Tag Archives: Dominion

Dominion Files to Extend Surry Nukes

Surry Nuclear Power Station

Dominion Energy has filed an application with the Nuclear Regulatory Commission to renew operating licenses for its Surry Power Station for an additional 20 years, the company announced today.

Like all nuclear units, the three-loop Westinghouse pressurized water reactors, capable of generating 1,676 megawatts each, were originally licensed to operate 40 years. Under its current licenses, the two nuclear units are allowed to generate electricity through 2032 and 2033. A second re-licensing would extend their lives through 2052 and 2053. The units account for about 15% of the electricity consumed by Dominion customers.

Dominion also has applied to re-license its two units at the South Anna power station. Between the four units, the utility estimates that it could spend as much as $4 billion on the re-licensing program.

Critics are certain to attack the proposal on the grounds that the power company should not make a long-term commitment to an expensive electric generating source even as the cost of solar power, wind power, and battery-powered backup continue to decline. Dominion argues that the nuclear units will provide a reliable, CO2-free source of base-load electric power. In essence, the critics are advocating a zero-nuclear, renewables-intensive energy policy similar to Germany’s energiewende, which has resulted in high electricity rates and burns CO2-intensive coal to replace the lost nuclear power.

It will make a fascinating debate.

Coal Ash Lessons from Hurricane Florence

Flood waters from Hurricane Florence spilled over an earthen dike at Sutton Lake at the L.V. Sutton Power Station.

Last month pounding rains from Hurricane Florence eroded a Duke Energy landfill, releasing some 2,000 cubic yards of soil and coal ash. Although Duke declared that the majority of displaced ash was collected in a ditch and haul road surrounding the landfill, North Carolina news media reported the “possible release” of material into the L.V. Sutton Power Plant cooling lake. Later, floodwaters from the Cape Fear River inundated the power station with a foot of water in places.

Environmentalists emphasized the danger of Duke’s practice of disposing of coal ash near waterways throughout North and South Carolina. “After this storm, we hope that Duke Energy will commit itself to removing its ash from all its unlined waterfront pits and, if it refuses, that the state of North Carolina will require it to remove the ash from these unlined pits,” said a Southern Environmental Law Center spokesman.

As I predicted here, the incident was sure to impact the debate over coal ash disposal in Virginia. And it has. The headline to a Richmond Times-Dispatch article today tells the tale: “Hurricane’s lessons add pressure for solution to Dominion coal-ash storage.”

Hurricane Florence “punished North Carolina and swamped at least one utility coal ash storage pond in its path next to the Cape Fear River,” stated the article. Then followed a quote from SELC attorney Nathan Benforado during a hearing of a General Assembly Labor and Commerce subcommittee: “Hurricane Florence is a wake-up call.”

A wake-up call? Benforado does have a point. Regulators need to consider the dangers of rare but recurring extreme weather events for coal ash disposal just as they do for electric grid planning. But a lot of relevant material didn’t make it into the Times-Dispatch article. Virginians need to know… the rest of the story.

First the background: The General Assembly subcommittee is studying how Dominion Energy Virginia should dispose of 27 million cubic yards of coal ash buried in ponds and pits at four of its coal-fired power plants: Possum Point, Bremo, Chesterfield, and Chesapeake. Under old Environmental Protection Agency (EPA) regulations, Dominion had dumped the coal combustion residue into large pits and mixed the material with water to keep down fugitive dust. After two major spills at other locations, including one at a Duke facility, the EPA wrote new regulations designed to prevent more spills. Dominion proposed de-watering its coal ash, consolidating the material into a single pit at each facility, and capping the pits with a synthetic liner to keep off rainwater.

SELC has raised at least two sets of concerns about the Dominion proposal. First, says the environmental group, there is nothing to prevent underground water from migrating through the ash pits, collecting heavy metals leached from the ash, and reaching public waters. Second, the proposed pits are located close to public waterways, hence they are vulnerable to erosion or inundation during extreme weather events like Hurricane Florence. SELC wants Dominion to remove the coal ash by truck or rail and bury it in lined landfills on higher ground. Dominion has said that the SELC proposal could cost billions of dollars. SELC has responded that recycling the ash into cement and cinderblocks could cut the cost dramatically. Dominion is now evaluating that alternative.

So, what exactly happened at Duke’s Sutton plant? Did the spillage and inundation create a human or environmental hazard? And knowing that conditions at each power plant are unique, is Sutton comparable to any of Dominion’s power plants? What lessons can we extract?

