plants throughout PJM is going to bite through future base rates. One way or another, VCEA and similar laws in other states are costing Virginians real money.

Steve Haner is a Senior Fellow for Environment and Energy Policy. He can be reached at [email protected].

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Time to Give Charter Schools a Chance in Virginia

Posted on July 26, 2024 by Christian Braunlich
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The Youngkin Administration is trying to jumpstart the creation of independent public charter schools in Virginia, in order to provide students additional high-quality options for their education.

This effort is long overdue.  But the road to quality choices in Virginia is a steep climb.

First established in Minnesota 32 years ago, more than 7,800 public charter schools now serve 3.7 million students – eight percent of all public schools in the United States. Charter schools also attract diverse student populations (29 percent white, 24 percent black, 36 percent Hispanic) and because they are not bound by public school boundaries, each school often attracts a more diverse population both geographically and racially.  Public charter schools also better deliver the goal of quality education.

Stanford University’s Center for the Study of Educational Outcomes (CREDO) has studied charter school performance for 15 years. In a study published last year comparing two million charter students with two million comparable traditional public school students, the center noted that in reading and math charter schools provide stronger learning for students, with reading advancing by an additional 16 days and math an additional six days each year.

Those are badly needed outcomes for educationally at-risk children. But here in Virginia, only seven such schools exist today.

Public charter schools are designed to be publicly-funded, free to attend, and run by independent contracts – not by the local school system with “one-size-fits-all” regulatory schemes.  Often, charters provide a specialization that public school systems choose not to offer.

Instead, charter operators create an agreement with the local school system to meet certain benchmarks.  If a charter fails to achieve its goals, it runs the risk of being shut down. This is the core of accountability in the charter school world – if they fail to educate children, they might have to cease operation … unlike traditional public schools, which often operate for years without being fully accredited and, in the process, fail to prepare the students in their classrooms.

Consider, for example, Petersburg City, where most schools have not been fully accredited more than twice in a row for the last ten years, and where only 39 percent of fourth graders can read on grade level. The children there deserve better.

So why have public charters failed to take off in Virginia?

The primary obstacle is a provision in the Virginia Constitution, written long before charters existed, giving manifest power to local school boards for “the supervision of schools in each school division.” The issue has been litigated more than a dozen times in the past hundred years, and each time, state courts have affirmed that local school boards have absolute authority over budget, curriculum, personnel, and buildings.

While the state Board of Education reviews applications, they cannot approve them. This means the local school board – the only entity empowered to authorize public charters schools – can deny a public charter application for any reason whatsoever with no oversight judging the validity of the denial.

Washington Post education columnist Jay Mathews long ago nailed the problem on the head in writing about the proposed Fairfax Leadership Academy. Endorsed by six local Members of Congress and the General Assembly, the Fairfax County Federation of Teachers, United for Social Justice, The Washington Post, and the Business Roundtable, teachers organizing the charter proposed a grade 7-12 school providing an extended school day and year, a smaller learning environment, wrap-around services to students and families, and individualized and workforce-oriented programs — focused on dual enrollment, mentorship, career exploration and service learning — to students from mostly low-income and minority families.

Wrote Mathews:  “There are no public charter schools in Fairfax County….There are no public charter schools anywhere in Northern Virginia. Every attempt to create one of those independently run public schools has died. Virginia law gives local school boards the power to veto charters in their territory. They usually don’t like charters because they might make regular public schools look bad.”

Indeed, nothing can make a school board support an innovative charter school. In fact, nothing requires a local school board to even choose:  Fairfax killed it by not voting at all.

Fairfax is not alone. Rural Rockbridge County rejected the Buffalo Creek Charter application submitted by parents who wanted to seek the re-opening of the local elementary school the school system had closed.  The Board declined to discuss the proposal in open session. In urban Hampton, the school board pulled the rug out from under Hampton University’s proposal for a charter after first encouraging the university to spend $500,000 for renovations on a college building to be used for the school.

And because there are so few real public charter schools in Virginia they are subject to fabrications and distortions. The Chair of Fairfax County Board of Supervisors, in an email to constituents pithily entitled “Why do Republicans HATE public schools?” referred to charter schools as the “usual tricks” and “experimental programs,” despite the existence of thousands of charters elsewhere with millions of students.  There are no experiments or tricks.  Just schools that work.

But it, and other communications from elected officials set the tone of the debate. And with no examples close by to point to, it is easy to demonize the unknown and delegitimize the successful.

