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Gov. McAuliffe Should Veto Dominion "Global Warming Starts Here" VA Power Corporate Welfare Bill

by: lowkell

Fri Feb 28, 2014 at 13:15:16 PM EST

This morning, Vice Chair of the Virginia Chapter of the Sierra Club Ivy Main wrote scathingly about a just-passed bill "that will cost Dominion Power's customers more than half a billion dollars as a down payment on a nuclear plant that hasn't been approved and isn't likely to be built."

As Main notes in her article, "environmental groups and good-government advocates have long decried the influence of corporate money in Virginia politics," including a "rising tide of utility and coal company contributions to Virginia politicians, coinciding with a series of votes enriching these special interests." Dominion Virginia Power is, by almost any standard, at the head of this tawdry list, having spent over $6 million since 2004 to essentially purchase Virginia's political system for the benefit of...well, not you and me, that's for sure.

The result, as Main points out, "has been spectacularly successful for Dominion, which rarely fails to get its way" on anything it wants. That includes this latest monstrosity of a bill, which "lets the company charge ratepayers for expenses it isn't entitled to pass along under current law," with ratepayers (that's you and me) getting "the satisfaction of assuming the sunk costs of a new nuclear reactor that will probably never be built, plus whatever more money the utility spends on it going forward." Great deal, huh?

Making matters even worse, if that's possible, is that this corporate welfare is going towards a really bad company (dirty energy Dominion) and a power source - nuclear - which is extremely expensive, thus can't compete economically and must rely on enormous government subsidies. Which is why there hasn't been ground broken on a new nuclear power plant in the U.S. since 1974. That's right, 40 years ago, when disco was all the rage, Gerald Ford was taking over from Tricky Dicky, the Soviet Union was still going strong, and the Vietnam War was winding down. This power source is just outrageously expensive, not even close to competitive at this point with other alternatives - including solar, wind, energy efficiency, you name it pretty much.

I've written about this subject extensively over the years (and worked for 17+ years at the U.S. Energy Information Administration as an energy economist), but it bears repeating: nuclear power is at the bottom of the energy heap in terms of cost-effective energy solutions (it trails energy efficiency, wind, solar, geothermal, natural gas...pretty much everything.

So, why on earth did a bunch of Democrats - including strong progressives and environmentalists - vote for this corporate welfare bill to help subsidize Dominion's costly nuclear boondoggle? I asked around, and got a few responses.

lowkell :: Gov. McAuliffe Should Veto Dominion "Global Warming Starts Here" VA Power Corporate Welfare Bill
*Virginia environmental groups inexplicably didn't raise the red flag on this bill, with the Virginia League of Conservation Voters actually marking this one down in the "monitor" (not "oppose," as it should have been) category. Huh?
*Virginia's part-time legislators are forced to deal with thousands of bills in a few weeks each year, meaning that they "go by in the blink of an eye," with "no time to sit and study bills" - including highly technical, complicated ones like this. That's why "ethics reform" should include a complete re-think about how we run our government here in Virginia. Right now, it's pretty much government of the lobbyists, for the corporations, by the super-wealthy people.
*I heard from multiple sources that this nuclear bailout bill somehow got linked to another bill dealing with wind power, and that apparently confused the heck out of legislators (clever, clever, Dominion lobbyists!).
*There's an almost total lack of expertise on energy issues among Virginia legislators, leaving Dominion's expert lobbyists to happily write the legislation, tell legislators how to vote, and generally game out the best strategy for getting what they want.
*To sum it all up, as one person told me: "there wasn't a concerted effort by the environmental groups, and the progressive lawmakers, particularly in the Senate, are not accountants" (or energy experts)...A total f@#@ up by the environmental movement, progressives, etc. This is perhaps the worst legislation to pass this year."

Great, huh? I know I'm feeling inspired and idealistic today, how about you? Nope, didn't think so. The last hope? Gov. McAuliffe should veto the "worst legislation to pass this year." But will he? After what we just saw in the Virginia General Assembly, and having seen the same type of thing for so many years now, I'm most definitely not optimistic.

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Progressives? (4.00 / 1)
When the House version of the bill, HB 1059, was being debated on the floor and some amendments were offered that were pro-consumer, it was Delegate Surovell who carried water for Dominion by moving to sever the amendments.  Toscano voted against all this, as did the freshman Sam Rasoul, but that's about it.  Especially disappointing were all the congressional wannabees who stood firm with Dominion.  They lost a great opportunity to create some contrast with the Republicans come election time.

Regardless of your opinion on nuclear power, paying for it this way and this far in advance of any decision to move forward with the plant is unprecedented and foolish (but very, very good for Dominion stockholders.)

