It is well known in Richmond Virginia that Dominion Energy is the state’s leading bootlegger. This was once again demonstrated in a recent order from the State Corporation Commission allowing it to build two offshore wind turbines in spite of the Project “As a purely factual matter (the project) would not be deemed prudent.”
According to Professor Bruce Yandle—the originator of the Bootlegger and Baptist theory of public choice—a bootlegger is a “public interest group that can speak from the moral high ground when endorsing new rules and restrictions.” A bootlegger pursues economic gain by embracing regulations and laws that appear to serve the public interest.
The Virginia legislature passed a bill, signed by the governor, setting a state objective of generating 5000 megawatts of solar and wind power by 2028. This was championed by environmental advocates as a way to respond to climate change by suppressing coal and natural gas in the generation of electrical power. This legislation has become a $300 million gift to Dominion Energy that will be paid by Dominion’s customers.
Dominion claims that this is a “demonstration project,” a characterization that can be used to justify its high cost. According to the State Corporation Commission, the two turbines to be built will produce electrical power at a cost of 78 cents per kilowatt hour. This compares with 9.4 for on shore wind power and about 20 times what electrical power can be bought on the open market. The Commission also points out that other utility companies have signed agreements with outside developers instead of undertaking an engineering project that places all of the risks on its customers.
Of course, if Dominion signed an agreement to purchase energy, it wouldn’t be able to add $300 million to its rate base and earn a guaranteed profit. The only thing that this “demonstration project” will demonstrate is the corruption of monopoly power and the validity of the Bootlegger and Baptist theory. Dominion is doing a remarkable job of representing the interests of its shareholders but who is representing the interests of its rate payers? It certainly isn’t the General Assembly that has legalized pickpocketing.
It is accepted that legislation involves deal making that ends up redistributing tax payer dollars but in this instance, Dominion is showing unbridled greed.