Dominion Explores Pumped Storage in SW Virginia

Graphic credit: Dominion Energy

Much to my astonishment, Dominion Energy is taking a serious look at building a pumped-storage hydro-electric power plant in Virginia’s coalfields. I wrote about the idea back in February but it struck me as a long shot. So much for my superficial impression. It now transpires that Dominion is identifying potential sites in far Southwest Virginia and hopes to narrow the list later this year.

If Dominion decides to proceed, it will notify potentially affected landowners and set up meetings to gain public support, according to Dominion spokesman Greg Edwards. Though still in the early exploratory phase, Dominion describes the prospects as “very exciting.”

The potential impact is enormous. The pumped-storage power station would have a capacity of 1,000 megawatts, making it even bigger than Dominion’s coal- and wood-burning Virginia City Hybrid Energy Center, which cost $1.8 billion to build and generates $6 million a year in tax revenue for Wise County. “We’re talking about revenues way in excess of what Virginia City generates,” Edwards told the Coalfield Progress.

The idea behind pumped storage is to move water between reservoirs at different elevations. Dominion would let the gravity-fed water run turbines, as shown in the company-supplied graphic above, during periods of peak power demand when the cost of electricity is expensive, and then pump the water back to the upper basin when electricity is cheap. The concept is the same as Dominion’s pumped-storage dam in Bath County, the world’s largest.

Pumped storage will be increasingly attractive as eastern utilities increasingly rely upon wind and solar power, which are intermittent sources of electricity. A pumped storage facility could help even out fluctuations in electric production due to variations in wind and sunshine, or even shift power production from periods of peak solar output during the mid-day to peak demand in the late afternoon/early evening. The massive scale contemplated for the project — 1,000 megawatts, roughly equivalent to the capacity of a state-of-the-art gas-fired facility — suggests that Dominion could be considering the plant for load-shifting purposes. And that could be a game-changer.

Source: Dominion 2017 Integrated Resource Plan. Click for legible image.

Dominion’s Integrated Resource Plan foresees the need for a new nuclear power plant by 2030 (under the strictest CO2 regulatory regime), up to five new gas combustion turbines by 2032, and more than 5,000 megawatts of solar power by 2040. I am entering the realm of speculation here — none of this comes from Dominion — but the addition of a giant pumped-storage facility to Dominion’s generating fleet might enable the company to shift more aggressively to solar power and still maintain grid reliability. Potentially, depending upon transmission line limitations, pumped-storage could eliminate the projected need for four 240-megawatt combustion turbines. (How such a shift would impact the demand for natural gas supplied by the proposed Atlantic Coast Pipeline is a big unanswered question.)

The idea originated with coalfield legislators, not Dominion. Del. Terry Kilgore, R-Gate City, Del. Todd E. Pillion, R-Abingdon, and Sen. Ben Chafin-Lebanon, amended the state code to add pumped-storage hydroelectricity generation and storage to the list of projects which, if built in the Virginia coalfield counties, would be deemed “in the public interest.”

Learning of the proposal during the General Assembly session, Dominion quickly began exploring the idea. Early media reports emphasized the idea of using underground mines as a holding tank for the water, but Edwards told the Coalfield Progress, “We’re not wedded to underground.”

So far, Dominion’s investigations into potential sites have involved working with maps and satellite imagery. The company has looked at “literally hundreds” of possible locations. Even if Dominion finds a suitable site, however, it could take seven to ten years until a pumped-storage facility became operational.

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21 responses to “Dominion Explores Pumped Storage in SW Virginia

  1. This is an intriguing option. I see several potential difficulties though. Putting clean water in an abandoned coal mine is likely to pick up contaminants such as heavy metals, arsenic, and other compounds that could make the water corrosive to turbine blades of the pump/generator. That much water could also contribute significant pressure that could breach mine walls and cause leaks that could contaminate ground water supplies.

    Above ground is an option, but new construction would result in a pumped storage facility that is considerably more expensive than one built in the 1980s that is mostly paid for (the Bath Co. plant). The likely use would be for load shifting from peak solar production to the evening peaks. Eight to ten years from now new solar facilities will cost 25% of what they do today, so the economics could be favorable. But batteries will also be 25% of their current costs and would have lower losses in the charge/discharge cycle, so we should be cautious in not sticking the ratepayers with another project that will cost them money compared to more modern alternatives. Pumped storage would have a longer discharge period than current batteries though (although that might not be the case 10 years from now). Perhaps compressed air storage in old coal mines should also be explored. It is now being used for medium-term storage of excess wind energy in the Great Plains and would avoid the costs and impacts of an upper water reservoir.

