TJI To SCC: Keep Dominion Gas Plants

The following has been submitted to the State Corporation Commission via the public comment portal it has established for Dominion Energy Virginia’s pending 2023 Integrated Resource Plan.  It was drafted by Thomas Jefferson Institute for Public Policy Senior Fellow Stephen D. Haner.

Dominion Energy Virginia is acting reasonably and prudently by planning to maintain most of its natural gas generation and perhaps some of its coal generation for the foreseeable future, despite narrow votes in the Virginia General Assembly in favor of eliminating their use.

That is the only aspect of the pending Integrated Resource Plan review (PUR-2023-00066) on which the Thomas Jefferson Institute for Public Policy is offering an opinion.  However, the opinion is strongly reinforced by data put on the case record by the State Corporation Commission’s own professional staff and cited below.

The modern proverb that all models are wrong, but some models are useful must have been devised by somebody doing long-range utility planning.  It is unlikely any utility, Dominion Energy Virginia included, can project 15 or 25 years into the future and make accurate calls on customer demand, commodity prices, or government policy. The other stakeholders in the current Dominion integrated resource planning also lack the gift of prophecy.

Yet the debate so far in this dispute seems to focus almost entirely on the projected future demand for electricity within Dominion’s Virginia jurisdictional territory. Outside experts retained by various parties and the SCC’s own consultant have offered fairly strong reasons to doubt the utility’s fairly aggressive projections of future demand. It is their models versus Dominion’s.

That overlooks a key point. Even if the demand does not grow as rapidly as projected by the utility, the need remains to maintain reliability as the solar and wind assets proliferate. The risk to energy stability from intermittent renewables is now being widely recognized, not least by the very regional transmission organization to which Dominion and Virginia belong, PJM.

The recent official comments PJM filed with the U.S. Environmental Protection Agency, raising concerns about the impact of its efforts to drive fossil fuels out of the energy generation mix, seem equally applicable in the discussion now before the SCC. If not made an official part of this record, the SCC should at least keep PJM’s warnings in mind.

Your own staff is also pointing directly to the problems. See for example Matthew Glattfelder’s testimony, which among other things challenges Dominion’s claims about the effective load-carrying capacity, or ELCC, of the massive wind and solar fleets Dominion plans to have online within a few more years. The fact that Dominion is making such optimistic predictions about the value to reliability of those additions, predictions that exceed PJM’s own view of the matter, is far more troubling than the debate over future demand growth.

Glattfelder also raises questions about Dominion’s optimistic projections of how much energy it will receive from the massive solar facilities and the small number of onshore wind facilities it included in the plan. Again, PJM data indicate existing projects produce less power than Dominion is expecting from these new installations. Even a one percentage point reduction in the 22% solar capacity factor matters when Dominion is planning to add 11 gigawatts of solar in the next 15 years.

The doubts about ELCC and solar and wind capacity factors raised by Glattfelder make the retention of the more reliable thermal generation sources all the more important. The proper mix between the various sources to maintain reliability is a complicated engineering decision, but if less future demand materializes, surely that should lead to fewer solar and wind installations and not just fewer thermal resources.

Andrew Boehnlein’s testimony finds “significant headwinds” against Dominion’s claims it will use demand side management programs to reduce its demand 5%, especially since it cannot name what methods it will use and so far the company has a weak track record of getting customers to participate. This undercuts the many witnesses from environmental advocacy groups who asserted that Dominion should rely even more heavily on energy efficiency incentives. Again, we will continue to need reliable thermal generation.

Finally, there is the evidence provided by the cost models. The bill impact spreadsheets in Anna L. Clayton’s testimony (mirroring Dominion’s own) show a continued upward trend in the long-term costs. The residential, commercial, and industrial bill illustrations for the end of the planning period are slightly higher than those filed with previous IRP documents. These only go up with time.

A year ago, the projections were that the bill for a residential user of 1,000 kilowatt hours would reach $185.81 by the end of 2030 and $213.36 by the end of 2035, using the Commission’s preferred methodology. Now those figures are $193.12 by 2030 and $235.40 by 2035, a 103% increase over May 2020. Dominion projects lower figures but does so by assuming the much higher levels of demand, the levels of demand disputed by so many witnesses.

