By Steve Haner
When your friends think you wrong and your opponents are saying nice things, a reevaluation of your position might be in order. Did it. It was still correct for the Thomas Jefferson Institute for Public Policy to put Virginia’s energy ratepayers first and express concern for the financial harm they might suffer if a wind turbine project gets cancelled.
Dominion Energy Virginia’s offshore wind project, now with a $10.7 billion price tag (not including decades of profit), is about half complete. A call to pause and perhaps cancel it was issued by a consortium of wind energy opponents from multiple states. President Donald Trump’s Executive Order has called for a review of pending projects, but it apparently did not pause Dominion’s and three other projects already under construction.
The Thomas Jefferson Institute for Public Policy was invited to sign the petition to pause them all and did not. It then explained the rationale to Virginians, mainly to be sure they fully understood that the stranded costs and other financial impacts of any cancellation could land entirely on them. Here is the report we made, which also links to the letter sent to Trump’s Department of Interior.
There was a bit of an explosion on the right for us not moving in lockstep, but it was uncalled for. We did not dispute the underpinnings of the petition to Interior, and the complaints about how President Joe Biden’s team gamed the system in favor of wind approvals may be totally valid. The concerns about harm to marine mammals may be totally valid.
That was followed by a round of applause from the left, also largely uncalled for. This article appeared in a publication that appears to be a wind energy booster, delighting in the apparent rift among offshore wind skeptics. The author lumps the Thomas Jefferson Institute in with Heritage Foundation and Project 2025. We had no hand in the drafting of that. Her lumping us in the “all of the above” camp is a major oversimplification, given that often includes pipedreams about hydrogen and carbon capture.
The decision on what to do with a half- or more than half-finished project is an economic call. Yes, offshore wind is, as I told the reporter (and she didn’t quote me) too much money for too little energy. But to cancel it now or soon would put the following risks on Dominion’s 2.6 million Virginia customer accounts:
- The stranded cost of the project to date, about $6 billion as of the end of 2024, plus any cancellation penalties from suppliers and the cost of removing what has been done.
- Under Virginia’s fantasy-based Virginia Clean Economy Act, that project was set to create about 8 to 10 million annual renewable energy certificates for Dominion to retire. Cancel it (or should the project just fail, as it might) and the ratepayers will have to pay for that many RECs from elsewhere or pay a “deficiency payment” (a.k.a. alternative compliance cost.)
- As low as its capacity factor might be, the 2.6-gigawatt project should run well at times. Dominion is still facing a rising wave of demand because of the data center explosion so the power will have to come from somewhere else. Again, the Virginia Clean Economy Act precludes the most logical hydrocarbon alternatives.
Well before that letter to the Trump Interior Department started to circulate for signature, the triple whammy facing Dominion’s customers was clear. Recognizing that, we have no regrets about sending up a rocket to inform people, and to cause the policy makers to move with caution before slamming a population already paying too much for power. Dominion’s project is the only one owned directly by a utility and thus puts ratepayers at such risk.
While it probably is the correct economic call to finish this first Dominion project (and an analysis could demonstrate otherwise), Dominion has two more planned and both of those were paused for review by the Trump Executive Order. Those leases are in jeopardy. Killing them also appears currently to be the best move for Virginia ratepayers.
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“As low as its capacity factor might be….”
The article didn’t say what that would be and I’m too distracted with other stuff to dig it out of the references.
30% is typical for on shore turbines. Off shore may be higher.
The Seabrook NH Nuke is some 90% with downtime scheduled for low demand months.
Dominion refused to agree to a performance standard on CVOW that it would share the financial risk if the project’s CF fell below 40%. That says it all, as in less than 40%. As important however is the “effective load carrying capacity” or ELCC, and PJM gives offshore wind a somewhat decent 60% ELCC score. Thus is is probably a better choice than solar, which is far below that in maintaining reliability, but yes, way inferior to a nuclear plants or a well run combined cycle gas plant. But Virginia law right now IMHO will thwart any new gas plant. A new nuke would be in compliance with state law, but will also be expensive and take a long time to get on line. Dominion is just beginning to consider an SMR reactor.
The only pathway an expansion of nuclear power has in the US is for state governments to directly fund new construction through either a state-owned power generation & marketing agency or through a quasi-governmental organization such as the TVA.
