“Incomplete!” SCC Sends Back Dominion IRP

SCC Offices on Richmond’s Main Street

The State Corporation Commission today rejected the 2018 integrated resource plan (IRP) filed by Dominion Energy Virginia, stamping it “incomplete” and asking the utility for additional information in a supplemental submission.

The IRP is only a planning document, and the one for 2017 was just approved by the Commission a few months ago.  But in response to the 2017 plan and the massive revision to utility laws by the 2018 General Assembly, several specific directives were imposed for this next plan, which is supposed to have a longer shelf life.  The SCC asserts Dominion failed to comply with some of those directives.

The IRP process forces the company to show various alternative plans with cost estimates for ratepayer impacts.  The process also gives other stakeholders a chance to dig into the details, challenge facts or assumptions and file questions that must be answered under oath.  The plan under consideration has been unusually contentious, and the critics clearly have persuaded the Commission to question the utility’s position on key points.

A key argument was over the company’s projections of future electricity demand, which underlies its plans to build new generation assets and extend the lifespan of its existing nuclear plants.  If the demand projections are inflated, such investments might be unnecessary to the point of being wasteful.

“The record further reflects that the load forecasts contained in the Company’s past IRPs have been consistently overstated, particularly in years since 2012, with high growth expectations despite generally flat actual results each year,” the order states. “For example, the evidence showed that the Company’s 2012 IRP projected peak load of approximately 21,500 MW in 2017 whereas the actual peak was approximately 19,500 MW.  Moreover, for the past several years, the Company has generally lowered its expected base year forecast with each subsequent IRP, while maintaining a similar slope for its long-term forecast.”

The SCC has ordered the revised IRP to reflect the lower load forecasts produced by the regional transmission organization PJM, which serves the Dominion territory.

It also has ordered the revised IRP to have a true lowest-cost plan to use as a baseline for comparison.  The company used a modeling system to develop and test various alternative combinations of generation sources, looking at both cost and how they match with environmental regulations. But like any computer model, the inputs drive the outputs.

The SCC complained that the various alternatives in the IRP included some high-cost elements, such as the two-turbine offshore wind demonstration project, which skewed the results.

 “In its corrected 2018 IRP, for purposes of its least-cost plan, the Company shall not force the modeling to select any resource, nor exclude any reasonable resource. This requirement does not reflect any finding that the Company should pursue any specific resource included in the least-cost plan; rather, as the Commission has repeatedly recognized, the IRP is a planning document, and it is reasonable, for planning purposes, to identify the least-cost plan to provide a benchmark against which to measure the costs of other alternative plans.”

The Commission also demanded full cost estimates for several other elements included in the 2018 General Assembly legislation.  Some are subject to other current cases, but an IRP is supposed to bring all the elements together.

 “As previously ordered, the Company shall also calculate the incremental cost impacts of the mandates contained in Senate Bill 966, including a comparison to the identified least-cost plan. This includes CVOW (note: the offshore wind demonstration project); 5,000 MW of nameplate wind and solar, including at least 25 percent of such resources from non-utility generators; $870 million in spending on energy efficiency programs; the 30 MW battery storage pilot; the SUP; the Grid Transformation Plan; and the Transmission Line Undergrounding Pilot.”

A major dispute in the case arose over whether and how to account for costs related to the Atlantic Coast Pipeline, which Dominion expects to use if completed as its future source for natural gas.  Dominion sought to exclude certain testimony about the rate impact of that choice, but in one footnote the Commission overruled those objections and in another reinforced the inclusion of gas transportation costs in cost projections.

14 The record reflects that the Company did not include fuel transportation costs in the modeled costs of certain natural gas generation facilities. Tr. 610. For purposes of the corrected 2018 IRP, the Company should include a reasonable estimate of fuel transportation costs, including interruptible transportation, if applicable, associated with all natural gas generation facilities in addition to the fuel commodity costs.