How to fix the problem?

As a first step, State Board of Education President Grace Creasey appointed a revitalized Charter School Standing Committee, composed of actual charter school practitioners able to offer practical assistance to applicants.  These include the Founders and former or current CEOs of two successful charter schools, the former president and CEO of the National Alliance for Public Charter Schools and the former president and CEO of the Thomas Jefferson Institute (Full Disclosure:  Me).

Many previous charter applications were less than professional, pulled together by parents and community members frustrated by their local school systems.  Yet, even the most sympathetic state staff knew very little about what it takes to run a successful independent public charter school and could provide limited advice. These appointments seek to offer a more collaborative experience and provide a resource that can counsel potential applicants.

The Administration would also benefit by reviving legislation introduced in 2017 by Senator Mark Obenshain (R-Harrisonburg), empowering the Virginia State Board of Education to create “Regional Charter School Divisions” in areas where schools have repeatedly lacked full accreditation.

These regional divisions would have their own school boards that can approve independent charter schools on their own.These boards would focus attention where it should be focused:  Giving educationally underserved students a better opportunity rather than on preserving the status quo in perpetuity.

The bill was approved in the General Assembly.  But despite the pleas of civil rights pioneer Wyatt Tee Walker to sign the bill “so that we can begin to throw a lifeline to the children we have left behind for far too long,” McAuliffe threw the rescue line away and vetoed the bill.

Independent public charter schools can offer incredible opportunities to educationally disadvantaged children: Just look at Success Academies, KIPP Academies or IDEA Public Schools.

But they will not come to Virginia and cannot help the children who need them so long as the decks are stacked against them. The Youngkin Administration’s effort is an overdue start at reversing that course.

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Don’t Politicize Cell Phone-Free Education

Posted on July 23, 2024 by Christian Braunlich
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Governor Glenn Youngkin’s Executive Order for developing policies restricting or eliminating cell phones in schools – a concept garnering widespread support among parents, with 61 percent favoring requiring students to leave their phones in secured locations during the day – responds to a clear and rising mental health, academic and behavioral problem.

Seventy-two percent of high school teachers say cell phones in the classroom are a major distraction. Ninety percent of principals support restrictions on middle and high school cell phone use during the day. And 68 percent of all American adults believe that smart phones should not be allowed in school.

The reasons for this level of support is self-evident: More than 80 percent of American adults – young and old – are concerned about the impact of social media on today’s children.  This concern is supported by the evidence.

According to the American Psychological Association, 41% percent of teens with the highest social media use rate their overall mental health as poor or very poor, compared with 23% of those with the lowest use. Ten percent of the highest use group expressed suicidal intent or self-harm in the past 12 months compared with 5% of the lowest use group, and 17% of the highest users expressed poor body image compared with 6% of the lowest users.

These figures have risen rapidly – not just because of the pandemic (being shut out of classes was surely a factor) but since teenage ownership of smartphones passed the 50 percent mark in 2012 (the iPhone was not released until 2007). The evidence for overwhelming increases in self-harm, clinical depression, adolescent anxiety, and suicide is clear.

But it’s not just teen mental health. Learning and grades have also dropped dramatically during this period of time as well. Over at the Thomas B. Fordham Institute, President Mike Petrilli tracked test score changes on the National Assessment of Educational Progress with distracting smartphone usage: The more cell phones were used during the school day, the more test scores dropped.  Virginia is no exception.

Elsewhere, policies to establish cell phone-free education have attracted bipartisan support.  Governors from New York’s Kathy Hochul (D) to California’s Gavin Newsom (D) are proposing restrictions on cell phones in schools.

Here in Virginia, at least 16 school divisions have already taken steps to restrict cell phones in their schools.  Governor Youngkin’s Executive Order is merely a smart way to accelerate this trend.  

Because politics in Virginia are ever present, and perhaps finding intolerable the notion that a Republican Governor might have a good idea, Senate Majority Leader Scott Surovell (D-Fairfax) immediately leapt to the fore to drag the issue into the wonderful world of partisan politics.  Saying he “appreciated” the Youngkin Executive Order, Surovell promptly created a “working group” of legislators to formulate a “consensus solution” through state legislation.  He appears to define “consensus” as “only Democrats need be involved.” 

