Dominion's "Green Tariff" Will Increase Coal & Wood Burning

Virginia’s largest monopoly utility—Dominion—is blowing a significant opportunity to do right by Virginians and to do right by the environment. 

Last week, the monopoly’s regulators at the State Corporation Commission (SCC) set a timeline for approving—or hopefully disapproving—Dominion’s proposal to provide clean renewable energy to its customers who—like me, and perhaps you— would prefer to purchase 100% clean solar & wind energy from our monopoly power provider. That way, when I flip on my lights, cook or refrigerate my food, or heat or cool my home, I know the electricity I use comes from clean, pollution-free solar or wind. There is growing customer demand in Virginia to take that small but important step as energy consumers, to reduce pollution, create clean energy jobs, and alleviate climate change, and a great way to do that is through a "green tariff."

So, what could go wrong with Virginians’ good intentions to use clean, green electricity?

Rather than do right by their clean-energy centric customers, Dominion is blowing it. Dominion proposes to direct most of its “green tariff” to prop up four uneconomic, carbon-belching power plants, three of which are powered exclusively by burning wood and the fourth of which is powered by…coal. 

Yes, you read that right: rather than harness their customers’ good will and desire to do the right thing by delivering them more 21st century solar & wind, Dominion wants to drag us back to the 19th and 20th centuries by subsidizing their carbon intensive burning of coal and wood.

THROWING GOOD MONEY AFTER BAD

Dominion’s blown opportunity is not just bad for the air, it’s also bad economics. If the SCC approves Dominion’s proposal as submitted, the dollars of clean-minded customers would unwittingly prop up four uneconomic wood and coal burning plants that belch millions of tons of carbon pollution each year. This bailout of three of Dominion's wood-burning clunkers is particularly egregious: several years ago, Dominion asked for permission to invest millions in customer dollars in these wood-burning, carbon intensive power plants. Even with already-existing subsidies, Dominion's bet on 19th century technology did not pay off, and those plants have only become increasingly uneconomic and harder to run without significant subsidy.

The fourth plant Dominion seeks to subsidize through their misleadingly-named “green tariff,” the nearly $2 billion Virginia City Hybrid Energy Center, burns coal and wood, and is also proving to be an unwise investment, as it only runs a little more than half the time. While remaining turned off half the time is good news for the air we breathe, throwing customers’ good money after bad on this kind of failing, dirty power plant is backwards and not in Dominion customers' interests.

If that backwards investment sounded bad enough, there’s more bad news for the environment and Virginians’ pocketbooks. If the SCC approves Dominion’s proposal to prop up its carbon polluting plants, customers like me who want to purchase truly clean solar & wind energy will be forever blocked from getting real renewable energy from any other free-market supplier: a pro-Dominion statutory provision prohibits any competing clean energy provider from entering Dominion’s monopoly territory, if the SCC has approved a tariff like the one Dominion just proposed.

THE WRONG PROPOSAL AT THE WORST POSSIBLE TIME

Dominion’s misguided, greenwashing proposal is poorly timed: as both Dominion energy costs relentlessly increase, along with increasing carbon pollution and therefore worsened climate change, trust in Dominion is eroding. This tariff to prop up dirty energy plants calls into doubt Dominion’s sincerity in addressing climate change. This attempt to put Dominion's Wall Street interests over those of its everyday customers back home in Virginia also comes on the heels of other high-profile attempts to rely on Virginians as a cash cow to boost Dominion's Wall Street profile. 

Last month, Dominion acknowledged that it’s been touting plans to Wall Street investors that rely on its captive Virginia customers to underwrite dramatic Dominion profit growth. That Wall Street-focused plan could cost the average Dominion customer in Virginia over $350 annually, just a few years from now.

Dominion also recently balked on what all thought was a good-faith commitment to deliver more energy efficiency, the only resource that is guaranteed to lower customers’ bills and decrease pollution.  While Dominion backed down on reneging on its pro-customer commitment to increase energy efficiency, the episode further eroded trust that Dominion is looking out for its captive customers' best interests.

Against that unsightly backdrop, Dominion’s current "green tariff" proposal, to collect additional customer dollars to cover Dominion’s bad investments in carbon-polluting power plants that burn coal and wood, will only worsen the public’s trust in the electric monopoly.

THE GOOD NEWS ON HOW DOMINION (OR THE SCC) CAN GET THIS ONE RIGHT

Dominion can still do the right thing, which is quite simple: ditch the subsidies to coal and wood burning plants, to make its "green tariff" truly green, and not so misleading. By directing the entire program to solar and wind, well-meaning, motivated customers won’t be greenwashed into worsening the environment and covering for Dominion’s bad investments in inefficient and dirty wood and coal burning power plants.

And if Dominion isn’t willing to remove its coal and wood burning subsidy, the SCC should do it for them. The SCC has broad discretion to look out for the best interests of Virginians who are captive customers of a monopoly like Dominion. Rather than throw good money after bad, the SCC must ensure that Dominion is truly innovative and low-cost, by investing only in truly renewable and low cost energy through their green tariff.

Only then can Dominion get back on track with cleaner air, lower bills, and increasing customer trust that they'll do the right thing.

About the Authors

Walton Shepherd

Virginia Policy Director, Climate & Clean Energy Program

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