The ‘Californication’ of Virginia’s Power Grid Brings Increased Costs, Less Reliability

There are things that strike our equilibrium when they fail us even if we intellectually know that they shouldn’t. The lights going on when we flip a switch is one of those things, and in Virginia, the governor and General Assembly are trying to address a dire report on the fragility of the commonwealth’s electricity infrastructure as demand continues to grow dramatically. But they will need to get around 2020’s Virginia Clean Economy Act to do it.

As Orwellian as its name entails, the act is the signature legislative “triumph” of the Northam administration. It is the act that ties Virginia’s energy policy to California’s. The act that mandates that Dominion Energy of Virginia and Appalachian Electric Power produce 100% renewable electricity by the years 2045 and 2050, respectively.

It also sets energy efficiency standards and restricts the development of “legacy” energy generation facilities (coal-fired and natural gas-fired power plants). Since 2020, coal-fired plants in Chesterfield and King George Counties have closed.

Passed along party lines during the COVID-19 lockdowns while one chamber of the General Assembly was meeting remotely and the other was meeting in plexiglass cubicles, the legislation has hit the poorest parts of Virginia the hardest, where each 5% increase in electricity rates that the State Corporation Commission approves takes out an even bigger percentage of a family’s income.

Thus, the political reason even the top Democrat in the state, House of Delegates Speaker Don Scott, has signaled that he would be open to revisiting the law. That won’t happen until next January, yet the large energy load for the summer is looming ahead.

Energy reporter Steve Haner reports in a recent Jefferson Journal piece that a vice president at PJM Interconnection (the mid-Atlantic region’s electric grid overseer) told the May 22 meeting of the Virginia Commission on Electric Utility Regulation about the perilous state of the grid caused by the retirement of coal and natural gas plants at the same time demand is exploding due to the growth of the electricity-intensive data center industry in Virginia.

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Haner went on to report that most of those retirements are being made not because the generators are too old or not economical, but because of policy mandates such as Virginia’s Clean Economy Act. Simply put, Virginia needs to generate more power—and quickly.

Gov. Glenn Youngkin’s “All of the Above” energy plan set into motion the development of new, modular, nuclear generation facilities, but they are at least 10 years away from completion, and Virginians are still turning those light switches on.

The worry for the grid is that it’s not only Virginia we need to worry about. PJM Interconnection includes the electric generation for much of the east and Midwest—12 states and the District of Columbia, most of which are not in any rush to build more electric generation facilities. You probably know the metaphor about a chain and its weakest link.

The secondary issue is going to be, who pays the bill? Should electric ratepayers be charged more because politicians passed bad laws that they knew were “virtue-signaling” at best, and at worst … well, at worst is very close to what we are being warned about by PJM?

The argument is, of course, “Virginians elected them, they deserve what they get.” However, a scan of then-gubernatorial candidate Ralph Northam’s 2017 campaign positions shows that they only spoke to stopping offshore drilling. There was nothing that signaled his “Californication” of the state’s economy.

The Daily Signal reached out to Youngkin’s office, and Virginia Department of Energy Director Glenn Davis pointed out something that is not being reported in the stories blaming data centers for the possibility of higher electric costs: “VCEA [Virginia Clean Economy Act] is going to cost Virginians $5.5 billion on their monthly bills just for penalties and subsidies.”  

That fact was also not mentioned when Northam was running for election. Would knowing that have affected people’s votes?

Davis, who was in the minority party in the House at the time, also pointed out that “the ill-conceived bill banned the [electricity] generation we need to create reliable and affordable power and forced Virginians to subsidize the unreliable renewables that just cannot get the job done.”

What if, because of the closure of two coal-fired electric facilities in the commonwealth since 2020, Virginia needs more power plants? Can these be plants refired the way Microsoft “recommissioned” a nuclear reactor at Three Mile Island in Pennsylvania for its data center needs?

We asked Haner of the Jefferson Journal how long it would take to bring a coal-fired plant back to life. “Perhaps some of those that stopped producing in the last couple of years are still viable,” he told The Daily Signal. “Dominion has also had and shut down some oil[-based] generators. They might be easier to restart.”

Would those Democrat leaders like Sen. Scott Surovell, who convened the May 22 commission meeting about the perilous state of the grid, and the House speaker be able to help move the ball? Virginia Public Radio reported that they both made comments about revisiting the Virginia Clean Economy Act.

Bottom line, the situation we are in was made by elected representatives creating regulations and restrictions that they never telegraphed to voters, and now they are asking for those voters to pick up the tab for the mess they left.

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