Dominion Touts Economic Benefits of Pumped-Storage Project

“Technology Risks and Maturity Level of Energy Storage Technologies.” Graphic credit: Dominion 2017 Integrated Resource Plan.

A proposed pumped hydroelectric storage power station in Southwest Virginia would bring more than $576 million in economic benefits to the Commonwealth, including $320 million in economic impact for Southwest Virginia, according to a study prepared by Richmond-based Chmura Economics & Analytics and commissioned by Dominion Energy.

The hydroelectric project, proposed by Dominion Energy, would support 3,000 Virginia jobs during development and construction, including 2,000 in the coalfield region. Once in operation, the facility would produce about $37 million annually in economic impact for Southwest Virginia including $12 million annually in tax revenues for local governments in Southwest Virginia, states Dominion in a press release.

“We are very excited about the prospect of bringing another major capital investment to the coalfield region of Southwest Virginia,” said Mark Mitchell, vice president of generation construction. (Dominion already operates a hybrid coal-biomass generating plant in Wise County.) “The entire grid system will benefit from having this new generation once it comes online, and the local area will benefit from the jobs and economic benefits that will come from it.”

The Dominion press release did not address the potential impact of the pumped-storage project on Virginia rate payers. While the facility would entail a hefty up-front capital cost, it could generate electricity during periods of peak demand or, potentially, offset fluctuations in output by Dominion’s increasing fleet of utility-scale solar farms. In its 2017 Integrated Resource Plan, Dominion describes pumped storage as the most mature and economically feasible form of energy storage, adding that the “proven dispatchable technology … would complement the ongoing development of renewable solar and wind resources.”

While Dominion operates the nation’s largest pumped storage dam in Bath County, it had not indicated much interest in second major facility until this year when the General Assembly enacted a bill that encourages a Virginia utility to build a pumped-storage facility in the coalfields. The law would allow the utility to petition the State Corporation Commission to recover project costs as they are incurred rather than waiting until the project is complete. Legislators made no secret of the fact that they saw the project as a boon for the economically depressed coalfield region, and some speculated that the pumped-storage facility might be accompanied by extensive local investment in solar power.

A pumped storage facility uses gravity-fed water from an upper-level basin to a lower-level basin to power the generators during periods of peak demand, when electricity is most expensive, and uses electric power to pump the water back to the upper basin when electricity is cheap.

After examining more than 150 potential sites in far Southwest Virginia for suitable geology and topography, availability of water, proximity to electric transmission lines, impact on landowners and other factors, Dominion has selected a site in Tazewell County “for further study.” Should its in-depth, on-the-ground studies show the site to be not suitable, it has identified other candidate locations for the facility.

Another option, touted by coalfield legislators, was to use a mine cavity as a lower reservoir. Dominion has engaged Dr. Michael Karmis at Virginia Tech to evaluate the idea. “Based on information provided to Dominion Energy Virginia,” says the Dominion website, “the former Bullitt mine near the town of Appalachia was identified as a top site for evaluation and will be evaluated in the Virginia Tech study.”

The company website says that the project is “in its very early stages and the project’s final size and scope have not yet been determined.” After scrapping with landowners along the route of the proposed Atlantic Coast Pipeline, of which it is the managing partner, Dominion is “sensitive to the needs and concerns” of homeowners who might be impacted by a pumped storage facility, the website says. The company “will make every effort to keep them informed and work with them throughout the process.”

Bacon’s bottom line: While Dominion is careful to say that it has not committed to a pumped-storage project, the fact that it has commissioned a positive economic impact report suggests that it is laying the political/PR groundwork for one. Could this be a harbinger of a greater commitment by Dominion to solar and wind power in the future? Or does Dominion plan to sell electricity into wholesale markets to for purchase by other utilities with big plans for renewables? That’s another economic analysis I’d like to see.

Share this article


(comments below)


(comments below)


28 responses to “Dominion Touts Economic Benefits of Pumped-Storage Project”

  1. “Could this be a harbinger of a greater commitment by Dominion to solar and wind power in the future? Or does Dominion plan to sell electricity into wholesale markets to for purchase by other utilities with big plans for renewables?”