Republicans are uninvited and persona non grata, including Senator Bill Stanley (R-Franklin) who this year introduced a bill to explicitly empower local school boards to enact cellphone restrictions during school hours.  Only three Senators voted against it, so Stanley may have some idea of how to develop genuinely bipartisan legislation.  

One of the three Senators to vote “no” is Senator Stella Pekarsky (D-Fairfax), a former school board member and also one of three Democrats appointed to Surovell’s working group. One suspects that if she found empowering her former colleagues on local school boards unacceptable, her real objective may be simply to write the law herself, her way.

It’s not as if Youngkin’s order is writing the specifics.

It doesn’t even “ban” cell phones.  It simply makes the point that the objective of school is the education of children, that ubiquitous social media has been harmful to the mental health and academic advancement of children, and steps need to be taken to eliminate distracting and negative influences in the classroom.

It doesn’t dictate details, but instead directs the Virginia Department of Education to facilitate listening sessions with the public (eight are scheduled so far), utilize the feedback to develop and publish draft guidance and implementation plans for local school boards (meaning that they are options localities can choose … or not), establish definitions, and ensure any such guidelines preserve for parents the ability to communicate with their children – especially in emergencies.

What Senator Surovell finds objectionable in that is hard to see.  The Executive Order leaves the implementation of any local policies up to … localities. Fairfax County is not Richmond City.  Prince William County is not Amherst County.  The diversity of Virginia’s school systems and population – in culture, technology, and resources – can’t be written in a single document applicable to all.

Which is not to say there won’t be obstacles finding solutions.

Prime among them will be the natural desire of parents to reach their children (and have their children reach them) in an emergency.  That’s understandable and parents will need to feel secure about that ability, although school security consultants warn that student access in an emergency can worsen a situation by distracting children’s attention from safety and emergency response directions or overwhelm a school’s limited Wi-Fi capacity or draw parents to run into an already chaotic situation adding complexity to first responders and staff.

The other issues will be administering and enforcing any restrictions and financing additional costs.  Teachers want to teach, not be the “cell phone police” and take time away from teaching.  If there are consequences, they need to be determined and made clear.  If phones are locked up and released each day, more time will be required to process students in and out of school.  And mere locked pouches may not work:  It doesn’t take long for students to figure out ways around them.

All of those are issues best worked out at local jurisdictions, and the Youngkin Executive Order encourages that.  Legislation, on the other hand, traditionally tries to impose a “one-size-fits-all” solution (or directs the state Board of Education to impose a “one-size-fits-all” solution.  That won’t work.

This is not something that can be solved immediately or without difficulty.  But the devastating effects of social media on our children and its negative impact on learning make cell phone access in the classroom worthy of debate and an eventual solution.

And to do so by leaving partisanship at the schoolhouse door.

Interested Virginians can sign up to attend the “Commonwealth Conversations” on Cell Phone-Free Education or submit their opinions by clicking here

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Virginia in Real Danger of Running Out of Other People’s Power

Posted on July 22, 2024 by Stephen D. Haner
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An electricity drought is looming, not only for Virginia but also for much of the United States, if the political hostility toward the most reliable forms of electricity generation is not reversed. Warnings that wind and solar power alone will not be sufficient resonated like a drumbeat from the podium of a two-day conference on Virginia’s energy future last week.

Virginia is on the leading edge of the national risk because Virginia is ground zero for the expanding data center industry, including the massive power-hungry facilities needed to harness artificial intelligence. Some use power measured in gigawatts, not megawatts. Virginia’s electricity demand could double by the mid-2030s.

“All the solar and all the wind cannot get you to the 24-7 baseload you need to run the AI economy,” reported U.S. Senator Mark Warner, D-Virginia, who leads the Senate Intelligence Committee. Warner was one of many to use the “all of the above” cliché to summarize his advice on needed power sources, but he focused on the emerging small modular reactor (SMR) nuclear technology and recent federal legislation to accelerate it.

Winning the international race to develop the dominant designs for the next generation of nuclear “ties directly into national security”, Warner said. The giant corporations still standing by their public carbon-free promises, “without SMRs none of them will get there.”

Virginia Republican Governor Glenn Youngkin, another speaker at the Virginia Manufacturers Association gathering in Virginia Beach, highlighted his own support for those SMR reactors, and 2024 legislation that will allow Virginia utilities to collect their exploratory development costs from ratepayers. But Youngkin was also blunt about the need to not just preserve natural gas as an electricity resource, but to expand it, including a contested new plant proposed for Chesterfield County.

