Division of Legislative Services > Legislative Record > 2008

Manufacturing Development Commission

August 22, 2008

The first meeting of 2008 was held at the McDemmond Center at Norfolk State University.


Stephen A. Walz, Senior Adviser for Energy Policy, Office of the Governor
Mr. Walz discussed reducing energy costs in the Commonwealth. Energy costs can be lowered by reducing electricity use during periods of high systemwide demand (demand response), reducing the energy input per unit of product (energy efficiency), and conserving energy.

The cost of electricity is at its highest at peak demand. Mr. Walz stated that demand response, or reducing electricity use during peak demand, reduces the average cost per kilowatt hour. Utilities and companies have developed programs for off-peak pricing and emergency load shedding.

The State Corporation Commission's 2007 energy efficiency study made recommendations relating to a statewide goal for capacity reduction, utility demand response programs with cost recovery, real-time or near real-time rate pricing, incentives for demand response programs, use of curtailment service providers, and defining emergencies for backup generator use.

Between 1960 and 2005, industrial energy use in the Commonwealth increased at a rate of 2.2 percent per year (greater than the national average of 1.1 percent per year for the same period); however, between 1990 and 2005, industrial energy use in the Commonwealth increased at a rate of 0.5 percent per year (greater than the national average of 0.2 percent per year for the same period). Save Energy Now is a program of the United States Department of Energy to reduce industrial energy use by 25 percent over the next 10 years.

Mr. Walz also discussed the Virginia Energy Plan, which sets a target to reduce the anticipated growth rate of energy use by 40 percent. The Plan has a goal of reducing electric use by 10 percent, natural gas consumption by 7 percent, and the consumption of fuel oils by 10 percent.

Tim Wilkins, Virginia Coastal Energy Resource Consortium subcontractor
Mr. Wilkins discussed the scientific and economic viability of harnessing Virginia's offshore winds to produce power. The Hampton Roads region is a favorable candidate for the harnessing of offshore winds because of:

  • Class 6 winds located within 10-15 miles of the shoreline.
  • A robust coastal transmission grid.
  • A minimal probability of major hurricane strikes.

Mr. Wilkins explained that if there is no reduction in demand for electricity through conservation by 2016, then approximately 5,100 MW of new electricity generation will be needed to maintain electricity imports into Virginia at current levels. If conservation efforts account for a 6-7 percent energy savings by 2016, then approximately 3,600 MW of new electricity generation will be needed to maintain electricity imports at current levels. Additionally, 1,985 MW of additional generation is anticipated by 2012 from currently planned projects. After taking into consideration conservation efforts and currently planned projects, Mr. Wilkins projected that an additional 1,600 MW of new electricity generation will be needed from projects that are not currently identified in order to maintain electricity imports into Virginia at current levels.

Norfolk State University and Science Applications International Corporation are preparing a report that will address the timetables and economic development impact to harness offshore wind potential. Mr. Wilkins estimated that the total capital investment to produce 2,000 MW of installed offshore wind capacity is $6.2 billion over a 10-year build-out period. Mr. Wilkins also estimated the value of local fabrication and installation contracts to install offshore wind capacity over this same 10-year period at $200 million per year, and the value of local offshore service contracts after completion of the build-out at $155 million per year.

Senator Wagner, Chair
Senator Wagner stated that Minerals Management Service estimates that there are 66.6-115.3 billion barrels of oil and 326.4-565.9 trillion cubic feet of natural gas that are undiscovered technically recoverable resources beneath the offshore waters of the Outer Continental Shelf. He said that the average estimates are 85.9 billion barrels of oil and 419.9 trillion cubic feet of natural gas. These estimates represent quantities that can be conventionally produced without consideration of economic feasibility.

Michelle Vucci, Director of Policy, Virginia Department of Education
Ms. Vucci gave an update on the development of the standard technical diploma and the advanced technical diploma established by the 2007 General Assembly. The Virginia Board of Education has published draft regulations for implementation of the diplomas. The regulations are in the public comment phase. She indicated the regulations include academic and career plans for students and a graduation and completion index that will be used in accrediting schools. The academic requirements meet or exceed the requirements for the Standard and Advanced Studies Diplomas.