    That’s a false choice. Dominion can and will do both. Dominion has already announced an expanded commitment to renewable power generation. As for sales, Dominion operates as part of the PJM grid and automatically sells all its output into the PJM energy market when dispatched. Pumped storage, from the grid operator’s point of view, is just a giant battery — it’s an expensive way to build that battery, but cheap to operate and maintain so it gets dispatched about as much as possible. If a lot of renewables come on-line on the PJM grid [NOT necessarily on Dominion’s part of the grid], Dominion may be able to sell that “battery” power at a profit to PJM after the sun goes down and the winds calm. Dominion, with extensive experience as the owner of Bath County, knows these economic tradeoffs well and must have decided that it’s a good bet to expand its “battery” power for the future.

  2. LarrytheG Avatar

    Good to see Acbar back here, commenting…where have you been guy?

    And I agree with Acbar.. false choice.. and more disengenuous blather from Dominion… I notice they don’t talk about how many jobs AFTER construction is done….

    And the thing is – pump-storage takes a fairly unique geographic situation.. you cannot do it anywhere… and I also notice they’re morphed from Coal Mines to Coalfields because you’re not gonna do a pump storage with a coal mine – no way, no shape, no form… mines are full of nasty contaminants like sulfuric acid – which you DO NOT want brought to the surface and put to a reservoir that will – during rain events overtop the dams and enter the watershed below.

    There are very few sites.. in Virginia to do pump-storage.. you basically need two confined valley’s that can be damned – with one significantly higher in elevation than the other and then pipes connecting them.. one – downhill through turbines and the the other -uphill to move the water after it’s been through the turbines back uphill –

    The basic concept of melding pump-storage to wind-solar is simple.. it’s the same basic problem with trying to use gas turbines in tandem with wind/solar… i.e. to fire up gas turbines with wind/solar drop… in the pump-storage scenario – the pump/storage would start to release water into the turbines when wind/solar dropped – and it would pump back up when you have more wind/solar than needed and/or at night when you had more baseload than demand…you’d use he excess to pump water up to the top to be re-used.

    the concept itself is not rocket science… but the infrastructure to actually do it – is not so easy… thousands and thousands of acres of land in valley’s most likely populated by people and small towns will have to be bought out and displaced…not a pleasant thing.

    I don’t think this is going to be an easy lift – especially if it’s mostly about Dominion providing “battery” to PJM… All those displaced Virginians are going to be not impressed.

    1. Been busy — took care of the marriage of one daughter and visiting another at Bard College this month!

  3. LarrytheG Avatar

    Burke’s Garden looks like the target.. big natural bowl…about 4 miles by 7 miles…

    that would make it a very large pump storage project comparable is size to Lake Jocasee in South Caroline… I’ll post that map in the next…

    1. No, not Burkes Garden, not a chance of displacing that many residents for a private project — this isn’t TVA in the 1940s. See if you can find the Bath County project on a comparable map; it’s not that large a footprint.

      The requirements for pumped storage: 1. It’s a hydro project, after all, so you need a lake — in this case, two lakes — and they have to be in rock/soil formations that do not leak, or can be sealed at little expense with a clay liner; 2. the difference in elevation between the lakes and their size determines the amount of energy storage, and you have to have a place to put the turbines/pumps at the lowest elevation (an abandoned deep coal mine with a strip mine on a “decapitated” mountain-top next to it could be ideal for this); 3. there must be some pretty hefty (230-500 kV) grid transmission lines near the power house at the lower (generating) lake; and 4. there must be some sort of water supply to the lower lake, but the water is recycled so there isn’t as much need for water as in most hydro projects. Aside from the lakes themselves and the power house, there has to be a massive tunnel and/or pipe between the lakes (this can be drilled or buried of course, but burying it, and the distance it travels, can be a big factor in environmental impact).

