by Steve Haner
In the coming weeks, Virginia’s State Corporation Commission takes up one of the largest utility investments ever undertaken in the Commonwealth, where the cost and the risk will rest squarely on Virginia’s citizens: Dominion Energy Virginia’s $10 billion Coastal Virginia Offshore Wind project.
In applications and appendices filed late last year, probably running to hundreds of thousands of words and hundreds of technical drawings, Dominion outlined its request to build the project 27 statute miles (24 nautical miles) off the mouth of Hampton Roads. The project area covers 176 square miles of seabed. It uses about one square mile for each of the planned 176 turbine towers.
Where the cables from the turbines come ashore in Virginia Beach, a major expansion of the transmission system will be required to integrate the electrons into the regional grid. While turbines that far offshore may not stir viewshed complaints, the onshore miles of new major power lines might (details here.)
A public comment period on the application is already open, and the comment portal can be found here. If you don’t want to dive into the gigantic case file, the SCC order giving public notice and setting the procedure for this application includes a summary.
Dominion is seeking a determination that the project is reasonable and prudent (as those legal terms have been defined by the General Assembly) and seeks to start charging the capital costs to its 2.6 million customers by September of this year. Construction could begin in late 2023 and power could begin to flow in 2026.
Whether or not the SCC can say no to the application, and if so on what grounds, will be a contested point in the testimony, hearings and legal arguments to come. The 2020 Virginia Clean Economy Act, which just survived another round of efforts to repeal or amend it, certainly contemplated this project. Did it mandate approval?
Attorney General Miyares’ staff argued in another case earlier this year:
Requiring electric utilities to transition to net zero carbon emissions will involve significant costs approaching $90 billion. The General Assembly has made the policy decision that Virginia’s electric utilities will transition to net zero carbon emissions over the next three decades. As with any long-term utility planning, there are pathways forward that will be higher cost and others that will be lower cost. The Commission, as the economic regulator overseeing this transition, has the authority to ensure that the costs of the transition are reasonable and no more than necessary. (Emphasis added.)
This project and a planned second tranche of about the same size (with financing costs and utility profits) are the largest piece of the $90 billion cited. In all the projections of how implementation of the VCEA vision of carbon-free generation will raise consumer bills over the next 20-30 years, the offshore wind project is by far the largest piece, especially if the critics are right that it will need to be supplemented with additional energy storage not now being planned.
On-line public comments will be taken until May 16, when the SCC will begin hearings with the various parties. The first day of hearings will be for public witnesses; then the lawyers and expert witnesses take the stand.
What parties other than the utility will participate in the debate? The SCC’s own staff will be doing financial and engineering analysis and making recommendations, due for release April 8. The window opened March 25 for all other participants to file initial testimony on the record, and many documents should be available this week.
In his role as Consumer Counsel, Attorney General Miyares and his staff will be at the table. Both the AG and the SCC staff are charged with considering the consumer viewpoint, including all classes of Dominion customers.
Three different environmental groups have filed to participate: The Sierra Club, the Charlottesville-based advocacy group Clean Virginia, and a broader coalition under the umbrella of Appalachian Voices. Recently the Nansemond Indian Tribe signed up for the case, but it is not clear what issues will be its focus.
Finally, Walmart – a huge Dominion customer with its retail and distribution operations — is participating. Also signed up to testify and pose questions is the Virginia Committee for Fair Utility Rates, representing several major industrial concerns. By way of disclosure, it was that group I worked closely with as the government affairs manager for Huntington Ingalls Industries until 2017.
At this point, those groups and they alone have access to the reams of secret information at the heart of this case, secrecy which has already been called to the attention of Bacon’s Rebellion readers (here and here.) When their own experts or lawyers cite that secret information, their documents are also redacted. When the hearings come in May, portions may be held behind closed doors with the public and media excluded.
Public interest in these matters is usually quite low. Media coverage has always been spotty; but now, with the legacy outlets down to skeleton staffs, expect very little. And it is safe to expect the reporting of any concerns will be countered by major pro-project public relations campaigns from Dominion and others. Many companies from around the world have a piece of this action, with Siemens Gamesa the supplier of the 14.7 megawatt turbines (about as big as they get now).
Those who oppose or question the wisdom of this project may be painted as opposed to the effort to remove fossil fuels from the electricity industry. But there are other forms of carbon-free energy, including solar, nuclear and hydro power, and even onshore wind has proven to have much lower costs per megawatt hour produced. Whether this particular 2,600-megawatt project, with its 30-year price tag, and this ownership structure, is a wise decision has nothing to do with carbon dioxide and our climate. Don’t fall for the “we must do exactly this to save the planet” nonsense.