    It is good that Dominion is looking forward to the potential retirement dates of the nuclear units. As I said before, the cheapest replacement for these units is energy efficiency. It is also a zero carbon alternative at a far lower price. With the current rules, utilities are still stuck with mainly considering supply side options.

  2. Great post. Without Bacon’s Rebellion I would have no idea of this stuff.

  3. “Senate Bill 1418: Electric utilities; costs of pumped hydroelectricity generation and storage facilities. Authorizes an investor-owned electric utility to petition the State Corporation Commission for approval of a rate adjustment clause for recovery of the costs of one or more pumped hydroelectricity generation and storage facilities that utilize associated on-site or off-site renewable energy resources as all or a portion of their power source and such facilities and associated resources are located in the coalfield region of the Commonwealth. The measure provides that the requirement that a utility demonstrate that it has considered and weighed alternative options, including third-party market alternatives, in its selection process does not apply to these generation and storage facilities. The construction of these generation and storage facilities is declared to be in the public interest, and in determining whether to approve such facility, the Commission is directed to liberally construe the provisions of Title 56.”

    Okay – let’s decode some of this bill description from the 2017 legislation, which of course Dominion says it didn’t suggest, request or draft. Hmmm. My sources during the session disagreed.

    Normally the utility seeking to build a generating facility has to demonstrate that it has considered alternatives in order to prove that the project is cost effective and a good use of ratepayer dollars. The bill suspends that requirement. The bill states that the project is “in the public interest”, which further ties the hands of the State Corporation Commission in deciding whether this is good for ratepayers. Finally the bill dictates that the SCC “liberally construe” any provisions of Title 56 – completing the trifecta of consumer disenfranchisement.

    Similar language led to the construction of the Virginia City facility far, far away from the Dominion service territory, perhaps the last coal plant that will ever be built in the United States. If these projects were the best use of ratepayer money to provide electricity to those ratepayers, why would the SCC need to be steered to doing them? If they build the very same facility in Eastern VA, closer to where the electricity being stored might be generated, suddenly all those consumer-protection provisions kick in. So where will it be built?

    This project may indeed make perfect sense but it should face the same economic analysis as everything else.

  4. “Change is ubiquitous. It’s totally unpredictable.” See comments to Coping Gracefully with depopulation.

    Well, that did not take long.

    Should this proposal gain any further legs, surely the building of a concurrent plan that allows the local community and region to gain the best advantage and leverage off of the long term fruits of the project should be a high priority, indeed a condition of the project’s approval. Surely those coal mines exacted a price the locals have paid many times over.

  5. Reread Jim’s February article titled Converting Coal Mines into Pumped Storage and the comments that follow it (particularly those of our resident electric energy scholar ACBAR).

    This project holds the potential to generate exponential public benefits in a multitude of different ways. Thus it can be an enormous game changer to the region.

    For example, we learn that:

    Some kinds of electric power generation can be far more valuable per kilowatt hour than most all other types of kilowatt hour generation. This is because certain types of electric generation by its inherent nature multiplies as if by magic many more kilowatt hours of altogether new and different energy sources that otherwise would not be possible or feasible.

    Hence, this SW Virginia Hydroelectric power project could turbo-charge the growth of the solar or wind power grid throughout the state and region. In short, if done right, this project could convert say a $2+$2 investment cost into a $16 annual return as this project uniquely supplies a key and otherwise missing ingredient that can radiate grid growth outward like ripples on a pond, except these ripples grow rather than dissipate over time and space.

    In addition, what makes the potential of this project truly wonderful is that this multiplier affect of electric generation holds the potential to create ripples of growth (wealth generators) in all sorts and varieties of independent commercial wealth building building enterprises. But the key here is to do these outside projects and their collateral satellite infrastructures in ways the promote and spread the opportunity for local entrepreneurship, instead of the too often typical way of giving money away so as to make citizens dependent on a hand-out dole rather than using benefits to empower them to create wealth with their own hands and wits. Thus it is critical that we avoid the current scourge of ill conceived government development projects that politicians and bureaucrats too often devise and use to buy votes and enslave citizens instead of empowering them to build their own futures as free and self-sufficient citizens.

    • “Thus it is critical that we avoid the current scourge of ill conceived government development projects that politicians and bureaucrats too often devise and use to buy votes and enslave citizens instead of empowering them to build their own futures as free and self-sufficient citizens.”

