Virginia’s Energy Future Is Fast Approaching

Two big energy news updates today:

Dominion files for large-scale offshore wind project. Dominion Energy has filed an application with PJM, the regional transmission organization of which Virginia is part, to interconnect 220 wind turbines off the Virginia Coast with the electric grid, the company announced this morning. Dominion has begun work already on the installation of a two-turbine demonstration project. The PJM filing for the $7.8 billion project represents “a vital first step to move forward in developing Virginia’s full offshore wind potential,” the company stated.

Apco to offer time-of-day pricing for EVs. Appalachian Power will offer residential owners of plug-in electric vehicles a discount for charging their cars when power demand is lower, the company announced today. A residential customer with a a typical car consumption will save about $86.50 annually for home-charging the vehicle during off-peak hours, generally during the night. Recent data indicate that nearly 700 plug-in EVs are registered to owners in Apco’s Virginia service territory.

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30 responses to “Virginia’s Energy Future Is Fast Approaching

  1. The Southern Environmental Law Center has issued this statement in response to Dominion’s announcement:

    “Tapping into Dominion’s offshore wind lease area is unquestionably one piece of the Commonwealth’s comprehensive response to climate change. We believe Virginia can become a hub for offshore wind development across the eastern seaboard, but whenever a project is paid for by Virginians, it is imperative – regardless of fuel source – that we carefully scrutinize the project to ensure that unnecessary costs are not imposed in our transition to zero-carbon electricity. The price of wind power is expected to decrease dramatically in the U.S., just as it has in Europe over the past 20 years.

    While offshore wind’s future is bright in the Commonwealth, it is also critical to approach our energy planning comprehensively. We can’t determine whether this project is the right size or cost for Virginia, until we know Dominion’s plans for ramping down its fossil fuel fleet, cancelling the unnecessary Atlantic Coast Pipeline, and maximizing energy efficiency programs, which reduce customer bills and energy demands.”

  2. Boondoggle 2.0. The cost will obviously be more reasonable than $300 million plus for 12 MW, but (this is a wow) even the SELC is warning of “unnecessary costs.” This will have the blessing of a Democratically-controlled General Assembly, which will be just as willing to pass the costs and risk to ratepayers and protect Dominion stockholders. New players, same game. Expect legislation ordering the SCC to accept this as “reasonable and prudent” on its face. It will be paired with the Tazewell County pumped storage plant to get the needed votes. (For that matter, expect legislation packing the SCC with more judges.) All you sheep? The shears are coming, trust me, in five years you will look back on your bills now and sigh…..

  3. The next shoe to drop? Abandoning the gas pipeline?

    • Only if that compliant Dem General Assembly promises to pass all those sunk costs onto ratepayers, as well! 🙂 Hey, it could. In other news, Democratic Party of VA with a big splash says it will no longer take Dominion money. No sign of giving back the $1 million or so over the years to both DPV and its Commonwealth Victory Fund. Clean Virginia endorsement list is up to 70 some, all of them of the same party, surprise surprise. The GOP members who have shown independence and skepticism on these bills? No help from Clean Virginia!

  4. As I have been saying recently, all of the East Coast elected officials are excited about mandating off-shore wind. This will be (expensive) but also implies new construction of plants to build these large ocean structures. The first such new plant is slated for South Jersey along the Delaware River, in Gloucester County, where I used to live. But building that plant presumably assumes NJ/NY decide to go ahead with their off-shore projects. Virginia sees this as enormous economic opportunity and wants to get in there to compete for the industry leadership. But hold onto your pocketbooks.

  5. Virginia has some built-in advantages for offshore wind. The turbines may be fabricated, at least partly, in Hampton Roads, which has a large, experienced workforce of metal benders. Unlike other port areas, HR does not have bridges that would restrict the height of some of the structures being towed out to sea. I don’t know much about this, but because of the extensive military presence, there may be some redundancy in power transmission lines.

  6. To Steve’s point, it’s a damned shame that Clean Virginia’s environmental bona fides are more important to that group of legislators than clean regulation of Virginia’s largest retail utility. If the same legislators who want all that wind power really understood the price they are making consumers pay for it, would they proceed anyway? How to teach them? This is a classic example of why utility rate regulation needs to be delegated (without interference!) to a specialized agency with its own staff devoted to fact-finding, in-depth analysis on behalf of the public, and due process.

  7. Gotta admire Dom. They have strategy, skill, competence and chutzpah to maintain their monopoly and expand it – while letting the ratepayers pick up the costs AND the risks. The way it looks is that Dom has almost no skin in the game.. and they’ll snarf up whatever rewards might result!

    Hey and I see the PR campaign right now – cue the shot of dozens, hundreds of turbines slowly turning in the wind and the camera zooms in and on each turbine: https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcSJ4HlkJCMiBb1pe2EhMKVvmIZE-RyE9IRdSUg6dJ8gst9rQ02M

    On the time of day pricing for EVs. It does not have to be manual at all – a “smart” meter will query the grid for power demand and price and decide when to “fuel” the EV – all completely automatic without intervention from the customer – he/she just gets a status… Every major appliance and water heater in the home can work this way and the result will be less energy use, especially at peak hour .

