At the end of January, a key subcommittee in the General Assembly considered legislation to cap Virginia’s carbon pollution through a program called the Regional Greenhouse Gas Initiative. In the hearing, a representative from the SCC testified that the costs to Virginia’s consumers from our participation in the program would be much higher than any other previous estimate or study that had been discussed much less seen.
For context, the RGGI is a market-based partnership of nine neighboring states designed to take action to lower energy costs, reduce pollution and bolster a clean-energy economy.
The SCC staffer provided no supporting evidence or details to justify the cost estimates, which were then used as justification to oppose Virginia’s involvement with the RGGI.
The SCC is supposedly apolitical, but you could have fooled many in the room that day. No one had seen the cost model the SCC cited. The SCC, because of a quirk in Virginia law, is exempt from Freedom of Information Act requests, so it cannot be compelled to provide the model to the public.
After substantial pressure, the SCC disclosed limited information in the form of a two-page letter provided to the committee chairman — not to the entire committee — and it was not considered by the members as they voted on this significant legislation. Only after the legislative session ended did the SCC provide its modeling to the Department of Environmental Quality.
The model and letter provide some insight into the staff’s presentation. First, SCC staff apparently asked Dominion Energy to develop numbers using a proprietary model that is known to favor utilities and uses an artificially low price for gas.
Further, the SCC assumes that most coal plants will keep running even if the commodity is no longer competitive with gas, even projecting coal generation through 2051. Few, if any, believe this, but the SCC built this into its analysis. There are other basic mistakes in the SCC staff analysis; for instance, the SCC builds new gas capacity into its analysis to replace coal but charges all of those costs to RGGI, when it is not clear that that capacity will be needed or that Dominion would build it or procure it from an independent power producer.
The SCC model also assumed that the mandates for renewable energy and energy efficiency in the Grid Transformation and Security Act would not be fully implemented or approved by the commission, despite that these are legislative requirements the SCC must follow.
Finally, the SCC analysis incorrectly assigns an allowance price within the RGGI program that is simply wrong. The allowance price in the RGGI is the price a polluter will have to pay per ton of carbon emitted. The SCC used a price that is significantly higher than RGGI’s historical price or a forward-looking modeled price.
Even if you agree with the SCC, its analyses should be public information designed to inform the public debate. The SCC, however, has chosen a less transparent route, disadvantaging the public and the legislature from having all the necessary information to determine energy policy in the commonwealth.