Duke spokesman Bill Norton told me that the hurricane caused incidents at two power plants — Sutton and, less publicized, H.F. Lee.

At Sutton the company had extracted four million tons of coal ash for placement in a landfill — precisely the solution the SELC and other environmental groups had called for. About three million tons remained when the hurricane hit. Norton described the scene as an “active construction site” and, thus, more vulnerable than the cap-in-place arrangement it has proposed for some of its other facilities. Pounding hurricane rain eroded the containment berm, releasing coal ash equivalent in volume to two-thirds that of an Olympic swimming pool. Flood waters from a swollen Cape Fear River also inundated the cooling lake  and overtopped a steel wall erected as a temporary structure. Other than the landfill erosion, however, the coal ash remained stable and the waters receded.

Water samples taken from the Cape Fear River showed that the floodwaters had washed away some “cenospheres,” lightweight, hollow beads comprised of alumina and silica that are environmentally benign, but not the heavier combustion residue which contains potentially toxic heavy metals. None of Duke’s tests found heavy metals in the water that exceeded state safety standards. Independent tests conducted by the North Carolina Department of Environmental Quality came to the same conclusion.

At the H.F. Lee power plant site, the coal ash basins had been inactive so long that they had grown over with forest. These basins also were inundated by floodwaters but Duke and NCDEQ tests have shown no heavy metal levels exceeding state safety standards. Continue reading

This Certainly Demonstrates Something (Don’t Ask)

Under normal circumstances, building two wind turbines 27 miles off the coast of Virginia at a cost of $300 million would  be neither reasonable nor prudent.  They may produce the most expensive 12 megawatts of electricity in Virginia history. The only rational reason to go forward is to test technology which is becoming more common around the world but is still untested in hurricane territory.

On that basis the proposed Dominion Energy Virginia project now pending approval at the State Corporation Commission received a lukewarm blessing from the SCC’s staff, mainly because Dominion continues to talk about quickly following up with a far more extensive turbine project in the same location.  Before building the big project, perhaps 2,000 MW, some testing is a good idea.

But the staff commentary also noted it would make sense to give the test project (known as Coastal Virginia Offshore Wind or CVOW) time to prove itself before building a multi-billion-dollar expansion.

“Should the Company decide to move forward with a larger scale offshore wind project before the CVOW Project is in service and the demonstration is complete, or before the CVOW Project has demonstrated that it can survive a hurricane type storm, the Commission may want to consider requiring the risk of such a decision be borne or shared by shareholders,” wrote Gregory L. Abbott of the Division of Public Utility Regulation in pre-filed testimony.  He also suggested the SCC put a hard cap on the cost.

He added: “…it appears unlikely that the CVOW Project will demonstrate that large-scale offshore wind will be economic compared to either the least-cost traditional generation option or to the least-cost carbon-free renewable generation option.”

The staff filed several sets of testimony, parts which are kept confidential at the request of Dominion.  There will be two hearings, the first and perhaps most important next week dealing with questions about the SCC’s authority when the General Assembly has deemed that a project is “in the public interest” based on lobbyist assurances.

The General Assembly used that phrase in connection with CVOW.  Does that reduce or even eliminate the Commission’s authority to reject things based on outrageous cost or imprudence?  Of all the many things to win that valued legislative endorsement, this is by far the worst use of your money.

It is your money.  In effect, Dominion will pay for the project with those excess profits it is not using to pay customer refunds.  There will not be a separate (and easy to track) rate adjustment clause.  When the accounting for this project finally comes up for SCC review in 2021, assuming the General Assembly doesn’t change the rules for the umpteenth time, whatever Dominion has spent on this will reduce the amount of potential profit for refund.

SCC staff witness Carol Myers dives into that, in a document replete with redaction.  The company hotly disputes her estimate of the real cost of the project at almost $700 million over 25 years, but it will have the incentive to prove a high cost in the next review because that prevents refunds or (the thought causes them to shiver) rate reductions.

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A Thumb On The Scale for ACP?

Weather normalized summer peaks for Dominion compared to earlier and current projections by the company. Source: Southern Environmental Law Center

A witness to whom Dominion Energy Virginia had vehemently objected, Gregory Lander of a company called Skipping Stone, had his time on the stand anyway at the State Corporation Commission Tuesday. His testimony might still be stricken, but the two commissioners and everybody else in the room heard it and then a lengthy cross-examination underlined it.

