Speaking on behalf of my fellow Dominion Energy Virginia customers, and to my fellow Virginians in Southwest Virginia not paying that utility’s bills, I have a simple question: Can’t we find an easier and less expensive way for you to shake us down?
None of us here see any need for a white elephant pumped storage hydroelectric plant in Tazewell County, more than a hundred miles south and west of where most Dominion customers live and work. It is just a new way for the utility to take our money, sharing only a small part of the benefits with you and your local economies. The major beneficiaries will be Dominion stockholders earning an annual profit for decades.
Any plan to dam Wolf Creek in Bland County and build a reservoir up against East River Mountain is of personal interest, as well, since it might flood the farm where my grandfather grew up. Despite that, if Dominion uses your money to build the facility to serve your part of the state, I wouldn’t object. Nor would I if it used risk capital to build this and market its storage capacity to multiple utilities through the regional transmission organization.
But, of course, that is not the plan. The plan is to finance this in the usual way, paying off the investment over several decades with money provided by Dominion’s captive customers. A state law your local legislators pushed through in 2017 makes it possible to finance this with what is called a rate adjustment clause, a separate charge on the monthly bill just to pay for that one project (with interest and with profit.)
If we just send you your share of the money directly and leave out the contractors and the utility stockholders, both sides would come out ahead. After all, this might not happen. The 2017 bill did make it harder for the State Corporation Commission to say no to this harebrained idea, but as I read it a rejection remains possible.
The law did remove any requirement that Dominion demonstrate in its application that it has “considered and weighed alternative options,” thus gutting a key consumer protection. It also had the legislature dictate to the SCC that the project “is in the public interest, and in determining whether to approve such facility, the Commission shall liberally construe the provisions of this title.”
But the General Assembly has used stronger language than that in forcing the SCC to approve Dominion’s bad investments in underground residential tap lines and a boondoggle two-turbine off-shore wind project. “In the public interest” by itself does not force the SCC to waste ratepayer money unreasonably and imprudently.
On its face, this idea is unreasonable and imprudent. The burden of proof rests on the utility, and for once the customers in the eastern and northern parts of the state might wake up and object. The $320 million in economic benefits Dominion has already calculated and it already touting on its own website provide the start of the conversation: All of that money flows from us to you. And as noted, it is a fraction of our total cost. Stockholders get more.
In its announcement June 18, the utility did abandon the original and extremely dumb idea of using an abandoned coal mine as the centerpiece of a pumped storage project. That was vulnerable on technical grounds. Now that it has moved to a conventional pumped storage approach, modeled on the Bath County project, the debate can focus on more traditional issues of need, cost and location.
With battery storage options dropping in cost and improving in efficiency, the utility may be hard pressed to rule out that alternative. Oh, wait, right! The law no longer requires such comparisons. Perhaps they saw that problem coming.
Part of the problem with this is the great distance electricity would have to travel over transmission lines, with the attendant loss of voltage. But the project would remain imprudent if built on the James River next to the new Dominion headquarters, surrounded by customers.
This is not about energy. This is not about the environment. This is purely a political play, using money paid by Dominion customers to secure political loyalty from legislators who do not represent Dominion customers. That solid block of Southwest Virginia committee and floor votes has been crucial on a series of anti-consumer measures, with more probably on the way in the future. This is the quid pro quo.