Next month, Dominion Energy Virginia customers will begin paying Virginia’s first direct carbon tax on their bills. The amount they pay to buy carbon dioxide allowances from the Regional Greenhouse Gas Initiative will not be listed on the bill separately but will produce a noticeable bump in price.
Many but not all rising energy costs flow from the 2020 Virginia Clean Economy Act, a state level “green new deal” intended to end all use of coal or natural gas for making electricity by 2050. Other new laws are setting similarly aggressive goals for eliminating motor fuels and reducing fossil fuel use in home appliances and even agriculture.
Democrats openly promised to do all this if voters put them in charge. It is safe to assume more will be done in this direction if they stay in charge after November’s elections.
The State Corporate Commission (SCC) took one more recent step important in this transformation, starting the application and review process on Dominion Energy’s proposed offshore wind project 27 miles off Virginia Beach. That was the centerpiece of the 2020 VCEA, with the General Assembly all but ordering the SCC to approve up to 5,200 megawatts of offshore wind and dump the cost on its ratepayers.
The potential $37 billion all-in cost of the wind project will be the main reason for the huge electricity price spike that is coming. The SCC has issued warnings of 50 to 60 percent price increases in a relatively short period. When that wave hits, quite a few Virginians will be turning to that PIPP fund to cap their bills at a reasonable level. The rest of us will wish we could.
This energy transformation has been largely under the radar for most Virginians, and it is not an accident that most of the costs will begin to arrive after the 2021, 2022 and even the 2023 elections. When discussed at all, the cost is obscured by claims that these steps are necessary to prevent a world-wide catastrophe from carbon emissions.
But the program is riddled with duplications and contradictions. The wind application when dissected will demonstrate a massive profit motive at work for both utilities and the wind energy industry, eager to crush its fossil fuel and even nuclear competitors.
Written by Stephen D. Haner, Senior Fellow at the Thomas Jefferson Institute for Public Policy. He may be reached at firstname.lastname@example.org.