Tag Archives: Dominion Resources

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Finally, utility-scale solar for Virginia?

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111022-N-OH262-322After a solar buying spree in other states, Dominion Power is at last taking a look at the possibility of building utility-scale solar in Virginia.

As reported in the Richmond Times-Dispatch, Dominion Resources, the parent company of Dominion Virginia Power, is considering building 220 megawatts of solar projects in Virginia, starting in 2017. The plan would involve five 40-megawatt “greenfield” projects, plus 20 megawatts located at existing power stations. (A greenfield is an area that is not already developed. So the large projects would be on former farmland, say, not closed landfills or old industrial sites.)

The company’s recent solar buys in California, Connecticut, Indiana, Georgia and Tennessee have all involved the unregulated, merchant side of Dominion Resources. But in this case, the plan is for Dominion Virginia Power to own the Virginia projects and sell the electricity to its customers here in the Commonwealth. This would require approval of the State Corporation Commission—which, as we know, is no friend to renewable energy.

A little more digging confirmed that Dominion plans to sell the solar energy to the whole rate base, rather than, say, to participants in the voluntary Green Power Program. How would they get that past the SCC? That remains unclear, but they know keeping the cost down will be key. Right now they’re looking at all the options to make it work. The company is still at the conceptual stage, is still looking for good sites of 100 acres and up, and hasn’t even made a decision to proceed.

So we should probably hold our excitement in check for now. After all, Dominion has had wind farms in Virginia “under development” for the past several years, with nary a turbine in sight.

Solar does have a few advantages over wind, though, from a utility perspective. For one, it produces power during the day, when demand is higher, while onshore wind tends to blow more at night. (Offshore wind, on the other hand, picks up in the late afternoon and evening, right at peak demand time.) And unlike wind farms in the Midwest and Great Plains, where turbines coexist peacefully with cows and cornfields, turbines in the mountains of the east have generated opposition from people concerned about impacts on forests and viewsheds. You find some curmudgeons who think solar panels are ugly, but they aren’t trying to block them wholesale at the county level.

With the sharp drop in solar costs over the last few years, large-scale solar has been looking increasingly attractive to utilities that want to beef up their renewable energy portfolios. As we learned recently, Dominion’s got a long way to go before it competes with even an average utility elsewhere. That puts it in a poor position to respond to the rapid changes heading our way. These include not just growing public demand for wind and solar and new regulatory constraints on carbon emissions, but also the much-discussed upending of the traditional utility model that depends on a captive customer base and large centralized generating plants running baseload power. Distributed generation and batteries increasingly offer customers a way to untether themselves from the grid, while wind and solar together are pushing grid operators towards a more nimble approach to meeting demand—one in which baseload is no longer a virtue.

Dominion and its fossil fuel and nuclear allies are fighting hard against the tide, but in the end, Dominion will do whatever it takes to keep making money. And right now, the smart money is on solar.

None of this means we should expect Dominion to become more friendly to pro-solar legislation that will “let our customers compete with us,” as one Dominion Vice President put it. But it does suggest an opening for legislation that would promote utility-owned solar, perhaps through the RPS or stand-alone bills.

Legislators shouldn’t view utility-owned solar as an alternative to customer-owned solar; we need both. And if being grid-tied means being denied the right to affordable solar energy, we will see customers begin to abandon the grid. But those aren’t arguments against utility-scale solar, either. Big projects like the ones Dominion proposes are critical to helping us catch up to other states and reduce our carbon emissions.

So full speed ahead, Dominion! We’re all waiting.

 

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Report confirms Dominion’s worst-place standing on clean energy

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photo courtesy of the Sierra Club

photo courtesy of the Sierra Club

A new report from the non-profit group Ceres shows Dominion Resources, the parent of Dominion Virginia Power, winning last place among investor-owned utilities on a nationwide ranking of renewable energy sales and energy efficiency savings.

That’s left Virginians wondering how a company that talks so big succeeds in doing so little. And more importantly, what would it take for Dominion to rank even among the average?

Dominion came in 30th out of 32 in renewable energy sales, at 0.52%. On energy efficiency, it achieved 31st out of 32 on savings measured cumulatively (0.41%), and 32nd out of 32 measured on an incremental annual level (at 0.03%). Together these put our team in last place overall—a notable achievement for a utility that trumpets its solar investments and carbon-cutting progress.

To show just how awful Dominion’s performance is, the top five finishers achieved between 16.67% and 21.08% on renewable energy sales, 10.62-17.18% on cumulative annual energy efficiency, and 1.46-1.77% on incremental annual energy efficiency. National averages were 5.29% for renewable energy sales, 4.96% for cumulative efficiency savings, and 0.73% for incremental annual efficiency savings. Rankings were based on 2012 numbers, the latest year for which data were available.

