Dominion's Excellent Efficiency Plan Will Lower Rates
Amid a sharp cost-of-living increase this winter, Virginia's largest energy provider—Dominion Energy—brought a significant glimmer of good holiday news for its ratepayers, with relief from energy bills not far over the horizon: Dominion just filed an excellent plan with their regulators at the State Corporation Commission (SCC), to lower ratepayer costs. They'll deliver that cost relief by bringing their A-game to expanding Virginia's most promising resource: energy efficiency.
That’s good news: rather than building or fueling far more expensive power plants, improving efficiency all across Virginia's economy—with better lighting, HVAC, insulation, and energy-drawing appliances—meets our state’s total energy needs in a way that decreases, not increases, monthly electric bills. Efficiency may be a still-untapped resource in Virginia, but it's not a new one everywhere else: nationwide, energy efficiency drove electric use down by nearly 5% in 2010-2015, even as GDP grew. There is far more potential for energy bill reductions here in Virginia, and Dominion's excellent efficiency plan, now before regulators for their approval, puts us directly on that path.
Cost-of living reductions from stronger efficiency here in Virginia will be significant, if Dominion and other utilities continue on this promising path: a recent study indicated monthly electric bills could be slashed by over $15 a month by the end of this decade, under a significant expansion of Dominion’s efficiency programs to most of its customers. And Virginians could certainly use that cost reduction: federal EIA data shows Virginia's statewide rates are higher than every state around us but one; of the 14 southern states, stretching from North Carolina all the way over to Texas, Virginia’s rates are higher than all but two of them (the Palmetto and Yellowhammer states). As our single largest utility, Dominion's good plan to start delivering significant efficiency offerings to its ratepayers can reverse that trend, and usher in a new era of lower rates.
Utility efficiency programs are not just the best bet to offset ratepayer increases to Dominion customers. Southwest Virginia customers of APCo and Kentucky Utilities can benefit from efficiency as well. APCo ratepayers saw cost increases in 2021 alone that future efficiency could defray, including $3.00 a month in increased power plant fuel costs and an $11.50 monthly increase in transmission costs. Far Southwest utility Kentucky Utilities, in particular, could use efficiency to offset coming bill increases, as it recently proposed a whopping $24 per month bill increase.
Bill savings will certainly come to Dominion ratepayers from this year’s proposal. Those useful, tailored programs include measures to increase the efficiency of: lighting in large commercial buildings; energy-intensive data centers and server rooms; small businesses; health care facilities; hotels; and low-income homes.
Just as important, Dominion’s plan also sets forth a visionary, big-picture strategy to unlock even bigger bill savings into the future, in a way they haven’t before. Those long-term plans include (1) unifying Dominion’s currently-scattered programs to have more synergy and ease of adoption; (2) establishing flexibility to expand the efficiency programs that deliver the most savings; (3) moving away from arbitrary and overly-restrictive budget ceilings; (4) better marketing of their programs to increase participation; and (5) proactively identifying those larger policy reforms that are still needed to Virginia’s creaky regulatory regime, to achieve sustained savings growth.
All of these improvements will prove a very welcome development for ratepayers. And that’s all the more reason Richmond lawmakers should get serious in the new year about making efficiency a permanent, predictable, and long-term Virginia resource. In this coming legislative session, lawmakers and Gov.-elect Youngkin can lock in cost-of-living reductions by making major bipartisan progress on efficiency.
Most promising is making permanent and more meaningful Virginia's modest "Energy Efficiency Resource Standard": Virginia law currently sets modest efficiency targets through 2025, and lawmakers should make those targets a permanent resource in Virginia’s energy mix, with specific, meaningful savings targets utilities will hit in every year moving forward. Doing so would make Virginia more competitive by catching up with other states’ much-higher efficiency levels, lowering rates, and putting energy dollars back in Virginians’ pockets.