RICHMOND — The State Corporation Commission (SCC) has approved the revised Integrated Resource Plan (IRP) filed by Dominion Energy Virginia. Last December, the SCC rejected Dominion’s original 2018 plan giving the company 90 days to revise it.
An IRP is the utility’s plan for the capital investments that it believes are necessary to provide reliable electricity service to its customers over the next 15 years (2019 to 2033).
While the SCC said that Dominion’s revised plan met the minimum filing requirements of Virginia law, it also warned that the IRP “may significantly understate the costs facing Dominion’s customers.”
The IRP includes a true least-cost plan as a benchmark for providing a reliable supply of electrical power. As ordered by the Commission, Dominion also showed the additional costs of the various legislative mandates contained in Senate Bill 966 passed by the 2018 General Assembly. And, evidence was presented at an SCC hearing in May on the capital spending plans that Dominion presented to Wall Street analysts earlier this Spring.
The evidence demonstrated that the Senate Bill 966 mandates will cost customers more than $6 billion in extra costs above the least-cost plan, not including lifetime financing costs.
The evidence also showed that the capital spending plans Dominion presented to Wall Street analysts on March 25, 2019 included approximately $12.1 billion in capital investment to be paid for by Virginia customers, the majority of which is eligible to be recovered through separate bill riders called rate adjustment clauses.
These costs will have an impact on the rates customers will pay in their monthly bills over the next five years and beyond. By December 31, 2023, the estimated monthly increase will be $29.37 for the average residential customer.
The Commission recognized that Dominion believes this monthly bill impact will be mitigated by lower fuel costs and other factors. However, the Commission noted that the $29.37 monthly bill increase does not include the monthly bill impact of several billion dollars of costs for the 2019 coal ash removal legislation that will be recovered from customers.
The Commission stated, “In sum, we approve Dominion’s IRP as legally sufficient, and we recognize the appropriateness of spending on capital projects when need is proven by factual evidence in actual cases. We do not, however, express approval in this Final Order of the magnitude or specifics of Dominion’s future spending plans, the costs of which will significantly impact millions of residential and business customers in the monthly bills they must pay for power.”
Virginia law now requires the company to submit an IRP every three years. The new schedule begins with Dominion’s next plan to be filed in May of 2020.