The next big test for SMRs comes with Ontario’s plan to install four 300 MW GE-Hitachi SMRs at its Darlington site. The first SMR is slated to go online in early 2030. If that first one is brought in on cost and on schedule, three others will be added by 2034 for a total of four.
IMHO, we will not see any serious movement towards an expansion of nuclear power in the US until and unless Canada’s Darlington SMR project is finished on time and on budget.
My particular combination of (undiagnosed) OCD + ADHD means I’d already looked at the data for both the Block Island and CVOW “pilot” offshore windfarm projects.
The EIA “monthly accumulator / sum” data for generated electrical energy, in GWh, for the latter can be downloaded from the following EIA link, currently available up to November 2024 :
https://www.eia.gov/electricity/data/browser/#/plant/59693/
Attached is my “processed” version of that data.
.
Notes
– The CVOW pilot project consists of just two 6 MW turbines. According to the Dominion Energy CVOW website the “commercial” project will consist of “176 14.7-megawatt Siemens Gamesa turbines”. Their CFs are likely to be (slightly ?) higher than the pilot project’s “small” 6 MW turbines.
– 12 MW x 24 hours/day x (28 to 31) days/month = 8064 to 8928 MWh per month.
– The annualised (12-month rolling average) CF for the pilot project is in the 45-50% range.
– Over the course of a year the pilot project’s CF ranged from ~25% in the “summer doldrums” (July-August) to ~65% during the “winter storms” season (Dec-Jan-Feb).
Data + OCD rules (;-))
The natural capacity factor (NCF) is not within the power of a government or entity to control. It is a characteristic of the site and environment, not the wind facility.
An offshore wind farm may reach a 35% capacity factor, but that is not certain, stable, nor reliable. The average site wind speed may rise or fall, by over 20% for many years in a sequence and varies more than a factor of 2 over a season. The Danish and German data have recorded this in detail – sweeping it under the rug.
The typical inherent efficiency (not the NCF) of a wind turbine peaks at ~45%, falling quickly around the optimum wind speed, meaning that wind encountering a rotor will convert less than 45% of its energy into rotor motion.
Well, it is free, you may respond.
Yes, but it is also limited to about 1 MW/km2 of ocean. In other words, a 5 MW wind turbine requires 5 km2 of ocean. That energy density limit is being ignored, so the wind facility can and will produce less power than design. The Germans have found 25% less energy produced than ‘expected’, and are baffled by the shortfall. Adding more wind turbines is tantamount to a dog chasing his tail.
These numbers do not include but do not illustrate the highly erratic and intermittent nature of wind; witness the now well-known term ‘dunkelflaute‘ – meaning an extended period of no sun and no wind, particularly in winter when both are essential to survival.
Ironically, when the wind is blowing hard, too much electrical power is produced, causing it to be negatively priced, and disrupting neighboring countries electrical systems.
Or, the wind turbine must be feathered to produce less power, decreasing its already low natural capacity factor.
A wind turbine is a delicate, finicky machine, large as it is. It wears out, particularly under offshore conditions.The rotor blades quickly deteriorate and must be replaced within 6 years on average; a monumental task and key part of ‘repowering‘ a wind facility – euphemism for rebuilding. The entire facility must be replaced within 15 years because within that time its output has declined by 25%, on average.
Along the East Coast, wind blowing ‘too hard’ includes hurricanes. We are assured that wind turbines will survive hurricanes, even though LONG experience shows that far more solidly constructed oil platforms do not. Simple analysis (as in the attached figure for 2005, but replicated nearly every year) proposed East Coast wind facilities anywhere along the East coast will be struck by hurricanes, requiring a drastic ‘repowering’.
Wind turbines produce only electricity and cannot solve our energy requirements. Wind turbines also introduce a number of environmental, ecological, and climate issues which are presently being roundly ignored.
To summarize, wind turbines may have a place somewhere, but that place is not yet identified, to the best of my knowledge. The basic reason is that civilization cannot run on power not available when needed, as shown by many decades of experience.
Reality instead of fantasy has returned to the US and the White House
Europe, with a near-zero, real-growth GDP, is slowly getting the message
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Trump has declared a national energy emergency, which he is allowed to do as President.
As a result, unreliable, weather-dependent, grid-disturbing wind/solar/battery systems are very low priority.
