How will Virginia businesses, citizens and policymakers respond to climate legislation?
- December 1, 2007
To the Editor:
As businesses, citizens and advocacy groups consider the future of energy in Virginia, people seem to be overlooking the costs of energy generation in a carbon-constrained economy, and this will be to our detriment as ratepayers [July issue, “The future of Energy in Virginia”].
Climate change legislation is becoming an inevitability at the federal level and has already been implemented by many of Virginia’s neighboring states. What’s more, the federal push is actually coming from Sen. John Warner, co-sponsor on the Warner/Lieberman Climate Securities Act of 2007, which is quickly shaping up to be a very popular global warming bill in the Senate.
There is no question that Congress will be ready to enact climate legislation in the next few years. And regardless of the economy and policy vehicles they choose to employ, it is hard to conceive of climate legislation that won’t increase the cost of constructing and operating coal-fired power plants, which provide almost a quarter of Virginia’s power.
Power companies understand this and are already taking action. Since most utilities have rate recovery, it is better to build the plants before states recognize the new cost of operation in a carbon-constrained economy. This would explain the recent coal rush we are seeing (with over 150 plants being proposed nationwide). It should be no surprise that Dominion Virginia Power (and subsidiaries) are now rushing to get approval for the proposed $1.6 billion plant in Wise County.
But how will Virginia businesses, citizens and policymakers respond? We can fight — and there is no question many businesses will. But once we accept that climate legislation is inevitable (and it is), there are many hard questions to ask. How much will coal cost in this new economy? How will this affect our rates? Do we really want to be locking ourselves into another fossil fuel plant with future economics a blur? Dominion is currently going before the SCC (case PUE-2007-00066) to seek a rate increase to pay for the plant on top of a 14 percent guaranteed rate of return. Shouldn’t someone be asking questions?
Chesapeake Climate Action Network