How Critical Is “High Quality” Electric Power?

Among the more influential business groups backing the Grid Transformation and Security Act of 2018 is the Northern Virginia Technology Council. In a Richmond Times-Dispatch op-ed today, President Bobbie Kilberg outlines her reasons for supporting the legislation, which would repeal the electric rate freeze and plow utility over-earnings into modernization of the electric grid.

Kilberg cites several advantages of an upgraded grid, including faster responses to power outages and greater security against cyber sabotage or physical threats. What intrigued me most was this statement: “High-quality power must be available on a 24/7 basis; even minute disruptions can have serious consequences for technology-dependent businesses.”

What does Kilberg mean by “high-quality” power? My primitive understanding is that high-quality power equates to electric current subject to a minimum of voltage fluctuation and micro-interruptions. Electronic equipment is designed to work at a specific voltage, and one of the great challenges of electric utilities is to maintain stability as customers dial their consumption up and down and as power sources kick in and drop off. That challenge will grow as Virginia comes to rely increasingly upon intermittent solar power. The problems appear to be well understood, however, and technology exists to address the problem. It just needs to be installed.

So, here’s my question: Are tech companies more dependent upon high-quality electric power than ordinary businesses that rely upon computers? Are tech enterprises more vulnerable to minute fluctuations in voltage and frequency? What costs are imposed by variations in electric current that might be imperceptible to the rest of us? Finally, if the quality of electric power is an essential input for tech companies, would modernization of Virginia’s electric grid confer a competitive advantage for the Old Dominion? These questions would seem to deserve greater scrutiny.

If the answer is yes, high-quality electricity does confer a competitive advantage in the tech sector, that introduces an important and under-reported consideration into the debate over grid modernization. There may be multiple paths toward the goal of high-quality electricity — the Grid Transformation Act is not the only way to finance upgrades to the electric grid — but whichever approach we choose, it would be useful to gain a keener clearer understanding of the economic-development stakes involved.

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18 responses to “How Critical Is “High Quality” Electric Power?

  1. This is ridiculous. The simple answer is to rebate the overages to the ratepayers and make the case for grid modernization per the normal regulatory process. The hiding and commingling of one thing with another is a willful distraction in the interests of ripping off the public with the complicity of our corrupt state legislature Enough! Hand back the money and then make whatever modernization case can be justified.

  2. “one of the great challenges of electric utilities is to maintain stability as customers jump on and off the grid and as power sources kick in and drop off.” And why shouldn’t those customers who want the ability to “jump on and off the grid” pay more for that privilege? Just as it’s not fair to allow Dominion to turn zero-cost capital into an earning and depreciable rate base asset, it’s also not fair to have small volume ratepayers subsidize large intermittent users’ ability to jump on and off the grid.

    I’ve known Bobbie Kilberg for years. But she’s dead wrong on this issue.

  3. Just the latest in a well-planned and obviously timed (and getting tiresome) public relations campaign to sell an unsuspecting public on one of the worst legislative boondoggles in the history of Virginia. But the people are getting it and the bill may hang around some necks in coming elections (note that congressional wannabes are all voting against it). Denying the utility the famed “double dip” solved just one of several anti-consumer aspects of this howler.

  4. “high quality electricity” is why we should neuter the SCC and let Dominion decide what to do and how much to charge?

    No one is opposed to “high quality electricity”..

    This is not only a PR campaign .. it’s a “distraction” campaign of false equivalences.. apparently designed for rubes other addle-brained.

  5. Data centers and other computer intensive enterprises do require high quality electricity. As you have described, this is electricity that has narrow variations in frequency and voltage. These industries have been using power conditioning equipment and large scale battery backup for a long time. There is nothing in the rate bill that will remove the necessity for this type of equipment for these businesses.

    All of the other comments have identified something that the GA has not yet grasped. If proper authority is restored to the SCC and the bill is stripped of all of its other giveaways, no obstacle exists to creating a modern grid in Virginia. The only requirement is that the improvements made also benefit the customers and are not primarily a profit source for shareholders.

