Dominion Energy’s proposal to develop new solar and energy storage resources faced harsh criticism in hearings before the Virginia State Corporation Commission (SCC) Monday and Tuesday.

Dominion is asking the SCC to approve its annual Renewable Portfolio Standard (RPS) Development Plan, which it filed Sept. 15 to comply with the Virginia Clean Economy Act (VCEA), which requires the utility to reach 100% clean electricity by 2045 (PUR-2021-00146).

Dominion is asking the SCC to approve:

• • • its CE-2 plan to build and operate 13 utility-scale projects totaling 661 MW of solar and 70 MW of energy storage and related interconnection facilities;
    • two small solar projects totaling 4 MW;
    • 24 power purchase agreements (PPAs) for 32 resources totaling 253 MW of solar and 33 MW of energy storage; and
    • cost recovery for three utility-scale solar projects totaling 82 MW (CE-1), which the SCC approved in April at an estimated cost of $10.4 million (PUR-2020-00134). (See Virginia SCC Gives IOUs a Pass on RPS Plans — for Now.)

Dominion attorney Elaine Sanderlin Ryan of McGuireWoods said Monday that the company opposes an SCC staff suggestion to increase stakeholder input in the request-for-proposals process. “If it’s not broken, don’t fix it,” she said. She also opposed a request by environmental group Appalachian Voices to allow interested parties to submit additional models of future power production and consumption for the company to run.

“When left to its own devices, Dominion does not prepare or even attempt to prepare viable least-cost plans,” Will Cleveland, senior attorney with the Southern Environmental Law Center, said Monday on behalf of Appalachian Voices.

Energy Department also Calls for Stakeholder Group

The Virginia Department of Energy weighed in Tuesday, saying that while it supports approval of Dominion’s projects it “has concerns regarding the efficiency of planning and procurement for RPS compliant generation” and supports commission staff’s proposal to form a stakeholder group to help the company refine its request for proposal (RFP) procedures.

Virginia Energy Director John Warren said that the VCEA’s targets “require large-scale investments to occur within a near timeframe.”

“While the company’s current proposal represents an important step towards RPS and storage goals, there is a much greater volume of generation due to be proposed and built in the coming years, and it is essential that the company is operating a fair, transparent and efficient process for planning and procuring future projects,” he said in a filing.

Warren said the stakeholder group should “at a minimum, review general RFP development, including process transparency, scoring criteria and the value of employing an independent evaluator.”

The Solar Energy Industries Association also expressed concerns while supporting Dominion’s CE-2 projects. “We believe that this represents a diverse set of projects, and that these facilities will help the company comply with its mandatory obligations under the VCEA,” attorney William Reisinger said Monday on behalf of the group.

However, he said, the solar industry finds it “extremely concerning” that Dominion is saying it may not be able to meet the 1% RPS carveout for 2021 and may have to pay the $75/MWh deficiency payment for noncompliance. That should only be done as a “last resort,” and there are sufficient resources in Virginia for the company to meet the compliance goal, said Reisinger, who was also speaking for the Chesapeake Solar and Storage Association (CHESSA).

Walmart, which operates 94 stores and two distribution centers in Dominion’s territory, also expressed reservations about the utility’s RPS plans. “We see significant costs under VCEA that are not borne by the company or solar developers; they are borne by the customers,” Carrie Grundmann, attorney with Spilman, Thomas & Battle, said Monday. She urged the SCC to compel Dominion to adopt lower-cost power purchase agreements (PPAs) rather than build out its capacity at a higher cost.

On Tuesday, her cross-examination of Emil Avram, Dominion’s vice president of business development, led to a tense exchange. The subject was a clause of the VCEA that states that “35% of such [renewable] generating capacity procured shall be from the purchase of energy, capacity, and environmental attributes from solar or onshore wind facilities owned by persons other than the utility.”

“Is there anything in the code says that only 35% can come from PPAs?” Grundmann asked him. She had argued in her opening statement the day before that the company was treating this figure as a ceiling, which meant that Dominion had to build or acquire 65%, a method that she said would be more expensive for customers.

“It’s clear to us that the law says 35% must come from third parties,” Avram said. “It doesn’t say at least, it doesn’t say at most, it doesn’t say approximately. It says 35%.”

An attorney for the utility objected to Grundmann “badgering” Avram after they went back and forth on this point for several minutes.

As of Aug. 31, Dominion said, it had 1,958.1 MW of solar and onshore wind nameplate capacity, including operating facilities, those under construction and those that have been proposed, including the CE-2 projects it is now asking the SCC to approve. PPAs constituted 788.8 MW of that total, and another 52 MW qualify as distributed solar under the VCEA, because they are 3 MW or lower capacity projects.

Through 2020, Dominion says, 322.8 MW in solar and onshore wind generation facilities had reached the commercial operation stage, including PPAs, company-owned systems, and company-owned “ring-fenced” resources that are not under contract with a potentially eligible “accelerated renewable energy buyer.” The VCEA exempts such buyers from the costs of the RPS.

By the end of this year, Dominion expects to add another 240 MW to the total, followed by 492.5 MW next year, 1,063.1 MW in 2023 and 740 MW in 2024.

From 2025 to 2035, Dominion projects it will add approximately 14,865.1 MW more in capacity, which “will offset the 16,100 MW target for the development of solar and onshore wind” set by state law. As a result, the company expects its carbon dioxide output to decline from the 2021 total of more than 15 million metric tons per year to 5 million tons in 2035, although there will be a slight increase in this pollution in the next few years.

Cost

Dominion said the cost of the RPS program to residential customers who use an average of 1,000 kWh/month would rise from 37 cents/month this year, to $5.11 in 2022, and increase more than five-fold to $28 by 2035. Under a different “directed methodology,” the total added to monthly bills in 2035 would be $43.22, the company said.

Advocacy groups were not impressed with Dominion’s plans. “Once again, I believe Dominion has failed to conduct adequate long-term, least-cost implementation planning, and the commission should reject the plan proposed here,” consultant Karl Rabago said in written testimony submitted Nov. 16 on behalf of Appalachian Voices. “Given the company’s failure to submit least-cost VCEA compliant plans for the past two proceedings, I recommend that in future proceedings, the commission require the company to perform a set number of modeling runs and sensitivities as prescribed by other parties.” Additionally, he said, SCC staff, industrial and commercial customer groups, and environmental and consumer groups should be permitted to submit alternative plans.

In written testimony submitted Nov. 17, the Virginia Department of Environmental Quality and other state agencies focused on steps Dominion would have to take to protect the Chesapeake Bay, wetlands and other sensitive areas for its planned projects to go forward.