Highland wind project largely 'symbolic,' SCC commissioner says 

RICHMOND – With nearly 19 years under his belt as a commissioner for Virginia’s State Corporation Commission, Judge Theodore “Ted” V. Morrison Jr. knows a thing or two about electric utilities. He was one of three, serving with Judith Williams Jagdmann and Mark C. Christie, who recently approved a certificate for the state’s first industrial wind energy facility, in Highland County, in spite of strong opposition from residents and landowners.

Morrison spoke to The Recorder this week about the SCC’s two-year process reviewing and subsequently granting a permit to Highland New Wind Development LLC to construct and operate a 39-megawatt plant atop Allegheny Mountain, along the county’s westernmost border.

“I spent time in Bath and Highland, years ago. I bought a quilt in Monterey. I know it’s beautiful country up there, and I think it’s perfectly reasonable for you all to want it to stay that way, without windmills on the skyline,” Morrison said.

“There are also those who would say, ‘It’s his damn mountain, let him do what he wants with it.’ I’m fairly libertarian in nature, but then, I run into the law. And the law says, we must protect people and the environment. I think this permit sets a good precedent, but it’s important that people (and developers) know the rewards come with real obligations and risks.”

Morrison stressed the federal production tax credits are what make commercial wind facilities attractive, but the reality is, the renewable electricity utilities will never substantially change the country’s need for larger power plants.

“These things are all taxpayer-subsidized. All those tax credits – we pay for that. People tend to forget that,” he says. “Maybe 39 megawatts is important, but good gosh, Virginia Power they’ll get 200 megawatts out of one plant – there’s a 19,000 megawatt portfolio. (This project) is largely ‘symbolic.’ I wish people would get realistic about the promise of renewables.”

Morrison believes renewable power won’t provide enough electricity in this country to make a dent in the need for large utilities, and HNWD’s small facility will be a drop in the bucket. Does he think it will make a difference? “I do not,” he said.

“With the time we spent on HNWD’s case, it was very interesting, but it was only for 40 measly megawatts, and that’s the size most of them will be. People shouldn’t think we can get away from large plants with these. If we tried to power New York with solar we’d have to blanket all of Manhattan with solar panels, and then half of New Jersey for the batteries,” he said.

Highland New Wind’s application

HNWD applied for a state permit in November 2005. After a number of public and evidentiary hearings, the SCC remanded the case back to its hearing examiner, Alexander Skirpan Jr., for more information on monitoring and mitigating the potential environmental damage the 20-some turbines, standing 400 feet above a 4,200-foot ridge, could cause.

The application, Morrison said, had to be considered strictly under the laws governing such SCC decisions, and was no different in that regard than any other.

“The law says that we’re supposed to be deciding to approve, or not, the construction of a utility, and give every effort to (minimizing) the impact on the environment, and defer to the DEQ and other agencies. The controversy in Highland County really boiled down to how much environmental protection we should afford, and who pays for it,” he said.

“Our job, under the law, is not to take steps to protect the environment ‘unless it costs too much,'” he said. “The problem is, we don’t know. It seemed to me if the developer had to pay more than was convenient, well, that’s not something we consider.

“In this case, there was no substantial disagreement about what had to be protected, just the extent of protection. This is definitely a laboratory project, a pilot project to see how many bats we can slay, if you will.”

One thing the SCC did not require, to the disappointment of many involved in the case, was a federal habitat conservation plan and incidental take permit from the U.S. Fish and Wildlife Service to protect endangered species.

“The hearing examiner felt, and the commissioners did too, that we weren’t going to put that on (HNWD),” Morrison said. “Some have suggested they’re going to have to do it, and the chances are good they will take endangered species. But to us, it was kind of pre-judging, facts not yet in evidence. I would think, if I were the developer, I would want to minimize risk as much as you can before you spend the whole bundle, $60 million, on the project. But that’s not up to us. I wish this project success, and I hope people will not be as impacted as they think.”

With the approval of HNWD’s permit, Morrison said, “I suspect we’ll see more (wind plant proposals). But there are reactions going the other way, like in Patrick County, where they banned them with a height ordinance.” He expects more localities will try to prevent wind energy projects in their midst. “People are already preparing,” he said.

“I don’t personally think they’re the most beautiful things, but that’s individual taste. Highland County, from what I understand and the polls taken – most of the folks were opposed to this. But the board of supervisors approved it, and we (commissioners) have to take that as the whole decision. We can’t go on personal preference, what people want. It’s strictly based on the local use permit. We have to follow the law.”