  4. LarrytheG Avatar

    Here’s Lake Jocasee which is called Bad Creek Hydroelectric project.

    even though it has substantial changes in the lake level due to the pump storage operation – it has become another Smith Mountain Lake with gated communities and high dollar homes, and like Tazwell… it’s way out in the middle of nowhere… 40+ miles and 90 minutes from Greenville, SC.

    started operating in 1991

  5. Steve Haner Avatar
    Steve Haner

    This is a gigantic pig in a massive poke. Where is the energy to be produced that they are going to pump and store? What excess generation do they how have? Will there be a massive wind farm covering mountaintops? Square miles of solar on old coal beds? The Bath County facility was directly tied to the nuclear plants, which run cheaply at night to produce the energy stored behind the dam. What is this tied to?

    Of course a $2 billion construction project will produce a significant amount of jobs, tax revenue, etc. That is totally irrelevant to whether the deal is of any value to Dominion ratepayers 300 miles away. If this is such a great idea, why not build it actually in Dominion’s service territory?

    The Wise County coal plant was built for political reasons, not for energy reasons. I think the amount of energy wasted by line loss as the juice is shipped to the east to actual Dominion customers is still a classified number. One thing still of value that Dominion can mine in Southwest VA is votes in the legislature.

    Until any of you see the kind of detail that is required for an actual filing with the SCC, I strongly suggest you remain highly, highly skeptical. Again, my really big question – pump and store energy from WHAT? Anybody who asked those questions during the 2017 General Assembly session got dead silence. Dominion constantly denied that this was their bill, their project.

    Oh, and the ROE on $2 billion is $180+ million per year (if that is all equity financing.) Again, if this is actually a serious proposal, there will be another multi-billion dollar shoe to drop to develop some kind of generation source.

    1. Steve, who initiated the legislation — Dominion or the SW Virginia lawmakers?

      1. Steve Haner Avatar
        Steve Haner

        One of the patrons said Dominion asked for it, and the Dominion reps said it wasn’t them. That alone had my radar fired up. Also there were several 2017 issues where Dominion was reasonably forthcoming with stakeholders in advance of the session, to prevent surprises, which I appreciated, but this bill was not discussed with any stakeholders.

        A bill with no cost estimate, no explanation of what excess energy would be pumped and stored, no construction timetable, was granted a rate rider and the magic “in the public interest” phase by a General Assembly that never held a real hearing or even asked any probing questions. It was another stunning display of raw political muscle.

  6. John Harvie Avatar
    John Harvie

    In Jest: Burkes Garden may be a perfect site. On our first visit we encountered a gate sign reading something like “Trespassers will be shot” near the post office. Maybe a good thing to flood the place…

  7. Steve Haner Avatar
    Steve Haner

    If as Acbar posits this will be a stand-alone battery, taking in energy from elsewhere on PJM, then I don’t see how they charge that to their service territory ratepayers. I don’t know why they needed a bill to create a rate rider, which is what they rammed through in the 2017 session. So at this point I don’t think that is it.

    And to the extent they develop solar and on shore wind, which certainly they are going to do and the costs are getting more attractive, I as a ratepayer want them to do that in their service territory. Don’t expect me to be impressed by all the jobs and taxes created somewhere else by my involuntary investment in that facility, especially since you got the Assembly to agree to gut the SCC’s oversight authority by declaring it “in the public interest.” Ideas that can stand on their own economic merits don’t need to have the SCC short-circuited.

    And speaking as a descendant of Tazewell County folks, nobody is flooding Burke’s Garden…

    1. Agree with you, nobody is flooding Burkes Garden.

      The rationale for building this big storage “battery” is the need for time-shifting renewables energy. Solar is, by definition, daylight only, and even then not if the clouds are thick. Wind is, by definition, only available when the wind blows. Run-of-river hydro is, by definition, only available when the rains have fallen upstream. If you can tap these sources as available but “bank” them for later use you can substantially increase their financial viability and their appeal to utilities and their regulators.