Those monthly costs are for Plan B in Dominion’s plan, the scenario that keeps most of the thermal generation online and even adds additional natural gas generation. As high as the projections are, they are lower than the projected customer costs under Dominion’s Plans D and E, the plans which remove all those plants. Plan D has the highest cost, topping out at $254.40 per month, an increase of almost 120% (over $1,600 per year) above May 2020.

As with all the models under discussion, cost models rely on a raft of assumptions, but the indication is clear that continuing with some thermal generation is the lower-cost approach. Ignoring the dictates of the Virginia Clean Economy Act would be lower still, as Dominion’s Plan A illustrates, but that is probably not an option under current law. (Plan A’s 2035 monthly cost is pegged at $217.36.)

For a reliable energy future, Dominion’s customers need at least the level of thermal generation it now has in Plan B to continue in operation. Please support that in your final order.

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26 responses to “TJI To SCC: Keep Dominion Gas Plants”

  1. In thirteen years, demand for electricity will be increasing at heretofore unknown rates if the government of the Commonwealth follows through on its planned 2035 ban on the sale of new private automobiles powered by internal combustion engines.

    1. Stephen Haner Avatar
      Stephen Haner

      Yeah there is that. We’ll need daily updates on sunshine and wind speed so we can know when it is safe to charge them.

      1. Nancy Naive Avatar
        Nancy Naive

        Incandescent lights are better, eh?

    2. Nancy Naive Avatar
      Nancy Naive

      If what you get when you google is to be believed, the Tesla will use 3,400 kWh in a year (10k miles).

      Here in Virginia the typical house uses 13,143 kWh.

      Every ~4 cars is another house. But then, how much savings in fuel does that represent?

      Well, “The ratings are based on EPA’s formula, in which 33.7 kilowatt hours of electricity is equivalent to one gallon of gasoline.”

      At 25.6 MPG (Virginia charges a use fee at better’n that) that’s 390 gallon of gasoline, or 13,143 kWh.

      What? Purely coincidental, I’m sure.

      Every 4 Teslas saves enough energy to power 3 houses.

      Whoa! That means, if everyone in Virginia drove Teslas, then the population could be 32 million and use the same energy as we use now.

      1. James Wyatt Whitehead Avatar
        James Wyatt Whitehead

        Curious. Do you own a Tesla?

        1. Nancy Naive Avatar
          Nancy Naive


          I had one of the dual motors leave me spinning like a hubcap at a stoplight one night (license plate DURACEL) and I don’t think I should own one… for the sake of others.

      2. Unfortunately, the savings in energy from not using gasoline will not help Dominion and other power companies meet the increased demands for electricity.

        1. Nancy Naive Avatar
          Nancy Naive

          Let ‘em burn gasoline.

          1. Gasoline-powered gas turbines?

          2. Nancy Naive Avatar
            Nancy Naive

            Mario Andretti’s Indy Car? They boasted they ran it on 151.

  2. LarrytheG Avatar

    There’s an existing good way to evaluate Dominion’s past predictions. Go back to their prior IRPs and see how well they reflect today. I suspect they’re not that good but perhaps they are or at least we could get a rough idea of how reliable they are.

    The second aspect is that Dominion already does not produce all of it’s own power and buys from PJM (or used to) and/or from other producers.

    Why can’t that continue to be part of a plan if they fall short and/or the solar/wind mix is too high?

    So Dom can buy power when needed so the discussion is about projected higher future demand.

    I’m not sure if I was SCC, I’d rely ONLY on Dom’s predictions alone nor TJs who clearly have their own biases.

    1. f/k/a_tmtfairfax Avatar

      Check Dominion’s credibility by looking at its past projections against actual results is a proper test. But how sensible is it to assume that a significant source of Dominion’s future power needs can be regularly purchased from other PJM members? It’s my understanding that PJM members don’t sell their power unless they have a surplus at the time of the sale.

