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Dominion’s unique ownership model causes increased risk for customers
FOR IMMEDIATE RELEASE
Cassady Craighill, Clean Virginia Deputy Director
[email protected], 828-817-3328
September 21, 2022
Richmond — In a legal response filed yesterday with the State Corporation Commission (SCC), energy reform organization Clean Virginia defended the regulatory agency’s requirement of a performance standard, a consumer protection measure for Dominion Energy’s offshore wind project, which would be one of the largest energy projects in Virginia’s history. Dominion’s 100% utility-owned model places essentially all of the financial risk on customers, making the performance standard the “most significant consumer protection adopted by the Commission”, according to Clean Virginia’s filing.
In its original testimony to the SCC earlier this year in support of the project, Clean Virginia recognized the wind project’s critical contribution to Virginia’s clean energy transition, and requested consumer protection and quality measures including an independent monitor, a cost cap, and an evaluation of alternative ownership models, which the regulatory agency did not adopt.
“Dominion Energy’s utility-owned model for offshore wind guarantees record profits at no risk for its shareholders. All other states developing offshore wind have adopted models that reduce risks to customers,” said Laura Gonzalez, Clean Virginia’s Energy Policy Manager. “It is the regulator’s job to balance monopoly profit motives by adopting common and reasonable standards that will protect Virginians.”
In a petition for reconsideration filed last month, Dominion, Virginia’s largest utility monopoly, requested that the SCC reconsider the performance standard, a common provision that requires the company and its shareholders to take on the financial obligation to provide credits to customers for replacement energy costs when the project does not meet the output levels that Dominion defended in its regulatory application. Dominion customers will cover 100% of the project’s development and operations costs, paying an estimated $21.5 billion over the project’s 30-year lifespan, which includes Dominion’s guaranteed rate of return, currently estimated to be $7.22 billion.
In its filed response to Dominion’s appeal, Clean Virginia argues that:
- The Commission’s Performance Standard is lawful, reasonable, and consistent with precedent. In fact, Dominion Energy itself has proposed similar standards for some of its solar facilities, and utility commissions in multiple states have adopted similar performance requirements for large-scale wind projects.
- The Company overstates the potential financial harm to shareholders if the performance standard is triggered in some future year. As the largest capital investment in Dominion’s history, the offshore wind project will also be one of the most profitable, rewarding shareholders with an estimated $7.22 billion in guaranteed profits. If ever triggered, the performance standard will likely have a limited financial impact on Dominion’s bottom line.
Dominion has until September 29 to file a reply to the pleadings filed yesterday.
Clean Virginia is a 501(c)4 independent advocacy organization with an associated Political Action Committee, Clean Virginia Fund. Clean Virginia works to fight corruption in Virginia politics in order to promote clean energy, a robust, competitive economy, and community control over our energy policy. We are motivated by the core belief that our democracy should serve everyday Virginians over special interests.