Manufacturing Development Commission
August 25, 2009
The second meeting
of the 2009 interim was held at the AREVA NP, Inc. headquarters facility
in Lynchburg. The Commission welcomed its newest member, Sean Kerlee of
Suffolk, who is employed at International Paper Corp. and is the Southeast
Regional Director of the Pulp & Paperworkers' Resource Council.
Sr. Vice President of Sales and Marketing, Kim Stein, Director of Wind
Development, AREVA NP, Inc.
AREVA NP, Inc.,
a U.S. subsidiary of French-based AREVA Group, designs and constructs
nuclear power plants and research reactors and their components. Mr. Cook
outlined the company's $50 million of investments in Central Virginia,
including a fuel manufacturing facility, service equipment refurbishment
facility, pump and motor service center, and technical training center.
Mr. Cook noted that AREVA NP has hired more than 300 new employees in
each of the past three years.
in the Commonwealth will expand sharply in the next few years with its
development, through a joint venture with Northrop Grumman Shipbuilding,
of a $363.4 million facility for manufacturing equipment and pressure
vessels for the nuclear energy industry. The Newport News-based project
is expected to create 550 new production and engineering jobs when it
becomes operational in 2012.
In addition to manufacturing
for the nuclear energy industry, AREVA manufactures offshore wind turbines
at a facility in Bremerhaven, Germany. Mr. Stein advised the Commission
that the firm has an interest in manufacturing offshore wind turbines
in the Commonwealth. The turbines, each capable of generating 500 megawatts,
would stand about 450 feet high. A production facility in Virginia, he
reported, could generate between 8,000 and 10,000 jobs over a 20-year
Wind Project Development Commission
presented a draft of a bill creating an Offshore Wind Project Development
Commission. This commission would be charged with facilitating and coordinating
the development of wind power projects in waters three miles or further
off Virginia's coast. The proposed entity would be charged with applying,
on behalf of the Commonwealth, to the federal Minerals Management Service
for leases to develop offshore wind energy projects. Guidance is being
sought regarding the extent to which this commission would be authorized
to assign or sublet its leases to other entities. In addition, the proposed
commission would be authorized to seek up to $4 billion in federal loan
guarantees in connection with the development of such projects. The entity
would be responsible for ensuring that the development of offshore wind
projects does not interfere with naval facilities and operations off the
coast of the Commonwealth, and coordinating the connection of electric
power generated offshore to the power grid. The chairman touted Virginia's
natural and infrastructure advantages as a home to offshore wind projects,
and observed that the development of such projects could encourage AREVA
to locate a wind turbine manufacturing facility in the Commonwealth.
At the Commission's April 2009 meeting, the chairman suggested that the
Commission consider providing for an extended evaluation period during
which the rate impact of electric utility legislation could be analyzed.
Staff provided members with an overview of the role of the Special Advisory
Commission on Mandated Health Insurance Benefits in reviewing proposed
legislation. In addition, members were advised of other measures directing
the preparation of impact statements for proposed laws, including the
authority of standing committee chairmen to request the Joint Legislative
Audit and Review Commission (JLARC) to analyze fiscal impact statements;
the Administrative Process Act's requirement for an economic impact analysis
of proposed regulations; and requirements that introduced bills creating
or expanding felonies, increasing unemployment benefits, or affecting
the Virginia Retirement System, include a statement of the proposal's
Staff observed that
developing a proposal to require that an entity conduct an analysis of
the rate impact of bills pertaining to electric utilities would present
a number of issues, including:
- Identifying the
proper entity to be tasked with conducting the analysis.
- Ensuring that
interpretations and methodologies used in preparing rate impact estimates
are not binding in rate cases.
that rate impact estimates are unlikely to be accurate predictors of
the rates that would be set by the State Corporation Commission (SCC)
in rate cases.
- Limiting the
burden of conducting rate estimates for different utilities and classes
of customers, and overstated periods of time.
- Defining the
types of legislation that would require the rate analysis, or giving
standing committee chairmen the authority to request an analysis of
- Determining whether
an entity to be charged with analyzing the impact of legislation will
be limited to quantifying effects on rates, in which case its membership
may be limited to persons with expertise in utility accounting and ratemaking
procedures, or whether the entity would be charged with conducting a
broader policy analysis, in which case a body modeled on the Special
Advisory Commission on Mandated Health Insurance Benefits may be more
A member remarked
that, as an alternative to requiring the preparation of unreliable estimates
of the future effects of pending legislation, the Commission should consider
requiring JLARC to conduct an analysis of the impact on rates of aspects
of electricity legislation, based on the SCC's application of the legislation
in rate case proceedings.
Virginia Manufacturers Association
Mr. Vassey briefly commented on two education issues. Currently, Virginia
is falling short of its stated goal of providing general funds for 30
percent of the cost of noncredit courses taught through the Virginia Community
College System (VCCS). He cautioned that it will not be possible to meet
workforce training goals over the next decade locally, and that a systemic
approach is needed. Mr. Vassey advised that efforts are underway to develop
legislation that would provide the VCCS with greater flexibility in the
use of state funds.
The second education
issue pertains to industry certifications in public school systems. Mr.
Vassey noted that his organization supports the use of Pell funds for
industry certifications. However, the existing industry certificate approval
process often takes several years. He noted the Commission on Youth is
examining the issue, and Mr. Vassey will report at a future meeting on
Virginia Industry Foundation (VIF)
Ms. Scott updated
the Commission on its campaign to improve the image of employment in Virginia's
manufacturing sector. She reminded members that the Virginia Manufacturers
Association's skilled trade gap analysis predicts that 23 percent of skilled
manufacturing employees may be eligible for retirement by the end of 2010.
In order to address this looming gap, the "Dream It-Do It Virginia"
campaign promotes awareness of career opportunities in advanced technology
fields. In addition to image marketing, the campaign includes a free online
career resource. The VIF is attempting to expand the campaign by developing
partnerships at regional and local levels.
The Commission plans
to convene its next meeting prior to the 2010 Session of the General Assembly.
Issues to be addressed at that time include workforce training provided
through the VCCS. The next meeting date will be posted on the Commission’s
website and the General Assembly calendar as soon as information is available.
The Hon. Frank
Frank Munyan, Ann
Louise Mason, DLS Staff
of Legislative Services > Legislative
Record > 2009