Commission on Electric Utility Restructuring
February 10,
2005
The Commission on
Electric Utility Restructuring met during the 2005 Session of the General
Assembly to address issues pertaining to its endorsement of a study of
renewable energy.
At the Commission's
December 20 meeting, members were briefed on a proposal for a cost/benefit
analysis of increasing the Commonwealth's use of energy from renewable
sources that had been prepared by Augie Wallmeyer. The December study
proposal had a stated objective of determining if the purported benefits
of increased use of renewable energy resources to generate electricity
in Virginia outweigh the predicted increased costs, compared to the status
quo. Mr. Wallmeyer suggested that if monetizing or otherwise specifying
such benefits outweigh the costs, then the study could recommend public
policy initiatives to realize them, within the framework of the restructuring
of Virginia's electric utility industry. It was noted that several incumbent
utilities had objected to a study that would consider any environmental
externalities. The Commission decided to begin discussions with the Virginia
Center for Coal and Energy Research (VCCER) to determine if the VCCER
would be able to do such a study within the scope of its statutory duties
without requiring additional resources.
The February 10 meeting
was called to address a revision to the proposed study. In the study,
the term "renewable energy" includes the broad range of environmentally
beneficial electric generating technologies. The revised study encompasses
14 components:
- Identify existing
renewable energy resources in Virginia.
- Determine the
cost of electricity produced by existing renewable energy resources
in Virginia, by type.
- Identify existing
barriers to expansion of renewable energy resources in Virginia.
- Identify existing
federal, state and local incentives to use and/or expand use of renewable
energy resources in Virginia.
- Examine the effectiveness
of existing incentives.
- Determine the
cost of new electric generating capacity additions using renewable energy
resources in Virginia.
- Compare the cost
of new electric generating capacity additions using renewable energy
resources in Virginia with the cost of new "traditional" electric
generating capacity additions in Virginia.
- Determine future
renewable energy resource potential in Virginia.
- Evaluate the costs
of present and future air emissions compliance in Virginia and potential
reductions in emissions and compliance costs due to increased use of
renewables, including the effect of increased use of renewables on Virginia's
efforts to improve air quality in ozone nonattainment areas and regions,
and elsewhere in Virginia.
- Determine potential
employment impacts in Virginia due to increased use of renewables, especially
in economically distressed Southwest and Southside Virginia.
- Examine the potential
effects on suppliers of renewable fuel, equipment and services in Virginia.
- Examine the potential
effects on Virginia's agriculture industry of replacing cultivation
of tobacco with the use of switch grass, sorghums, or other crops as
boiler fuels.
- Estimate potential
local tax base impacts due to increased use of renewables.
- Examine and consider
other benefits and risks of increased use of renewables.
The revised study
proposal was unopposed. The Commission received a report that VCCER Director
Dr. Michael Karmis was interested in conducting the study and can undertake
the development and coordination, but that the need to have portions of
the study conducted by other academic centers at Virginia Tech would preclude
the VCCER from doing the study within its existing appropriation. Dr.
Karmis advised the members that he had reviewed the revised resolution
presented by Mr. Wallmeyer and concurred with the scope of work for the
renewables study. He noted that the VCCER can support internally the portions
of the study that deal with existing and future resources, costs and economic
measures. He requested funding of $15,000 to allow VCCER to engage other
qualified experts that can contribute and develop the remaining topics
of the study, which encompass incentives and barriers, cost/benefit analyses,
and economic development considerations.
The Commission agreed
to a motion supporting the conduct of such a study by the VCCER, and members
agreed to work during the remainder of the General Assembly Session to
attempt to secure an appropriation of funds for the study.
Chairman:
The Hon. Thomas
K. Norment, Jr.
For information,
contact:
Franklin D. Munyan
DLS Staff Attorney
Website:
http://dls.state.va.us/elecutil.htm
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