Home Energy and Environment Where ethics and utility profits intersect, a stain spreads across the “Virginia...

Where ethics and utility profits intersect, a stain spreads across the “Virginia Way”

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(For an explanation regarding why subsidizing nuclear power is such a dumb idea, see here. For an explanation of why we should be focusing on energy efficiency instead, see here. – promoted by lowkell)

The Virginia General Assembly has punted on ethics reform, preparing to pass watered-down legislation that does very nearly nothing. At the same time, legislators are about to pass just passed a law that will cost Dominion Power’s customers more than half a billion dollars as a down payment on a nuclear plant that hasn’t been approved and isn’t likely to be built.

These are not separate issues.

Virginia has had an ethics problem since long before Bob McDonnell met Jonnie Williams. As many people have noted, the real scandal is how hard it is to break our ethics laws. So long as you fill out a form disclosing the gift, it’s legal for politicians to accept anything of value from anyone, to use for any purpose. By this standard, McDonnell’s biggest failure was one of imagination.  

The legislation that appears likely come out of the General Assembly merely puts a $250 cap on the price tag of any one gift, with no limit on the number of lesser gifts and no limit on the value of so-called “intangible” gifts like all-expense-paid vacations. The mocking of this bill has already begun.

Conveniently, the bill deals with a tiny side stream of tainted cash compared to the river of money flowing from corporations and ladled out by lobbyists. Corporations don’t usually give out Rolexes and golf clubs. Instead, they give campaign contributions. Here again, Virginia law places no limits on the amount of money a politician can take from any donor. Five thousand or seventy-five thousand, as long as your campaign reports the gift, you can put it in your wallet.

And here’s the interesting part: you don’t have to spend the money on your campaign. If gerrymandering has delivered you a safe district, you can use your war chest to help out another member of your party-or you can buy groceries with it. The distinction between campaign money and personal money is merely rhetorical. A spokeswoman for the State Board of Elections was quoted in the Washington Post saying, “If they wanted to use the money to send their kids to college, they could probably do that.”

In an eye-popping editorial, the Post ripped into one Virginia delegate who charged his campaign more than $30,000 in travel and meals, and another $9600 in cellphone charges, in the course of just 18 months.

As with taking the money, the only rule in spending campaign funds is that you file timely paperwork showing what you spent it on; the reports are not even audited. The theory originally may have been that the threat of public disclosure would keep a gentleman from taking money from unsavory persons. If you took it anyway, the voters would learn of it and throw you out. How quaintly respectful of the energy and capabilities of voters! How pre-gerrymandering.

And how pre-corporation. The smartest companies today spread the wealth around: more to the legislators in charge of the important committees, less where they just need floor votes. The largesse is bipartisan, making everyone happy but the voters. Certainly, a legislator who accepts thousands of dollars from a lobbyist would be churlish to criticize the company writing the check.

So what do you call someone who pays for his meals out of the check he gets from a company?

How about, “an employee”?

Environmental groups and good-government advocates have long decried the influence of corporate money in Virginia politics. In their 2012 report, Dirty Money, Dirty Power, the Sierra Club, Appalachian Voices, and Chesapeake Climate Action Network documented the rising tide of utility and coal company contributions to Virginia politicians, coinciding with a series of votes enriching these special interests.

Dominion Power has consistently led the “dirty money” pack. As the single largest donor of campaign funds aside from the Republican and Democratic parties themselves, its influence in Richmond is widely acknowledged, even taken for granted.  Most legislators will not bother to introduce a bill that Dominion opposes, even if they like it themselves. Critics joke that the General Assembly is a wholly-owned subsidiary of Dominion Resources.

According to Dirty Money, Dirty Power, Dominion’s contributions to elected officials totaled $5.2 million from 2004 to 2011. The Virginia Public Access Project shows another $1.4 million in 2012 and 2013. The contributions overall somewhat favor Republicans, but often the contributions are so even-handed as to be comical, like the $20,000 each to Mark Herring and Mark Obenshain in the Attorney General’s race last fall. These contributions are not about supporting a preferred candidate; they are about buying influence.  

Note that much of the donations don’t go directly to General Assembly members but to the parties’ PACs, which then dole out the money. This gives Dominion extra influence with party leaders-again, on both sides.

The result has been spectacularly successful for Dominion, which rarely fails to get its way. Bills it opposes die in subcommittee (witness this year’s bills to expand net metering). Bills it wants succeed.  

That brings us to this year’s money bills. As you may have read, Dominion has been “over-earning,” collecting more money from ratepayers than allowed by law. In the ordinary course of things, this would result in both a rebate to customers and a resetting of rates going forward to produce less revenue for the utility.

For Dominion, the solution is a bill that lets the company charge ratepayers for expenses it isn’t entitled to pass along under current law. (Indeed, in a nice touch, the bill actually requires Dominion to pass along these expenses.) Presto: it’s no longer earning too much, owes no rebate, and doesn’t have to cut rates.