They are automatically put at the bottom of the list, and reliable, non-grid-disturbing gas, oil, coal plants are at the top of the list.
This is not rocket science, because the economy needs lots of electricity for future AI systems, and data storage systems
Wind and solar systems do not qualify. Battery systems often catch fire.
What is generally not known, the more weather-dependent W/S systems, the less efficient the other, traditional generators, as they inefficiently counteract the increasingly larger ups and downs of W/S output. See URL
https://www.windtaskforce.org/profiles/blogs/fuel-and-co2-reductions-due-to-wind-energy-less-than-claimed
.
W/S systems add great cost to the overall delivery of electricity to users; the more W/S systems, the higher the cost/kWh, as proven by the UK and Germany, with the highest electricity rates in Europe, and near-zero, real-growth GDPs
At about 30% W/S, the entire system hits an increasingly thicker concrete wall, operationally and cost wise.
UK and Germany have hit the wall, more and more hours each day
The cost of electricity delivered to users increased with each additional W/S/B system
.
Base-load nuclear, gas and coal plants are the only rational way forward, plus the additional CO2 is very beneficial for additional flora and fauna growth and increased crop yields to feed hungry people.
https://www.windtaskforce.org/profiles/blogs/we-are-in-a-co2-famine
I have yet to hear of a single wind installation that met its planned CF. In Australia, the average onshore wind CF is 30%. For the U.S, the EIA May 2024 report stated 33.5%, and said that it had dropped to an eight-year low. The UK wind CF was stated as 22% for onshore, 32% for offshore.
22% !? – I guess that’s one way to encourage building more solar plants in the UK despite its cloudy weather. 🙂
Doubling down of failure?
Seems to be a reasonable conclusion. Make the best of a bad situation and don’t repeat the mistake.
The “bad situation” does not include the electricity storage capacity which would be required to make CVOW dispatchable. That investment would make the “bad situation” about 7 times worse.
Indeed. That was not suggested. It will never be dispatchable but it will add something, albeit at great cost. Damned if you do and damned if you don’t, but it seems just trashing it in the middle is nothing at all compared to something in completion. Virginians have screwed themselves. I am glad that so far Utah remains relatively sane in that respect.
Wind and solar will add great cost to the overall delivery of electricity to users, the more W/S systems, the higher the cost/kWh, as proven by the UK and Germany, with the highest electricity rates in Europe, and near-zero, real-growth GDPs
Both have hit the cost wall, already for years.
Cost wall means smaller bang for each additional buck
Europe tried to screw the US into going down the wind/solar black hole, and make $billions in the process.
That ruse did not quite work out
The European wind industry being in shambles, predates Trump by about 2 years.
We were saved from the US leftist, woky Damnocrats by Trump, who declared a national energy emergency, and put wind and solar and batteries at the bottom of the list, and cut their licenses and subsidies, and put their environmental impact under proper scrutiny.
CANCELLATIONS OF PROJECTS ARE HAPPENING ALL OVER
Ed Reid: “The “bad situation” does not include the electricity storage capacity which would be required to make CVOW dispatchable. That investment would make the “bad situation” about 7 times worse.”
An argument can be made that Virginia’s ratepayers must feel considerable pain before they will respond to the rising cost of electricity. And the more pain they feel, and the quicker they feel all that pain, the more likely they are to abandon wind & solar energy in their state.
In that mode of thinking, the law under which these Virginia wind projects are being constructed might be amended to force the inclusion of suffcient battery storage so as to guarantee a 90% annual capacity factor for each wind project; and that the costs of this battery storage must be recovered on a turbine-by-turbine basis within five years of the date each individual turbine goes live.
I make one caveat here. If a majority of Virginia’s voters are as commited to a wind & solar future as are my relatives in New York State and in the bay area of California, then it doesn’t matter to them how much their electricity costs, they will never abandon their green energy fantasy dreams.
Dominion Energy already has a 3000 MW pumped storage plant. But it was intended to store baseload nuclear power, not “renewables” and has been in operation for decades.
Such storage plants were mandated, in case of a nuclear plant outage
The storage plant would provide electricity until other, traditional plants were started
New England has an 1800 MW storage plant for the same purpose.
I am afraid that was not the purpose for Bath County pumped storage. There was no “mandating” for that station.