In case you’re wondering, American Electric Power, the parent company of Appalachian Power Co., earned 24th place for renewable energy, with 2.65% of sales from renewables—a number only half the national average and one we might have called pathetic if it weren’t five times higher than Dominion’s. AEP’s efficiency rankings also placed it firmly in the bottom half of utilities, running 23d and 20th for cumulative and incremental efficiency savings, respectively. However, AEP earned its own laurels recently as the nation’s largest emitter of carbon pollution from power plants due to its coal-centric portfolio.

A study of the rankings reveals that Dominion’s major competition for the title of absolute worst came from other utilities based in the South. The critic’s favorite, Southern Company, nabbed 31st place on the renewable energy sales measure, but failed to make the bottom five on one of the efficiency rankings. Another southeastern utility, SCANA, achieved rock bottom on renewable energy; but like Southern, its marginally better performance on efficiency disqualified it from an overall last-place ranking.

Why do utilities in the South do so poorly? Probably because they can. Most of the poor performers have monopoly control over their territories and are powerful players in their state legislatures. Lacking in competition, they do what’s best for themselves. Possessing political power, they are able to keep it that way.

Of course, they still have to contend with public opinion and the occasional legislator who gets out of line. For that it helps to have a well-worn narrative handy, like the one about how expensive clean energy is. Dominion has found that Virginia’s leaders fall for that one readily, even though it’s false.

And so, when asked about the Ceres report, Dominion responded that Virginia wouldn’t want to be like the states that have high-performing utilities. Dominion spokesman Dan Genest told the Daily Press, “The three states — California, Connecticut and Massachusetts — the report mentions as being leaders in those categories also have among the highest electric rates in the nation. Typical residential customer monthly bills are $228.85, $206.07 and $191.04, respectively. Dominion Virginia Power customers pay $112.45.”

This would be an excellent point, if it were true. Alas, Genest’s numbers appear to be a product of a fevered imagination. According to recent data reported in the Washington Post, California’s average monthly electric bill is only $87.91, Connecticut’s comes in at $126.75, and Massachusetts’ at $93.53, while Virginia’s is $123.72. (Virginia’s numbers presumably reflect an average of bills paid by customers statewide, probably accounting for the higher figure than Genest cites for Dominion’s “typical” customer.)

That’s right: in spite of higher rates, Californians pay way less for electricity than Virginians do, in part because they have achieved high levels of energy efficiency. If you do that, you can afford to invest in more renewable energy without people’s bills going up.

This is such a great idea that it seems like it would be worth trying it here. Remarkably, this is precisely the strategy that environmental groups have been urging for years in their conversations with legislators and their filings at the State Corporation Commission. With the pressure on from global warming and the EPA’s Clean Power Plan, this would seem to be a great opportunity to save money, cut carbon, and move us into the 21st century.

So go for it, Dominion. Aspire to lead! Or failing that, at least shoot for average.

 

 

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Where ethics and utility profits intersect, a stain spreads across the “Virginia Way”

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Dominion buildingThe Virginia General Assembly has punted on ethics reform, preparing to pass watered-down legislation that does very nearly nothing. At the same time, legislators are about to pass a law that will cost Dominion Power’s customers more than half a billion dollars as a down payment on a nuclear plant that hasn’t been approved and isn’t likely to be built.

These are not separate issues.

Virginia has had an ethics problem since long before Bob McDonnell met Jonnie Williams. As many people have noted, the real scandal is how hard it is to break our ethics laws. So long as you fill out a form disclosing the gift, it’s legal for politicians to accept anything of value from anyone, to use for any purpose. By this standard, McDonnell’s biggest failure was one of imagination.

The legislation that appears likely to come out of the General Assembly merely puts a $250 cap on the price tag of any one gift, with no limit on the number of lesser gifts and no limit on the value of so-called “intangible” gifts like all-expense-paid vacations. The mocking of this bill has already begun.

Conveniently, the bill deals with a tiny side stream of tainted cash compared to the river of money flowing from corporations and ladled out by lobbyists. Corporations don’t usually give out Rolexes and golf clubs. Instead, they give campaign contributions. Here again, Virginia law places no limits on the amount of money a politician can take from any donor. Five thousand or seventy-five thousand, as long as your campaign reports the gift, you can put it in your wallet.

And here’s the interesting part: you don’t have to spend the money on your campaign. If gerrymandering has delivered you a safe district, you can use your war chest to help out another member of your party—or you can buy groceries with it. The distinction between campaign money and personal money is merely rhetorical. A spokeswoman for the State Board of Elections was quoted in the Washington Post saying, “If they wanted to use the money to send their kids to college, they could probably do that.”

In an eye-popping editorial, the Post ripped into one Virginia delegate who charged his campaign more than $30,000 in travel and meals, and another $9600 in cellphone charges, in the course of just 18 months.