    There are plenty of cost-effective improvements to the grid that are necessary. A “grid modernization bill” is not required to accomplish them. Only a clear and convincing proposal from the utility to the regulator is needed. Why is Dominion so reluctant to go through this process? Are they concerned that an objective review would reveal that portions of each of the major proposals in the bill do not have value to the ratepayers?

    Shakespeare might say that they “doth protest too much.”

    • Modern data processing / IT / server equipment uses switch mode powersupplies that will work from any voltage from 100V to 260V and any frequency from DC to several KHz (if not higher).

      UPS systems may, depending on the model, be more critical for frequency–if the frequency is too far off from 60Hz then they may transfer to battery. However, the electric utility has it’s own reasons for keeping the frequency tightly regulated–to work correctly, the grid must maintain tight frequency tolerances.

      UPS problems with frequency tolerance are usually related to operation from backup generators, which may allow too much frequency variation for the UPS to work. One solution is to install an electronic speed governor on the generator if it didn’t come with one.

      So that brings us to voltage tolerance and UPS systems. Most UPS systems are OK with a least a +/- 10% variation in input voltage. In fact that’s one of the touted advantages of a UPS, it can correct the input voltage. (Although as explained above most equipment doesn’t really need the correction).

      So, given all that, do data centers really require tight regulation of voltage and frequency?

      No, not really.

      Far more important is reliability–the fewer outages, the better.

  6. Remains to be seen if Gov. Northam can handle it as effectively as Gov. McAuliffe. McAuliffe just said Dominion big wigs insisted they had to have a rate freeze, and with the obviously burdensome Clean Power Plan, he had some cover, although many of us did not buy it.

    Northam would appear a little more exposed, but the argument is they forcing Dominion to go solar which everyone agrees is better and cheaper and is what society is asking for.

  7. Neither McAuliffe nor Northam are going to mess with Dominion when Dominion has a lot of General Assembly and business/Chamber of Commerce, supporters.

    Those who question Dominion are cast as “anti”…

    This is how folks get locked into positions. Those who question Dominion are never really going to trust them now having seen to the lengths they’ll go to sustain their wants.. … and those that support Dominion are never really going to abandon them, the tactics are forgivable because they are a “good” company…… . There are a few undecided in the middle as usual… I could support them.. but not the way they are behaving right now.

  8. TBill,

    The brilliance in Dominion’s approach is that they are making it look like they are making sacrifices in giving back owed refunds and will “accept” the requirement to build more solar in return. Dominion really wants to build solar because it is the cheapest source of new generation, it provides a 13.2% rate of return and it is the only type of generation that Dominion’s only source of new load growth (the data centers) want. The bill gives Dominion total control of most new solar development in the state without ever questioning whether that is a good idea. Dominion is yelling “don’t throw us in the briar patch” and is smiling all time when it happens.

    It’s poor policy on the part of Virginia’s leadership, but it is an effective strategy on the part of Dominion.

    • Yes Tom I am happy to hear your replies om this matter. Another sacrifice Dominion is making is getting ready for electric vehicles whereas they expect demand. More likely, get ready for the Dominion push.

  9. DJR, TH, right on!

    Jim, this stuff about upgrading to achieve “high quality electricity” so as to attract high tech customers is a scam. There are a number of qualities of the electricity delivered to any business customer that matter and they are all addressed by the NERC, ANSI and IEEE standards applicable to any retail electric service delivered in the U.S.

    Here are a few: Frequency — set by the grid operator (PJM) so long as the grid subregions remain connected. Voltage and reactive power — regulated by the grid operator overall and sustained at the distribution level by robust transmission and distribution connections to the grid, by the presence of nearby spinning generation, and by capacitors appropriately located in distribution substations. Harmonics — electricity has one main 60 Hz frequency but the same current can carry an infinity of other fluctuations, including induced frequencies or random static from other attached or nearby equipment, or even from solar flares, and especially through back-feeding from certain customers with particular uses such as for smelting or welding; how “dirty” or “clean” the electricity’s frequency signal is may matter to some users, but if the customer has purity requirements in excess of conventional industry standards it’s up to him to filter out the noise; the utility must meet industry standards but cannot give one customer better quality service than another at the expense of all customers. And finally there’s the big one: reliability. Utilities don’t guarantee reliability, but they strive for it; the customer that wants more had better go buy a bunch of utility-style batteries.

