News | February 25, 2019

Virginia regulators doing more to look out for electric customers

Year after year SELC attorneys have been in front of the Virginia State Corporation Commission (SCC), demonstrating that Dominion Energy submits big spending plans for energy infrastructure without fully considering the actual demand for a project, or how consumers will benefit from these significant expenditures — and the SCC has begun to take note. For instance, over the last few years, regional grid operators have projected flat or declining energy demand largely thanks to efficiencies, yet Dominion continues to project steady and significant increases in electric demand. Those assumed increases provide justification for building projects like the Atlantic Coast Pipeline.

Late last year, for the first time ever, the SCC rejected Dominion’s long-range plan, known as an Integrated Resource Plan. The SCC ordered Dominion to refile the plan to correct the significant errors and shortcomings, including the fact that Dominion’s long-term forecasts for energy needs were unrealistically high and it had failed to properly account for energy efficiency programs.

Then, in mid-January, the SCC rejected most of Dominion’s $6 billion plan that purported to improve and modernize the power grid. As the SCC ruled, Dominion had failed to establish that its customers would sufficiently benefit from the utility’s laundry list of grid expenditures. In reaching this conclusion, the SCC quoted SELC’s expert, explaining that, “without a well-reasoned plan, this expensive equipment could be under-utilized and provide little to no benefit to customers and the utility.”

“The commission recognized that Dominion was essentially asking to spend hundreds of millions of customer dollars on various projects, without a clear plan to ensure customers would actually realize any benefits,” said SELC attorney Nate Benforado. “Spending money first and hoping it works out is not prudent planning.”

The Consumer Counsel of the Office of Attorney General also weighed in and faulted the plan as “significantly lacking in detail.”

Updating our power grid is important. Customers served by Dominion need a flexible delivery system for their electric power that can ensure reliable service, better integrate renewable energy like rooftop solar, and enable customers to make smart decisions about energy use. But, if billions of dollars are going to be spent, it’s important to ensure they are spent wisely and in accordance with a clear plan that unlocks the benefits of a modern, smart grid for customers.

Dominion shareholders are guaranteed a minimum return on their infrastructure investments — which incentivizes the utility to rush into spending money on things like modernization, knowing captive customers will foot the bill, however unwise or ineffective the project may be.

Until those incentives are changed, the SCC has an important role to play in fulfilling its duty to look out for utility consumers.