If he is correct the entire integrated resource plan filed by the giant utility, a process ordered by the General Assembly to plan the utility’s future, had a fundamental flaw. One single input in a model had a ripple effect in its choices for future generation, some of which it hopes to support with the controversial Atlantic Coast Pipeline.

The three-day hearing on the integrated resource plan, which will stand for two years, opened with SCC Chairman Mark Christie deferring a ruling on the motion to exclude some of Lander’s testimony. He said the decision on the ruling would be announced with the full decision.

Christie also repeated what has become a standard SCC disclaimer on IRP cases. It is just a planning document, any future plants will need a full commission review, “and just because you admit evidence does not mean it’s a finding of fact.”  He also added that before the ratepayers are billed for gas from the ACP the cost will need to be judged reasonable and prudent in its own case.

A little background: Dominion uses a modeling system called Plexos that uses information such as the expected new demand, generating units which might need to retire, various types of generation and their costs and environmental expectations to design its future system. As engineers say, and it was said again this week at the SCC, all models are wrong but some of them are useful.

The five future generation configurations included in the integrated resource plan used the model with different inputs, many of the variations dealing with future carbon regulation. According to Lander, and this was apparently confirmed in interrogatories, the cost of transporting natural gas through the ACP to Dominion generators was simply left out. SCC staff witnesses pointed to the same omission.

The commodity cost for gas was plugged in, but the cost of getting that gas to the plant was not. This omission made the choice of natural gas more cost-competitive and perhaps skewed the model in favor of gas. It put a huge thumb on the scale.

It is the transportation charge for the gas which will include the cost recovery, plus profit, for the construction of the project. Lander claims that will add up to $3 billion to ratepayer costs over 20 years. Opponents claim gas from the ACP will be more expensive than from existing pipelines. Lander was an expert witness hired by Appalachian Voices, an anti-pipeline group.

The IRP cannot be found reasonable and prudent, Lander told the judges, if an important cost like fuel logistics is set at zero. “The model is making choices that are not reflective of total costs.” He said that instead of building new gas combustion turbine units, included in the plan to complement all the intermittent solar also planned, the company should just keep some of the other fossil fuel units it plans to retire early and run them less often.

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Dominion Objects to Testimony on Pipeline Cost

One of the first decisions the State Corporation Commission may need to make in Monday’s hearing on the Dominion Energy Integrated Resource Plan (IRP) is whether to allow and consider testimony about the cost of the Atlantic Coast Pipeline.

Dominion filed a September 7 motion asking that testimony from a witness brought by Appalachian Voices “be stricken as irrelevant and improper,” which the environmental group answered with its own brief filed Friday.  Dominion argues the cost of the pipeline is not part of the IRP and is not properly before the commission in this case.  It will seek to recover the pipeline capital costs when gas from the pipeline is subject to a future fuel cost review.

Gregory Lander of energy consulting firm Skipping Stone states in his disputed testimony that the costs are already built in.  “The Company’s 2018 IRP embeds the costs of the Atlantic Coast Pipeline into each of the generation scenarios it presents…. (but) has not properly costed-out the all-in cost of increasing, beyond its current pipeline capacity portfolio, the costs associated with the level of pipeline capacity it intends to obtain on the Atlantic Coast Pipeline.”

He claims that acceptance of the IRP by the Commission in effect accepts that up to $3 billion of the cost of building and operating it will be passed on to ratepayers over 20 years.  Those are in addition to the cost of the gas.  Opponents of the pipeline argue it is not necessary to bring natural gas via the ACP to Dominion’s generators, and if it does so it will be supplanting lower-cost alternatives.

“In reality, the Company’s goal is not to avoid scrutiny of the ACP costs in this proceeding, the Company’s goal is to avoid scrutiny of the ACP costs in every proceeding,” states the brief in support of retaining Lander’s testimony.  It noted a similar effort to keep the data out was made successfully in 2017’s IRP case and during the certificate of need case for the new natural gas generation plant in Greensville County.

This is just one of the disputes expected when the SCC takes live testimony for two days on the plan, which outlines several scenarios for meeting future demand in Dominion’s territory while meeting current and future environmental rules. The amount of demand growth over the period is itself the main point of contention, with opponents claiming the utility has inflated its needs to justify excessive new plant construction.