As with taking the money, the only rule in spending campaign funds is that you file timely paperwork showing what you spent it on; the reports are not even audited. The theory originally may have been that the threat of public disclosure would keep a gentleman from taking money from unsavory persons. If you took it anyway, the voters would learn of it and throw you out. How quaintly respectful of the energy and capabilities of voters! How pre-gerrymandering.

And how pre-corporation. The smartest companies today spread the wealth around: more to the legislators in charge of the important committees, less where they just need floor votes. The largesse is bipartisan, making everyone happy but the voters. Certainly, a legislator who accepts thousands of dollars from a lobbyist would be churlish to criticize the company writing the check.

So what do you call someone who pays for his meals out of the check he gets from a company?

How about, “an employee”?

Environmental groups and good-government advocates have long decried the influence of corporate money in Virginia politics. In their 2012 report, Dirty Money, Dirty Power, the Sierra Club, Appalachian Voices, and Chesapeake Climate Action Network documented the rising tide of utility and coal company contributions to Virginia politicians, coinciding with a series of votes enriching these special interests.

Dominion Power has consistently led the “dirty money” pack. As the single largest donor of campaign funds aside from the Republican and Democratic parties themselves, its influence in Richmond is widely acknowledged, even taken for granted.  Most legislators will not bother to introduce a bill that Dominion opposes, even if they like it themselves. Critics joke that the General Assembly is a wholly-owned subsidiary of Dominion Resources.

According to Dirty Money, Dirty Power, Dominion’s contributions to elected officials totaled $5.2 million from 2004 to 2011. The Virginia Public Access Project shows another $1.4 million in 2012 and 2013. The contributions overall somewhat favor Republicans, but often the contributions are so even-handed as to be comical, like the $20,000 each to Mark Herring and Mark Obenshain in the Attorney General’s race last fall. These contributions are not about supporting a preferred candidate; they are about buying influence.

Note that much of the donations don’t go directly to General Assembly members but to the parties’ PACs, which then dole out the money. This gives Dominion extra influence with party leaders—again, on both sides.

The result has been spectacularly successful for Dominion, which rarely fails to get its way. Bills it opposes die in subcommittee (witness this year’s bills to expand net metering). Bills it wants succeed.

That brings us to this year’s money bills. As you may have read here or in Virginia papers, Dominion has been “over-earning,” collecting more money from ratepayers than allowed by law. In the ordinary course of things, this would result in both a rebate to customers and a resetting of rates going forward to produce less revenue for the utility.

For Dominion, the solution is a bill that lets the company charge ratepayers for expenses it isn’t entitled to pass along under current law. (Indeed, in a nice touch, the bill actually requires Dominion to pass along these expenses.) Presto: it’s no longer earning too much, owes no rebate, and doesn’t have to cut rates.

In return, the ratepayers get the satisfaction of assuming the sunk costs of a new nuclear reactor that will probably never be built, plus whatever more money the utility spends on it going forward. I believe the technical parlance for this is “blank check.”

“But we must have nuclear,” our legislators murmur as they sign our names on the check. Um, why? Nuclear energy today can’t compete economically. Just last year Duke Energy gave up on two nuclear plants it had been building, after billing ratepayers close to a billion dollars in construction costs. (BloombergBusinessweek headlined its article on the subject, “Duke Kills Florida Nuclear Project, Keeps Customers’ Money.”)

Dominion itself understands the wretched economics of nuclear perfectly well; its parent company, Dominion Resources, just closed an existing nuclear plant in Kewaunee, Wisconsin, because it couldn’t produce power cheaply enough to attract customers. And that’s from a plant that’s paid for; energy from new plants is now more expensive than natural gas, wind, and even some solar.

Memo to Democrats: when the cheaper alternative is renewable energy, no self-respecting progressive signs on to nuclear.

The steadily falling price of wind energy, and more recently, solar energy, helps explain why nuclear is on its way out nationwide. The only nuclear plants under construction in the U.S. today are over budget and reliant on billions of dollars in federal loan guarantees.

Memo to Republicans: no self-respecting, Solyndra-bashing conservative signs on to nuclear.

The State Corporation Commission also understands the economic picture, and it has been skeptical of Dominion’s nuclear ambitions. On top of that, there are serious concerns whether a third reactor at North Anna could even get a license from the Nuclear Regulatory Commission in the wake of the earthquake that shut the existing units for four months in 2011. (For a good short history of the North Anna reactors, including the fine Dominion paid in 1975 for hiding the existence of the fault line, see this article in the local Fluvanna Review.)

So there’s a pretty good chance that Virginia ratepayers will find themselves following in the path of Duke Energy’s customers, with many hundreds of millions of dollars thrown down a rathole and nothing to show for it.

The elected officials voting for this boondoggle, on the other hand, will have plenty to show for it, unfettered by rules of ethics.