Virginia is on the brink of an energy crisis.
Power demand is surging and projected to keep increasing in the coming decades, largely because of data centers and the rise of artificial intelligence.
The cost of power is also going up for utilities and their customers. Plus, the state is trying to meet mandates for renewable energy to reduce its reliance on fossil fuels that contribute to climate change.
William & Mary Law School is launching a new Center for Energy Law & Policy, which will “serve as a hub for convening policymakers, scholars and students to address critical issues shaping the future of energy regulation,” the university wrote in a recent news release.
WHRO spoke with Mark Christie, a longtime state and federal regulator who will serve as the center’s founding director and visiting professor.
This interview has been edited for length and clarity.
WHRO: So tell me a bit about your background and what drew you to this new role.
Mark Christie: I began specifically in energy when I worked for Gov. (George) Allen, when he was governor of Virginia back in the 1990s. I was his policy director and chief counsel, and a lot of energy issues were on the agenda even back in the ‘90s, particularly the issue of whether Virginia should restructure its electric regulation system. It was called deregulation. So I started really getting involved back then. Then, later on, I was elected by the Virginia General Assembly to the State Corporation Commission. This commission in Virginia regulates all the public utilities. I served as a commissioner for almost 17 years.
After my third election, I was asked about, would I be willing to go on the Federal Energy Regulatory Commission? I said yes, I’ll serve if nominated. I got nominated by the President (Trump) and then confirmed by the Senate. And so I went on the Federal Energy Regulatory Commission, which is called FERC, and spent 4 ½ years there, including the last seven months as chairman. I departed from FERC on Aug. 8.
I was approached by a member of the William & Mary Law School Foundation about potentially setting up a new center that would be a forum to study energy issues, and I was very attracted to it. I wanted to return to teaching. Before I went on FERC, I taught for 20 years at Virginia Commonwealth University, I taught for 10 years at the University of Virginia Law School. So I thought, well, this is an exciting opportunity because it's not only teaching but also the chance to start something new, to start something very important. The leadership has been totally supportive and very all-in on getting this center up and going and making it a nationally known center for discussing and analyzing energy policy.
WHRO: How will the new energy center operate and what do you hope to accomplish?
MC: This is going to be a neutral forum to discuss, analyze, evaluate the critically important issues in the energy space today, such as, how do we pay for all the new generation we're going to need? How do we allocate the cost for the new generation? How do we get the infrastructure built? How do we keep the grid reliable so that we have electric service 24/7, which everybody wants and expects?
I'm going to be teaching a course on energy law each semester. But the center itself is going to offer students the opportunity for in-depth study, internships, doing papers, just getting students the opportunity to really get deeply involved in energy issues, which are huge. They intersect with environmental issues as well. Whereas 20 years ago, you might have talked about energy law and policy and environmental law and policy as two separate issues, now they've pretty much merged.
WHRO: Any conversation about energy in Virginia right now revolves around data centers. How does that factor into the curriculum?
MC: Virginia is ground zero for data center development. Not just for the United States. We are ground zero for the planet. There is more data center capacity, more data center development here in Virginia than any other political jurisdiction on the face of the earth. Think about that.
It affects Virginia in a lot of different ways, and that's one of the things that we want the center to really delve into and dig into. There are many, many issues to be considered and many nuances to those issues. So the details really matter. On the one hand, obviously data centers have been an important economic development factor in Virginia. The local tax revenues are just extraordinary. Data center tax revenues are paying for a lot of local government services. But there's no question that data centers, particularly in the volume that Virginia has been developing them, bring costs that have to be considered.
They use a huge amount of electricity. Basically in Virginia, what we've been doing for the last 20 years is we've been building new Manhattans, new San Franciscos, new Chicagos, in terms of power demand, all over eastern Virginia. It takes a lot of money to serve that load. When a large data center connects, Dominion (Energy) has to spend a lot of money to upgrade that grid, to upgrade those wires, because this huge amount of power is now flowing.
The other element of the cost is Dominion has to come up with the new generation. Because when you're connecting a customer that may be using as much power as Manhattan, that takes a lot of additional generation, and that's got to be built or purchased. That cost has to be allocated. And this is where it really affects everybody. To a certain extent, what's been happening in Virginia is those costs largely have been socialized. The question is, are the costs being allocated fairly? That's the kind of issue that we need to really look at very closely.
We're dealing with issues that other places may deal with later, but we're dealing with them right now. It's the perfect place for having a center devoted to energy law and policy right here in Virginia.
WHRO: On the transmission side, another big discussion in Virginia has been about PJM, the regional grid operator. How does that fit in?
MC: PJM covers 13 states. We're one of them. First and foremost, it's the system operator. It dispatches the power that keeps our lights on, and it does it very well. The vast majority of the complaints that you're hearing from the governors about PJM are not about how PJM operates the system. It's about what's called the capacity market operated by PJM. The purpose of the capacity market is to have utilities that serve customers have a place to go to buy the generating capacity that they need.
It all really goes back to about 25 years ago, when a lot of states did what was called deregulation, in which they forced their utilities to get rid of their generation and then they made them go buy the generation in the PJM capacity market. The theory was that the capacity market would give generation at a cheaper price. It hasn't worked out that way. The problem with the capacity market is twofold. Number one, it's not producing enough generating capacity. The prices in the last two auctions have been skyrocketing in price; I’m talking 10 times all-time highs.
We in Virginia are shielded from it to a large degree, because we allow utilities to own generation, and we pay for it through what's called rate base. And those rates are regulated by my former commission, the Virginia State Corporation Commission. So, actually, all Virginia consumers can be very happy that we're not at the mercy of the PJM capacity market. Virginia is not as exposed, but we're getting exposed more and more because we're not building enough generation in Virginia. The more we don't build generation in Virginia, the more we have to buy it from the PJM capacity market.
I don't know what the outcome is going to be. I do think that the PJM capacity market, as currently structured, is not going to survive in its current form. I think there'll be a capacity market in the years to come, but I think more likely the capacity market will be something like a backstop that utilities go to if they can't build enough or buy enough on their own. But see, those are the kind of issues that the center will be getting into. Because I think it's a huge debate: Does Virginia stay in PJM? Does Virginia consider pulling out of PJM? That's exactly the kind of issue the center can provide a forum to debate and discuss.
WHRO: Do you plan to delve into discussions about renewable energy, particularly with activity in Virginia on offshore wind, solar and nuclear?
MC: When you look at what generation is going to be needed, I think you have to look at all forms of generation. Every form of generation has pros and cons. Obviously, the debate about fossil fuels — coal, oil, gas — has to do with carbon emissions. Wind and solar don't have carbon emissions, but they're also what are called intermittent, which means they don't run all the time. And we have an electric grid that has to be up all the time, so you have to try to square that circle.
Dominion has four nuclear plants. Nuclear is a very good energy source but it uses fuel and it has to be refueled. And obviously, you get into the storage problems. What do you do with the nuclear waste? There's no perfect source of energy, so we have to make choices and we have to make decisions balancing pros and cons. Those are the kinds of issues it's great to debate, great to discuss and analyze.
WHRO: How does energy policy shape people’s lives in Virginia?
MC: If you get a monthly power bill, and virtually everybody does, you are affected by energy policy. And I know a lot of people are actually struggling to pay their power bills because they've been going up. They've been going up, really, for five years. There's a lot of reasons why it's going up. But the short answer to your question is, if you pay a monthly power bill, you had better care, in fact, you do care, about energy policy, even if you don't think about it in terms of the details.