The commissioners were fully aware of the opposition to HNWD’s project, but Morrison said other SCC cases, like proposed rate increases, draw strong, emotional responses, too. “Some of these people, they can be real tearjerkers,” he said. “They really tug at my heart É and then we also get letters from delegates and senators – some of the same people who voted for legislation that resulted in these cases. Then they want us to fix it. To me, that’s the biggest act of hypocrisy.”

Taking a hard look at the potential impacts, though, was paramount. Morrison explained it was not until the early 1980s that an arrangement for the SCC to lean on other state agencies for environmental recommendations was created. Since then, a memorandum of understanding has been in place which requires the SCC to defer to the state Department of Environmental Quality, and all other state agencies it consults, to make recommendations and judgments about how a utility might affect everything from cultural assets to wildlife. The problem, says Morrison, is that agency personnel were only interested in providing the information, not testifying in the cases.

HNWD’s application changed that, however. “It was the first time we actually got one of the agencies involved enough that they actually brought witnesses,” Morrison said. “We had had problems getting someone from these agencies to testify like they would in court É In this case, when we remanded the case back to the hearing examiner, we weren’t sure whether the Department of Game and Inland Fisheries was going to be able to participate without an attorney. So I sent word to the Attorney General’s office to get them a lawyer. And they participated fully. That’s the first time that’s ever happened.”

General Assembly influence?

During the time HNWD’s application was pending before the SCC, Sen. Frank Wagner (R-Va. Beach) introduced the Virginia Energy Plan, which contained language that, once passed by the legislature, stressed the need for the state to ease the way for renewable energy like wind and solar and provided incentives for their development. Wagner testified in strong support of HNWD’s proposal more than once, but Morrison says the energy plan and related renewable power bills in the making didn’t influence the SCC’s decision.

“Sen. Frank Wagner can talk all he wants, but he doesn’t know anymore about windmills than I do,” he said. “He was really supporting offshore drilling until he got tangled with environmentalists, and then he fell into this thing and became an advocate for renewables.”

Morrison stressed the SCC is an independent agency, which does not serve under any branch of the state government. Its decisions can be appealed only to the state Supreme Court. “The constitution says we’re separate. We are not one of the (government) branches, although we often have a hard time reminding legislators of that.”

What the General Assembly does is relevant only as it applies to SCC’s directives. As for how legislation reflects the state’s energy policies, “that’s for them to say,” Morrison stressed.

Before he began his stint on the SCC, Morrison had served in the House of Delegates. “I was a policy-maker 20 years ago and I know the difference. We made some good decisions and some bad ones. But I’m no longer a policy maker. Whatever the (Assembly’s) recipe is, we (commissioners) have to go along with it.”

In the General Assembly’s current session, Wagner introduced legislation that would remove renewable energy utilities generating less than 50 megawatts from SCC authority. Morrison would not speak to the proposal as a commissioner, “but as a citizen, no, I don’t think it’s a good idea,” he said, noting the state departments involved would not have any say about such facilities if that happened. “These agencies have no enforcement powers. That’s why we set it up (as a condition of HNWD’s permit) so the DEQ can come back to the SCC if necessary, if something’s not working.”

Morrison added, “In the time I’ve served, the legislature’s changed a lot.” He noted several hot- button bills related to utilities have been passed by the General Assembly over the years, and some of them haven’t worked. Lawmakers used to consult the SCC on such proposals, but not anymore. “In the old days, the legislature listened (to the SCC). When I was in the Assembly, I wouldn’t think of taking a controversial matter (to the legislature) that had to do with SCC jurisdiction without input from the commission. Moneyed interests have a lot of sway now, and it’s a shame. I predict a few years from now we’ll see a resurgence in consumerism É Right now, it’s largely absent. We just don’t see that kind of activism.” There’s plenty of opportunity for citizens to get more involved in the kinds of cases handled by the SCC and other agencies, he says.

Current pending bills are one example. Wagner’s proposal for streamlined permitting on small renewable power plants, Morrison said, would cover most of those kinds of utilities

“And that’s most of the wind projects,” he added. “They (lawmakers) never consulted us about it, but that’s a public policy decision,” he said.