      You have an interesting point about why DOM ratepayers should pay for this if it’s PJM market power that is being stored and sold. We can get into a lengthy discussion sometime about why building this big “battery” is in the interests of DOM shareholders AND ratepayers, but the short answer is, Dominion wears two distinctly different hats here: (1) market seller/generation owner, and (2) purchaser/distribution/retail sales provider. That market is PJM. Dominion also owns and maintains transmission facilities, but federal law and the FERC ordains that they are under the exclusive operational control of PJM, as is control over all the economic dispatch of all the generation connected to the PJM grid. Wearing its generation-owner hat, Dominion can make a lot of money building the fossil (gas) and pumped-storage generation that’s needed to dovetail with all that cheap solar and wind power that’s coming on line across PJM’s multi-state slice of the grid over the next few years. DOM may also make money building some of those solar and wind generators for itself, but that’s another discussion. LarryG has been saying this repeatedly, you can’t have all this renewables stuff without complementing it with cycling generation that IS available after the sun sets and the wind dies down.

    2. To complete that thought: the power Dominion is pumping up hill, for generation later when it falls, is power from the PJM grid. This is true right now for Bath County, and will be true for the new plant. Dominion can locate that pumped storage unit anywhere in PJM and buy or sell that power at essentially the same price and make the same profit on it. They will, most likely, choose to locate their new generation within their own service territory because it’s nearer the rest of their maintenance folks and because it’s the politically correct thing to do: reward the local politicians with those construction jobs. But PJM’s grid and grid market is the same whether they connect to it in Virginia or North Carolina, or Ohio, New Jersey, Indiana, or Kentucky.

      The surprising thing today is that Virginia, unlike most of the Northeast and Midwest, continues to allow Dominion to place all its generation costs in the “rate base” for its retail customers to carry and guarantee Dominion a steady return on all that investment. That was, indeed, the old regulatory model; but after dabbling with changing things in the 1990s, the GA backed away from deregulating Dominion’s generation. Nevertheless, Dominion joined the PJM markets, as required by federal regulators. The SCC has correctly insisted that Dominion report, in its future annual IRP filings, what the alternative cost to ratepayers would be if Dominion bought more (or all) of its required power for its retail customers from the PJM wholesale markets. Dominion could buy all its customers’ requirements from those markets, and separately, Dominion could sell all its generated power into the PJM wholesale markets on an unregulated basis without any minimum profit guarantees or maximum profit restrictions (or risk to ratepayers). The GA should be asking that question, too, instead of endorsing the SCC’s approval of retail rate riders for every new generating plant.

      1. Steve Haner Avatar
        Steve Haner

        Acbar, you have provided a clearer rationale for this than was ever provided by anybody during the (minimal and evasive) discussions during the General Assembly session. Battery storage services for the PJM market as a whole like you describe might be creating a new category, something other than generation or transmission, and how those costs are recovered ought to be discussed and negotiated. Given the bill created a rate rider, I had to assume the plan was to add this to the bill of every ratepayer in their territory. I am still acting on that assumption until somebody from Dominion is more forthcoming.

        1. Bulk electricity storage is “kind-of” a new category of generation. The grid marketplace is open to wholesale buyers and wholesale sellers; in this case the participant is both. It buys from the wholesale grid when it stores the energy, and it sells to the wholesale grid when releasing the energy. The grid has a market price (for both sales and purchases) which varies from time to time depending on loads and generation availability, so Dominion can buy grid power to store (by pumping water uphill) when it’s relatively cheap and sell that power back to the grid when it’s profitable to do so. As a buyer, Dominion gets to pick when to run its big pumps (at what grid price). As a seller, Dominion sets the price in advance daily at which it will sell; Dominion’s pumped storage hydro turbines would be treated like other generators and “dispatched” by PJM as needed, but PJM schedules and dispatches available units in economic order, cheapest generation first, so Dominion can simply place a sufficiently high price on its pumped-storage power to ensure that its “battery” isn’t dispatched unprofitably.

