Questions Multiply Around Virginia’s Hiring of Coal Advocate to Write Key Energy Study

The Christopher- Karmis Mystery Continues

Dr. Michael Karmis

Dr. Michael Karmis

In my recent post, “Is Coal Center Too Conflicted to Analyze How Virginia Responds to Fed’s Clean Power Plan?” I raised questions about who in Virginia government chose a professional coal advocate to conduct a cost-benefit analysis of how Virginia should best meet the Clean Power Plan standards.

The advocate in question is Virginia Tech’s Michael Karmis. He runs the Center for Coal and Energy Research and has extensively consulted with the coal industry. His Center is sponsored by:

VCERC sponsors 11.3.14

The Center’s “Advisory Board” includes the Virginia Dept. of Mines, Minerals and Energy Director Mr. Conrad Spangler, along with the major players in the state’s fossil fuel industries, including:

Of its eight staff experts, all appear to be closely tied to the coal industry. Neither Dr. Karmis, nor anyone else on the Center’s staff have any discernable experience with energy efficiency and renewable energy sources, which have in recent years created 290,000 jobs in neighboring Mid-Atlantic states.

Foundation Document but No Analysis of Renewables

The cost-benefit analysis that Dr. Karmis was hired is a foundation document for informing how the state will respond to the federal Clean Power Plan standards (CPP). The Governor, his staff, and the Virginia legislature will heavily rely on its findings over the next year, and they were already included in the State Energy Plan, released on Oct. 1, 2014.

In Section 3 of the analysis, Commercially Available Technology (page 49), renewables are not included:

  • Improving the Efficiency of [coal] Power Generation (p.51)
  • Carbon Capture, Utilization and Storage Technology Assessment (p.63)
  • CCUS in VA (pg. 72)
  • Energy Efficiency Technology (p.74)

On pages 94-95, Dr, Karmis writes:

“There have not been adequate studies or analysis to demonstrate the practicality of such expansion [of renewable power generation] within Virginia, and few efforts are currently ongoing which can be used as positive examples of the capability of the Commonwealth to meet demand using renewable sources. A study conducted by Virginia Tech in 2005 assessed various sources of renewable power for Virginia, and concluded that… cost and applicability for Virginia must await a detailed assessment.”

Critics have said that this finding clashes with the business world realities of rapidly dropping prices for solar and wind energy.

Questions

The selection of Dr. Karmis begs some straightforward questions:

  • Who made the decision to hire Dr. Karmis?
  • Doesn’t Virginia have someone with experience in a range of energy sources and efficiency expertise to conduct this critical cost-benefit analysis?
  • Was anyone else considered for the task of writing this vitally important study?
  • What was Dr. Karmis paid, if anything, to do this study?
  • Were there clean energy experts that Dr. Karmis consulted with?
  • And, does the coal lobby’s money that heavily underwrites Dr. Karmis’ “Center” and his salary make him too conflicted to write an objective analysis?

After doing some initial research, calling the British Gas number and getting some info, on Oct. 9, I contacted Dr. Karmis by phone in his office to ask him the questions above. He was between meetings and was only able to speak with me for very short period of time. Dr. Karmis told me that he had consulted renewable energy experts in producing the cost-benefit analysis, but he could not tell me who they were because there was a non-disclosure agreement. If Al Christopher, director of energy of Virginia’s Dept. of Mines, Minerals and Energy DMME), gave him permission, he would be glad to tell me. Karmis told me Christopher had “coordinated” the study.

dmme_logoI had sent Freedom of Information Act requests to DMME and Virginia Tech in pursuit of these and other questions. In response, DMME sent me emails and other records that I am in the process of analyzing. The response from VT was disappointing.

I caught up with Mr. Christopher in Richmond on Oct. 14, prior to Gov. McAuliffe’s unveiling of the Energy Plan. Christopher said that state law required that Dr. Karmis write the cost-benefit analysis, and that I should look at the statute, which I’ve posted here. The law in Section 1 A says only that Dr. Karmis’ Coal Center be “consulted,” not that Dr. Karmis should write the entire cost-benefit analysis – a big difference.

I sent Mr. Christopher an email asking for a clear answer about whether or not Dr. Karmis was free to answer my question about which renewable energy experts Dr. Karmis had consulted, but have received no reply.

Christopher email snip 10.14.14

I have also asked Mr. Christopher in a follow-up email to tell me where in the law he was “required” to hire Dr. Karmis to write the cost-benefit analysis, but again with no reply.

This morning, I left a message at Mr. Christopher’s office to confirm he received my emails. I have not received a reply to any of my emails to him or my voice mail. I will continue to press for answers.

 

Scott Peterson

Executive Director

Is Coal Center Too Conflicted to Analyze How Virginia Responds to Fed’s Clean Power Plan?

I was in Richmond for Gov. McAuliffe’s unveiling of the 2014 Virginia Energy Plan. There, I had an opportunity to pursue questions about why Dr. Michael Karmis, Director of Virginia Tech’s Center for Coal Research, was chosen to write the critical cost-benefit analysis for Virginia’s response to the federal Clean Power Plan (CPP).

