The State Corporation Commission has approved certain provisions of the most recent electric grid transformation plan proposed by Dominion Energy Virginia.
The approved elements include strengthening cyber security protections, improving service reliability through grid hardening, and a new computer platform to support customer service.
The SCC denied other plan elements due to the projected heavy costs to customers without adequate benefits. The rejected elements include Advanced Metering Infrastructure, commonly referred to as “smart meter technology.” And, grid upgrades and related features for which the company failed to justify what would be gained by the projected level of investment.
Dominion’s proposal, if approved in full, would have cost customers nearly $7 billion at full roll-out over 10 years. The elements of the initial phase approved by the SCC will, at a minimum, cost an estimated $212 million. The SCC rejected initial phase elements costing nearly $626 million. All cost figures include financing costs.
The SCC said, “We recognize the importance of the plan’s overall objectives. We have approved those elements in which the heavy costs to customers have been adequately justified by the overall benefits to customers, and we have denied approval to those elements whose heavy costs were not justified by the overall benefits to customers.”
Smart meter technology was one of the most expensive elements of the plan at $752 million in total costs. The Commission agreed again with a witness for environmental organizations in the first Dominion grid transformation proceeding (Case PUR-2018-00100), who said that smart meters “are beneficial and cost-effective only to the extent the Company utilizes them to maximize the potential gains of rate optionality, energy efficiency, demand response and distributed energy resources.”
In this case, the SCC found that Dominion had again failed to justify its smart meter proposal with a plan, including a well-crafted rate design, that could maximize the potential for benefits to customers through energy efficiency and demand response pricing (time of use rates).
For the components approved by the Commission, any costs that exceed the current estimates must be proven by the company in a future proceeding before recovery of those costs from ratepayers will be permitted.
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