    I don’t think smart meters will actually benefit the utilities. It will ultimately lead to less electricity demand when all these devices just automatically sense demand and time shift – much like dynamic tolling shifts demand to periods of lower demand.

    Right now – today -the price of an airline ticket varies by the minute. Gasoline at the gas pump – the price can change hourly …. motels – the price varies dynamically … also.. Now we’re going see this with energy use.

  8. On the plug-in vehicle topic, that’s interesting about 700 plug-ins in APCO territory…wish we knew more. State-by-state car sales data by model is only available through pay-for-the-data sources, so we have no public info on it. The California New Car Dealers Assoc. does give a quarterly breakdown for California, but only in big lumps like Hybrids, Plug-in Hybrids, BEV.

    In related news, apparently Virginia is sending notice to 16,000 hybrid owners (clean fuels plate) owners that their free HOV prividges are hereby revoked. Plug-ins will apparently still be allowed. This action takes me by complete surprise, so I do not know who did this, why, and what any other changes are. I would have thought they would have delayed any action like this until 2022 when the I-66 HOT Lanes are completed, at that point there is not much use of Clean Fuels plates, unless the they juice up the program to spur Plug-In sales, which is what California does.

  9. HOT lanes are more directly about the capacity of the road than air quality. Cars are dramatically cleaner now and more and more cars are the more modern ones with way better emissions but the capacity of the road to carry traffic is the issue and congestion/dynamic pricing is about managing the traffic demand and encouraging time shifting and car pooling (to take cars off the road to reduce congestion).

    So they’re rewarding people based on not driving SOV during the more congested times – not about air quality.

    Some day when perhaps lots and lots of vehicles are EVs and the air is even cleaner – but the roads clogged with traffic – they’ll be using tolls to manage the congestion… even more. There will be no virtue in using an EV if you are clogging the roads!

  10. So check this out. The recent SCC projection that Dominion’s capital costs would add $30 to residential bill did include some off shore wind, but only $900 million. This is EIGHT TIMES that much money in the next few years. On the back of my envelope, adding another $7 billion to that capital plan above adds $17 or so to that $30 projection. You can also assume that many of the other investments on that list are going to far exceed the initial estimates, ’cause that’s how it goes. For the $8 billion (that’s the raw cost, not the capitalized cost over 30 years) we’ll get a weak-ass capacity factor at best, and a hurricane target at worst. There is a reason no other utility (utility, not merchant generator) is rushing in to this field – the economics are shaky as hell.

  11. So there is something a little funny about the press release and that is does Dominion ALSO have to file an application with PJM for any new gas plant (ANY NEW generation), that they build and bring online?

    what’s the significance (or not) of this?

    Could they just have built the turbines and feed them into their own grid in Virginia without getting approval from PJM?

    • The filing with PJM is to study the impacts of interconnecting that off-shore power into the PJM-managed grid. Any developer of any power plant, include the gas plants Dominion has brought on-line in the past 8-10 years, has to make a similar filing. PJM does not issue building permits, however. The individual states where the lines are planned do that.

      So, the answer to your last question, Larry, is NO.

  12. No. Not unless VA leaves PJM, a prospect raised on an earlier comment string. Oh, they’ll sell this power all over PJM, with us footing the capital bill.

    Another back of the envelope calculation. So, $8 billion in cap ex, say 50 percent is equity. $4 billion in equity with an allowed return on equity of 9.2% (current). But of course that’s really 9.9%. And then you have to add the 100 basis points of ROE allowed for these beloved renewable projects…..so call it 10.9 percent.

    That’s $436 million in profit every year at the start. That figure does decline as the project amortizes, but roughly $400 million for 30 years is (drumroll) $12 billion in returns. And of course we ratepayers provide the interest on the portion financed with debt. With all the real financial risk on the ratepayers. Yep. Boondoggle 2.0 indeed. I bet Dominion feels quite betrayed, releasing this just in time to cheer up the Democrats only to have DPV and Clean VA publicly spit in its face on the same day.
    https://bluevirginia.us/2019/09/virginias-democratic-party-joins-ranks-of-no-dominion-money-legislators-and-candidates

    • And don’t forget, ratepayers and not investors will generate some proportion of the construction costs by the legal confiscation of the refunds they would otherwise be entitled to of Dominion’s excess earnings.

  13. Okay but what keeps Dom from also running a gas plant and selling the power to PJM or selling their Nukes power to PJM?

    I’m still not quite understanding the distinction.

    I know they coordinate with PJM in bring new plants online but what determines if such plants are feeding the utility’s service area needs versus feeding into the grid to serve some demand in the PJM service area that is not the utility’s service area and they receive compensation from whoever bought that power?

    do we really understand how this works and what the significance of their Press Release means when they directly mention PJM versus any other plant they bring online and as far as I know, do not mention PJM?

    • The Virginia Power part of Dominion can only build in Virginia. It builds those plants to meet provable load of Virginia (and its North Carolina) customers. It can’t build a purely “merchant” plant. All the power those plants generate gets sold into the PJM market but bought back by Virginia Power for its customers’ use.