Is Karmis Too Conflicted to Analyze How Virginia Can Respond to Fed’s Clean Power Plan?

Michael Karmis, Ph.D

A cost-benefit analysis would normally be an obscure, bureaucratic document. But this year the Virginia legislature mandated a cost benefit analysis be included in the third annual state energy plan. How Virginia responds to the federal CPP standards is a big deal. People ask me why a coal backer was tasked with writing this foundational document that the legislature will rely upon. I typically respond, “Good question!”

As I see it, here are some important questions that need to be answered:

  • Why was Dr. Karmis chosen?
  • Why did Dr. Karmis choose Clean Air Markets LLC, J. E. Cichanowicz Inc., and Chmura Economics and Analytics and no firms with renewable energy experience?
  • Did Dr. Karmis consult with any renewable energy experts during his execution of the cost benefit analysis?
  • Did anyone on Dr. Karmis’s staff provide input on renewable energy in preparation of the analysis? If so who are they and what are their credentials?
  • Why did Dr. Karmis not ask his Virginia Tech colleague and renewable energy expert Dr. Saifur Rahman for his input on renewable energy?
  • Did any lobbyists recommend to Dept. of Mines, Minerals and Energy (DMME) that Dr. Karmis be hired?
  • Was Dr. Karmis too conflicted to write a document the Governor and legislature will depend upon as an unbiased, informed look at how Virginia can best respond to the CPP?

On pages 94 and 95 of his cost-benefit analysis, Dr. Karmis states:

“The EPA’s proposed rules would encourage development of renewable power generation within the state. There have not been adequate studies or analysis to demonstrate the practicality of such expansion within Virginia, and few efforts are currently ongoing which can be used as positive examples of the capability of the Commonwealth to meet demand using renewable sources…. [T]he cost and applicability for Virginia must await a detailed assessment.”

But Governor McAuliffe and people in the Virginia business community are pointing out that Virginia has fallen behind other Mid-Atlantic states, which created a combined 290,000 clean energy jobs in recent years. North Carolina added, in just one year (2013), 335 MW of solar capacity—roughly 18 times Virginia’s total installed solar capacity.  Most of the additions were by residents and other private investors.

Maryland North Carolina New Jersey
  1. Virginia
Tennessee Virginia
Solar 142 592 1,337 N/A 74 13-18*
Wind 120 0 9.6 583 29 0

 Installed capacity measured in megawatts (MW). One megawatt is equal to 1,000 kilowatts (kW).

*Estimated. There is so little solar in Virginia that no one really keeps track.

I spoke with Dr. Karmis by phone at his Virginia Tech office on Oct. 9th. Dr. Karmis’s center lists a large number of significant players in the coal industry as sponsors that provide “generous financial contributions.” I asked him what renewable energy expertise he had used in his work. He claimed that he had consulted with renewable energy experts while writing the analysis, but he was unable to tell me who due to a nondisclosure agreement he had signed with DMME. Dr. Karmis said that DMME’s Energy Director Al Christopher “coordinated” the analysis and asserted that if Mr. Christopher allowed him to tell me who he consulted with, then he would be “glad to tell me.” Unfortunately, however, Karmis told me that he would be away at a visit to a West Virginia coal mine until the day of the formal unveiling of the State Energy Plan and would be unable to speak to me until after then.

On Tuesday, during the plan’s unveiling in Richmond, I was able to catch up with Christopher. He asserted that Dr. Karmis had consulted with renewable energy experts that are on the coal-industry sponsored center at Virginia Tech. Christopher also stated that DMME was required to hire Dr. Karmis’s Center.

Later, I read the legislation that Christopher referred to. In Section 1A it states:

“The Division [of Mines, Minerals and Energy], in consultation with the State Corporation Commission, the Department of Environmental Quality, and the Center for Coal and Energy Research, shall prepare a comprehensive Virginia Energy Plan….”

Notice the phrase “in consultation with.” DMME was to consult with Karmis’s coal center. Some people might take that to mean getting input on drafts.

I learned more by reading the Fiscal Impact Statement that states in Section 8:

“DMME has indicated that [sic] would need to hire expert consultants with skills and knowledge not currently available in house to conduct a comprehensive analysis.”

Did Christopher take that to mean he had to hire Dr. Karmis?

The Virginia legislation required there be “(d), an analysis of… (iii) the commercial availability of technology required to comply with such regulations.” Yet Dr. Karmis’s anaylsis focuses almost entirely on coal technology, with only a short section on energy efficiency and nothing on renewable energy. The federal Clean Power Plan suggests four tools that can be used to achieve carbon pollution reduction:

  • Making existing coal plants more efficient.
  • Using existing gas plants more effectively.
  • Increasing renewables and nuclear energy.
  • Increasing end-use energy efficiency.

Going forward, as the discussion of Virginia’s compliance with the federal CPP heats up, it is important to understand more about why Dr. Karmis and his team were chosen to write the pivotal cost-benefit analysis. I have submitted two Freedom of Information Act requests; one to DMME and another to Virginia Tech. Perhaps we will learn more.

 

Scott Peterson

Executive Director, The Checks and Balances Project