Bath County pumped storage is in Maine?
PUMPED STORAGE HYDRO IN NEW ENGLAND
https://www.windtaskforce.org/profiles/blogs/pumped-storage-hydro-in-new-england
New England PSH Plants: NE has two major PSH plants. The Northfield plant is the major subject of this article.
Bear Swamp, rated storage/cycle 600 MW x 6 h = 3000 MWh
Northfield rated storage/cycle 1168 MW x 8 h = 9344 MWh
The actual values are less. See table 1B.
Production over about 8 hours is 12344 MWh, if both cycle capacities were fully available at the same time.
The New England grid operator, ISO-NE, required it to stabilize the grid.
It turned out Nuclear outages were less than expected.
The storage is frequently used by ISO-NE, and has become indispensable for the grid, due to more wind and solar, as I was told in a meeting with ISO-NE personnel.
Of course Bath County is not in Maine, it is in Virginia. Your reply was evidently intended to generalize your statement about PSH in New England, but my response was about CVOW in Virginia.
I am also unsure about the use of your term “mandated.” Northfield was intended to balance the output of Vermont Yankee (now shutdown) as Bath County was intended to balance North Anna and Surry Nuclear plants. But this was system planning by the utility, not something mandated by a regulatory authority.
Since wind power needs subsidies just to operate, the best of a bad situation would be to simply shut down all of it and start dismantling.
You may be right but as long as the subsidizers don’t include me that’s not my call. Here in Utah, we do have two larger-scale wind projects but all of their output is sold to California.
They do include you, because an inefficient, expensive power system makes the US even less competitive on world markets
Europe is Not Our Ally
.
The woke Euro elites tried to lure the US into going down the wind/solar/battery black hole, and make $billions in the process. That scam did not work out. The European wind industry is in shambles
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The US was spared by Trump from the offshore W/S evils of the Democrat leftist cabal, that used Biden as a Marionette.
Trump declared a National Energy Emergency, and put W/S/B systems at the bottom of the list, and cut their licenses and subsidies, and put their environmental impact under proper scrutiny.
.
Europe was using the IPCC-invented, global-warming/climate-change/CO2-is-evil hoax, so the US would also deliver electricity to users at high c/kWh, to preserve Europe’s extremely advantageous trade balance with the US.
https://www.windtaskforce.org/profiles/blogs/international-trade-is-a-dog-eat-dog-business
.
When will woke Euro elites finally admit, CO2 is a good gas, absolutely essential to grow more flora and fauna, and increase crop yields to feed hungry people?
https://www.windtaskforce.org/profiles/blogs/co2-has-a-very-minor-role-in-the-atmosphere
https://www.windtaskforce.org/profiles/blogs/we-are-in-a-co2-famine
“the 2.6-gigawatt project should run well at times.”
“the Virginia Clean Economy Act precludes the most logical hydrocarbon alternatives.”
These two quotes distill the problem of continuing the project down to its essentials. The VERY BEST to expect is that the project will run well “at times”. The rest of the times it won’t run at all, and without hydrocarbon alternatives, there are there are no other feasible backups on the project’s likely horizon. This especially when you consider that the lifetimes of similar projects are much shorter than planned.
The issues then become “Will the costs to the consumers be higher or lower if the project is cancelled”?, along with “Will the reliability of my electrical power be better or worse if it is cancelled?” The answers to those questions are not clear at all. The safest alternative may very well be: “Spend no more good money after bad.”
All I ask is that somebody qualified run the math, preferably under the review of our independent regulatory body, the State Corporation Commission. And the Thomas Jefferson Institute did sign the coalition letter about ending the IRA subsidies. Eliminate those (and eliminate the state’s Clean Economy Act) and a decision to just cut and run on CVOW gets much easier. Unfortunately our legislature is so hopeless it just passed a bill to more deeply entrench the imaginary “social cost of carbon” in all decisions.
CVOW ….Completely Void Of Worth ……
The SCC already did the math since they had to approve the project before it began. However, they are also under the same “Virginia Clean Economy Act” as DE.
It is a self-inflicted conundrum. They bit into it and are chewing on it. If they swallow it can they digest it? If they spit it out they have no nourishment at all. Just don’t come to me for the Rolaids.