In rebuttal testimony Dominion pushed back on claims by the SCC staff and others that it won’t need additional generation. It says the others ignored recent winter peak demands and claimed that an economic slow period responsible for flat demand is coming to an end.  “The lack of economic growth in Virginia has been a key driver to the forecast being higher than what has actually occurred” wrote Dominion’s director of energy market analysis Robert Thomas.

One of the reasons cited for expected growth is the explosion of data centers in Virginia, but representatives of that industry filed their own written comments disputing they will cause higher demand.  The letter was signed by eBay and Adobe among others.

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Dominion Proposal A Total Refresh, SCC Staff Says

The integrated resource plan (IRP) for Dominion Energy Virginia, pending at the State Corporation Commission, involves building or rebuilding enough generation to replace most of its existing capacity.

That is one conclusion reached by the SCC staff’s own analysis of Dominion’s filed plans. A bottom line $5.6 billion estimate of the 15-year customer cost of this building spree, along with upgrades to the transmission grid, produced a banner headline story in the Richmond Times-Dispatch.

Go to the SCC website and you find the staff written testimony divided into eight documents, with a total of 422 pages, and there are additional exhibits not available to view because the company has demanded the information remain confidential. An integrated resource plan by its nature covers the entire company operation, and this review is the first since 2018 legislation changed many of the rules and produced General Assembly blessing of grid and renewable energy investments.

A summary of the overall testimony is provided by Gregory Abbott, associate deputy director of the public utility division. It was Abbott who noted that the 15 gigawatts (GW) of generation in the plan approaches the maximum demands of 16.3 GW in 2017, although summer peaks for Dominion customers have reached 18 GW. “In other words, the Company’s build plan is nearly equal to its existing coincident peak load,” Abbott testified.

SCC testimony hides the projected cost of extending the life of Dominion’s nuclear plants, at company’s request.

Part of that is not new generation but a license extension for the existing nuclear plants accounting for 3.3 GW.  The cost of upgrading those plants to achieve that extended lifespan is substantial however and needs to be weighed against alternatives.  The actual cost is hidden by redaction.

To make room for the new, about a dozen existing plants will be retired years before the end of their useful lives, stranding about $450 million of depreciated costs on the company’s books.  Most of them burn coal, oil or wood to generate electricity, although two burn natural gas. Customers get the bill coming and going, paying for both sets of facilities – new and old.

Dominion plants proposed for early retirement, and their expected retirement dates.

The staff testimony usually starts the debate on these cases, and other case participants will now add more to the record, all of it answered eventually by Dominion staff and its own outside experts. The two judges of the Commission (no movement on filling the third seat at the Assembly) will hold a public hearing starting September 24.

The IRP itself is just that, a plan, and only takes form as the various grid or transmission projects later come to the Commission for review. The SCC in the past has said approval of the IRP does not guarantee approval of the elements. But this IRP, more than any previous one, is going to the heart of key issues facing Virginia.

First, as noted by the newspaper article, the SCC staff is rejecting Dominion’s own internal projections for electricity demand growth. It points to data from the regional transmission organization PJM that indicates a lesser demand going forward, and if you don’t have as much demand, you don’t need all these new generation sources. If you build them and don’t need them, the cost per customer goes up.

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Dominion Excess Profits Continued to Roll in 2017

Bill increases since 2007 by category. Source: SCC

During 2017 Dominion Energy Virginia earned $365 million in profits above the target return on equity the State Corporation Commission would likely have established, but of course the General Assembly regulates the utility now – not the SCC.

For the year Dominion Energy’s profit margin on its Virginia operations was just under 14%, well above what probably would have been an allowed target of less than 10%.  On the generation side of the house the margin was more than 19%, which would make most other manufacturers ecstatic (and, yes, Dominion manufactures electricity).  The margin on transmission was right on target.

The figures come from the annual update the SCC provides to the General Assembly on utility regulation since the landmark 2007 return to regulation, which was followed by the unprecedented 2015 law that suspended rate regulation, only to lead to the 2018 revolutionary regulatory revisions only now taking full shape.  (The adjectives are intended to be sarcasm and fully reflect the opinion of the author.)

Yes, the instability borders on insane. The 2018 bill calls for a full SCC review of rates and profits, the first “rate case” since 2015, in 2021 and these excess profits will be part of that review (along with this year and the two following). Do not bet your retirement funds on that happening without further changes to the law.  But in the interim, instead of a rate case we get this report.

