Dominion fails to meet energy efficiency standard

RICHMOND, Va. – Yesterday, the State Corporation Commission (SCC) ruled that Virginia Electric and Power Company (Dominion) failed to comply with the energy efficiency standards established by the Virginia Clean Economy Act. This year’s case was the first year in which the SCC determined whether Dominion had complied with the standards, evaluating the amount of savings its programs achieved in 2022.

Energy efficiency programs allow participants to do the same activities while using less electricity and can include simple measures like insulating ductwork, sealing windows, and upgrading appliances. These sorts of measures help a participating customer reduce their own energy bill and can reduce costs for all utility customers—including by avoiding the need to build new power plants and infrastructure.

Under the law, Dominion and Appalachian Power must achieve a certain level of energy savings each year. For several years, Dominion has been trying to take credit for a category of savings—called ‘free rider’ savings—that by definition are not achieved by the utility’s programs. These savings occur regardless of the utility’s energy efficiency programs. In this year’s proceeding, Dominion went so far as to request that customers be required to pay the utility a bonus of more than $6 million dollars, a request only made possible by including ‘free rider’ savings.

“The SCC has unequivocally rejected Dominion’s position that the utility should get credit for energy savings it was not responsible for,” said Peter Anderson, Director of State Energy Policy at Appalachian Voices. “Energy efficiency programs are so beneficial and with Dominion already falling short in the first year of compliance, I hope this ruling serves as a wakeup call. Dominion customers deserve better.”

Moreover, Dominion’s failure to comply with the energy efficiency requirements significantly narrows its approval pathway for the proposed gas plant project the utility is pursuing in Chesterfield County. Under the law, the SCC “shall not approve” a carbon-emitting power plant if the utility has not met the energy savings standard, and may only do so if the utility establishes a specific reliability or security threat, and that the power plant is a cheaper solution than other options, including energy efficiency and demand response programs, or energy storage options.

“The law establishes a clear requirement that Dominion maximize cheap, non-polluting energy efficiency programs before pursuing a project like the proposed Chesterfield gas plant,” said Rachel James, staff attorney in SELC’s Virginia office. “They have failed to do that. I hope Dominion rethinks its polluting proposal and starts to listen to the community members who will be most negatively impacted by this harmful project.” The docket number for the case is PUR-2023-00217 and documents from the case can be found on the SCC’s case document system.