Dominion Energy could face tighter scrutiny from its key regulator over ratepayer impact, commissioners on the State Corporation Commission signaled Wednesday.
Dominion’s transparency related to its long-term planning and the projected impact on ratepayers came into question during a daylong hearing before the commission Wednesday, as the utility sought to defend its 2018 long-range outlook for energy consumption and generation in Virginia.
In December the commission rejected the utility’s plan in an unprecedented move. At Wednesday’s hearing the company, environmental groups and commission staff dived into Dominion’s revised plan.
Judges on the commission chided the utility over a March 25 presentation to Wall Street investors that showed the company plans to spend $16.4 billion on an array of projects that are not reflected in the revised long-range plan the company submitted to the commission just over two weeks later.
Dominion told investors in that presentation, which is subject to federal Securities and Exchange Commission regulations, that over the next five years, it planned capital investments in solar energy, upgrades to its transmission lines, a new energy storage facility and much more.
Nearly all of the expenditures, SCC judges and staff said, could translate into increases to Virginia ratepayer bills. Dominion told investors the same, with the exception of $1.3 billion of its projected $3.7 billion investment in solar.
Dominion’s April 7 filing to the commission reflects just $8.26 billion in anticipated projects.
“Dominion knew exactly what they were going to tell Wall Street. … You could have filed it with this filing,” said Judge Mark Christie, a member of the commission, referring to Dominion’s revised plan.
Christie asked commission staff and Dominion to produce an estimate on the impact of those projects to ratepayers within two weeks.
“The whole point of an IRP is that it should be a snapshot, and not one that is photoshopped,” he said, referring to Dominion’s long-range Integrated Resource Plan. “This is not an accurate picture. It’s not telling the public, the consumer and the legislators what is coming down the road.”
Commission staff, environmental groups and the Virginia Citizens Consumer Council expressed similar concerns.
“To the extent there is a disconnect between the IRP and the company’s real-world planning process is disconcerting to staff,” said Ashley Macko, the lead attorney with the commission, adding that the information in the investor presentation is not reflected in any of the filings the company made to the commission.
Representatives of Dominion did not dispute the differences between the two documents. Robert Thomas, director of energy market analysis for Dominion, at one point said of the 2018 Integrated Resource Plan that “the value of it is not much right now.”
Nevertheless, the company said that its revised 2018 IRP simply addresses questions the commission posed when it rejected the original long-range plan first filed last fall.
The company said that document is based on projections made at that time.
Vishwa Link, an attorney with McGuireWoods representing Dominion, said that if the utility had accounted for changes in its revised long-term plan, “You’d have an apple and an orange.”
Link made the same argument when asked about the sudden retirement of 11 coal unit plants throughout Virginia, including two at Dominion’s Chesterfield power plant.
In both the original and revised long-term plan, Dominion told the commission that the units weren’t slated for retirement for years. The two it permanently retired in Chesterfield County were due to close in 2023.
By quickly retiring the units, Dominion can deduct the cost of the retirements from any over-earnings it makes between now and 2021, potentially avoiding ratepayer refunds.
Link chalked up the decision to the “dynamic industry” Dominion operates in.
SCC Judge Judith Jagdmann, who served as Virginia’s attorney general after Jerry Kilgore resigned to run for governor in 2005, questioned the impact to ratepayers in the short term, despite Dominion’s assertion that it would result in cost savings between now and 2030.
“That’s over a long period of time,” she said.
SCC staff appeared satisfied with the company’s attempts to address the commission’s questions over how it projects electricity demand in the state and how it plans to comply with a set of directives from the state legislature on energy efficiency in the 2018 plan.
But, both staff and the commission’s members signaled they expect future plans to build on that work with better projections.
Sierra Club senior attorney Dori Jaffe said it would not be “productive to pick apart” the 2018 plan at this point, but said she hopes the commission scrutinizes Dominion’s future plans.
“Things are changing and the company’s future IRPs should as well,” Jaffe said.