    There is nothing about these industry standards that is any different for high tech customers. If the high tech user just has to have something “better” than standard electric service, he can use the utility’s power to run his own “motor-generator set” thereby generating his own power that’s technically not on the grid and having precisely the characteristics he wants. Or he can pay the utility to create a new class of service delivered directly from the grid to meet his needs, provided he pays 100% of the extra cost of doing so. It would be discriminatory for the utility to be more generous to any one ratepayer at other ratepayers’ expense and the SCC, rightly, would never allow it.

  10. Dominion’s antiquated grid, operated on a shoestring, is why there are no data centers in Loudoun County. Oh wait. Right – there are more than anywhere else in the world.

    Yet another Dominion “trot out”, yet another #fail.

  11. re: ” Dominion really wants to build solar because it is the cheapest source of new generation, it provides a 13.2% rate of return and it is the only type of generation that Dominion’s only source of new load growth (the data centers) want. The bill gives Dominion total control of most new solar development in the state without ever questioning whether that is a good idea. Dominion is yelling “don’t throw us in the briar patch” and is smiling all time when it happens.”

    Does this mean that 3rd party solar will be more difficult?

    If solar returns 13% right now.. then what is keeping Dominion from build a lot more – right now? why are they seeking that they are prevented from doing – right now?

  12. Good points by Don the Ripper, Haner and Gross.

    It seems as if Dominion has been avoiding addressing the new network for years along with trying to slow renewables.

  13. Larry,

    By developing new solar rate agreements for the data centers, Dominion has effectively foreclosed third-party PPAs as far as I can tell.

    Residential, commercial and industrial customers can still install their own solar units. However, when other states have used public money to incentivize solar, they usually have required some of what is installed to be distributed units at customer locations because of advantages to the customers and to the grid compared to utility-scale solar.

    Dominion is building solar now. They are well along on the 400 MW approved as a part of the rate freeze deal with Governor MacAuliffe.

    The data centers want solar. But Dominion doesn’t really need more generation, especially with the huge surplus with PJM. So they need a bill that makes it looks like we are forcing them to build more solar so they can control its development and earn a high rate of return from it.

    Plus they want the ratepayers to pay for the old units they are closing down because they are no longer economic. This is done by keeping the old base rate structure in place for another 10 years without any re-evaluation of the appropriate ROE and cost-recovery schemes.

    Several other states are resetting the role of utilities to be in charge of all of the wires and for retail sales. Solar additions and a variety of energy services would be provided by by innovative, nimble new businesses which does not require additions to the rate base so energy costs are lower. The utilities are well paid to improve and manage the grid and earn a profit on the platform and transactional services they provide for others.

    This is a different model, but it provides a much more rapidly evolving energy system at a lower cost and an important and ongoing role for the regulated monopolies. Legacy units are still paid for using the current cost-of-service rate scheme.

  14. Something is “different” for 3rd party solar than a few years ago though because the numbers of new projects plus the much larger size of some of those projects are now proceeding whereas a few years ago it seemed there were few of them proposed in Virginia – even as we saw them being built in other states.

    ” Within a couple of years, Spotsylvania County could be home to one of the largest solar energy facilities on the East Coast.

    Utah-based Sustainable Power Group is proposing a 3,500-acre solar farm in western Spotsylvania as similar projects take shape in the Fredericksburg region. ”

    ” The King George County Board of Supervisors last month voted in favor of a 610-acre solar farm near Hopyard Farm, with developer Community Energy expecting to invest $30 million on the project.

    these are just a couple… and more are being planned …

    I did not read that the Spotsylvania one had anything at all to do with Dominion … even though it will hook up to a Dominion line… and that much solar would seem to have more than a small effect on that line and nearby substation.

    These projects seem to be going forward without interference from Dominion – and as far as I can tell , without any involvement from the SCC… or DEQ… they basically are being held to local land-use and other development standards…

    so they seem like they are going on – entirely independent from Dominion.

    On thing that does concern me is that there is some significant NIMBY type opposition .. that is spouting all kinds of nonsense.. for instance, claiming that because the panels have to be washed.. that they will “pollute” the groundwater… or that they kill songbirds.. etc.. just stupid stuff..

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