April 26, 2024

BLOG: What is an integrated resource plan?

…an expert for Dominion Energy confirmed that three of its plans do not meet the utility’s own stated goal of reaching net zero emissions by 2050 while the other two plans rely on technology that does not currently exist.”

Author: Amy Waters, Clean Virginia Communications Manager

Dozens of Virginians gathered in a State Corporation Commission (SCC) courtroom last fall to hear arguments for and against Dominion Energy’s long-term energy plan, known as an Integrated Resource Plan (IRP). IRPs are critical planning tools designed to provide regulators, policy makers, and other stakeholders with a clear picture of current and future energy demand as well as an assessment of potential costs and impacts associated with different ways of meeting that demand. Experts from a variety of organizations, including Appalachian Voices, Advanced Energy United, Clean Virginia and the Virginia Chapter of the Sierra Club, critiqued the utility’s plan, citing concerns over affordability, environmental impacts and a planning process that largely excluded meaningful stakeholder input.

What is an Integrated Resource Plan?

Every two years, Virginia’s publicly regulated electric utilities submit a plan to regulators at the SCC illustrating how they will meet expected energy demand over the next 15 years. The SCC then conducts a rigorous analysis and hears from a variety of experts before determining whether the plan is “reasonable” and “in the public interest” based on Virginia law. 

Dominion’s plan again fails to meet the mark

The SCC rejected Dominion’s two prior IRPs in 2018 and 2020 due to the utility’s failure to accurately project future energy demand, consider environmental justice impacts and identify a least-cost option. The utility’s latest plan also failed to comply with the Virginia Clean Economy Act (VCEA), requiring Dominion, which provides electricity to two out of three Virginia households, to transition to 100% clean electricity generation by 2045.

Testifying on behalf of Clean Virginia, Dr. Bryndis Woods, who has a doctorate in Environment and Natural Resources from the University of Iceland and is a Senior Researcher at the Applied Economics Clinic, argued Dominion’s latest IRP should again be rejected for failing to comply with state law and for the energy monopolies’ overreliance on costly, unproven technologies.

Failure to comply with state law

Dominion’s 2023 IRP contains five possible options for meeting expected energy demand, all of which fall short of meeting the basic obligations of the VCEA, including requirements for energy efficiency, renewable energy and fossil fuel plant retirements. 

During proceedings, an expert for Dominion Energy confirmed that three of its plans do not meet the utility’s own stated goal of reaching net zero emissions by 2050 while the other two plans rely on technology that does not currently exist.

Dominion’s plans also do not comply with state law that requires the development of a least-cost option for meeting energy demand, instead favoring costly new infrastructure like the gas-fired plant the utility recently proposed in Chesterfield County. 

Failure to consider energy efficiency

Dr. Woods argued even a modest investment in energy efficiency by the utility would meaningfully reduce energy demand, negating the need for new infrastructure while lowering customer bills. Despite these benefits, Dominion has made little effort to reduce demand from large customers like data centers and anticipates virtually zero incremental energy efficiency savings after 2025, indicating the utility does not plan to meet the requirements outlined in the VCEA. 

Flawed data projections

Critics argued the utility’s plans rely on flawed projected load forecasts that do not accurately predict energy demand over the planning period. The majority of Dominion’s projected load forecast, used to justify the utility’s plans for new infrastructure, is based on anticipated data center development. While the 2023 IRP does account for short-term increases in energy demand due to confirmed plans for data center expansion, it does not consider the possibility of data center energy demands changing in the future. According to Dominion, only 10 customers account for more than 80% of data center demand. If even one of those customers changed their plans, it would dramatically alter future energy demand. Accurate demand predictions are critical to ensure utilities do not overbuild at the expense of ratepayers. 

Failure to meaningfully involve stakeholders

In drafting its IRP, the utility did not meaningfully consult with external stakeholders or communities that would be impacted by its plans, including “environmental justice communities,” defined by the Virginia Environmental Justice Act (VEJA) as any low-income community or community of color. According to the VEJA, environmental justice communities should have “meaningful involvement” in the “full cycle of the decision-making process” about proposed activities that will affect health and the environment. 

Additionally, a state law amended earlier this year now requires utilities to “engage the public in a stakeholder review process and provide opportunities for the public to contribute information, input and ideas on the utility’s integrated resource plan, including the plan’s development methodology, modeling inputs, and assumptions, as well as the ability for the public to make relevant inquires, to the utility when formulating its integrated resource plan.” Gathering stakeholder and community input is vital to energy planning and should be incorporated in any future IRP development. 

2023 IRP Consensus

Clean Virginia and many others critiqued Dominion’s 2023 IRP, arguing the SCC should reject the utility’s plans due to its failure to comply with state law, meaningfully incorporate stakeholder input, or to consider least-cost options such as energy efficiency.

In December 2023, the SCC Hearing Examiner, Ann Berkebile, released a statement recommending the Commissioners reject the IRP given that it is neither “reasonable” nor “in the public interest.” Berkebile noted that Dominion included new gas facilities in all their plans without showing they met the requirements the VCEA requires for new gas plants.

Despite this recommendation, the State Corporation Commission closed the case without reaching a consensus.  Former Commissioner, Jimmy Dimitri, brought back in temporarily due to multiple vacancies on the SCC bench, filed a statement indicating that he “would have found that the 2023 Integrated Resources Plan is reasonable and in the public interest.” Sitting Commissioner Jehmal Hudson did not concur, but did not release a statement. As a result, on February 22nd, 2024, the SCC released a statement closing the docket as a result of the Commission not having reached a majority.

What comes next?

Since the closure of the IRP docket and for the first time in over a year, the State Corporation Commission is at full capacity, marking a win for Virginia consumers. Sam Towell and Kelsey Bagot fill the remaining vacancies on the Commission (sworn into office in March and April 2024 respectively), meaning Dominion’s next IRP filing will be reviewed by a fully staffed regulatory body.

Although Dominion did not to conduct a stakeholder engagement process in the development of its 2023 IRP, the utility started the process ahead of its next IRP filing, holding its first stakeholder engagement workshop on March 28, 2024. At the meeting, more than 90 attendees expressed their concerns about data center load forecasting, the critical need for energy efficiency inclusion and reasonable inputs when it comes to solar, battery storage and other clean resources. Stakeholders expect meaningful engagement and for Dominion to incorporate relevant modeling input suggestions in their planning so that its next IRP reflects the goals and policies of Virginia.

Dominion’s next IRP filing is due in October of 2024.