In return, the ratepayers get the satisfaction of assuming the sunk costs of a new nuclear reactor that will probably never be built, plus whatever more money the utility spends on it going forward. I believe the technical parlance for this is “blank check.”

“But we must have nuclear,” our legislators murmur as they sign our names on the check. Um, why? Nuclear energy today can’t compete economically. Just last year Duke Energy gave up on two nuclear plants it had been building, after billing ratepayers close to a billion dollars in construction costs. (BloombergBusinessweek headlined its article on the subject, “Duke Kills Florida Nuclear Project, Keeps Customers’ Money.”)

Dominion itself understands the wretched economics of nuclear perfectly well; its parent company, Dominion Resources, just closed an existing nuclear plant in Kewaunee, Wisconsin, because it couldn’t produce power cheaply enough to attract customers. And that’s from a plant that’s paid for; energy from new plants is now more expensive than natural gas, wind, and even some solar.

Memo to Democrats: when the cheaper alternative is renewable energy, no self-respecting progressive signs on to nuclear.

The steadily falling price of wind energy, and more recently, solar energy, help explain why nuclear is on its way out nationwide. The only nuclear plants under construction in the U.S. today are over budget and reliant on billions of dollars in federal loan guarantees.

Memo to Republicans: no self-respecting, Solyndra-bashing conservative signs on to nuclear.

The State Corporation Commission also understands the economic picture, and it has been skeptical of Dominion’s nuclear ambitions. On top of that, there are serious concerns whether a third reactor at North Anna could even get a license from the Nuclear Regulatory Commission in the wake of the earthquake that shut the existing units for four months in 2011. (For a good short history of the North Anna reactors, including the fine Dominion paid in 1975 for hiding the existence of the fault line, see this fine article in the local Fluvanna Review: http://www.fluvannareview.com/…

So there’s a pretty good chance that Virginia ratepayers will find themselves following in the path of Duke Energy’s customers, with many hundreds of millions of dollars thrown down a rathole and nothing to show for it.

The elected officials voting for this boondoggle, on the other hand, will have plenty to show for it, unfettered by rules of ethics.  

  • va_lady2008

    Your comments concerning the Virginia legislature and “ethics” are spot on. Our “solons” wrap themselves in the mantle of the Virginia way, ignoring to the detriment of the taxpaying citizens the fact that a proportion of them (how large a share I cannot say) are clearly on the take.  Sadly, I suspect that being in the take is about the ONLY bipartisan thing going on in Richmond.  

  • Virginia Organizing and the Alliance for a Just Society release study as debate on health care coverage continues in Richmond

    Richmond, VA – Virginia Organizing and the Alliance for a Just Society released a study today, “Expanding Health Coverage With Federal Funds Will Create Economy-Boosting Jobs in Virginia,” showing that fully implementing Medicaid expansion will create 30,821 annually and that a high proportion of these jobs will be higher-paying jobs.

    “This report shows that we can have a win-win situation if we expand Medicaid in Virginia this year,” said Sandra A. Cook, Chairperson of Virginia Organizing. “We can get federal dollars to provide health insurance coverage for 400,000 Virginians and at the same time, we can create lots of economy-boosting jobs. More health care coverage and more good paying jobs-who can argue against that?”

    According to the report, “Adoption of the health coverage expansion will trigger an influx of federal dollars into Virginia, with a significant resulting impact on job creation and economic activity. While the new jobs created as a result of Medicaid expansion will include jobs in industries all across the state’s economy (because of indirect and induced economic impacts of new Medicaid spending), a majority of the new jobs will be concentrated in the health care industry.”

    The report says, “With a high proportion of new jobs created through the expansion of the health care sector and wage and job projection data showing that jobs in Virginia’s health care industry tend to be higher-paying, living wage jobs, this analysis finds that Medicaid expansion will support economy-boosting jobs in Virginia.”

    The report concludes, “Virginia faces both a gap in affordable health coverage and a gap in living wage jobs. Accepting the federal funds to expand health coverage is a policy prescription that has the potential to help address both of these challenges.”

    “We can’t delay taking $5 million a day from the federal government so people can get health care and we can create more jobs,” Cook said. “We should be moving forward with Medicaid expansion as soon as possible.”

    One recommendation made in the report that Virginia Organizing supports would be to invest in health workforce development strategies that expand opportunities for people of color and low-income communities: “The new job creation resulting from Medicaid expansion is an opportunity to strengthen racial and ethnic diversity in the state’s health workforce and expand opportunities for people of color. A recent report from the Joint Center for Political and Economic Studies recommends strategies that include: establish “health care center academies” at high schools that serve students of color and low-income students, strengthen funding for community colleges’ health care occupation programs, and support on-the-job training initiatives and “career ladder” strategies that help people of color advance in the health fields.”