The quandary Dominion Energy is in the “Virginia Clean Economy Act is still in force and requires 100% clean energy by 2050 and has interim milestones to enforce compliance. The current democrat majorities in both houses are unlikely to change this, leaving DE between a rock and a hard place. The other wind projects were intended to fill this gap. Oops.
As with all green energy projects the final real cost exclusive of subsidies per KWH is never disclosed. Add to that the costs of dispactable backup power and one will see that the ratepayers are going to pay much higher prices for the power. I doubt that this expensive power will attract many data centers without substantial incentives from the taxpayers.
New Hampshire status.
First, these bills were all heard in one afternoon, though there was so much testimony that one got carried to the next week. NH committees consider their bills and pass a recommendation on to the full house, generally “Ought To Pass” (OTP) or “Inexpedient To Legislate” (ITL). The full house with 400(!) members votes, then it all goes to the senate.
This is Email I sent to a NH anti-wind group:
I see in the news,
https://indepthnh.org/2025/02/20/nh-house-approves-new-energy-policy-without-offshore-wind/ that
HB 682 passed, it’s one of the bills Lisa referred to us wrt the Feb 3rd hearings.
The latest status on each:
> HB682 <https://gc.nh.gov/bill_Status/billinfo.aspx?id=476>
>
> relative to the office of offshore wind industry, the offshore and port development commission,
> and the office of energy innovation.
Ought to Pass: MA RC 206-163 02/20/2025 HJ 6
> HB575 <https://gc.nh.gov/bill_Status/billinfo.aspx?id=742>
>
> prohibiting offshore wind energy infrastructure.
Committee Report: Inexpedient to Legislate 02/10/2025 (Vote 16-1; CC)
> HCR4 <https://gc.nh.gov/bill_Status/billinfo.aspx?id=190>
>
> relative to rejecting all offshore wind energy projects in the waters off the coast of New
> Hampshire and the Gulf of Maine.
Majority Committee Report: Ought to Pass 02/04/2025 (Vote 9-6; RC)
> HB219 <https://gc.nh.gov/bill_Status/billinfo.aspx?id=269>
>
> relative to the phasing out of the minimum electric renewable portfolio standard.
Due Out: 3/6/2025
A couple of other energy bills are also under consideration:
HB189: https://gc.nh.gov/bill_status/billinfo.aspx?id=191
Title: defining “clean energy” and the department of energy’s 10-year state energy strategy to include new technology small-scale nuclear energy, renewable energy, and fuel diversity; and, removing references to the energy efficiency and sustainable energy board.
Ought to Pass with Amendment 2025-0105h: MA RC 206-148 02/06/2025
HB504: https://gc.nh.gov/bill_status/billinfo.aspx?id=536
Title: relative to the state energy policy.
“This bill revises the state energy policy to promote affordable, reliable, diverse, and secure energy resources for the health, safety, and welfare of its citizens.” It changes the emphasis from renewable energy to affordable and reliable.
Ought to Pass with Amendment 2025-0215h: MA RC 204-165 02/20/2025
I submitted testimony wrt HB219, but it applies better to HB504, see https://gc.nh.gov/house/committees/remotetestimony/showtestimony.aspx?&id=391687
Has anyone suggested getting NH out of the RGGI scam? I was a bit surprised that Sununu didn’t push for that. Perhaps our new guv, Kelly Ayotte will.
I’ve heard absolutely nothing about that, somewhat to my surprise, too. Its costs (and savings?) aren’t called out in electric bills, so I assume we spend more time stressing out about the generation side, even the coal plant in Bow even though it’s online only in very hot or cold weather and will be shut down for good fairly soon.
After doing a little further reading:
https://stopthesethings.com/2018/12/13/staggering-cost-offshore-wind-power-25-times-more-expensive-than-coal-gas-nuclear/
25x more for electricity!!! Screw Dominion for even planning such a rape. Force them into bankruptcy.
At risk (or certainty!) of repeating myself, what about the vise (almost spelled that “vice”) of the “Virginia Clean Economy Act?” Making DE go bankrupt seem a tad harsh under the circumstances.
It is called don’t throw good money after bad. Rate payers are going to pay no matter what. They will pay less if these dogs are euthanized.
Not all that long ago TVA rate payers were eating the costs for canceled nuclear projects. Shifting political winds can waste a lot of money.
