Dominion Energy plan: Electric bills could rise 3% a year over the next decade to pay for net-zero carbon emissions
Look for electric rates to rise faster than they were set to already, in response to bills enacted by the 2020 General Assembly, Dominion Energy Virginia says in a letter to legislators accompanying copies of its latest long-term plan.
The 296-page Integrated Resource Plan filed Friday with the State Corporation Commission marks a major shift towards net-zero carbon production.
Covering the cost of those directives – which include retiring plants that produce carbon dioxide, reducing energy use and joining a regional cap-and-trade system – will boost customers’ bills by 3% a year over the next decade, Dominion said. That translates to bills that would be 34% higher than current levels in 2030, or about $2.94 a month higher than they’d otherwise be, a Daily Press analysis shows.
“This plan is our good-faith effort to analyze those policy changes, but it is a snapshot based on today’s technology,” said Katharine Bond, vice president of public policy and state affairs.
The plan does not assume any changes in technology, although the company believes that improved batteries for storing electricity, using hydrogen fuel and capturing carbon dioxide at gas plants will speed progress towards net-zero carbon emissions – its goal by 2050.
“But hope doesn’t keep the lights on,” Bond said.
The plan filing, which is revised every year, is not a formal request for permission to increase rates or build any particular plants – rates and investments in generating plants are subject to formal approval by the State Corporation Commission, typically after filings thousands of pages long. The commission has to find that any rate increases or investments are in the public interest and that the costs to be borne by customers are fair.
The plan itself sets out four possible paths for the next 25 years. One – the “least cost” alternative required by State Corporation Commission orders – could not meet requirements set by the 2020 General Assembly, Dominion said.
The three others would cut carbon emissions by more than one half in 15 years, to about 11 million tons a year. Two of them, which would shutter all of Dominion’s gas plants between 2035 and 2045, would reduce emissions to just about zero by the end of that period. The third would still generate about 10 million tons a year in 2045, unless new technology for carbon capture or the use of hydrogen fuel or the small nuclear reactors the U.S. Department of Energy has been working to develop since 2012 become more practicable.
All three call for construction of offshore wind turbines to generate 5,112 megawatts of electricity – double Dominion’s current plans to install 220 turbines 27 miles off of Virginia Beach. With the increase, offshore wind turbines would make enough electricity to power 1.3 million homes.
The main difference in the three alternative pathways comes down to solar power.
The one Dominion told legislators is the most feasible would boost solar generation from the current 396 megawatts built or under construction to 15,920 megawatts by 2035 and 31,400 by 2045. All in all, it’d cost $66 billion by 2045, or about $23 billion more than the “least cost” plan that does not include meeting Virginia’s clean energy requirements.
But it would retain 9,700 megawatts of gas-fired plants, which the other two alternatives would drop. Instead, they call for more solar panels, nearly twice as much battery storage and a doubling of imported electricity from other states – states that might not have clean energy standards like Virginia’s.
The main difference between the two bigger solar plans is that the costlier one, with a bill totaling $81 billion by 2045, uses a lower estimate for how often solar facilities would actually be able to produce electricity than the less costly, $79 billion alternative. The State Corporation Commission favors the lower estimate, but Dominion thinks the higher one is reasonable.
In its plan, Dominion warned that the energy savings goals the legislature set – 5% a year by 2025 – might be a reach too far. It also noted that the solar panels envisioned in the plan would cover at least 490 square miles, which is about 25% more than Fairfax County’s area.
All of the plan’s alternatives count on Dominion’s nuclear workhouses, in Surry County and North Anna, to keep producing zero-carbon power. Dominion has filed for a 20-year extension of Surry’s license, which would keep that plant’s two units running until 2052 and 2053. It will apply for a similar extension for North Anna this year, which would keep that plant running until 2061.
The plan continues a call to close Yorktown’s rarely used oil-burning unit in 2023.
While the plan that includes gas units would keep Dominion’s generators in Chesapeake and Gravel Neck, in Surry County, running, they’d close sometime in the late 2030s or early 2040s under the alternatives that call for more imports instead of gas plants.
“Dominion is proposing a substantial overhaul of the way electricity is generated, consumed and stored, all of which will have a significant economic impact for Virginian families and businesses,” said Brennan Gilmore, executive director of Clean Virginia, a Charlottesville-based advocacy group that operates a political action committee focused on energy issues.
“The new construction envisioned by its IRP will generate significant shareholder profit for Dominion, but major rate increases for customers,” he added.
Separately, Dominion asked for bids to supply for up to 1,000 megawatts of solar and onshore wind generation and up to 250 megawatts of energy storage equipment. It’s the largest request for development proposals in the company’s history.
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