      Oh this is too rich. LOL.

  6. I don’t think they mean coal mines which are usually full of sulfur and when water is added – it makes acid.. there are rivers in WVA right now that are acified from runoff from mines..

    I suspect they mean the terrain of coal country in general where there are valleys and such that can be damned and then a lower elevation valley damned and pipes in between.

    pump storage is about “head” which is how much elevation change because that generates the pressure needed to turn turbines – the more the “drop” in elevation the higher the pressure generated to move the turbines. The second part if how long can you do it and that relates to how much reservoir capacity you have.. Large lakes can generate a long time… small ones run out quick.

    There is no free lunch here – you WILL be kicking people off their land and the wording of the legislation sounds like they CAN use imminent domain.

    so yes, you WILL look at “hundreds” of potential sites but my suspects are that in the end – it’s going to be precious few that meet the “head” and “capacity”

    Then you have to ask – what power source will be used to pump the lower reservoir water back up to the top one .. will it be using excess solar or will it come from coal plants or natural gas? To see pump storage in concert with solar is a way different concept than pump storage as a “peaker” plant.

    There is a bright spot and I refer folks to this map:

    Lske Jocassee is a pump storage facility in SC and it’s not as big as Bath but it has kicked off a large number of retirement/resort communities… bringing in a ton of money to formerly wretchedly poor counties…and providing not only construction jobs but maintenance and operations for residential.. hvac, plumbing, electric, appliances, etc.

    So.. if the right combination of terrain can be found.. and new homes for the people kicked off… perhaps lets them partake in the lakefront land bonanza .. etc… but I’m still skeptical … these things if not properly “sold” to the locals will generate a storm of opposition…

    • You’re on the right track. Retirement villages create jobs – some OK, some good. They bring residents who pay more in taxes than they consume in cost of services (no school aged kids). They bring no crime (other than as victims unfortunately).

      The problem with the Lake Jocasse example is that it’s only 147 miles from Charlotte so world class medicine and a world class airport are a couple of hours away. Big advantage.

  7. Yes, it is a good idea, but the Wall Street Journal had it a month ago:

  8. A good idea? Here is a quote from the original article:

    “The cost of the German system is about €2,750 ($3,075) per kilowatt-hour. New Jersey-based Eos Energy Storage, a cutting-edge battery company, offers a storage system powered by zinc-hybrid batteries for $168 a kilowatt-hour that can last around 20 years, according to the company’s director of business development, Charles Russell.”

    As we expected, the cost is far greater than existing options let alone the options that will be available in 8-10 years (at 1/4 of current prices). This is another General Assembly gift to Dominion shareholders that will cost ratepayers a fortune, just like the pipeline and the rate freeze.

    I don’t see how any impartial regulator could authorize such a project unless their hands were completely tied by the GA. There is not enough spread in the daily prices to allow storage this expensive to be paid back.

    • Bless you, my friend, for you see the Light clearly….although I still want to see at least one of those pipelines to the east coast built and I prefer the one that benefits Hampton Roads. I do not agree that pipeline is bad for electric ratepayers, not at all, and it ought to be great for natural gas users.

      • Steve,

        I don’t want to get off on another pipeline rant. That is not the purpose of this post. But it is intelligent people such as yourself that are the key to seeing the pipeline issue clearly, because the pipeline is the same as this proposition.

        Virginia and NC can have all the gas they need at a far lower price than is offered by the ACP, without asking the ratepayers to pay an exorbitant amount to the utility holding companies that own the pipeline.

        A Dominion subsidiary has signed a contract with the ACP that could obligate the electric ratepayers to pay $4 billion over the next 20 years to the ACP. Dominion Energy Virginia (DEV) will not make a profit on this transaction but they expect the ratepayers will pay in full regardless of the amount of gas transported on the ACP for DEV’s use to generate electricity at their power plants. The profits will accrue to Dominion Energy, Duke Energy and Southern Company.

        North Carolina ratepayers are likely to be exposed to the same liability for $12 billion over the next 20 years.

        Consumers in Virginia could get the same amount of gas paying 3-8 times less for transportation than using the ACP. North Carolina customers could get the same amount of gas at precisely the same delivery points for up to 5 times cheaper than delivery costs using the ACP.

        The Hampton Roads region could be served with as much or more capacity by running a pipeline to Virginia Natural Gas along one or more existing right-of-ways at a fraction of the cost of transportation offered by the ACP.

