Utility’s resource plan fails to incorporate energy efficiency efforts similar to those of comparable utilities in other states and does not meet intent of the VCEA, resulting in $1 billion in higher electricity costs for Virginia customers

RICHMOND, October 20, 2020 — Today Virginia Advanced Energy Economy (Virginia AEE) submitted comments to the State Corporation Commission stating that Dominion Virginia’s 2020 Integrated Resource Plan (IRP) falls short in leveraging lower cost energy efficiency resources in its proposal to meet the Commonwealth’s projected energy needs. The utility's plan fails to incorporate energy efficiency efforts similar to those of comparable utilities and does not achieve the intent of the Virginia Clean Economy Act (VCEA), resulting in $1 billion in higher electricity costs for Virginia customers.

“Our review of Dominion’s IRP shows that it fails to adequately consider energy efficiency as a resource, presenting a plan that is unnecessarily costly and attributes excessively high costs to meeting requirements of the VCEA,” said Harrison Godfrey, Executive Director, Virginia Advanced Energy Economy. “Dominion considers only those energy efficiency programs that are already approved or required, rather than all cost-effective energy efficiency efforts that could save money for Virginia families.”

“Our independent third-party review found that implementing robust energy efficiency programs would virtually eliminate any incremental costs of electricity bills that Dominion Virginia attributes to the VCEA,” said Godfrey. “For this reason, in our comments we urge the Commission to send Dominion back to the drawing board. The utility needs to present a plan that fully utilizes affordable, clean resources — like energy efficiency — to implement the VCEA in a least-cost manner. To date, it has not.” 

“This is particularly disappointing given that the benefits of utility energy efficiency programs are well-documented across the nation,” said Godfrey. “Our analysis, based on EIA data, shows that Dominion significantly lags the vast majority of comparable utilities across the nation when it comes to residential and commercial efficiency, and at the same time overestimates the cost of efficiency programs.”

Based on U.S. Energy Information Administration (EIA) data, Dominion ranks 69th out of 88 utilities nationally in terms of savings from residential energy efficiency programs.

Virginia AEE’s analysis shows that if Dominion Virginia were to accelerate energy efficiency programming to a pace of 1.5% - 2.0% Annual Incremental Savings at costs similar to the average investor-owned utility, it could substantially reduce the need for new generation resources, meeting the Commonwealth’s clean energy goals, and saving its customers substantial costs. Currently, Dominion’s residential programs achieve just 0.25% Annual Incremental Savings. A 2% Annual Incremental Savings would put Dominion Virginia on a level comparable with peers like PECO in Pennsylvania, DTE in Michigan, MidAmerican in Illinois, Southern Indiana Gas & Electric (Vectren South) in Indiana. 

When taking into account both the cumulative avoided costs to the grid that result from additional efficiency, and reduced household consumption, Virginia AEE’s analysis indicates such efficiency programming would reduce the average monthly residential bill in 2030 by an estimated $16.76 below what it would otherwise be. 

“Customer cost savings from energy efficiency programs like those offered by other utilities could exceed $1 billion over the 15 years covered by Dominion Virginia’s resource plan,” said Godfrey. “We urge the Commission, and the utility, not to leave those savings on the table.” 

Background Resources:

• "Anatomy of an Advanced Energy Win in Virginia," Advanced Energy Perspectives blog post is here.
•  SCC Docket PUR-2020-00035 for Dominion Virginia’s IRP is here*.

*Note: AEE offers free, complimentary access to its PowerSuite online platform tracking all federal and state energy legislation and regulatory filings, plus RTO/ISO policy action, to credentialed media. Sign up for a free trial and contact Monique Hanis (mhanis@aee.net) for permanent media access.

About AEE and Virginia AEE:
In Virginia, Advanced Energy Economy (AEE) operates as Virginia Advanced Energy Economy (Virginia AEE), a group of businesses that are making the energy we use secure, clean, and affordable. Virginia AEE seeks to drive the development of advanced energy to boost the state’s economy and competitiveness by working to remove policy barriers, identify market growth opportunities, encourage market-based policies, establish public and private partnerships, and serve as the voice for companies innovating in the advanced energy sector. Track industry news @AEEnet and @VA_AEE.