After Clean Economy Act, Dominion says ‘significant build-out’ of new gas plants no longer viable

By: - April 10, 2020 12:01 am
Dominion Energy's downtown Richmond building. (Ned Oliver/Virginia Mercury)

Dominion Energy, Virginia’s largest electric utility and a major U.S. energy company, is headquartered in Richmond. (Ned Oliver/Virginia Mercury)

Although it has not yet been signed into law by Gov. Ralph Northam, the Virginia Clean Economy Act passed by the General Assembly this March has already spurred changes to the long-term plans of Dominion Energy, the state’s largest electric utility.

On March 24, Dominion asked regulators to waive a requirement that as part of its long-term planning it comprehensively assess the risk and impact of new natural gas plants on the grounds that “significant build-out of natural gas generation facilities is not currently viable, with the passage by the General Assembly of the Virginia Clean Economy Act.”

“The VCEA establishes the objective of 100 percent clean energy by 2045, and permits the construction of carbon-emitting generating facilities only if there is a threat to reliability or security of electric service,” Dominion stated. “For these reasons, the Company believes that the aforementioned requirements related to the development of those specific resources are no longer necessary.”

The request, which was granted by the SCC March 26, is related to the utility’s Integrated Resource Plan, a long-range forecast that must be regularly approved by the commission. 

The last IRP submitted by Dominion in 2018, which was initially rejected by regulators and subsequently revised, originally called for eight new natural gas plants to be built. At the same time, the utility continued to push for the construction of the Atlantic Coast Pipeline, the $8 billion 600-mile planned natural gas pipeline running from West Virginia to North Carolina in which Dominion owns a majority stake.

Dominion Energy spokesman Rayhan Daudani characterized the utility’s request as “a procedural step to remove some outdated reporting requirements” ahead of the May 1 deadline for the company’s IRP filing.

But despite the company’s assertion that a “significant” buildout of new natural gas facilities is no longer viable, Daudani stated that “natural gas remains an important part of the around-the-clock reliability our customers rely on.”

Natural gas accounts for the largest share of Dominion’s current energy portfolio, producing 42 percent of the utility’s electricity in Virginia, according to the company’s most recent numbers. The next most important fuel source, nuclear, accounts for 30 percent of Dominion’s generation. 

The utility also has plans underway to construct two new plants in Chesterfield and Pittsylvania counties. Dominion did not respond to a question from the Mercury about whether it still intends to pursue those projects but told the Associated Press that it has not canceled its plans.

Clean energy advocates celebrated the shift in direction, which Chesapeake Climate Action Network director Harrison Wallace described as “the first snowball in what should soon become an avalanche of companies abandoning gas in all its forms, including pipelines and generation plants.”

Dominion, however, remains committed to the Atlantic Coast Pipeline. 

The project “is still urgently needed for electricity, home heating and manufacturing in Virginia and North Carolina,” said Daudani. “Dominion Energy Virginia is just one of several public utility customers of the ACP, with a large portion of the capacity going to North Carolina utilities.”

In February, in an investors’ call, Dominion president and CEO Tom Farrell announced the company had bought Southern Company’s 5 percent stake in the pipeline, bringing Dominion’s ownership in the project to 53 percent.

Exactly how much change the Clean Economy Act would be able to spur in transitioning Virginia off of fossil fuels was hotly debated by the General Assembly this winter. A small faction of Democrats, many of them in favor of enacting a state version of the Green New Deal, contended that the VCEA lacked the teeth to halt new natural gas investment because of its lack of an outright moratorium on such infrastructure. Supporters, however, claimed that the law would effectively disincentivize such investment by utilities through economic carrots and sticks.

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Sarah Vogelsong
Sarah Vogelsong

Sarah is the Mercury's environment and energy reporter, covering everything from utility regulation to sea level rise. Originally from McLean, she has spent over a decade in journalism and academic publishing. She previously worked as a staff reporter for Chesapeake Bay Journal, the Progress-Index and the Caroline Progress, and her work has been twice honored by the Virginia Press Association as "Best in Show" for online writing. She was chosen for the 2020 cohort of the Columbia Energy Journalism Institute and is a graduate of the College of William and Mary. Contact her at [email protected]

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