A similar report last year detailed large excess profits for 2015 and 2016, the first two years covered by the General Assembly’s suspension of SCC authority. A portion of those profits, $200 million, is being returned to ratepayers as rate credits in 2018 and 2019, a concession Dominion Energy offered for all the other good and valuable considerations in the 2018 bill.  You got the first portion on your bills in July.

The 2017 SCC report predicted that the excess profits would continue to roll in, and the new numbers fit that prediction. Under the regulatory scheme Dominion wrote for itself last winter, there remains a chance ratepayers could receive some of that excess back in refunds, potentially more than $200 million. But the new law gives the utility a pass on paying refunds if the money is instead invested in its coming grid capital program or certain favored renewable energy projects.

The state’s other investor-owned power company, Appalachian Power, also earned profits above the likely target, with a profit margin of 11.3 percent. Its excess earnings were estimated at $32 million but APCo has one-fifth the number of customers, so keep that in mind when making comparisons to Dominion.

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Irony: Clean Money Group Donates More than Power Company


The Virginia Public Access Project has updated its list of largest campaign donors in Virginia, and the results making good reading.

My money is cleaner than yours. Perhaps the most fascinating tidbit is that Charlottesville-based Michael Bills, founder of Clean Virginia and scourge of Dominion Energy Virginia’s influence on state politics, has injected more money into the political system than Dominion has so far in 2018-2019. Bills donated $245,000 while Dominion contributed $190,940. (The Dominion number does not include personal contributions by Dominion executives. CEO Thomas Farrell, for example, has given $7,500 so far. Dominion executives Paul Koonce and William Murray chipped in $5,000 and $4,500 respectively. Still, Bills managed to give more than Dominion’s PAC and executives combined.)

Clean Virginia’s mantra: “In Virginia, corruption is legal, and it is time for that to end.” Clean Virginia’s solution: The organization out-bids its sworn enemy for the loyalty of Virginia legislators.

To my mind, the most fascinating untold story in Virginia politics today is the rise of Charlottesville’s landed aristocracy as a bankroller of liberal and Democratic Party causes. Virginia’s horse country gentry helped lefty Tom Periello nearly unseat moderate Ralph Northam in the 2017 Democratic Party nomination for governor. I view Bills’ Clean Virginia initiative as a continuation of that momentum.

Speaking of big money… Democratic PACs and allied groups totally dominate the list of largest donors. These include the Stronger Together PAC, which raised money for Northam’s campaign; the Laborer’s District Council, which gave heavily to the Northam campaign; and the Commonwealth Victory Fund and the Legislative Majority PAC, two Democratic Party-aligned groups.

The biggest GOP-leaning donor was William B. Holzman, a Shenandoah Valley oil and gas distributor. Collectively speaking, Virginia’s big businesses — Dominion, Comcast, Verizon, Altria, and the Realtors and Bankers associations — lean to the GOP but they spread their money between both parties. If political power in the General Assembly shifts to the Democrats, the corporate money likely will follow.

How will the media cover this story? As far as I can tell, only David Ress with the Daily Press has reported on the latest VPAP numbers. His focus, unsurprisingly, was Dominion — although he took a man-bites-dog angle on the story, noting that the utility is not the biggest campaign contributor this year. I’m waiting for the media to start showing the same level of interest in the other big-money players as it does in Dominion. And don’t get me started about all the “dark money” sloshing around the system. I’ll save that for another day.

Postscript: By the way, U.S. Senator Tim Kaine is out-raising Republican Corey Stewart by a ratio of about 17 to one. Clearly, Virginia’s moneyed class is avoiding the Trumpier-than-Trump candidate like the Ebola virus. Worse for Stewart, he’s even losing the small-donation race (less than $200) by a margin of about three-to-one. This race will be a wash-out. The Virginia GOP looks like it’s in huuuge trouble.

What a Tangled Analysis We Weave

Dominion Energy Virginia does not want state regulators to require a formal cost-benefit analysis of its plan to spend $3 billion on grid modernization over the next decade, reports the Richmond Times-Dispatch.

“I do not believe it would be appropriate to impose such a requirement for its approval,” said Edward H. Baine, senior vice president of distribution for Dominion Energy’s power delivery group. In testimony filed with the State Corporation Commission. He urged the commission to consider “the many qualitative or otherwise unquantifiable benefits” of the plan.

