Name: Despite Clean Economy Act, Dominion forecasts a strong role for natural gas in Virginia - Virginia Mercury
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Despite Clean Economy Act, Dominion forecasts a strong role for natural gas in Virginia - Virginia Mercury

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0:01News StoryDominion Energy, Virginia’s largest electric utility and a major U.S. energy company, is headquartered in Richmond. (Ned Oliver/Virginia Mercury)The Integrated Resource Plan released by Dominion last Friday incorporates many of the commitments fervently sought by clean energy advocates, including a roadmap for adding 16 to 19 gigawatts of new solar, five gigawatts of offshore wind and 2.7 gigawatts of energy storage over the next 15 years, with just under a gigawatt of natural gas energy as a “placeholder” to remedy potential reliability problems.A press release issued by the company along with its IRP filing emphasized that “natural-gas fired generation will continue to play a critical, low emission role in our system for decades to come.”McClellan and Sullivan said Dominion’s IRP “underutilizes energy efficiency and underestimates its cost effectiveness,” contributing to an overestimate of the burden on Virginia ratepayers.“Energy efficiency is also the largest source of jobs in the clean energy sector. By underinvesting in this clean, affordable resource, Dominion is not only needlessly inflating costs, it is shortchanging Virginia’s economy and workers. Rejecting energy efficiency efforts will result in ratepayers getting higher bills without the intended climate or economic development benefits the VCEA intended to achieve,” they wrote.Xby Sarah Vogelsong, May 8, 2020by Sarah Vogelsong, May 8, 2020Despite highly publicized commitments by political leaders and Dominion Energy to transitioning the state off carbon sources in favor of renewable forms of energy, the state’s largest electric utility is continuing to bank heavily on natural gas, a long-range plan and statements to investors and shareholders reveal.The continued allegiance to the fuel, expressed in Dominion’s forward-looking Integrated Resource Plan released May 1 and reiterated in investor and shareholder calls this week, sparked a sharp response from the two Democratic legislators who spearheaded Virginia’s historic Clean Economy Act this past session.The utility’s long-range plan, said a joint statement from Sen. Jennifer McClellan of Richmond and Del. Rip Sullivan of Fairfax, “is tantamount to quitting the game before the first pitch is thrown.”A legislatively mandated but not binding forward look, the IRP sketches out the demand the utility expects to fulfill over the next 15 to 25 years and how it anticipates meeting that demand.&nbsp;This year’s plan was the first to reflect the ambitious climate change goals of both Gov. Ralph Northam and the new Democratic majority that took control of both houses of the General Assembly for the first time in a generation this winter.Last September, directing that Virginia’s electric grid become carbon-free by 2050. And this March, after months of negotiation with environmental groups, the renewables industry and Virginia’s two major electric monopolies, Dominion and Appalachian Power Company, , which upped Northam’s ante to chart a course for the state’s grid to become carbon-free by 2045.Among the provisions of the highly technical law are mandated targets for solar, wind and energy storage development, as well as binding standards for utilities’ renewable generation portfolios and energy efficiency provisions.The Integrated Resource Plan released by Dominion last Friday incorporates many of the commitments fervently sought by clean energy advocates, including a roadmap for adding 16 to 19 gigawatts of new solar, five gigawatts of offshore wind and 2.7 gigawatts of energy storage over the next 15 years, with just under a gigawatt of natural gas energy as a “placeholder” to remedy potential reliability problems.But while Dominion offered four possible paths forward for regulators to review, the IRP it released Friday ultimately recommended approval of its natural gas-heavy Plan B, which&nbsp;recommends retaining almost 10 gigawatts of natural gas as part of the utility’s portfolio “to address future system reliability, stability and energy independence issues.”“In order to preserve the option to address probable system reliability issues resulting from the addition of significant renewable energy resources and the retirement of coal-fired facilities in the near term, the Company is evaluating sites and equipment for the construction of gas-fired [combustion turbine] units,” the IRP said.A press release issued by the company along with its IRP filing emphasized that “natural-gas fired generation will continue to play a critical, low emission role in our system for decades to come.”Two alternative plans outlined by the utility would retire all carbon generation by 2045 but, Dominion warned, would “severely challenge the ability of the transmission system to meet customers’ reliability expectations” and would require the company to import electricity from outside the state, “in part from CO2-emitting generation.” (The fourth plan, which outlines a scenario that ignores existing laws and regulations, serves only as a baseline and is not “realistic,” the utility noted.)That importation, according to the IRP, could necessitate some $8.4 billion in transmission upgrades — and maybe more.But even Dominion’s preferred course will come with a hefty price tag: the utility projected customer bills will rise by about $46 between now and 2030, of which about $19 is attributed to legislative mandates from the 2020 session such as the Clean Economy Act.Exactly how much of a financial burden the VCEA would exact upon ratepayers’ was a hotly contested issue this winter. Supporters including the Northam administration argued that due to factors such as fuel savings and energy efficiency, customers could see their bills slightly fall or only rise marginally as a result of the law and other legislation joining Virginia with the Regional Greenhouse Gas Initiative’s cap-and-trade carbon market.Republicans, however, fretted that the new mandates would push captive ratepayers’ bills ever higher, a fear bolstered by estimates from the State Corporation Commission that they could increase average monthly costs by almost $28 by 2030.