“If we spend a bit of time thinking about it, we realize how anemic providing energy through renewables like wind and solar is,” he added. “I looked at windmills in California É I was there 4-5 days and not a single one of them were turning. There were hundreds of them, and someone, somewhere had to be powering electricity elsewhere.”

The decision-making process Morrison said he couldn’t speak specifically about the HNWD decision, but explained the basic process for similar cases where the application requires a great deal of review. These larger decisions are typically assigned to one of five SCC hearing examiners. “They’re sort of like deputy commissioners,” Morrison said. “We assign things to them like utility rate cases, and they collect evidence, all of which is transcribed, and provide us a summary report. Then parties to the case get to file responses.”

The hearing examiner’s report is provided to the three commissioners. “Once we get it, that’s when the reading really starts,” he explained. “I confess we can’t read every single paper on a case, but we read most of them.” Morrison said commissioners not only spend a great deal of time reading the material at work, but often take much of it home to read as well. “We read the record of every case, and all the responses,” he said.

Commissioners then talk to each other. “We’ve traditionally divided responsibility between the three commissioners É If it’s a utility case, excluding telephone utilities, I take responsibility for doping out what we ought to do,” Morrison said. “I have an assistant, and we come up with a draft order. We don’t have the formality of some (agencies) and there’s no required notice to the public when we meet, just like the Supreme Court or Court of Appeals, although we readily furnish all our public records.”

Meetings take place, both between commissioners and with all three together, over the course of discussions. “I’ll take it to one of them and say, ‘Here’s a draft, let me know what you think.’ And they’ve been reading as much as I have. So then we get together and discuss different ideas and thrash it out,” Morrison said.

If there’s serious disagreement, which isn’t often, Morrison said commissioners who disagree are urged to write a dissent attached to an order. “But throughout my tenure, even if there’s disagreement, we’ve never had anything other than friendly, cordial, cooperative relations.”

In Virginia, unlike other states with similar entities, the SCC reviews far more than utility proposals. It also handles banking, insurance and corporate industries. “That’s why we have a staff of over 600. No other state has the scope and function we do. It’s worked well, I think.”

In terms of making decisions, Morrison said commissioners are a cordial and collegial group. Most of its cases are straightforward, and do not require the level of research and public hearing procedures HNWD’s application needed.

He also attributes the SCC’s success to having only three commissioners, as opposed to other states, which have five to seven members serving in a similar capacity.

One of the most difficult utility cases the SCC gets, Morrison said, is related to transmission lines for electricity. There’s one pending in Northern Virginia now, and the other two commissioners have flown over the area in question by helicopter to get a better look. “It’s one of the worst kinds because you just can’t satisfy everybody. There’s always the ‘not in my back yard’feeling É We always try to route the power line as best we can with the least impact for people, cultural resources, and the environment. We’ll meet in the conference room with charts and easels, trying to re-route a line to avoid a school yard or a couple of house, and refine the location.”

What’s next for Morrison?

Prior to his stint with the SCC, Morrison was a full-time lawyer and House Delegate for Newport News, serving his last session in 1987. “I had intended to go back to my law practice (after leaving the House), but two years later, I was persuaded to seek a position on the SCC,” he said. Morrison had been a general practice attorney, doing trial work on anything from divorce to criminal cases, and had no experience with the kind of responsibilities SCC commissioners had. “In fact, I had no earthly idea of doing anything related to the SCC,” he said. “But I was persuaded by a friend.

“This is not a job you just learn in a couple of years,” he added. “This is rocket science sometimes.”

Morrison said he was fortunately elected by the General Assembly as a commissioner at a time when there were two long-term members already in place. “They whipped me into shape,” he said. This was in 1989. Morrison now finds himself almost two decades later as its senior member on the verge of retirement – two years late. The General Assembly had to pass special legislation to extend the mandatory age-70 retirement age when Morrison thought he would be leaving. At the time, another commissioner was retiring, and the third was new to the position. Lawmakers agreed it was better to keep him on board a while longer while new members were getting their feet wet.

Though he formally ended his tenure, he’s still in his office every day to help take care of loose ends while he waits for the General Assembly to name his replacement. At that point, Morrison said he’s not sure whether he’ll return to practicing law or find something he can do on a part- time basis, “just to keep my mind active,” he said.

Truth be told, he’s a little sad about leaving. “I’ve enjoyed every bit of it. There was never a day when I didn’t want to come to work,” he said.

BY ANNE ADAMS • STAFF WRITER

THE RECORDER, January 31, 2008