At first blush Baine’s remarks sound like Dominion is asking for a blank check –“Give us permission to spend a bunch of money, but don’t look too closely at how we spend it.” Predictably, Dominion’s critics of all stripes have been quick with criticisms. Some say the grid modernization sacrifices the interests of rate payers with unnecessary spending, others that the plan is insufficiently transformative of the electric grid. In today’s political environment, Dominion makes an easy target. In the T-D article, even the utility’s friends had qualms about the company’s wish to avoid a traditional cost benefit-analysis.

My intention in this post is not to defend the plan, the details of which I have yet to see. As a general rule, I am a huge proponent of conducting cost-benefit analyses for any public expenditures (or in Dominion’s case, expenditures that require public approval). Indeed, some criticism may be justified. As Steve Haner has pointed out, some of the tap-lines in the proposed undergrounding project sound absurdly expensive. And as Walton Shepherd with the National Resources Defense Council has blogged, the strategic thrust of the $3 billion spending plan, a grab bag of initiatives, could use sharpening.

So, by all means, let’s have a vigorous public debate over Dominion’s grid modernization plan. But let’s have a better debate than the one that seems to be shaping up. To start, let’s admit that some benefits to Dominion’s plan are, in fact, difficult or impossible to quantify. Then, permit me to introduce two critical concepts — (1) risk and (2) the time value of money — without which we cannot have an intelligent discussion.

Writing in the Commentary section of the Times-Dispatch today, Robert M. Blue, CEO of the Dominion Energy Power Delivery Group, discusses the benefits of the plan’s priorities — investment in renewable energy and energy-efficiency; resilience in the face of sabotage, cyber threats and natural disasters; more assistance to lower-income Virginians — without offering a cost-benefit justification.

In his SCC testimony, Baine has said the plan will save the company more than $2 billion over 20 years. In other words, $3 billion invested over 10 years will save only $2 billion over 20 years. On its face, that seems like an indefensible assault on the rate payers. But, as he made clear, the numbers exclude “unquantifiable benefits.”

Let’s take the undergrounding program as an example. In March Dominion filed to recover $284 million to bury 660 miles of its most outage-prone tap lines. Those lines accounted for 9,368 outages over the past 10 years. Dominion should be able to quantify the estimated cost of continuing to repair these tap lines over the next 10 years. I don’t know what the cost is, but it’s certainly in the tens of millions of dollars, perhaps in the hundreds of millions of dollars. What Dominion cannot quantify is the value to customers of having their electric service restore more quickly. When your power goes out, how much is it worth to get it back on? The loss of an hour or two is a minimal hardship. But the loss of electricity for three, four, or five days — I’ve had mine go out for 10 days — spikes as food spoils, working at home is impossible, or as extreme cold or heat makes houses uninhabitable.

Alternatively, let us consider investments in hardening infrastructure against the sabotage of physical facilities or corruption of IT systems. These may be investments for which we never see a benefit. Dominion can spend tens of millions of dollars upgrading its IT computers and communications and never come under cyber attack. Without making the investment, however, there is an increased risk of system-wide collapse. How much will Dominion decrease the risk of catastrophe by making those investments? That’s impossible to measure. What would the cost be if the grid experienced an extended blackout? Also impossible to measure.

While the risk of sabotage on an electric sub-station, a cyber-attack on grid IT systems, or a Category 3 hurricane overwhelming coastal infrastructure may be remote, it would be irresponsible not to guard against them. How much should Dominion spend to protect against them? There is no measure. The decision requires a judgment call.

Next, let’s address the time value of money.

In his T-D article Michael Martz makes the following statement:

The company plans to spend $2 billion on the Strategic Undergrounding Project, which the SCC estimates will cost $6 billion over the life of the buried lines, including the financing expense and utility profit.

I am seeing this total-cost number — initial cost + profit + financing costs — quite often. The purpose, of course, is to make the cost to rate payers look as large and frightening as possible. We never see this with other types of infrastructure expenditure, as in, to make up an example, “The Virginia Department of Transportation plans to spend $2 billion to build Superhighway X, which will cost $6 billion after operations, maintenance and interest expense on bonds are taken into account.”