On the key question of how to project power generation from planned solar projects, the utility had built its plan using a 26 percent capacity factor.  That was challenged as too high, using the observed 20 percent capacity factor at existing Dominion solar facilities, which admittedly are older technology.  On that one the SCC seemed to split the baby, asking for estimates in the IRP based on a 23 percent capacity factor.

The revised IRP with its more detailed cost estimates on alternative plans and General Assembly mandates will likely be filed well after the 2019 General Assembly has come and gone, so whatever actions it takes (if any) will be made without that data.   Perhaps by then the General Assembly will at least have filled the vacant seat on the three-member court.

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13 responses to ““Incomplete!” SCC Sends Back Dominion IRP

  1. A long overdue development. I had hoped this would happen last year but better late than never.

  2. Sounds like the SCC is paying attention to the current make-up of the General Assembly because, God-bless-them, they are right, it’s about time someone called Dominion on their bogus projections … and their “build” plans based on those bogus schedules.

    Perhaps the GA now has more folks who support the SCC and doing it’s legitimate role?

  3. Note to readers: I made a tweak to the paragraph about the disputed testimony related to the Atlantic Coast Pipeline. It was another footnote (3) that admitted that disputed testimony and footnote 14 was not directly related to that….but still yet another rebuke to the company. The thing about this and the complaints that the grid filing is also incomplete or lacking important info – either the utility is just no longer taking this process seriously and is “dissing” the SCC or it is not up to some of these tasks. I actually hope it is the first because incompetence is NOT something I want to consider with them.

  4. re: ” … “dissing” the SCC or it is not up to some of these tasks. ”

    well in terms of overestimating demand – that’s been going on for years, right?

    and actually “dissing” in light of what the GA has done to the SCC role .. well, that’s more than “dissing”.. that’s more like neutering the SCC role but now – something has changed…because this action would seem to be provoking the GA to interfere even more …i.e. to force them to accept the IRD like they did the Offshore wind and Grid Transformation… so now the SCC is openly challenging Dominion on something they had not in years prior. No?

  5. This is the outcome that many of us recommended in our comments to the Commission.

    This year’s IRP was supposed to meet various new requirements that were spelled out in the new energy bill. But it failed to do that. It also repeated many of the same errors contained in previous reports, such as over-stating future demand and using out-dated forecasting techniques.

    Most importantly, the new energy bill changed the filing requirements to every three years and this IRP would stand for much longer than usual. It was very important that the SCC had a useful planning document and a good prototype on which to base future reports. It was appropriate that the SCC considered that the document was incomplete until its shortcomings were remedied.

  6. Will the deadlock over Commissioner Dmitri’s successor continue in this session? Chap Peterson’s article in the WaPo in August concludes, “Dmitri’s retirement leaves a consumer-minded void in the SCC.” And, he points out that the Governor can appoint a Commissioner if the deadlock persists – I don’t know if such an appointment is interim or final. But Larry is right to suggest, “Perhaps the GA now has more folks who support the SCC [in] doing its legitimate role.”

  7. In Arizona, CA and Hawaii the Regulatory body has sent their utilities back to the drawing boards. I am delighted to see that our SCC has done the same and I am curious too see if our new legislature will find their way to a new direction too.

    We can’t just talk of more solar, more wind and whether storage can suffice to smooth the intermittency of renewable resources as long as utility profits are based on a rate-based system of building and selling more electricity. Twenty-one states, including VA, are still operating under the old 20th century utility monopoly regulation, pushed forward only by their RTO’s regional market and corporate sustainability demands.

    As Dominion knows from the fact that they pledged to provide Amazon with as much renewable energy as Amazon requires, and as reported at PowerGen 2017, “corporate buyers are driving an unprecedented demand for renewable energy today and will continue to do so into the future”. That promise to Amazon will require a new grid structure and that new physical structure requires a changed regulatory structure.