      I would expect that, unless a PJM member is primarily in the wholesale power business and without a legal obligation to serve retail customers in its franchise area, the duty to serve retail customers comes first. But also having substantially more generating capacity than needed to serve retail customers should be a ground for excluding the excess capacity from the rate base and earnings.

      1. LarrytheG Avatar

        I see where DOm got out of the PJM “capacity” market but I’m clueless as to what that issue is and the implications but if Dom remains part of PJM, PJM takes the lead on reliability and reports when they feel there is not enough assured capacity and thus more generation should be built.

        On top of that, Dom seems to have the ability to build it’s own plants and sell their
        excess capacity when they don’t need it but keep it and use it when they do need it.

        That would be a legitimate part of it’s integrated planning , no?

        Are they advocating building more plants because they are not sure they can buy enough
        power when it is needed? If they make such a statement, it would be a Clarion call to most folks who would urge them on to do it, right?

        It’s really hard to understand the dynamics even though Haner gives it a shot but sometimes I think Haner is promoting a view that is not wholly objective and somewhat tainted by the forces that want to phase out more fossil fuels… over time – reduce their use, not kill them 100%

        1. Stephen Haner Avatar
          Stephen Haner

          Of course they are assuming they won’t be able to buy all the power they need for the next several decades, and thus need their own generation. It would be crazy to think otherwise. PJM demands they have sufficient native generation.

          Me? Biased? Here’s my bias. The high daily temp here in Richmond today was set in 1954, the year of my birth, a year my mother always complained was horribly hot for a person carrying a child. In almost 70 years there has been almost no “climate change” at all, and what there has been is so negligible that it is crazy (that word again) to build your energy plan assuming an imaginary crisis is real. We can keep using gas.

          1. Eric the half a troll Avatar
            Eric the half a troll

            Richmond is global now…?

          2. Stephen Haner Avatar
            Stephen Haner

            Well, it was hot in Richmond AND Texas, where we were, so that’s global enough. 🙂 And my mother-in-law in Maryland was expecting that same summer and made the same complaints of discomfort to my future wife.

          3. Stephen Haner Avatar
            Stephen Haner

            Well, it was hot in Richmond AND Texas, where we were, so that’s global enough. 🙂 And my mother-in-law in Maryland was expecting that same summer and made the same complaints of discomfort to my future wife.

          4. LarrytheG Avatar

            You’re not paying much attention to what is happening in the rest of the world Steve.

            It’s okay to be a “skeptic” but a 100% skeptic without any doubt what-so-ever that we should be wary enough to not bet the farm?

            But back to Dom and their “plan” how many new generation plants are they saying they will need?

            Is there a timeline for building them?

            Are they doing it right now?

            What plants are being planned right now? Where? what cost?

      2. William Chambliss Avatar
        William Chambliss

        PJM is not composed only of regulated utilities. In PJM parlance, these are Load Serving Entities. Many states have deregulated generation, so most of PJM’s members are these independent generators. They are ALL (with limited exemptions) obligated to offer all their generating capacity into the market every market cycle. Those that offer sufficiently competitive pricing for their power “clear” the market. They are not paid what they bid, however. Every MW that is accepted as needed to meet demand is paid at the rate of the highest price MW needed to meet that demand. So, there is almost always a surfeit of capacity available for purchase.

      3. William Chambliss Avatar
        William Chambliss

        However, neither Dominion nor Apco participate in the PJM Capacity markets; both are FRR participants, which means they accept responsibility for serving their own customers. Each can purchase energy (not capacity) from the PJM energy market, but will only do so when the price of such available energy is less than the price of the utility’s own available units. “FRR” means Fixed Resource Requirement, obligating a member to secure all its own requirements from its own units. There are advantages and disadvantages to this participation model.

          1. LarrytheG Avatar

            Thank you sir!

    1. Nancy Naive Avatar
      Nancy Naive

      Competitive billing?

  3. Nancy Naive Avatar
    Nancy Naive

    Dare I murder the quote? Oh, watt the heck! A Watt saved is a Watt generated.

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