          Who keeps that profit? If the unit is in Dominion’s retail rate base, the cost of building it will be reflected in a rider, and the costs or benefits of operating and maintaining the pumped storage will go to ratepayers (who would also bear the risk of unexpectedly high maintenance or early obsolescence). If the unit is built and operated by Dominion for its own account, as an independent generator, then Dominion keeps all the profits (and bears all the risks). PJM doesn’t care; all generators are treated the same in the wholesale markets.

          Undoubtedly Dominion has analyzed the future economics of the PJM marketplace, given the trends and the new generation and retirements already in the PJM pipeline and the projected load growth, etc., and concluded that pumped storage looks like a profitable complement to all that wind and solar generation that’s planned. But should Dominion build it in rate base or as an independent venture? That’s an interesting question.

          1. “PJM doesn’t care; all generators are treated the same in the wholesale markets.”

            I’m not sure that I agree. You are right about the wholesale market. But watching the proposals in the IRP and all of the inaccurate messages about the pipeline, I think Dominion very much cares. They want the ratepayers to shoulder all of the risk and pay more than market price so the parent company can keep the stock price up. As long as the SCC or GA goes along with it Dominion Energy wins. If the policymakers ever truly wanted to find out what is going on or if the ratepayers realized they are paying billions extra for these projects – there might be much more opposition to these plans.

            I believe that Dominion Energy and its its utility subsidiary can succeed by doing what is good for Virginia and its citizens, but the recent proposals (the pipeline and this pumped storage will not accomplish that).

          2. We agree, TH, the reason for ratebasing is financial risk abatement, and the open question is why regulators feel that having ratepayers shoulder that risk is a good thing. The long term risk of adverse grid evolution and the premature obsolescence of its current components is what scares some investors, and Dominion is responsive to their fears. Whether shifting that risk of obsolescence to ratepayers results in them paying higher rates in the short term should be a less speculative analysis. I have to hope that Dominion at least is asked to make the short-term-benefit case to its regulators to justify all that ratebasing.

  8. LarrytheG Avatar

    Here’s a google terrain map of that area.. they may be other linear type valley sites nearby:,+VA,+USA/@37.0975418,-81.3510376,10.6z/data=!4m5!3m4!1s0x884e2c94c0511243:0x7e1f10b25ae77c57!8m2!3d37.1148374!4d-81.5195548!5m1!1e4

    I don’t put much stock in any of this to be honest… West Virginia would have far more suitable sites …for combined pump-storage/wind/solar sites… and I think what DOM is up to is just letting the GA they are “thinking about it”…

    Clearly – DOM is building gas turbine plants to generate baseload… which hopefully could also be used as cycling to complement wind/solar.

    We need to put the pump-storage thing in a realistic perspective and here’s a way to do it. How many MW of wind/solar will we eventually likely have? I’m suspecting it’s going to be 10-20 times as much as we’d likely be able to get from pump-storage… so where is the rest of the complementary power than runs when wind/solar is not available, going to come from? You can put up a 1200 MW gas turbine on a small footprint site lightening fast with little environmental impact issues compared to the mammoth issues and time-frame associated with pump-storage ( though pump storage would be easier than a Nuke).

    I think as long as Gas is available – its pretty much destroyed the economics of coal, nukes or pump-storage even before you team it with wind/solar .

    1. Steve Haner Avatar
      Steve Haner

      Just heard a couple of presentations yesterday on just how much gas is available domestically, and how many decades the proven reserves might last, and how many more fields might be out there at the right price. Gas is going to have centuries of dominance, just like coal did before it.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Gas is our future. Solar and wind are not our future in the foreseeable future absent highly speculative breakthroughs.

        Unless wind and solar can overcome common sense, environmental degradation, and fierce local resistance.

      2. You are right about considerable gas reserves, but it is a matter of price.

        If all of the pipelines that are applied for in Appalachian Basin get approved and built (including the ACP and the MVP) there is not enough gas available to fill them. It will be well past 2022 before production could catch up. And at what price?

        In every country that aggressively exports its gas, the domestic price approaches the export price. Gas has increased in price by 50% in the last year or so and is on its way higher.

