Under continual pressure from politicians, protesters and even shareholders to develop more renewable energy, Dominion Energy (which has changed its name from Dominion Resources) offered a vigorous defense of its environmental policies at its 108th annual meeting in downtown Richmond today.
Since 2000 the company has cut nitrogen-oxide emissions 81%, sulfur dioxide emissions 95% and mercury emissions by 96% — a performance exceeded by only one other electric utility in the country, CEO Thomas F. Farrell II told shareholders.
Dominion also has reduced the carbon intensity of its electricity by 43% between 2000 and 2015, Farrell said. Carbon intensity measures the pounds of carbon-dioxide (CO2) emissions per megawatt hour of electricity produced. Dominion’s performance compares to a 23% reduction for the electric utility industry as a whole.
Carbon intensity will fall another 25% as Dominion expands solar power generation to a projected total of 5,200 megawatts within 25 years. “Solar is growing very rapidly,” Farrell said. I know that a lot of folks would like all of our power to come from renewables. That’s not realistic. That’s not affordable.”
Of greater interest to most of the shareholders in attendance, Dominion reported an 11.8% increase in earnings in 2016 and an 8.1% increase in dividends. But numerous shareholders, some owning as few as one or two shares, lined up to take the microphone during a Q&A session. They pressed for changes to Dominion’s governance practices, urged more aggressive adoption of solar power, and chastised the company for construction of the Atlantic Coast Pipeline (ACP).
Several shareholders argued that Dominion should reduce its corporate exposure to environmental risks, especially those resulting from severe weather or drastic regulatory changes implemented in response to climate change. One formal shareholder proposal recommended the company nominate a director with environmental expertise; another asked Dominion to evaluate alternate technologies as a way to comply with Paris Agreement accords to cut CO2 emissions. All shareholder proposals were voted down.
Farrell unapologetically defended the company’s environmental record, citing its achievements to date and its plans for the future.
Dominion was one of only four electric utilities to file a brief in favor of the Obama administration’s controversial Clean Power Plan, Farrell said. The plan, the status of which is now up in the air under the Trump administration, mandates major cuts to electric-utilities’ CO2 emissions, although the amount would vary depending upon how each state implements the plan.
While some have suggested that the Trump administration will scuttle the Clean Power Plan, Farrell insisted that carbon regulation is here to stay. An EPA endangerment finding, upheld by the U.S. Supreme Court, declared that the EPA is required to regulate CO2. “I have no idea what that’s going to look like. Neither does anyone else,” Farrell said. But some form of regulation is unavoidable.
In the meantime, a McAuliffe administration task force has been looking at the CO2 issue and is expected to announce its recommendations for the General Assembly next month. “There’s going to be carbon regulation, and to suggest otherwise just isn’t true,” Farrell said.
The carbon-regulation issue is particularly sensitive to Dominion because critics have argued for a rollback of a rate freeze put into effect two years ago in response to the Clean Power Plan. Now that the plan is likely to be overturned, they contend, the justification for the rate freeze — to provide rate stability amidst regulatory uncertainty — no longer exists.
Farrell also defended the “urgent need” for the Atlantic Coast Pipeline, a 600-mile pipeline that would bolster natural gas supplies to “grossly under-served” communities in Virginia and North Carolina. The pipeline has inspired fierce resistance from property owners along the route, especially in the steep mountains of western Virginia where environmentalists have raised concerns that construction on steep slopes and narrow ridges will lead to erosion and disruption to water fragile water supplies.
Large chunks of eastern Virginia and North Carolina have reached the limits of existing natural gas pipeline capacity, Farrell said. Furthermore, much of North Carolina is served by only one natural gas pipeline, Transco, making the region vulnerable to supply disruptions. He cited a recent outage on Transco that interrupted the gas supply to the company’s Brunswick Power Station near the North Carolina border, forcing it to halt generation temporarily. The ACP would provide an alternate pipeline to serve Brunswick and the nearby Greensville Power Station, which will be the world’s largest combined-cycle natural gas plant when construction is complete, as well as to Duke Energy power plants in North Carolina. Continue reading