Smart meters are a start, but Dominion Energy has more to do

Dominion Energy recently submitted a request to the Virginia State Corporation Commission (SCC) to spend a total of $3.5 billion on grid upgrades. This proposal, which would be broken into three phases, is massive even for the utility giant. $500 million of this has been designated to provide all Dominion customers with smart meters.

Currently, every customer of Dominion, or any electricity provider, has a meter which tracks and displays energy usage. This data is then used to calculate each customer’s electric bill. Typically, traditional meters must be read periodically by an employee of the electric company and the data is simply recorded, generally once per month.

Smart meters, on the other hand, transmit the data directly to the electricity provider, which allows for real-time energy consumption information. It can provide information regarding a customer’s peak consumption and can help consumers determine how to reduce their usage.

While having this information can be valuable, the greatest potential value of smart meters lies in “time-of-use” pricing programs. These pricing structures allow consumers to pay the real-time price of electricity. The cost of electricity increases as demand increases and decreases as demand decreases. These programs create great incentives for customers to invest in energy efficient products, battery storage, solar panels, and more, to offset consumption at peak pricing times.

As it stands, Dominion’s $3.5 billion expenditure does not include the implementation of a “time-of-use” pricing option. While the investment in smart meters is an important step forward, if Dominion wants to spend such large sums (which are charged to the ratepayer), it should also be required to maximize the benefits to the ratepayer.

The SCC has approached this matter with a similar skepticism. It has the ability to accept or reject the proposal based on whether the spending is “reasonable and prudent.” And the commissioners seem to recognize that Dominion’s plan does not empower consumers the way it should. The way forward for a more modern grid is to put more control in the hands of consumers, whether that is through their choice of energy or their ability to efficiently curtail energy usage at times of higher prices.

The SCC has a large part to play in this matter. It should not be shy about permitting Dominion to invest in upgrades but should ensure that those upgrades are positively impacting the ratepayers who are funding them. As a reminder, the SCC currently has a vacancy and whoever fills it will be making important decisions such as this. Now is the time to urge your legislator to select a commissioner who understands the importance of protecting consumers and investing wisely in Virginia’s energy future.

If you’d like to read Dominion’s proposal, it can be found here.