    Rocky Mountain Institute has a lot of information on the requirements of our energy future and our utilities. In #RocktheGrid – New Market Demand for Renewables, Lily Donge of the Rocky Mountain Institute and head of the Business Renewables Center (BRC), said that this year 16 corporations have signed deals to purchase renewable energy and of those 16, 13 are new, indicating the growing interest. When the BRC was launched in 2015, Donge said they hoped to attract about 50 organizations. The BRC has 213 member companies and 47 have signed PPAs for renewable power. Those 47 are driving the growth of more than 8 GW of power” and IT is leading the way.

    Glad to welcome Amazon.

  8. Thank you, JT, for this pithy summary of where we clearly are in Virginia: “We can’t just talk of more solar, more wind and whether storage can suffice to smooth the intermittency of renewable resources as long as utility profits are based on a rate-based system of building and selling more electricity. Twenty-one states, including VA, are still operating under the old 20th century utility monopoly regulation, pushed forward only by their RTO’s regional market and corporate sustainability demands.” It’s beyond credulity that the SCC, obviously encouraged by the GA, continues to push Dominion to rate-base the bulk of its generation resources — notwithstanding that the entirety of Dominion’s load is within the 12-State PJM wholesale energy market, offering a huge array of short term and long term competitive electric generation and demand-side options at lower cost to the consumer.

    I too want to see renewables dominate those lower-cost options, and they are fast getting there; but I don’t see how you can separate that debate from the need for dependable and low-cost bulk power storage. Lithium-ion batteries are not capable, raw-materials/production quantity or cost-wise, of filling the need to “smooth the intermittency” to the extent it will take to get above 30-50% renewables on the grid. A commitment to “100% renewables” by Amazon these days is achieved simply by buying up all the renewables power Amazon needs for its loads leaving the rest of us with an even higher share of our consumer electric loads on fossil fuels. This commitment by a few large customers for image-stroking reasons has pushed utilities to experiment and surely has helped scale down the costs of new renewables technology, of course, but getting beyond 50% renewables overall on the Grid still looks like a pipe dream to me. Where are those new battery breakthroughs we’ve been promised these many decades?

  9. Acbar, I appreciate the knowledge and experience that is clearly in your comments, but I think that Dominnion/Virginia’s issue with maintaining central demand is not only short sighted, I think doesn’t allow us to think about how dramatically demand can be reduced through efficiency, and through onsite and third party owned generation. CitiGroup estimated central demand can be reduced by up to 50% in their Energy Darwinism report. Tom has laid out a very doable demand reduction based on efficiency that could meet Dominion’s currently produced demand from her aging nuclear plants. Rooftop solar can meet up to 25% of demand according to the GIF study done at NREL. Community solar can extend that well beyond 25%, and offshore wind will dramatically alter the idea of peak demand with the timing of its nighttime generation working synergistically with solar.

    Certainly extending generation hours with longer than 3-4 hour storage capability will make getting to 100% easier, but holding onto the rules that restrict 3rd party and onsite generation ownership won’t even get us to 30-50%.

    News sources say Scotland is on target to become 100% renewable by 2020. They are getting there by looking at the full range of opportunities for generation while Virginia has not really analyized what can be can accomplish with onsite generation, community microgrids, and building owner efficiency improvements .

    Time to look at more than Dominion’s central generation overestimated demand.

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  11. GEEZ Reed … There you go again with a negative political judgment and no facts. I haven’t a clue what you are objecting to.
    Glad to read the complicated facts about the state of ‘stuff’ regarding what happened in the fall. This ‘green lady’ did not think the environmental groups should have allowed themselves to be bought out with a bit of utility scale solar. As I wrote …
    “We can’t just talk of more solar, more wind and whether storage can suffice to smooth the intermittency of renewable resources as long as utility profits are based on a rate-based system of building and selling more electricity. Twenty-one states, including VA, are still operating under the old 20th century utility monopoly regulation, pushed forward only by their RTO’s regional market and corporate sustainability demands.

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