Virginia regulators should reject Dominion Energy’s long-term resource plan
Key Takeaways:
Dominion Energy’s latest long-term plan for Virginia is deeply flawed with highly uncertain projections
The 15-year plan contains an aggressively high capacity price forecast for the PJM market that favors keeping old, polluting fossil fuel plants
Dominion assumes hydrogen will be a viable, cost-effective replacement for gas but offers no hard cost and supply data
The plan relies on overly optimistic assumptions about future generation from its older coal- and newer natural gas-fired assets
Dominion Energy’s latest long-term energy resource plan for Virginia is replete with questionable assumptions and highly uncertain projections for the 15-year span the plan covers, according to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA).
The report explains why IEEFA believes state regulators would be well-advised to have the utility address and revise these shortcomings before endorsing the utility’s integrated resource plan (IRP).
“Given the many flawed assumptions in this plan and the serious economic consequences, Virginia regulators should ask for new, more realistic modeling before approving the IRP,” said Dennis Wamsted, IEEFA energy analyst and author of the report. “As it stands now, Dominion’s IRP contains significant long-term risks for the utility’s ratepayers and Virginia’s energy security.”
Among the most important problems with Dominion Energy’s plan are:
- An aggressively high capacity price forecast for the PJM power market that skews its analysis in favor of keeping the company’s old, polluting fossil fuel plants online;
- Its projection that hydrogen will be a viable, cost-effective replacement for gas, without providing any hard cost and supply data;
- Overly optimistic assumptions regarding future generation from both its old coal and newer gas assets;
- An unwillingness to examine additional energy efficiency measures, which have been shown repeatedly to be the least-cost supply option in many cases; and
- Extremely high demand growth estimates.
The company’s IRP is now pending before the Virginia State Corporation Commission (SCC) and given these shortcomings, the plan deserves a closer look.