        Gas-fired power plants (including production and transmission of the gas) have the same overall climate effect as a coal plant. I would suspect that sometime during their 40 year lives, gas plants will have to deal with a least a charge for carbon, but eventually probably a charge for their full atmospheric effects. This will push the price even higher.

        We will have gas-fired power plants for the next several decades, but my guess is that their dominance will disappear by the 2030s.

  9. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    American coal companies have already despoiled much of this land and many of its people during the 19th and 20th centuries. I assume Dominion does not plan to do the same thing all over again with big solar and wind farms despoiling these peoples property and their environment in order to serve other more affluent neighborhoods. Such as, for example, other solar projects intended for Delmarva peninsula and other solar projects to serve UVa in Charlottesville with big solar farms in Middlesex County and King William County.

    1. I think Dominion plans to add up to 7000 MW of solar between now and 2042. All of it central station utility-scale solar. And they want to add it into the rate base.

      Their entire approach is to build more to earn more. They want to control it all (or most of it) and treat it just like another central station power plants, so they can get paid to build more transmission.

      This is not the best way to use solar. It is different from the types of generation that we have used before. It can be sited in brownfield locations (no environmental disruption) and be connected to the distribution system, not the transmission system. This contributes to greater grid reliability and resilience.

      Somehow we have to stop designing our energy system for the 20th century. Even most of the intelligent comments to this post are still addressing the pumped storage issue in 20th century terms.

      We have to move our utility regulations into the 21st century so that we can unleash the innovative, job creating, cost-saving solutions created by third parties. They won’t occur to nearly the same degree from utilities focused on protecting their own turf. Our utilities need to assume a new role and get well paid for it. Otherwise they will continue to propose projects that are good for them, but not for the rest of us.

  10. LarrytheG Avatar

    IF wind/solar went 24/7 – gas could not compete. The major flaw is that wind/solar is not reliable but that’s not a fatal flaw if we have the ability to use it – harvest it as the least cost energy, when it is available and have “backup” when it is not.

    The places to see where this dual-use balance is imperative are places that do not have fossil fuels – no coal and no gas and must import fossil fuels to power their grid. Places that have to do that end up paying 40-50 cents per KWH. Any options to reduce that cost are much more important than places which have more diverse availability of fuels and can generate electricity for one forth the cost.

    So – those places that have to import fuel oil – than can use wind/solar instead of fuel oil – can make a huge dent in the cost of electricity.

    Just as gas has replaced coal and nukes over it’s lower cost – wind/solar will supplant gas as a lower cost fuel – when it can be used. The fact that it cannot be relied on 24/7 is not critical if there is a backup source – like gas.

    If islands can reduce the cost of electricity – by using wind/solar when available – why can’t we also do that?

    Even if DOM wants to drag it’s heels on utility-scale solar – others are not – and we are seeing it right now as 3rd party solar companies are finding and exploiting the “loopholes” in Virginia’s laws limiting 3rd party.

    At some point – the economics of rooftop solar will make it advantageous for residential and commercial regardless of net metering… it just will be cheaper to use solar than grid power when solar is available and people will do that.

    You can expect a perfect storm if increased wind/solar and less use of gas – if research shows that the intensity of these hurricanes is related to increased greenhouse gases… It won’t take too many more Houstons , Floridas and Puerto Ricos to get folks attention.

    If you thought you were going to be without power for weeks.. would you look into solar and similar for at least minimal power for refrigeration, fans, lights, etc?

  11. CleanAir&Water Avatar

    Must comment …

    Noone is talking about storage and distributed generation including microgrids. They are the future and will provide resiliance s well as clean air. Prices are dropping rapidly. Add to that the fact that offshore wind, now cheaper than nuclear, is coming soon to the East Coast, just not in any real amount in VA.

    “As cities and utilities rebuild, there’s an option to look toward solutions that provide grid resilience, such as distributed energy, especially solar and battery storage sited on distribution grids. In fact, a growing body of evidence suggests that states and countries that replace old, costly fossil-fired generators with renewables, efficiency, demand response, and other distributed energy resources (DERs) have found greater reliability and resilience at lower costs.”