&nbsp;McClellan and Sullivan said Dominion’s IRP “underutilizes energy efficiency and underestimates its cost effectiveness,” contributing to an overestimate of the burden on Virginia ratepayers.“Energy efficiency is also the largest source of jobs in the clean energy sector. By underinvesting in this clean, affordable resource, Dominion is not only needlessly inflating costs, it is shortchanging Virginia’s economy and workers. Rejecting energy efficiency efforts will result in ratepayers getting higher bills without the intended climate or economic development benefits the VCEA intended to achieve,” they wrote.Challenge accepted?In the wake of the IRP’s unveiling May 1, members of the coalition behind the VCEA reacted to Dominion’s recommendations with dismay.“In September 2019, Dominion responded to Governor Northam’s 100 percent clean energy by 2050 executive order with a simple statement: ‘Challenge accepted,’” McClellan and Sullivan wrote in their Thursday joint statement. “Dominion was subsequently an active participant in the countless hours of detailed discussions about this bill. It knew all about the benchmarks the VCEA requires. As the legislators who wrote Governor Northam’s goals into law, we urge Dominion to follow through on its previous public commitment — not attempt to run from it.”Will Cleveland, an attorney with the Southern Environmental Law Center who was closely involved with VCEA negotiations, described the IRP’s conclusions as disappointing.“The Clean Economy Act at its heart is a climate bill. It’s supposed to be addressing climate change,” he said. “And Dominion’s preferred plan to do that keeps almost 10,000 megawatts of gas generation online through 2045. That is an incredible implementation of a climate bill.”Harrison Wallace, Virginia director of the Chesapeake Climate Action Network, another party that helped shape the VCEA, said the prospect of needing to import carbon-fueled power decades from now was unlikely.“Dominion said they could do this,” he said. “They weren’t planning on passing a bill like the Clean Economy Act in October of 2019. The politics changed and they adjusted their business model accordingly, but they said they could do this.”Dominion did not respond to a list of questions about the IRP and its compatibility with the Clean Economy Act.In a Tuesday call with investors and at the annual shareholders meeting held Wednesday, however, company leaders also reiterated the need for continued reliance on natural gas, and particularly their ongoing commitment to the controversial Atlantic Coast Pipeline.&nbsp;“We are going to lead the nation in renewable energy in our Virginia electric service territory,” Dominion CEO, chairman and president Tom Farrell told shareholders May 6, according to a recording provided to the Mercury by a shareholder. “We look forward to embracing that change, but with today’s technology for the foreseeable future, natural gas infrastructure will be necessary to ensure our core mission.”&nbsp;“Now, if those technologies change, and hopefully they will over the decades to come … then we will be able to transition away from that, from natural gas as a feedstock for electric power,” he added. “But that is not a realistic request for today.”Farrell also reaffirmed the importance of the Atlantic Coast Pipeline in a first quarter investors’ call May 5, asserting that the $8 billion project will go forward as planned despite the loss of eight permits and .&nbsp;The revocation of one such permit, from the U.S. Forest Service, is , which is expected to issue a ruling on the case later this spring.&nbsp;“We remain confident in the successful completion of the project,” Farrell said on the May 5 call. “Customers need this infrastructure now more than ever.”Dominion’s IRP will now begin regulatory review by the State Corporation Commission, during which case participants and judges will argue the merits of the company’s assumptions and conclusions.is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: . Follow Virginia Mercury on and .Copy to clipboard1RepublishOur stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

0:01News StoryDominion Energy, Virginia’s largest electric utility and a major U.S. energy company, is headquartered in Richmond. (Ned Oliver/Virginia Mercury)The Integrated Resource Plan released by Dominion last Friday incorporates many of the commitments fervently sought by clean energy advocates, including a roadmap for adding 16 to 19 gigawatts of new solar, five gigawatts of offshore wind and 2.7 gigawatts of energy storage over the next 15 years, with just under a gigawatt of natural gas energy as a “placeholder” to remedy potential reliability problems.A press release issued by the...

Despite Clean Economy Act, Dominion forecasts a strong role for natural gas in Virginia - Virginia Mercury

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