When a private-sector company examines its capital-expenditure alternatives, it looks not only at the up-front cost, it looks at the time value of money. The basic principle is that a dollar spent today has greater economic value than a dollar spent twenty years from now. Why? Because a dollar put to work today will have twenty years of compounded returns compared to a dollar invested two decades from now. In simplified terms, a dollar spent today is worth two dollars spent twenty years from now.

To compare the value of projects with long expected finance costs and financial payback, financial people calculate what they call net present value. To include the financing expense of the Strategic Undergrounding Project (or any other project) without taking into account the time value of money is highly deceptive.

Do these qualifiers mean that Dominion’s proposed $3 billion grid-modernization investment is totally justified? Not at all. The SCC needs to give each component a good, hard look. But it is fair to say that any analysis of costs and benefits is meaningless without taking into account unquantifiable benefits, risk and the time value of money.

AP’s Latest Hit Piece: Journalism or Polemic?

Here we go again. The Associated Press’ Alan Suderman has popped out another context-free article making an issue of Dominion Energy’s tenfold increase in lobbying expenses over the past year to more than $1 million. That spending, writes Suderman, “came during a period when the company successfully pushed through legislation that could lead to substantial increases to electric bills.”

It is a legitimate exercise in journalism to report the lobbying expenditures of the state’s largest investor-owned utility, especially when it is as politically influential as Dominion and when the utility backed controversial and far-reaching legislation. But it’s not legitimate to strip the story of highly relevant context such as… oh, I don’t know… maybe, how much other stakeholders spent on lobbying, advertising, education and outreach.

If Dominion were alone in increasing its investment in influencing legislators, that would be one story. If, given the magnitude of the stakes involved, the utility’s spending was matched by the spending of other interest groups, that would be a very different story. Suderman did not raise the latter possibility in his article, thus creating a highly negative impression of Dominion — an impression he reinforced by quoting Clean Virginia, a group formed to counter Dominion’s political influence:

“It’s unfortunate that at a time when refusing monopoly money has become a hallmark of good governance, Dominion is doubling down on its political spending in an attempt to rig the rules in Richmond and mislead Virginians about the cost of their corruption,” said Brennan Gilmore, executive director of Clean Virginia.

Suderman notes in passing that Clean Virginia is a “newly formed group.” Ironically, Clean Virginia does not yet appear in the Virginia Public Access Project (VPAP) database as a campaign donor, even though the organization has pledged to back General Assembly candidates who refuse Dominion money, nor as a registered lobbyist, even though the group is actively involved in influencing public opinion. Come to think of it, the Clean Virginia website does not say where its money comes from either. One guess is that some, if not all, of its funding comes from its founder and chairman, Michael Bills, a wealthy investment manager (founder of Bluestem Asset Management) from the Charlottesville area. But there is no way for members of the public to find out — Clean Virginia’s 990 filings have yet to show up in the ProPublica database of nonprofit companies.

While Clean Virginia is a cipher, Dominion details precisely how much money it contributes to political campaigns, whom it has hired as a lobbyist, how much it has contributed in gifts and entertainment, and (through other reports) how much, and to whom, its nonprofit foundation donates money.

There’s a real asymmetry at work: Dominion scrupulously documents its lobbying activities but other players in the burgeoning renewable-energy and energy-efficiency fields, not to mention some of the company’s most relentless critics, do not. Suderman calls out Dominion for its spike in lobbying-related activity but cares not a whit what others are spending or their refusal, for whatever reason, to be fully transparent about their activity.

Actually, there’s an even bigger asymmetry at work. While Dominion exercises its influence largely through campaign donations and lobbying, the company’s critics make their power felt by devoting resources P.R., education and outreach to influence public opinion — expenditures that aren’t captured in any database.

If it were possible to compile all the information needed to make a valid comparison, perhaps we would find that Dominion’s bolstered its spending by many times more than others did — although that would raise a different set of issues. (Dominion spokesman David Botkins argues that the spending surge was necessary to “break through the fake news and propaganda perpetuated by anti-energy groups like Clean Virginia and their ilk.”) Alternatively, perhaps we would find that Dominion’s spending increase was matched by others. We don’t know what we’d find until someone does the digging. But it is patently unreasonable to skewer Dominion for its spending surge without (a) comparing the increase to that of other stakeholders, and (b) acknowledging that Dominion is being more transparent than many of its critics.

Biased journalism such as Suderman’s is what causes many Virginians to mentally discount whatever they read. “What is this reporter not telling me?” readers wonder. “Is this just a hit piece?”