        The Department of Energy says the reversal of flow in the Transco system will bring enough gas from the Marcellus to the Mid-Atlantic and Southeast to meet even the high-gas usage scenario. Transco has nearly 4 times the southbound capacity offered by the ACP.

        The ACP claims that all of this capacity is “fully subscribed” and not available for use in Virginia and NC power plants. The “subscribers” are marketing companies of natural gas producers. The sources that are “unavailable” for power plant use are being used by Dominion to provide an even greater amount of gas to Cove Point.

        This is not an issue about whether we can have the gas we need. It is about whether ratepayers will be forced to pay many times the market price for service they could get from existing pipelines, without paying a premium to the utility holding companies. This is a political deal that will benefit only one group, not an arm’s length transaction that serves a public need.

  9. “This is not an issue about whether we can have the gas we need. It is about whether ratepayers will be forced to pay many times the market price for service they could get from existing pipelines, without paying a premium to the utility holding companies. This is a political deal that will benefit only one group, not an arm’s length transaction that serves a public need.”

    Tom –

    With regard to the comments and opinions of the “intelligent people” why should I put any stock in that statement above than I put in your earlier statements a couple years back that by now American would run out on gas supply because all the players in the fracking industry would be dead broke and irretrievable out business forever by this time?

    • Reed,

      I think you misinterpreted what I said. What I said was that drillers of natural gas were going broke because their cost of production exceeded the price they could sell the gas for. By the end of 2016, over 200 oil and gas developers had gone bankrupt. Others who were in more profitable or higher productivity zones bought up their leases and drilling equipment for dimes on the dollar. The number of drilling rigs are down considerably from two years ago. Drilling services costs are rising and well productivity is declining. I said that the projections were that by 2020 the production of natural gas priced under $4 mcf would peak. But that we would continue to have a supply of gas, it would just be more expensive.

      My point was that the historic low price of natural gas was likely to be a short-term phenomenon. Basing a 40-year decision to build power plants or pipelines on a year or two of data was not prudent, in my opinion. The price of natural gas has increased 50% in the last year and is likely to continue increasing. Dominion predicts that gas will be 3-4 times more expensive than the recent lows within 10-15 years.

      I said that we did not need more natural gas supply for two reasons, 1) because growth in electricity demand was flat and we would not need more new gas-fired plants. This was supported by PJM’s latest forecast, which confirms essentially flat load growth in Virginia. They say we need over 3700 MW less capacity that what Dominion is asking for.
      2) Alternatives such as energy efficiency(2-3 cents/kWH) were less expensive than any new generation and that was a better choice to lower energy costs to ratepayers. I also said that we must change the rules so that our utilities can prosper in this new energy era.

      Everything I have spoken out about has been based on publicly available data from government agencies, independent consultants, or industry journals. I am speaking out because I care about the financial health of utilities and the state of Virginia. The path we are on hurts families and businesses now and will harm shareholders in the future.

      The information about the contracts for using the ACP costing ratepayers $4 billion unnecessarily is based on information provided by Dominion, and information from the DOE and various pipelines about their available capacity and the much lower costs to transport gas based on the tariffs for using existing pipelines.

      The facts are available if one wants to dig deeply enough. Unfortunately, it easier to rely on press releases and published articles that just repeat what has been issued by the pipeline developers.

      It is easy to trust a company that you have known for years. But these decisions are not being made by the regulated utility. They are being made by the parent company, whose sole purpose is to make money for the shareholders, regardless of how much extra the ratepayers must bear. If you are interested in the truth of the matter, I can send you the basic data and you can make your own decision, as you should.

      My purpose has been to make the rest of the story available so people can choose for themselves. I’m sorry that I was not effective enough in presenting the information so that you could understand the point I was trying to make.

      I am not trying to raise a ruckus to make things harder for Dominion. I am trying to point out that their current proposals have serious downsides for their customers and potentially for their shareholders too.

  10. Tom, I would not think that Dominion could lock in a 20 year contract for gas from the ACP at a price that is disconnected from the market price. Why would such an important element of the price of electricity be outside the review of the SCC? Especially given it is not an arm’s length transaction? I know this is recovered in the fuel factor, not the base rates, but isn’t the fuel factor also subject to analysis as being reasonable and prudent? Won’t those other pipelines also have capital costs during the period that also need to be covered by ratepayers? If is really is 8 times cheaper that’s hard to just ignore, but I find that claim hard to buy.

