October 5, 2015, Richmond Times-Dispatch
By: John Ramsey
As Virginia considers how to comply with the U.S. Environmental Protection Agency’s new carbon reduction mandate, utilities continue to warn of higher electricity bills, while renewable energy advocates see a chance to expand in a state that relies almost entirely on coal, natural gas and uranium for its power supply.
The federal Clean Power Plan, if it withstands the numerous lawsuits already challenging it, would cut carbon dioxide emissions from power plants nationwide by a third during the next 15 years.
The mandate gives states leeway to choose their own paths, though it likely means an even sharper turn from coal toward natural gas, solar and wind.
For the first time last week, Gov. Terry McAuliffe indicated he expects the state to do more than its baseline requirement, which could open up a market for Virginia to sell carbon credits to its neighbors.
“We’re not only going to be able to meet those guidelines, I think we’re going to be able to exceed them here in the commonwealth,” McAuliffe said.
The governor pitches clean energy as a way to improve the environment and to create jobs to replace those being lost in coal mines and manufacturing.
Environmental advocates praise his statement and cite the need to combat rising global temperatures and rising sea levels that already cause regular flooding around Norfolk.
But the cost of the changes would be passed on to ratepayers, and utilities in the state have warned of price increases, with an executive at Old Dominion Electric Cooperative calling it “one of the most costly rules ever propagated by the EPA.”
“I’m not against clean air and clean water, and I’m not here to preach and politicize this, but I’m here to tell you there is no doubt this rule will cause electricity rates to rise, 20 percent on the low end and as much as 40 percent,” said Sam Brumberg, a lawyer for the Virginia, Maryland & Delaware Association of Electric Cooperatives.
“I’m urging Virginia, as you implement this, do not turn electricity into a luxury item.”
But others who have studied the 1,500-page set of rules say efforts to conserve energy combined with the falling costs of renewable sources, especially solar power, could keep customers’ bills relatively flat.
The state Department of Environmental Quality is holding a series of listening sessions across the state to help determine Virginia’s plan to comply with the rules.
Last week in Henrico County, two speakers connected to utility companies blasted the EPA regulations as too costly. But more than 30 others spoke in favor of the rules, with many saying its biggest flaw is that it does not go far enough to promote carbon reduction.
Lisa Jacobson, president of the Business Council for Sustainable Energy, said McAuliffe’s statement during a trip to the Eastern Shore to tout Amazon’s planned solar farm sent the message that Virginia is becoming a growth market for all types of energy that could replace coal.
“These technologies are affordable and becoming cost-effective, and that’s only going to benefit ratepayers in the long term,” Jacobson said.
“We should use a healthy combination of natural gas and renewable energy. It would be foolhardy to put all your eggs in one basket and focus on a one-technology solution.”
A Bloomberg New Energy Finance report found that Virginia already is halfway to its carbon-reduction goal. Another analysis by the Southern Environmental Law Center and other groups claimed the state was 80 percent of the way there before Virginia’s federal target was relaxed.
Tom Farrell, president and CEO of Dominion Resources, which provides most of Virginia’s electricity, said such estimates do not seem based in reality. Dominion plans to release a detailed analysis of the impact of the Clean Power Plan as part of its annual long-term plan next year.
“I’ve heard people say utilities are against renewable power. It’s just completely wrong,” he said. “We’re not against renewable power at all. We’re against unreliable power, because our customers are against unreliable power. And you need an enormous amount of space to provide the same amount of power that you get out of a fossil fuel.”
For example, Dominion’s planned solar farm in Fauquier County will occupy 125 acres and power 5,000 homes an average of 28 percent of the time. But on cloudy days like those of late, solar panels are practically useless.
The utility’s planned Warren County natural gas plant will power 330,000 homes 90 percent of the time and take up one-third of the acreage.
Dominion reduced its emissions rate by 28 percent from 2008 to 2014, mainly by replacing coal with natural gas. And natural gas will continue to be an important part of the state’s energy mix to make sure the lights stay on, Farrell said.
“You want more renewables; you’re going to have more pipelines. They go hand in hand,” he said.
Dominion’s most recent long-range plan, released this summer, identified solar energy as the cheapest way to meet increasing demand with coal off the table. But all those solar panels would take up an area roughly the size of the city of Richmond.
A report this year by PJM, which operates the regional electricity grid, found that it could withstand up to 30 percent of electricity from intermittent renewable sources such as solar and wind with no need for additional backup power such as natural gas or coal.
The Bloomberg report said clean energy sources are on the verge of being economically viable in Virginia without the need for subsidies. And a study being released today by World Resources Institute notes that Virginia could easily surpass the carbon reduction requirements with an increased efficiency in its natural gas fleet along with meeting its policy goals for energy efficiency and renewable energy. Those policies have been criticized for being voluntary instead of mandatory.
But if the goals are met, the institute study found, Virginia could stand to gain $100 million a year by selling carbon credits to other states while saving residents a combined $2 billion a year on electric bills.
Final revisions to the Clean Power Plan, released this summer, give states until 2017 to finalize their plans. But some government watchers expect Virginia to move quickly, in part so McAuliffe can cement clean energy as part of his legacy.
“Just a year ago, Virginia was nowhere to be seen on this, much less in the years preceding that,” said Natural Resources Defense Council attorney Walton Shepherd, referring to the state’s record on renewable energy sources, especially solar.
“Everyone sees Virginia as a growth market. It only has upward to go.”