Cover for the 2023 update of Appalachian Power Company’s plan to comply with the Virginia Clean Economy Act (VCEA) in coming decades.
by Steve Haner
Appalachian Power Company (APCO), serving Western Virginia, has now filed its annual update on Virginia Clean Economy Act compliance, including long term bill impact estimates. As the State Corporation Commission begins its review process, here are some highlights:
- The projected increases in electric bills are little changed and perhaps a bit lower than those reported a year ago. The cost for 1,000 kilowatt hours to power a home for a month was $117.09 in 2020; using the compliance plan the company prefers, it is projected to be $172.12 in 2030 (up 55%) and $193.29 (up 65%) in 2035.
- Despite all the political discussion about Virginia turning to the new, smaller nuclear reactor technology (so-called small modular reactors, or SMRs), they don’t turn up in APCO’s development plan as even an option for a long time, perhaps in 2040 when its major West Virginia coal plants will retire. Dominion Energy Virginia’s preferred VCEA compliance plan also didn’t turn to SMRs in the short term.
- Energy demand projections within Appalachian’s territory are negative, going down. Over the next 15‐year period (2023‐2037), its service territory is expected to see population decline at 0.3% per year and non‐farm employment growth of ‐0.1% per year. It projects its customer count to decline by 0.1% over this period. Internal energy requirements and peak demand are expected to decline by 0.4% per year through 2037.
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by Steve Haner
Customer cost projections for compliance with the Virginia Clean Economy Act have increased again from the first such estimates made in 2020. The bill for 1,000 kilowatt hours of electricity from Dominion Energy Virginia to power a home for a month may rise almost $100, or 83%, by 2035.
Dominion residential customers were already paying $288 (21%) more per year for 1,000 kilowatt hours per month by December 2022, compared to May 2020, just before VCEA became law. That will cost another $547 annually by 2030 and $878 more by 2035. Cost projections are even higher for commercial and industrial customers.
After all the hyped discussion coming out of the 2023 General Assembly that regulatory changes it made will “lower electricity bills,” it is important to face reality. Ignore claims from any incumbents who say they voted to “lower bills.” VCEA compliance is still going to be very expensive, and nothing just passed changes any of that.
The most recent figures are very similar and slightly higher than those reported in 2020. They were filed last year by the utility as part of the annual VCEA compliance plan, outlining its planned conversion from fossil fuel generation to massive amounts of wind and solar power over the next two decades. Continue reading →
Whether Dominion is building the solar farm or just buying its output makes a huge difference in cost.
by Steve Haner
In preparing for the latest round of new additions to its solar generation assets, Dominion Energy Virginia rejected eight privately- developed projects which were substantially cheaper than the projects it wanted to build on its own with ratepayer money. Just how much more expensive the company-owned projects will be is not clear, but the higher costs will be locked in for decades.
It is the 2020 Virginia Clean Economy Act which is driving the massive solar buildout, and one part of the statute is being read one way by the utility and another way by most of the other stakeholders. Dominion believes the law requires it to provide a fixed 35% of the new renewable electricity from third-party providers under long-term power purchase agreements (PPAs). It claims the law dictates that it must own 65% of the generation assets directly.
Just about every other party to the most recent application for new solar believes that 35% is a floor, a “no less than” target, and a higher percentage could be from PPAs. Entities taking that position include the Office of the Attorney General, environmental activists, and even large electricity users such as Walmart. The issue dominates final arguments on the application filed this week at the State Corporation Commission.
What is the solar price differential? As with far too many of these disputes, most of the key financial information is confidential, available only to case participants who have filed a promise to maintain secrecy. But in its final brief, the staff for Attorney General Jason Miyares (R) provides some dramatic comparisons. Continue reading →
by Bill O’Keefe
With the two chambers of the General Assembly politically divided, there is no hope for a bipartisan compromise on changing the Virginia Clean Economy Act. Without change, we are stuck with a radical energy policy that will enrich Dominion and leave consumers holding the bag. VCEA will stand as a monument to hubris.
There is one course of action that the Democrat-controlled Senate might be willing to accept, and that is subjecting Dominion’s approach to a “Red Team” review. If the GA can’t agree to do that type of review, the SCC could undertake it on its own.
The “Red Team” concept was developed by the Department of Defense to provide a means to realistically validate the strength and quality of strategies or policies by employing an outside perspective. A Red Team’s review evaluates whether a proposal is robust and complete. The use of red teaming has expanded broadly within government and the private sector.
Dominion and the Democrat Senate are by now so deeply committed to the offshore wind farm and to the VCEA mandates that it is impossible for either to take a fresh, objective look at either.
There are a number of reasons why a “Red Team” analysis is needed. Continue reading →