Questions Dominion didn’t answer at its shareholder meeting
- May 9, 2021 11:17 pm GMT
Dominion Energy held its annual shareholder meeting virtually on May 5. Prior to the meeting, some shareholders submitted questions to the company in hopes of getting better transparency about its thinking regarding a range of pressing questions facing both the company and society at large. In an article that ran in the Virginia Mercury the week before the meeting, I offered a list of questions I’d really like answers to as well.
I wasn’t able to attend the shareholder meeting, but I understand the questions mostly did not get answers at that time, with the exception of a non-sequitur CEO Bob Blue offered up in response to a question about third-party sales of renewable energy (read on!). The company has promised to email responses to the people who submitted questions.
Here are my questions:
1. We learned in Dominion’s Integrated Resource Plan (IRP) case last year that the Virginia City Hybrid Energy Center, the coal plant it owns in Wise County, has a 10-year net present value of negative $472 million. Why isn’t Dominion retiring it immediately to save money and reduce the number of emission allowances it has to buy now that Virginia has joined the Regional Greenhouse Gas Initiative?
2. In last year’s IRP, Dominion’s preferred scenario would have it keeping its gas plants open indefinitely, even past 2045, when the Virginia Clean Economy Act requires them to be closed. The refusal to plan for full compliance with the law almost certainly impacts the decisions Dominion is making today. Now that Bob Blue has taken over the reins of Dominion from former CEO Tom Farrell, has that changed, and can we expect Dominion to take actions consistent with a full phase-out of fossil fuels before 2045?
3. The energy transition will require construction of tens of thousands of megawatts of solar on hundreds of thousands of acres of land across Virginia. However, community resistance to utility-scale solar farms in Virginia is growing, in large part because they look more like industrial uses than like agricultural uses. As a result, some projects are not being permitted, a costly waste of the company’s time and resources. It’s possible to combine solar with traditional agricultural uses like animal grazing, or to install native plants to support pollinators and provide wildlife habitat, both of which would increase community acceptance. Dominion installs pollinator plantings along some of its transmission line rights-of-way, so the company has experience in this area. Will Dominion begin doing this at its solar projects? If not, what is Dominion doing to “sweeten the pot” for local communities in order to secure permits?
4. Dominion offers residential customers the option of a renewable energy product that includes biomass energy, a source that is not carbon-free and produces more air pollution than coal. The inclusion of biomass also makes the tariff more expensive than it would be without biomass. In contrast to this unattractive option, two years ago Dominion received SCC approval to sell solar to residential customers via a “community solar” product. This would have appealed to far more customers, but Dominion never followed through. Why not?
5. With no solar option available, residents who don’t own a house with a sunny roof are currently shut out of the solar market in Dominion’s Virginia territory. In 2019 and 2020 the General Assembly considered legislation that would have allowed customers to buy renewable energy from third party providers. The bill passed the House each year but failed in a Senate committee due to Dominion’s opposition. If Dominion isn’t interested in selling solar to its customers today, why not let them buy it from others?
Mr. Blue reportedly answered this question at the meeting by exclaiming, “Because deregulated markets don’t work, they fail! Look at Texas!”
I can, with difficulty, draw a line from the question to Blue’s answer, but it is not a straight one. Nor is it an honest one, since the causes of the Texas debacle don’t apply here (beyond a similar overreliance on natural gas).
Here is the answer that is most probably true: “We threw together our so-called renewable energy offering for the sole purpose of blocking out competitors, and the SCC stupidly let us get away with it. If we cared about climate change, we would offer a clean renewable energy product people actually want, but we only care about profit. That requires us to keep our customers locked in, but nothing says we have to make them happy.”
But because hope springs eternal, I’ll also add an answer that I would much prefer Mr. Blue to give: “Under my new leadership, we are taking climate science seriously and will develop the renewable energy options our customers want. My goal is to offer a solar tariff so good that none of our customers will want to look elsewhere, and the question will become moot.”
6. According to Dominion’s 2020 IRP, data centers make up 12 percent of Dominion’s load in Virginia, a number that has been increasing by 20 percent per year. Data center operators say they want renewable energy but have trouble getting it from Dominion. The biggest tech companies negotiate deals for solar, but smaller customers have fewer attractive options. What is Dominion doing to ensure that data centers have access to solar energy at attractive market rates?
Notice how the answers to the previous question apply here. Dominion has a huge opportunity to lead on climate, requiring only that the company actually care.
7. A year ago Dominion canceled the Atlantic Coast Pipeline, losing the almost $3 billion already spent on the project but saving the additional $5 billion-plus it would have cost to complete the project. About the same time, Dominion sold off its entire gas transmission business, indicating it had come to see pipelines as poor investments. This makes sense since the company already gets all the gas it needs through existing pipelines, and going forward, climate policies and the increasing competitiveness of renewable energy and battery storage mean gas use will decline. But then the company contracted for 12.5% of the shipping capacity of the Mountain Valley Pipeline through its subsidiary Public Service Company of North Carolina, at a cost of at least $50 million per year. How can the company justify this investment? Is there an exit clause in the contract, or will shareholders suffer in the event the company is not allowed to pass this cost on to ratepayers?
8. Dominion is currently pursuing relicensing of its two aging nuclear reactors at North Anna, which are already beyond their 40-year design life. According to the 2020 IRP, Dominion plans to run the North Anna reactors, as well as its two reactors in Surry County, at least through 2045, the period covered by the IRP. Nuclear is a carbon-free resource, but so are wind and solar, and nuclear plants in other states are closing because they are no longer economically competitive. What will it cost Dominion to refurbish these nuclear plants to keep them in operation safely so far beyond their design life? And what will it cost the company if, in spite of refurbishing, one or more of the reactors can’t pass a safety inspection, or even suffers a major failure?
9. Millions of customers in Virginia, North Carolina and South Carolina are at risk from hurricanes and other weather events that can knock out power for many days at a time. Today, onsite solar-plus-storage can keep critical facilities operating and allow community centers and schools to serve local residents who have lost power, ensuring they have a place to store medicines that need refrigeration and to charge cellphones, motorized wheelchairs and other devices. If Dominion were to supply the batteries for these facilities, the company could access them for grid storage and services when they are not needed as backup power. In addition to offering a new profit center, it would relieve some of the pressure on line crews who work to restore power after a storm. When will Dominion offer this lifesaving service to its customers?
10. Electric vehicle charging will increase demand for electricity in Virginia, and it also offers an opportunity for the company to deploy vehicle-to-grid technology, making use of the batteries in buses and private vehicles to help balance the grid. Virginia’s General Assembly rejected legislation that would have allowed Dominion to own and control the batteries in school buses in Virginia, but it passed a bill to help local school districts buy electric buses. Will Dominion now support the ability of the school districts to buy electric school buses and own the batteries themselves, and work with them to implement a vehicle-to-grid program?
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