Without both more nuclear and natural gas, Youngkin warned, “Get ready to be California in the summer or to be Texas in an ice storm.” Both states have had high-profile energy brownouts or failures, due at least in part to their heavy reliance on wind and solar power during very challenging weather.

Out of the two full days of panels filled with policy and industry experts, experienced regulators, and leading manufacturers, only Youngkin’s speech attracted reporters. One Hampton Roads televisionreport included his key points, but the anti-carbon fuel outlet Virginia Mercury then quoted wind and solar advocates to dispute some of his points and insult him as anti-environment. None of the other 30 or so conference speakers got a mention.

Federal Energy Regulatory Commission member Mark Christie, who formerly served on Virginia’s State Corporation Commission, pointed out the energy crunch is already evident. On a hot day last week, PJM Interconnection, the regional transmission organization that includes Virginia, set a new 13-state record for electric usage of more than 153 gigawatts. The PJM system did still have reserves available that afternoon, but only 11 gigawatts. (For comparison, Dominion Energy Virginia reportedly peaked at more than 23 gigawatts of demand that afternoon.)

At the peak that day at 5 p.m., 45% of the electricity being used in PJM was generated by natural gas and 20% by coal. Two-thirds of the electricity came from two crucial fuels targeted for full elimination by Virginia’s Clean Economy Act and similar laws in other PJM states. The fuel sources that VCEA was written to mandate, solar and wind power, covered less than 6% of the PJM load on that very hot afternoon.

All through the PJM territory, coal and gas power plants that run 80-85 percent of the time are closing or scheduled to close by 2030, with wind and solar projects less than half that reliable promised to replace them. “The math does not work,” Christie said.

The whole point of the PJM system, the largest by power demand and population of the regional power pools, is to shift electrons to where they are needed. Virginia needs to worry about what is going on through the entire PJM network because it is routinely importing power. As former Dominion Vice President Katharine Bond told the packed audience, “Eventually you run out of other people’s power.”

Bond was of course borrowing a line from the late British Prime Minister Margaret Thatcher, who said the problem with socialism was, “Eventually you run out of other people’s money.”

The need is for “dispatchable” electricity, Bond said, with the on-off controls that wind and solar lack. Right now, 79% of generation assets are dispatchable, but 99% of those closing or slated to close are dispatchable and only 15% of planned replacements are. There again is the equation for disaster Christie mentioned.

James Robb of the North American Electricity Reliability Corporation, which has the job of worrying about meeting future electricity demands, said the number one priority for meeting the challenge is to connect as many of the pending no- and low-carbon energy projects as rapidly as possible. Second, we need expansive transmission projects to tie them together. A crucial power line for just two states, Arizona and New Mexico, took 17 years to build. Virginia’s new Mountain Valley gas pipeline needed an act of Congress to end the litigation delays after nine years.

Robb calls his group the “trade association for physics” because it focuses on the hard scientific reality of how the electricity grid works. The third overwhelming challenge will be to maintain the constant grid balance between supply and demand, and the key energy source for that remains natural gas. “We’ve got to stop making natural gas an enemy,” he said. He told the audience gas would remain a core mainstay of the grid for the rest of their lives.

Looking across the whole of North America, including Canada but not Mexico, at this point the PJM region is not considered the most vulnerable. A NERC map he displayed shows the red high-risk areas in the middle west, heavily wind dependent, and the orange elevated-risk regions mostly in the far west. He predicted a more dire outlook for PJM and perhaps another color when that map is updated.

The North American Electric Reliability Corporation 2023 assessment of the risk of grid failure in various regions.

One of our Democratic U.S. senators is warning us. Our Republican governor is warning us. Our main electric utility is warning us. The federal energy regulators charged with maintaining electric reliability are warning us. Some of Virginia’s largest employers are warning us. Virginia and indeed most of America is on the wrong path.  

 

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Clean Economy Act’s Future Challenged By Land Use, Cost, Energy Reliability Concerns

Posted on June 25, 2024 by Stephen D. Haner
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There is a growing recognition that the Virginia Clean Economy Act (VCEA) as written is going to fail. Those who strongly believe in its goal of ending the use of hydrocarbon fuels, and those who consider that idea nothing but fool’s gold, both see major problems on the horizon.

There is also a large middle group that would like to see less reliance on hydrocarbons, and greater reliance on wind and solar for generating needed electricity but see danger in totally abandoning reliable natural gas. Sadly, most Virginians are not paying any attention at all. They should.