      When the Virginia gas plants generate excess power that is sold to another utility off-system, the profits of those sales are returned to Virginia Power customers through its fuel factor, same as costs of off-system power the utility may need to buy from time to time to meet its customer loads are paid by customers through the fuel factor.

      There are people that understand how it works. Unsurprisingly, many of them work at the SCC.

  14. Recently I’ve seen an article about maintenance issues with the ocean wind turbines. The large blades are made of fiber glass/expoxy, and although they look slow and majestic, the actual speed of the blades is 100-200 mph or so. At this high speed, small dust particles and salt water mist start eroding the blade edges, such that power recovery potential goes down signifcantly.

    But since we will all be millionaires due to the ultra low cost of renewable energy, we will be double millionaires if we have to rebuild these turbines. What’s not to like?

  15. $7.8 billion is still a lot cheaper than a new nuke. Perspective, please!

    • Well, one has a 98 percent capacity factor and the other perhaps 40 percent, and without that in the equation the cost comparisons are useless. But cost will also prevent the construction of new nukes, and should likewise prevent the construction of this.

      • Off shore wind probably better than 40%? But I agree we need to realize 100 megawatt full time is better than 100 megawatt peak sometimes, when new, but when a few years old, it loses even that power.

      • But the capacity factor is a misnomer. The point is that it produces valuable energy a LOT of the time that is cheaper when it is available.

        It’s sorta like saying it’s better to have more expensive polluting fuel that is available 24/7 than to cut it back when you can with less costly fuel that is less polluting.

        So they use the 24/7 “standard” to argue against something that has immense value when it is available.

        The worlds 10,000 inhabited islands is an example where 24/7 means burning diesel fuel 24/7 – at about twice the cost of mainland fossil fuel generation and where any solar at all – cuts the amount of diesel fuel that has to be burned… completely aside from the pollution aspect – just a pure economic aspect.

        we keep pitting good against perfect and it’s a dumb game.

  16. While most of us will be dead and long gone, scientists will someday discover that humanity has eliminated too many carbon and other greenhouse gas emissions that will be determined to protect our atmosphere from something devastating.

    Reread Genesis 11.1–9. It always reminds me that I’m far from all-knowing. But I am smart enough to know that I’m not the only one who doesn’t have all the answers.

    Climate Change as found in today’s world is religion for the masses and a license to steal for the leaders.

  17. There was a wonderful sci fi I read about a decade ago, with the premise that as soon as the greenhouse gas was contained, the ice age hit full strength.

    • I think human behavior can affect climate over decades and that we need to be careful about anything we put into the air. But I also remember that, in the 1970s, many scientists (and the media bow-wows) were claiming an new ice age was around the corner. Guess what? It didn’t happen. Now we’ve had decades of dire predictions that temperatures would be much higher than they are today and that sea levels would be much higher than they are today. And, of course, they bow-wows parroted everything they heard. Guess what? Those predictions didn’t happen. Credibility, credibility, credibility.

      One reads that we really don’t measure temperatures in many locations but, rather, extrapolate measurements from hundreds and even thousands of miles away. (Imagine being in high school physics class and trying to write a test answer explaining why that is good science.) One also reads how “scientists” have adjusted both old and new data points up or down to fit a desired trend line. (In high school, that would have been labeled cheating.) Credibility, credibility, credibility.

      I’ve spent well over 40 years in telecom and technology law working with many engineers, some better than others. But while I’ve seen mistakes, I’ve never seen any just adjust data or make up results. Moreover, their work is tested by that of other engineers, agency staff and even cross-examination. Engineers tend to protect their credibility by following scientific method.

      In any area but “climate science,” today’s claims would be vigorously tested and credibility challenged. It would be laughable but for the fact that the average person will be harmed by the transfer of wealth to the politically correct rent seekers, all cheered on by the media bow-wows. Isn’t there a single William Allen White out there?

      • What’s your take on the Ozone Hole and CFCs TMT?

        • Larry, once again, you miss the point. I’m not arguing that human behavior cannot affect the climate; we should not be careful of what we emit into the atmosphere; or that we should not work towards cheap, reliable energy from renewable sources.

          What I’m arguing is that there is considerable fraud in science. Absent strong evidence to the contrary, which does not exist, this fraud extends to climate science. What evidence do you have that climate science does not contain any fraud like every other field of science?

          There are numerous examples of “scientists” adjusting either historical data or current measurements/extrapolations to achieve desired results. When I was in school that was called cheating. Today, it’s worshiped by results-oriented politicians and members of the media.

          We also have situations where missing measurements are estimated. It’s one thing to present data with 90% of the actual data points measured. It’s something else when there might be only 30% actual measurements. No one would want to have their doctor diagnose them based on an EKG that had 70% of the electrode connections not working.

          Why is this acceptable for elected officials, the media, other academics, government agencies, universities, and well-educated people to ignore the fraud? Wouldn’t we have a better climate policy if we exposed the fraud, discounted it and the fraudsters behind it and used clean data and research to make policy and shape the public debate?

          I don’t expect any answers to my questions as it’s easier to shut one’s eyes to the fraud.

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