A New Sheriff Is in Town: SCC Rejects Dominion's Pricey Plan

Dominion regulators at the State Corporation Commission (SCC) showed full oversight strength today, despite being one commissioner down after one of three commissioners announced his retirement over a year ago: the two-member Commission rejected Dominion's long-term, 15-year proposal on how it plans to meet its customers electricity needs (a.k.a. Dominion's "Integrated Resource Plan" or IRP for short).

The Commission rejected Dominion's IRP for a very good, commonsense reason: Dominion's IRP does not contain a "least-cost" pathway to meet Virginia's energy needs. Without that reliable, least-cost baseline, it is impossible for the SCC to weigh the merits, or lack thereof, of subsequent proposals by Dominion to spend its customers' dollars.  In other words, if you're on a limited budget, you should know the baseline price of milk and bread before you go to the grocery store, so that you can spend your dollars most wisely.  Because Dominion's plan lacked those fundamentals, the SCC sent them back to the drawing board, so that better and clearer investment choices can be made.

In the next 90 days, Dominion must resubmit an improved IRP to the SCC (which by then may be back up to three commissioners, if a third is appointed to the aforementioned empty seat), after Dominion fixes at least these three fundamental flaws: 

1. Including energy efficiency technology improvements: The best possible investment to reduce Dominion customers' increasing bills (and associated pollution) is energy efficiency. Think investing in attic insulation, upgrading lighting from CFLs to LEDS, and swapping out old clunker appliances for new efficient ones, so that we don't have to buy as much electricity or build new power plants. Dominion's IRP lacked information on how meeting the utility's energy efficiency commitments will lower customer consumption and therefore their electricity bills.

2. Inflated demand growth projections: Dominion habitually over-inflates how much power it needs to pump out (and therefore how much it needs to spend) to keep the lights on. This "load forecast" is the foundation of any long-term plan, because it dictates how much supply Dominion will build to meet that projected demand.  In the past, the SCC has had a "honk if you need our permission" approach to letting Dominion build shiny new expensive plants to meet supposedly growing demand. Those days appear to thankfully be over: in the revised IRP due in 90 days, Dominion is no longer allowed to pump up their demand projections in their quest to spend money and increase profit. Instead, Dominion must use a lower, more reasonable and accurate load forecast, which thankfully will be lower cost due to less need to build more power plants.

3. The customer cost to pay for Dominion's proposed Atlantic Coast Pipeline: Dominion is asking for its Virginia customers to underwrite its highly-speculative Atlantic Coast Pipeline venture, even though the pipeline is not destined for the use of those Virginia customers being asked to pay for it. One cost estimate shows a nearly 3 billion dollar increase in Virginian electricity bills, an inconvenient fact Dominion has repeatedly tried to suppress through legal maneuvers (Dominion is apparently unable to instead simply rebut those increased customer costs). The SCC is no longer allowing Dominion to ignore the transportation costs customers will be asked to pay to support Dominion's pipeline. Therefore, assuming Dominion has not called off their Atlantic Coast Pipeline venture in the next 90 days, their corrected IRP should include a more transparent view of how, and how much, their customers are being asked to shell out for that risky venture.

Each of these improvements to Dominion's IRP is good news for Dominion customers, and reflect regulators at the SCC who are now wide awake to the costs increases, or cost reductions, that can be delivered to Virginians as a result of the investment decisions Dominion makes on their behalf.

About the Authors

Walton Shepherd

Virginia Policy Director, Climate & Clean Energy Program

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