The Attorney General’s Office says Dominion Virginia Power should abandon plans to build a third nuclear reactor in Louisa County to avoid what the government called a waste of billions of dollars on an excessively expensive power source.
The utility giant is on pace to spend nearly $2 billion on the controversial reactor — which it maintains it hasn’t committed to building — by the end of 2018. The utility said that would likely be the earliest it will ask the State Corporation Commission for approval.
Dominion, which is still working to get a license for the third reactor at its North Anna plant from the federal Nuclear Regulatory Commission, would spend $19.3 billion and increase customers’ bills by 25 percent, an expert witness for the Attorney General Office’s Division of Consumer Counsel testified before the SCC.
Dominion’s own 15-year outlook — the subject of SCC hearings this week — shows that the nuclear option is more expensive than building natural gas plants or relying on such renewable resources as solar power as it works to comply with new federal carbon dioxide emissions restrictions.
“How many hundreds of millions or billions of dollars does a company need to spend on a generation project before it can say we are planning to build this generation project?” said William Reisenger, an assistant attorney general. “Is there a threshold? Could Dominion spend $3 billion on a generation project without deciding whether it is building that project?”
Dominion executives said they expect a federal license in 2017, and to stop work on designing the reactor before that would be premature. That federal license wouldn’t expire once it was obtained, and Dominion could at that point step back and consider its options, company executives testified Wednesday.
The SCC’s three commissioners, charged with regulating the state’s energy industry, considered whether they should hold a type of preliminary hearing to weigh in on Dominion’s plans before 2018.
“The option value that the (federal license) provides for customers is almost immeasurable,” said Thomas P. Wohlfarth, Dominion’s senior vice president of regulatory affairs. “Right now, North Anna 3 is the third most expensive option for complying with the Clean Power Plan. But all it takes is some variation on how the state decides to implement the plan, or decisions by other states, or change in gas prices. You could very easily see a flip in the value where North Anna ends up being the lowest cost. ... You can’t go all in on one fuel source.”
Nuclear energy already is a major component of Dominion Virginia Power’s portfolio. Its twin reactors at North Anna and Surry provide more than 40 percent of its customers’ electricity.
Another concern for Dominion is whether it can renew its reactors for another 20 years. The licenses in Surry expire in 2032 and 2033, and at North Anna in 2038 and 2040. Without those renewals, executives have said, it’s unclear how the state will continue to meet its clean power requirements.
The General Assembly has previously allowed the company to write off most of $570 million it spent developing the third North Anna reactor, which Dominion began planning in 2001.
SCC commissioner Mark C. Christie said he wonders if Dominion considers how all of its requests for extra charges to customers will affect them. The SCC this year rejected a Dominion plan to bury its most vulnerable power lines, noting the pressure of multiple rate increases on customers.
“All this stuff is adding up and it has to be paid for by the ratepayers,” Christie said, adding that a “prudency review” might be needed before Dominion commits millions more toward North Anna.
Environmental groups have long opposed Dominion’s planned third reactor. And the Virginia Citizens Consumer Council on Wednesday applauded the attorney general’s office for questioning Dominion’s spending.
“The massive $19 billion cost for the North Anna 3 nuclear reactor project makes it the biggest single threat posed today against the pocketbooks of Virginia consumers,” said Irene Leech, the council’s president.
“We agree that this project is so ill-considered that the state must insist that, this time, ratepayers not foot the bill if it must be abandoned before completion, as happened when it was attempted before and has happened with so many fiscally unsound nuclear projects,” Leech said.
The SCC hearings Tuesday and Wednesday, and continuing today, are focused on whether the state should accept Dominion’s latest 15-year forecast.