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Coal and Energy Commission September 24, 2001, RichmondThe Coal and Energy Commission held its first meeting of the 2001 Interim on September 24, 2001. Senator Wampler called the meeting to order and gave a brief overview of the goals of the Commission for the coming year. The Chairman expressed concern about U.S. dependence on foreign entities for forty percent of its energy sources, and stressed that the Commission needs to look at supply, consumption, and all types of energy infrastructure in the Commonwealth to identify ways of stimulating the domestic energy supply and ensuring reliability of energy distribution throughout the Commonwealth. Steve Walz of the Department of Mines, Minerals, and Energy gave a detailed report to the Commission on production of traditional and alternative energy sources, consumption of energy, and energy efficiency measures in the Commonwealth. Walz noted that coal production in Virginia increased slightly, totaling over thirty-three million tons last year, at a value of $875 million. Several Commission members noted the difficulty in finding and retaining skilled coal miners, and Walz confirmed that information, and stated that the average miner is more than 50 years old, so mine employment will continue to be a problem in the industry. Walz reported that Virginia’s natural gas production declined slightly in 1999-2000, with just over 71 million mcf produced for a value of $284 million, but production should increase this year. Virginia has seen a large increase in the number of wells, and while the price of natural gas is higher than in 1998 and 1999, the price does seem to be dropping. Oil production remains limited in Virginia, but has increased in recent years from 8,804 barrels to 12,418. Walz presented the Board with data from the federal Energy Information Administration (EIA) about consumption of energy in Virginia. Overall, forty percent of energy used in Virginia comes from petroleum, with the remainder of consumption divided almost equally among coal, natural gas, nuclear power, and electricity. However, these numbers vary greatly depending on the sector of consumption. Residential and commercial sectors get most of their energy from electricity, while the industrial sector is more evenly balanced among energy sources, and the transportation sector consumes ninety-nine percent of its energy from petroleum. Virginians consume 324.1 million Btu per person, and the national average is 350.9 million Btu. Virginia has a number of programs encouraging the use of alternate energy, and Walz outlined many of them in his presentation to the Commission. In the area of business development, there are solar manufacturing grants, and wind projects, to encourage businesses to domesticate in Virginia and produce equipment that fosters the use of alternative energy sources. Net Metering, park power, VHDA locans, and solar easements are some of the other programs Virginia supports, and private companies engage in poultry litter projects and municipal solid waste plants for the generation of energy through biomass. Finally, Walz outlined the Virginia Energy Plan. The plan has two main goals: to operate state government as a model of energy efficiency, and to ensure the sustainable use of energy in Virginia. Many state agencies have implemented their own programs to use energy more efficiently, and DMME is currently conducting a study of energy conservation public education. Senator Watkins gave the Commission an overview of the recent activities of the Southern States Energy Board (SSEB). The SSEB just approved the Energy Policy in the South, which was done as a result of the National Energy Policy promulgated by the President earlier this year. The Energy Policy in the South is designed to provide guidance to southern states about energy production and consumption, based on five guiding principles: 1) ensuring the diversity of domestic energy resources, 2) addressing energy supply for stability and reliability, 3) increasing conservation and energy efficiency, 4) expanding and strengthening infrastructure capacity, and 5) advancing research and development and use of clean energy. Delegate Stump asked if there was an interest in clean coal technology, and Senator Watkins replied that it is of great interest, and it is incumbent on Virginia to leverage as much of the federal funding for that technology as possible. Steve Young of Consol briefed the Commission on current activity in Congress affecting the coal industry. Young noted that Virginia is fortunate to have Rep. Rick Boucher of the 9th District as the ranking Democrat on the House Commerce Committee. In 1999, the Virginia Coal Association adopted a resolution urging Congress to support research and development for clean coal technologies. A number of bills have been introduced in Congress and have one through some of the committee process, but none have passed yet. A hearing on one major bill was to be heard September 11, and had not yet been rescheduled. Senator Wampler asked Young to keep tabs on what has been happening in Congress, and provide the Commission with an update at a later meeting. Howard Spinner of the State Corporation Commission (SCC) presented the Commission with an overview of current and planned energy infrastructure in Virginia. Virginia currently has around 20,000 megawatts (mW) of electric generating capacity, plus one 540 MW plant under construction. Plants that have obtained a certificate from the SCC comprise between 5628 and 7043 MW of generation, and another 7430 MW of generation have been announced, but applications for certificates for those plants have not been filed. AEP’s ninety-mile, 765-kV power line has been granted a certificate but is not yet under construction, and Dominion Virginia Power has applied for certificates for two new power lines: one 500-kV line of 101 miles, and one 230-kV line four miles in length. Dominion also has a natural gas pipeline with a certificate from the SCC, and two other companies have filed applications for their pipelines. Other significant natural gas projects include Dominion’s Greenbrier and Mid-Atlantic pipeline projects, Duke Energy’s Patriot pipeline, the Saltville natural gas storage facility, Columbia Gas’s Homestead Expansion project, and Williams Cos. Transco Pipeline Expansion. Senator Wampler noted that the end point of many new gas pipelines is an electric generating plant. The Commission needs to look at ways of getting some of that gas dropped off to consumers along the pipeline. The Chairman also noted that the Commission looks to the SCC to see whether Virginia has an adequate energy infrastructure, and expects timely decisions from the SCC based on what is best for the Commonwealth. The Commission received its annual update on the Low-Income Home Energy Assistance Program (LIHEAP) from Vickie Johnson-Scott of the Department of Social Services. Johnson-Scott noted that over 84,000 families were served by LIHEAP this season due to increased federal funding of the program, and between five and ten percent of funds were used for cooling assistance. The Chairman noted that most crisis funds are used to pay heating costs in winter months, but summer heat is just as much a health risk when low-income persons, particularly the elderly, do not have adequate cooling in their homes. Senator Watkins noted that the Southern States Energy Board (SSEB) looked at LIHEAP funding this year, and most funding goes to the Northeast to pay for heat in winter, despite the fact that the instance of fatalities resulting from extreme heat in summer is equal or greater to that in winter. Senator Watkins indicated that the SSEB passed a resolution asking the federal government to reexamine funding allocation methods, taking new Census data into account, and suggested that DSS pass a similar measure and communicate it to Congress. Senator Wampler stated that LIHEAP has been underfunded at the state level, and suggested that the Commission recommend allocating TANF dollars in the upcoming budget to supplement LIHEAP funds. He asked Johnson-Scott to update the Commission at a later meeting with additional figures for the year, as well as funding needs for next year. Floris Weston of the Department of Housing and Community Development gave a brief update on the Weatherization Assistance Program. Weston told the Commission that funding levels increased in FY 2000-2001, but the number of homes served did not increase dramatically because of turnover among skilled weatherization workers. The costs of training are high, and the Department of Energy has increased funding for safety training, but retention of employees is very difficult. The Chairman asked if the Weatherization Program had any funding challenges, and Weston indicated that the federal funding picture looks good. The funding may not increase, but she does not expect it to decrease this year. Senator Wampler asked her to keep staff apprised of any funding challenges she may encounter. The Chairman asked Senator Watkins, as chair of the Energy Preparedness subcommittee, to examine the federal energy plan, the SSEB Energy Policy in the South, and energy infrastructure within the Commonwealth. Senator Watkins estimated that the subcommittee would need two meetings to examine these issues. The next full Commission meeting will be October 14 and 15 at Southwest Virginia Community College, and will include a tour of a coal mine in Buchanan County. Additional information about the Commission and any meeting materials may be obtained at http://dls.virginia.gov/cec.htm. The Honorable William C. Wampler,
Jr., Chairman |