The growing concerns of both VCEA’s fans and its detractors are the reason an effort is underway to review this law and to consider possible amendments, potentially in time for a vote by the 2025 General Assembly. The first step in this review was a series of meetings in the spring where a broad list of known problems was discussed. In reviewing those discussions, it is possible to discern what changes are most likely being considered.

The legislator chairing this effort, Senator David Marsden, D-Fairfax, had staff produce a 38-page summary of what was said in those meetings, with no attribution to individuals or companies. It was probably meant to stay with the participants, but it is too important not to share.

Land use issues dominate the discussion. Advocates for the rapid expansion of solar power in Virginia are finding growing resistance to the needed permits from neighbors and local regulators as new and more extensive projects are proposed. They want to break down those barriers, and legislation to do that has already been proposed, but there is recognition that these steps would be unpopular and could spark backlash. Someone in the industry told Marsden:

Local opposition to solar and energy storage is a singular threat to our business plan and the achievement of VCEA goals. This threat stands out even in comparison with other “high visibility” threats, including interconnection costs and delays, federal tariffs on solar panels, and elevated interest rates…

A local government representative mentioned that by their count, about 181 square miles of Virginia are already covered by solar panels, an area larger than several counties and almost all cities. Elsewhere in the discussions, the prediction was VCEA would require solar fields covering 3% of the entire state, about 1,200 square miles (think Virginia Beach, Chesapeake, Suffolk, Norfolk, and Portsmouth combined).

The advocates can be dismissive of those who stand opposed. Somebody said:  It goes beyond NIMBY – it’s also cultural (older white rural communities are against the VCEA; in other areas people are younger and diverse probably from somewhere else and religiously and ethnically they are very different) …

Marsden has designated one of these environmental groups as the official defender of the Virginia average consumer in his negotiations. In a recent conversation, he was unapologetic about that decision. Asked about the Office of the Attorney General, designated by state law to represent consumers, he replied they were not invited and “would get their chance later in the process.”

The advocates for the VCEA also see that the rapid growth in electricity demand coming from all the new data centers is creating pressure to maintain existing generation resources. The catch phrase was that data center growth can and should be “managed” to protect VCEA. Whether and how to do that will be a big debate, especially considering that in some areas, like Loudoun County, over half of the county revenue is from their data centers.

The state and local rules, as they now exist, can also impede construction of the needed power lines to connect all these new projects, plus a growing number of small community-based projects. Zoning, project siting, and local authority will be front and center in this debate.

Utilities were frank in their concern that strict compliance with VCEA is going to lead to both supply and reliability issues. Compliance with the law has already shut down most of Virginia’s coal generation, but under the law, natural gas also must disappear within a few decades. Many in the industry want a clearer path to keeping natural gas in service, and that will be a huge debate in the process. From the utility summary:

Forced retirement (of hydrocarbons) is a challenge in the VCEA. The needs of our customers are growing, but the VCEA requirements are permanent. It’s one thing to not use those resources but to have them on demand to use them when needed; but this is very different from retiring them forever. It makes it very difficult to hold onto the plan.

The business representatives at the meeting and the utilities were aligned in seeing VCEA as it exists as a threat to energy affordability and reliability down the road. Plenty of warnings have come from national groups charged with maintaining reliability and from our own regional transmission organization. From the business community summary:

As private businesses we have our own goals, and some are related to environmental impact. But business wasn’t given a seat at the table to make sure the VCEA met their needs. In a larger macro sense, the bottom line is the bottom line. There is not a lot of upside here for us. The math is the math. We have to pass these extra costs on to our customers. However, incentives will help us absorb a lot of the costs.

Incentives? Those would be cash payments or tax advantages that also have a financial impact on people, but hit them as taxpayers, not as customers. Unfortunately, subsidies of some sort are more likely to emerge from these negotiations than any agreement to relent, and to allow the utilities and electric cooperatives to keep natural gas generation in the mix for decades to come.

There are other issues. The conflicting interests are strong enough that a compromise, consensus proposal for the 2025 General Assembly may not emerge. The process may only feed into the 2025 Virginia election cycle, punted to a new governor and House of Delegates. The fate of VCEA, the Regional Greenhouse Gas carbon tax, and the California electric vehicle mandate may all three be decided then.

Steve Haner is a Senior Fellow for Environment and Energy Policy. He can be reached at [email protected].

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