Dominion Pink Slip Methodology

The Dominion “Pink Slip” is an attempt to estimate the amount of construction/installation jobs (temporary) and ongoing operations jobs (permanent) that will be lost if current policy and practices at regulated energy utilities like Dominion Energy and Appalachian Power Company are continued from now until 2028. The assumptions in this model are based on actual, demonstrated practices at Virginia’s utilities, which are often at ends with their stated goals or promises to lawmakers. In other words, this model goes by actual results achieved, not self-reported “projected” goals.

In calculating jobs figures, we identify four key sectors of potential clean energy and efficiency job growth in Virginia. While these sectors do not represent the entirety of growth sectors affected by utility and regulatory policy, they are the most significant. Just as important, we have reliable data on job creation figures to have confidence in our estimates. We then compare those job creation figures to a reasonable base-case scenario to determine how many jobs are being “lost” by current Virginia utility practices and policy.

Our four key job sectors include:

  • Photovoltaic (PV) Solar Production
  • Offshore Wind Production
  • Onshore Wind Production
  • Energy Efficiency Improvements

In general, we use the National Renewable Energy Lab’s (NREL) recommended or referenced tools for creating our estimates, most notably the economic forecasting model know as Jobs and Economic Development Impact (JEDI).

Solar Jobs Methodologywe use the NREL’s PV JEDI model to assume that an additional 9,365 MW of residential and utility-scale PV solar would be built by 2028 compared to a base-case scenario. That is the amount of additional capacity it would take to reach 10,000 MW of PV solar in Virginia, or roughly 7% of Virginia’s total electricity production . In 2017, Virginia only had 635 MW of PV solar capacity, compared to neighboring North Carolina, which had nearly 4,500 MW of PV solar capacity, and is projected to clear 10,000 MW by 2023. Thus, we believe an additional 9,365 MW of PV solar constructed in Virginia by 2028 to be a reasonable baseline for comparison, and one that is still obtainable simply by loosening restrictions on solar production, allowing market demand to drive private investment, and holding utilities to promises they’ve made in the past on utility-scale solar production.

For simplification purposes, we assume the following costs and sizes for residential, commercial, and utility scale PV (see below). In real life, one should expect a much wider range of project sizes and outputs (and likely cheaper costs).

Offshore Wind Jobs Methodologywe use the NREL’s 2015 Offshore Wind JEDI analysis to assume that an additional 2,000 MW of offshore wind power capacity would be built, as envisioned in Governor Northam’s 2018 Energy Plan. Dominion Energy is currently developing one single project that should meet this goal, but with no legal requirement and incentive to simply sit on assets like leased offshore territory, we cannot assume this will necessarily be completed by 2028 (as envisioned in the Governor’s plan). We use NREL’s median job creation projections in their 2015 report (taken from the median estimate of job creation numbers for the Southeast region as outlined on page IV in NREL’s analysis) for our base-case scenario. These jobs numbers are likely optimistic, but NREL’s analysts consistently argue that the Southeast region (particularly with the Port of Virginia) would see outsized jobs gain relative to other areas, as much of the induced activity from construction and manufacturing would stay within the area.

Onshore Wind Jobs Methodologywe use the NREL’s JEDI model to assume that an additional 179 MW of onshore wind power capacity would be built by 2028. This would be a very conservative addition to Virginia’s energy portfolio, as it represents only 10% of the onshore wind potential identified in Governor Northam’s 2018 Energy Plan. There is less than 1 MW in onshore wind currently operating in Virginia, making the base-case scenario tantamount to starting nearly at zero. For simplification purposes, we assume onshore wind projects will be 1 MW on average, but it’s worth noting that planned projects in Virginia are slated to be considerably larger, according to the Governor’s Energy Plan.

Energy Efficiency Jobs Methodologywe use the American Council for an Energy Efficient Economy’s (ACEEE) estimate of 2.8 cents per kWh in obtaining the 10% efficiency and conservation goal that was promised in Virginia’s first Energy Plan in 2007. That plan had a target year of 2022, which Virginia is projected to miss by a large margin. Dominion and APCO remain very far away from achieving their share of this goal, even with generous projections. Notably,  notably hasn’t even achieved a 1% total efficiency goal, according to DMME’s energy efficiency roadmap report. DMME’s report recommends a benchmark of 15,800 GWh (note that figure is in gigawatt hours) of efficiency gains, which would in our scenario is achieved in by reducing energy consumption through efficiency cumulatively every year in increasing increments of  .25% by 2028. In other words, in 2019, Virginia would reduce energy consumption by .25%, .5% in 2020, .75% in 2021, and on until we reach 2% in the year 2026, with every year from then on reducing energy consumption by 2%. The goal would then be hit around 2028-2029.

We estimate that it would cost roughly $1.7 billion dollars (or around $170 million a year) to achieve this goal, with around 60,000 GWH in efficiency gains needed over those ten years. We then project job creation figures based on Pacific Northwest National Lab’s Employment Impact Analysis, which cites 9.29 installation jobs and 3.99 ongoing operations jobs for every $1 million spent on energy efficiency. The resulting figure is a very conservative estimate, as these are jobs on net, meaning that these jobs figures deduct the opportunity costs of that $1.7 billion being spent elsewhere, as well as leaving out jobs created by spending from lowered energy bills as a result of less energy usage.

Results: As seen below, we estimate that Virginia will lose out on a little more than 223,000 total jobs by 2028 due to current utility policy and actions. These estimates are broken down by temporary and permanent jobs to reflect that certain industries employ many more people in the construction phase, while other sectors create relatively more jobs in the ongoing operations phase. Again, we believe this to be a conservative estimate given our assumptions, the sectors we limited our analysis to, and the job creation numbers seen in other states with a more competitive regulatory environment.

For results broken down by district, we assume the job creations numbers will be spread around evenly throughout Virginia, except for offshore wind jobs, which we assume will go to coastal and near-coastal districts. We will be modeling more complex, district-by-district numbers in the future to more narrowly tailor job creation numbers.