“the stranded costs and other financial impacts of any cancellation could land entirely on them [Virginians]”
Don’t all costs usually land on taxpayers anyway? Are future costs less than “stranded costs”?
Part of the rationel for this project are the needs of new data centers. Well I have some “new” news here, data centers need 24/7 power so there has to be an new equivalent nuclear or fossil source of power built to backup the wind.
The CVOW was proposed and approved long before the wave of data center energy demand was recognized. The stated purpose of going that route was to save the planet! The unstated but actual purpose was/is 30 years of ROE for the utility, which got a friendly (well greased) Assembly to override the regulatory rules on “reasonable and prudent.”
For VA residents it sounds like a situation of pay me now and pay me more later. Looking at the issue from a distance, I suggest VA residents get on State Hwy#168 and head for the North Carolina line. Or for those that prefer hills, maybe Hwy#15.
For those wanting to stay, I’d vote for cutting the waste and help the wind industry go the way of Enron Corporation.
Here in Washington State, I’m expecting to see Oregon, Washington, and California form a renewable energy alliance targeted at maintaining their mutual wind & solar fantasy dreams in the absence of direct support from the Trump administration, and possibly in the eventual absence of wind & solar subsidies from Congress.
And if such an alliance does come to pass, it will be done with the approval of a majority of voters in each of those three states, the ones who keep green politicians in office year in and year out.
Its not clear how exactly they did the evaluation. The situation comes up all the time with mid-life project reviews of failing projects. Costs have risen, projected returns have moved further out or fallen. Should you cancel or should you go ahead?
What you do not do is anything involving the sunk costs. They are gone, they are irrelevant to the evaluation.
Instead you take all the future cash outlay to finish the project, all the currently projected incoming cash flows, and do a net present value assessment. Compare this with the cash flows if you abandon. Take the one with the best NPV.
People can get confused about subsidies in these situations. The way through is that the only thing that matters is cash flows to or from the entity making the decision.
I suspect that even cutting the cost in half (which is what maybe it will cost to finish) will not help, but you’d have to see the numbers..
Virginia’s green politicians don’t care what their wind and solar dreams will cost. Dominion knows it can make substantial profits on its wind & solar asset base assuming it can manipulate the Virginia legislature and the regulatory agencies in Virginia to defend those profit making opportunities with sufficiently dense rate analysis fog.
As a decisionmaker, I learned long ago to not chase sunk costs. Making current and future uneconomic decisions to hopefully ameliorate the current and future pain of prior uneconomic decisions is a Fool’s Errand.
As required in a rational market, let Dominion’s stockholders “eat” the consequences of past management mistakes. Such management was sufficiently warned over the years of the lack of technical and economic feasibility for offshore wind.
We lost so many things in recent years: fiduciary responsibility, ratepayer fairness, border enforcement, science integrity, and fairness in hiring practices. The rollback needs to include a lot of investigation of nonprofits and lawfare.
Decisions, decisions…
Door #1: Complete project and saddle rate payers with high costs of intermittent energy, while Dominion investors, bankers, suppliers, regulators and politicians, etc. prosper; or
Door #2: Abandon project and saddle rate payers with high costs of stranded ‘asset’, penalties, ‘RECs’, etc., while Dominion, management, investors, bankers, suppliers, regulators and politicians, etc. prosper; or
Door #3: Realize that the entire project was the culmination of a scientific fraud supported by the Left and take the following steps: Cancel the project, fire Dominion’s senior management, BoD and regulators, eliminate any VA requirements for ‘RECs’, place Dominion in Chapter 11, sell-off all renewable ‘assets’ and, finally, bring the company, now called ‘Dominion w/o Wind & Solar’ out of receivership with new management and investors.
I can help here, stop building both wind and solar. Only build generators that can produce energy when it is needed, that can be dialed up or dialed down, that does not kill massive numbers of wildlife, that does not disrupt or endanger the grid, that is long lived and is economical. There is a hell of a lot more to consider here than a few billion dollars.
And so, the root problem appears to be that “the Virginia Clean Economy Act precludes the most logical hydrocarbon alternatives.”
Couldn’t have said it better myself.
A messaging point that would have been missed, following a useful discussion that wouldn’t have happened, had we just signed the letter. (wink) In fact, other than posts here, the letter landed with a thud.