Carrying Water? (0.00 / 0)
I'm not sure what you are talking about.  I moved to sever the amendments because they presented two policy issues.  One was whether to give the SCC discretion about allowing Dominion to expense $400M today and the second series of amendments had to do with whether to do it now or in two years.  

No one asked me to do it - I thought it would allow people who supported a two year delay, but not giving the SCC discretion to avoid having to kill Delegate Ware's entire amendment so that he might get part of it through.  I viewed it as friendly to his attempts.

Otherwise, your analysis of this issue is over-simplistic and speculative.

No nuclear plant has been constructed in Virginia in 50 years.  There are no modern precedents post-EPA, NEPA, CAA, CWA, OSHA, etc. and it is a massive investment.  Modern planning costs are completely different than five decades ago.  

The SCC's current cost recovery precedents are designed for coal, natural gas, and biofuel plants which is like comparing speedboats to aircraft carriers.

Those of us who support non-carbon forms of energy production saw this as an opportunity to make it clear that the legislature is not going to interfere with construction of a nuclear plant.

Moreover, until the SCC is subject to FOIA (which they fought me like hell to prevent this year), I won't trust their discretion on anything including their furniture purchases.

[ Parent ]
Reply to Reply (0.00 / 0)
The plans for North Anna 3 were central to the discussion of the 2007 re-regulation legislation and the plan for cost recovery built into that law -- at the request of Dominion- is more than adequate.  It is in fact similar to what is now being done for nuclear plants in SC and GA.  Then the 2007 legislation layers on the bonus ROE which is NOT being granted anyway. This new scheme came out of nowhere.

I will worry about the SCC's FOIA exemptions when the General Assembly gives up its own.  The SCC is a court. As such it accepts no gifts, no campaign contributions, accepts no ex parte communications during a proceeding.  I will trust it far more than the General Assembly when electricity rates are being set.  

[ Parent ]
A Court? (0.00 / 0)
The 2007 re-regulation legislation didn't contemplate something that wasn't contemplated - like a new nuclear plant.  

It's facially absurd to suggest that cost-recovery on a 20-year, $10B project should be judged by the same principles as a $1B project that takes less than half of that to plan and construct from start to finish.  Detractors are over-simplifying this problem because it's politically convenient.  

As for FOIA, the SCC is a "court" that:

- Writes regulations for car title lenders, banks, payday lenders, insurance companies, and a zillion other industries;
- Processes consumer complaints about all of the above;
- Incorporates and unincorporates companies; and
- Does a million other things.

Calling the SCC a "court" is like saying the only thing the Fairfax County Board of Supervisors is zoning.  You're being way too myopic.  It is a totally unaccountable and powerful agency of government.  

There are no prohibitions on accepting gifts or communications outside of proceedings.  In fact, during the FOIA debate, several regulated industries said that FOIA would destroy their ability to have "informal" discussions before initiating formal actions. Detractors from my legislation said it would harm our "business friendly environment."  

The fact that the SCC and its friends fought so hard on FOIA raises all kinds of red flags as to what's really going on.  You clearly don't have a full understanding of how the SCC works.

[ Parent ]
More Info on the SCC & FOIA (0.00 / 0)
Read this:


Here's the important part:

BUSINESSES AND LOBBYISTS showed up to oppose the effort anyway, and members of the subcommittee decided against endorsing the legislative effort. Opposition was led by the gas utilities and the telecommunications industry, whose representatives said they didn't see any reason for opening up the process to public scrutiny. Some parts of the commission's business resembled a judicial body, they said, while other parts required secrecy to ensure that the captains of industry could take quick and decisive action without having to worry about the public looking over their shoulders.

#"If the notes and the dialogue from those meetings were to be subject to FOIA, we feel like it would have a negative effect on the way that we operate our system and ultimately have a negative effect on the customers we serve," said Brent Archer, director of business policy for Columbia Gas of Virginia. "There would be hesitancy and a reticence among the utilities to share that information to have that kind of dialogue."

#Leaders of the telecommunications industry agreed, adding that the State Corporation Commission is not subject to the Virginia Freedom of Information Act for a good reason - so industry leaders and their regulators can have open and frank conversations without fear that sensitive information will be revealed to the people or the press.

#"We enjoy that give and take with the commission, and we would hate to see that dialogue become a matter of public record," said Duront Walton, who represents the Virginia Telecommunications Industry Association. "If it does, it will certainly change the combatants and people who represent us will be in a courtroom and not in an informal meeting."

[ Parent ]
Sounds eerily familiar. (0.00 / 0)

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