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SCC weighs in on Dominion Energy grid transformation plan

Virginia SCCThe State Corporation Commission has approved the cyber and physical security provisions of a proposed grid transformation plan submitted by Dominion Energy Virginia. The SCC denied other provisions of the plan that were unsupported by the evidence or where the Commission determined the high costs to customers outweighed any proven benefits.

As presented, Dominion’s 10-year plan was projected to cost approximately $6 billion, including financing, to be recovered from its customers. In this proceeding, Dominion sought approval for the first three-year phase of the plan, which had a total cost of approximately $1.5 billion, including financing.

The parts of the plan the SCC approved will cost $154.5 million to be recovered for the first phase. The parts the SCC denied would have cost $1.34 billion for the first phase and $5.07 billion in total.

In its final order, the Commission said, “Dominion’s proposed plan is expensive, so it is important that Dominion’s customers receive adequate benefit for the costs they will bear in their monthly bills.”

With respect to the denied elements, the SCC agreed with the Consumer Counsel of the Office of Attorney General, which argued, “the plan as filed is significantly lacking in detail…”  The SCC also agreed with a witness for environmental groups who testified, “As a complete package, the … plan is not cost-effective and will result in an economic loss for all customers.”

The Commission stated, “While we find the plan elements related to cyber and physical security are well-conceived, well-supported and cost-effective, we find that the remaining plan elements, which will cost customers hundreds of millions of dollars, are not.”

One of the costlier elements of the plan that the SCC denied was advanced metering infrastructure, known as smart meters. The Sierra Club, Environmental Respondents and Consumer Counsel all opposed Dominion’s smart meter proposal as not cost-effective.

The SCC agreed with an environmental-group witness who testified, “…without a well-reasoned plan, this expensive equipment could … provide little to no benefit to customers.”

“While grid modernization—things like smart meters and other technology—can be very beneficial to customers if done properly, the Commission recognized that Dominion was essentially asking to spend hundreds of millions of customer dollars on various projects, without a clear plan to ensure customers would actually realize any benefits.  Spending money first and hoping it works out is not prudent planning,” said Nate Benforado, attorney with the Southern Environmental Law Center.

Other elements of the plan that were denied included, among other things, grid hardening provisions which involved replacing and rebuilding certain primary electricity line segments. Consumer Counsel and environmental groups all opposed these plan elements as not providing sufficient benefit for their large cost. The Commission agreed.

The Commission’s denial of certain elements of the plan was “without prejudice.” Dominion is free to seek approval for an amended or better supported plan in the future if the company chooses to do so.

Update:  Thursday, 4:22 p.m. Statement from Ed Baine, senior vice-president, electric distribution in response to the SCC’s order on our Grid Transformation Plan.

“The State Corporation Commission today authorized important upgrades to the cyber and physical security, as well as telecommunications elements of Dominion Energy’s plan to transform Virginia’s energy grid.

“However we’re disappointed they denied significant, foundational elements of our plans, including a new customer information platform and smart meters which would be paid for through existing base rates.

“We remain committed to building a smarter, stronger, and greener grid for our customers and will use the guidance provided by the Commission as a framework to refile our next plan.”

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