An initiative that was at first widely viewed as a success is now disappointing many Virginia stakeholders. Last year, Dominion Energy agreed to spend $870 million on energy efficiency programs. These programs were intended to reduce the need for additional energy supplies and to help low-income consumers spend less on their energy bills. However, Dominion is now contending that the spending plan should include the revenue it would lose because of the decreased energy usage. The result, if approved by regulators, would be a reduction in spending to $350 million, a mere 40% of the original amount.
In 2018, in an effort to pass the Grid Transformation and Securitization Act, which had significant opposition, Dominion Energy offered up this investment into energy efficiency as a way to assuage concerns. As a result, many in the community are rightfully frustrated by this decision and are viewing it as a showing of bad faith.
Investments into energy efficiency are a low-risk way to reduce energy demand and lower the cost of energy for low-income customers. However, Dominion has very little to invest in, or incentivize investment in, energy efficiency programs. In a ranking of energy efficiency among large investor-owned utilities, conducted by the American Council for an Energy Efficient Economy, Dominion placed 50th out of 51 utilities. Further, Ceres, in its analysis of the largest electric utilities in the country, also placed Dominion Energy last, with only about 80,000 MWh (0.10%) of savings through incremental energy efficiency as a portion of retail sales. This is compared to more than 1,000,000 MWh saved by the highest ranked utility.
It’s clear that energy efficiency programs are good for the consumer and for reducing the burden of energy production, and that Dominion Energy has failed to adequately invest in these measures. Even worse, after promising to improve, Dominion is attempting to use the regulatory process to significantly reduce its investment. Those who helped negotiate the Grid Transformation and Securitization Act last year, such as Secretary of Natural Resources Matthew Strickler and Senator Dick Saslaw, have spoken out against Dominion’s decision, stating that this outcome was not the intention of the legislation.
Dominion fears a reality in which consumers are using less electricity and thus paying less. But this is the equivalent of a company recalling a product, promising to pay for the repairs, and then charging customers for the revenue lost from decreased sales on newer products. Growth in energy demand is never a guarantee and rather than charging ratepayers for its expected loss in revenue, Dominion should find ways to innovate, just as any other company would. For instance, Dominion’s 2018 IRP anticipates very little growth in electric vehicles (EVs) in Virginia. It could easily invest some of its resources into paving the way for more EVs, which would, in turn, increase demand while keeping with its promise of a more energy efficient future.
The State Corporation Commission heard Dominion’s request on Wednesday, March 20th. It is our hope that the SCC will recognize the importance of rejecting this proposal for Virginia’s consumers and for Virginia’s economy. Powered by Facts will continue to update you as this matter unfolds.