A student must earn four standard credits in career and technical education in a career concentration approved by the board for both the standard and advanced technical diplomas. If a career concentration includes a specific assessment approved by the board, the student must take this assessment in order to earn the diplomas. Twenty-two credits must be earned to receive a standard technical diploma, which is the same number of credit requirements for a standard diploma. Twenty-six credits must be earned to receive an advanced technical diploma, which is the same number of credit requirements for an advanced studies diploma.

Gloria Westerman, Virginia Community College System
Ms. Westerman discussed Virginia's Career Readiness Certificate (CRC). The CRC gives employers a uniform measure of workplace skills and workplace readiness. CRC measures skills that are easily understood by employers, educators, and recipients. The CRC is based on the WorkKeys comprehensive skills assessment tool, which is a widely accepted common language for skills definition among employers, educators, and employees. In order to earn the certificate, individuals must test in reading for information, applied math, and locating information. As of August 18, a total of 19,372 persons have taken the three tests with a total of 17,109 certificates being awarded.

Legislation passed by the 2008 General Assembly creating the CRC program makes instruction and remediation easily accessible, requires a statewide online data system that incorporates services for employers and individuals, and requires the Virginia Workforce Council to develop policies and guidelines to administer the CRC program.

Joseph Mayer, Virginia Department of Taxation
Mr. Mayer discussed the constitutionality of using tax preferences to foster business investment and expansion in the Commonwealth. He stated that the use of tax preferences to stimulate economic development, as opposed to general fund appropriations, will be scrutinized by courts to determine if there has been a transgression of the federal Commerce Clause.

Joseph Croce, Senior Vice President, Virginia Manufacturers Association
Mr. Croce discussed a stormwater control fee that local governments may impose upon businesses and other persons contributing to stormwater runoff. Section 15.2-2114 of the Code of Virginia provides that a locality imposing the fee may provide for a full or partial waiver of the fee to any person "who develops, redevelops or retrofits outfalls, discharges or property so that there is a permanent reduction in post-development stormwater flow and pollutant loading." Some manufacturers who have implemented stormwater runoff improvements that led to a permanent reduction in postdevelopment runoff have not seen a partial or full waiver of the fee. The Virginia Manufacturers Association believes that at least some of the fee should be waived for businesses that have implemented such improvements.

Nikki Rovner, Deputy Secretary of Natural Resources
Ms. Rovner reported to the Commission on the Governor's Commission on Climate Change (the Governor's Commission). Ms. Rovner stated that the Governor's Commission is charged with preparing a Climate Change Action Plan that will:
Inventory the amount of and contributors to Virginia's greenhouse gas emissions. Evaluate the expected impacts of climate change on Virginia's natural resources, the health of its citizens, and the economy.

  • Identify actions to take to prepare for climate change.
  • Identify the actions that need to be taken to achieve a 30 percent reduction in greenhouse gas emissions by 2025.
  • Identify climate change approaches being undertaken by other governmental entities.

Ms. Rovner noted that the impacts of climate change will include higher coastal water levels and greater salinities, ocean acidification, shoreline erosion, increasing nutrient inputs and decreases in oxygen content in estuarine waters, and significant ramifications for coastal, bay, and estuarine plants, animals, food webs, and ecosystems. These impacts put Norfolk Naval Facilities at risk for sea level rise and put Virginia's roads, rail, airports, and ports also at risk.
Climate change approaches being taken by other governmental entities include state greenhouse gas emission targets, renewable portfolio standards, regional cap-and-trade initiatives, vehicle emission standards, and the U. S. Mayors Climate Protection Agreement.

Next Meeting

The next meeting date will be posted on the study's website and the General Assembly calendar as soon as information is available.

The Hon. Frank Wagner

For information, contact:
Mark Vucci, Joan Putney, DLS Staff

Division of Legislative Services > Legislative Record > 2008

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