By Steve Haner
Dominion Energy Virginia is facing about a ten-fold increase in the price it will pay when it must call on generation resources outside its own assets to meet daily demand. The most recent auction for guaranteed capacity within the 13-state PJM Interconnection network set incredibly new high prices, but nowhere as high as within Dominion’s service territory.
Most days Dominion will have enough power produced by its own generation assets, and not have to worry about the extra $444 per megawatt for purchased power. The impact of the new capacity prices, set to go into effect in the summer of 2025, could be more dramatic for Virginia’s rural electric cooperatives or municipal electric companies within the PJM Dominion Zone, most of which rely on purchased power.
But even Dominion’s own planning projections shared with the State Corporation Commission show a need for outside capacity purchases growing over time. This higher price may find its way onto customer bills at some point, when demand is at peak or something disrupts Dominion’s own plants.
The huge jump in capacity prices is just one more flashing red light about the danger in the PJM region from accelerating retirement of reliable thermal generators. The stated goal of the Virginia Clean Economy Act and similar laws in other states – no coal or natural gas plants allowed – has the region rushing toward energy shortages.