  12. Rowinguy1 Avatar

    Jim, could you get Dominion to let you link to the actual Chmura study? I’ve wondered how taking, say, $2 billion from your customers accelerates
    overall economic activity. Isn’t every dollar Dominion collects in rates and devotes to a capital project just a dollar that the customer could use equally well for some other economic-stimulating activity like buying a new car or going out to eat?

  13. We have to understand the history of pumped storage and why it is a bad fit for the modern grid.

    Pumped storage has been around for decades. I worked on what was the largest pumped storage facility at the time (early 1970s- it’s a bit smaller than Bath). It used Lake Michigan as the lower reservoir and a large lined pond was built high on a bluff above the lake. Pumped storage was needed because at that time a large amount of nuclear capacity was being planned and that capacity was in excess of the night-time load.

    The nukes were “must run” facilities and the transmission interconnections between regions were just getting set up. So there was a need to shift the load, as Acbar describes it.

    The nukes never were as cheap as everyone was counting on, but once they were built, they still needed to run all of the time, so even though the pumped storage facility was very expensive to build, and not terribly efficient, once the nuclear units were in place, it had a benefit and could be put in the rate base.

    Today the situation is different. Aging nuclear units are unlikely to be cost competitive in the future after the billions of retrofits required for license extensions. New nuclear plants have energy costs that are an order of magnitude higher than any other option. Even with population and economic growth, night-time loads might actually decline. So all of the solutions that made sense in the 1900s, don’t make as much sense any more.

    Pumped storage plants will be far more expensive to build per MW than it cost for the Bath facility in the 1980s. The lowest cost options for grid planning today are distributed energy resources (generation and storage). Batteries are more efficient, faster responding, and have multiple benefits such as frequency and voltage control that can be stacked on top of the storage function. Having multiple, grid-embedded, geographically dispersed storage units, will be of much greater benefit than a single storage facility located hundreds of miles away, that requires expensive new transmission.

    In 8-10 years, battery costs will be 25% of what they are today. When a coal-field pumped storage facility goes on-line in 8-10 years it will cost well above the $2 billion dollar estimate.

    This is another attempt to put costs into the rate base that provide a long-term stream of revenues, but are much more costly to the ratepayers than other available options.

    New solar units do not require storage in order to be useful and cost-effective today. Dominion has traditionally been summer peaking (in the afternoon). Solar matches very well with the load curve and does not require any storage to usefully contribute to the grid. Dominion has adequate peaking units to track variations and PJM has plentiful supplies to fill in longer periods when solar output is lower.

    Currently, PJM has 75% more generating capacity than its needs to maintain an adequate reserve. More gas-fired units are in the PJM queue and will add to this surplus over the next several years.

    There is no justification for adding more gas-fired generating capacity during the foreseeable future until we see how long it will take to work off this surplus. Ratepayers will suffer as a result of new additions to the rate base. Reliability is not at stake.

    We have allowed the energy companies to seize control of the narrative. All they have to do is mention “lower costs” and more “jobs” in order to get support for their projects. Unfortunately, the federal regulators are not asking them to prove it. As citizens and ratepayers, we are about to be stuck with many expensive projects that we will receive no benefit from. This pumped storage proposal sounds like another one.

  14. Economics is the great leveller here — provided you leave ratebasing out of the equation. IMHO Dominion should be allowed to build whatever generation it wants to — but on its own nickel: no ratebasing of new generation (except perhaps for emergency peaking and system stability). If Dominion doesn’t trust the current predictions of cheap battery technology on the horizon (as promised vainly for decades), then fine, the SCC should let them spend shareholder dollars on pumped storage as the alternative.

    Personally I think there will be battery technology breakthroughs, and renewables are here to stay, and distributed generation and energy efficiency measures are a big part of the future grid — but no one is asking ratepayers to underwrite those assumptions.

Leave a Reply