By Robert Walton, Utility Dive
Dive Brief:
Virginia regulators on Thursday accepted Dominion Energy’s revised integrated resource plan, but warned that it likely understates the cost of complying with state mandates and does not include coal ash cleanup expenses.
Dive Insight:
It’s been just over six months since the SCC sent Dominion back to the drawing board — in a first for the commission, regulators in December rejected the utility’s 15 year-plan. Now, they say the utility’s plan meets the state’s minimum filing requirement, but also “may significantly understate the costs facing Dominion’s customers.”
Dominion’s IRP includes a least-cost plan as a benchmark for providing reliable electric supply, while also showing the additional costs of Virginia legislative mandates passed in 2018.
Senate Bill 966 mandates will create more than $6 billion in extra costs for customers above the least-cost plan, not including lifetime financing costs, regulators said. And the capital spending plans Dominion presented to Wall Street analysts earlier this year included approximately $12.1 billion in capital investment, “to be paid for by Virginia customers, the majority of which is eligible to be recovered through separate bill riders called rate adjustment clauses,” the SCC said in a statement.
Regulators acknowledged that Dominion believes monthly bill impacts will be mitigated by lower fuel costs and other factors. But they also sad the $29.37 monthly bill increase “does not include the monthly bill impact of several billion dollars of costs for the 2019 coal ash removal legislation that will be recovered from customers.”
“In sum, we approve Dominion’s IRP as legally sufficient, and we recognize the appropriateness of spending on capital projects when need is proven by factual evidence in actual cases,” the commission wrote. “We do not, however, express approval in this Final Order of the magnitude or specifics of Dominion’s future spending plans, the costs of which will significantly impact millions of residential and business customers in the monthly bills they must pay for power.”
A Dominion spokesperson said the $29 figure “is only part of the story.”
An SCC staff analysis shows Dominion projects bill increases could be offset by $14.65 **a month**, driven by a $3.6 billion decrease to its Virginia jurisdictional rate base, and a decrease in projected fuel costs driven by natural gas and renewable generation.
“We think today’s ruling affirms our commitment to provide reliable, affordable, clean energy for our customers. That’s what we’re focused on,” Dominion spokesperson Audrey Cannon told Utility Dive.
Cannon said the utility will file a 2019 Integrated Resource Plan Update, and take the SCC’s comments into consideration.
That update will be due in September, and must give more detailed cost estimates of battery storage, solar power purchase agreements, gas transportation costs, Regional Greenhouse Gas Initiative compliance and other issues.
Virginia utilities must file a new IRP every three years, which can include updates during that period; the schedule calls for Dominion’s next plan to be filed in May 2020.
Clean Virginia, an environmental and customer advocacy group, was highly critical of the SCC’s decision to accept the plan.
The IRP “sets a new dismal standard for Virginia’s energy market and worsens conditions for anyone in the Commonwealth who is not a Dominion executive,” Clean Virginia Executive Director Brennan Gilmore said in a statement.
“Thanks to the close relationship between Dominion Energy and our General Assembly, Virginians will once again be forced to shoulder the full cost of Dominion’s projects and, as captive consumers, have no say in the matter,” Gilmore said.
The Sierra Club focused on other aspects of Dominion’s plan, noting that it shows the utility’s Chesterfield and Clover coal plants should be replaced by 2025.
“We’re pleased to see the SCC requiring that Dominion do better analysis of clean energy options in future plans,” Sierra Club Virginia Chapter Director Kate Addleson said in a statement. “It’s time for Dominion to put a real plan forward to replace expensive, dirty fuels with clean energy.”