    • The contract has already been signed that obligates Virginia Power Energy Services (a wholly owned subsidiary of Dominion Energy Virginia – VEPCO) to pay over $4 billion to the ACP for a 20-year Firm Transportation Agreement that reserves 300,000 Dth/d of transportation capacity from the ACP.

      I raised the concern that this was a drastically higher price than was available via other pipelines when I gave testimony to the SCC during last September’s IRP hearing for Dominion.

      I suggested to the Commissioners that they review this extremely high cost now so that it would be fair to both the pipeline developers and the ratepayers. Waiting until the charges had been passed through would harm either the developers or the ratepayers without either having a voice in the matter.

      Several parties did attempt to get this issues heard in this year’s Fuel Factor proceeding, but Dominion successfully argued that it should not be heard because no charges related to the ACP are in this year’s fuel factor. Now we are back to the same problem.

      Dominion has said that they believe firm transportation agreements serve the customer by reserving firm capacity to be certain that power plants can receive the fuel they need at all times. I agree with that, in general. It is because the agreement they signed for the ACP is many times more expensive than other options that causes a problem.

      The SCC does limit the recovery by the utility to the “lower of cost or market price”. However, this is where it gets complicated. Dominion has firm transportation agreements with several different pipelines. These agreements for firm capacity are many times less expensive than the cost to use the ACP (in the range that I specified). Many are not published rates, but negotiated ones, so I cannot announce them publicly to prove my point. Dominion has provided the various contracts to the SCC (except for the ACP), so when the SCC chooses to actually take up the issue they will have all of the information to show how grossly overpriced transportation using the ACP is.

      The ACP has said there are no alternatives to the ACP. Dominion will try and make the case to the SCC that no matter how high the price for the ACP, the utility should be allowed to recover the full price of the contract no matter how much gas is actually transported using the ACP contract to be burned in Dominion power plants to produce electricity.

      Using publicly available rates, Dominion tells us that transporting gas using the ACP will cost about $1.88 per Dekatherm (Dth). Transporting gas to the same power plants (Brunswick and Greensville) will cost less than $0.53 per Dth using Transco pipelines. This is more than 3.5 times less than the cost of the using the ACP (it is the lower bound of the range).

      The cost of using the ACP to transport the gas is over 60% of the current commodity price of natural gas. It is not possible for the ACP to deliver a lower total price (gas + transportation) to ratepayers in this time when prices in many production zones are reaching parity, or are within about 10% of each other.

      Reversing flow in the multi-pipeline Transco corridor provides nearly 6 billion cubic feet per day of southbound capacity (about 4 times the amount provided by the ACP). The ACP says that this capacity is “fully subscribed” in order to back up their claim that there is no alternative to the ACP. The “subscribers” of this capacity are mostly the marketing subsidiaries of the gas producers that own the pipelines that are adding this new capacity to the Transco system. The gas producers are desperately seeking new customers. Dominion claims there is not 300,000 Dth/d of capacity available to carry fuel for power plants via Transco. Yet Dominion is purchasing 350,000 Dth/d of this “fully subscribed” capacity from Transco to supply Cove Point. The gas producer selling to Cove Point has committed supply 850,000 Dth/d in just one pipeline and is looking for more customers. At least one of the several takeaway pipelines that is providing new capacity to Transco is larger than the ACP. You form your own opinion whether there is actually extra capacity in the Transco system to serve Virginia over 3 times more cheaply than the ACP.

      The ACP’s application to FERC shows that there is an agreement with Columbia Gas to take receipt of Dominion’s allocation of 300,000 Dth/d. This could flow through the Columbia Gas system to supply the Warren plant or to most parts of Virginia since the Columbia Gas system serves a far greater portion of Virginia than the ACP could. This agreement proves that the Columbia Gas pipeline has 300,000 Dth/d of available capacity to serve Virginia. One of the supply zones used by Columbia Gas is roughly the same as intended for the ACP (the Western Marcellus). Columbia Gas is one of the least expensive options to transport gas to Virginia and results in the greatest savings compared to the ACP (the high end of the range).

      This is far more information than you probably want to deal with, but I needed to prove my point, which is:

      1. There are several available options to provide the gas we need to Virginia.
      2. Each of these options cost many times less than the ACP.
      3. Dominion wants the ratepayers to pay the entire $205 million per year for 20 years to the ACP for this contract regardless of how much of the capacity contracted for is actually used to generate power in Dominion’s plants (it is a take-or-pay contract).
      4. This is a bad deal for ratepayers because they are being forced to pay an exorbitant price for something they can get for far less by other means.
      5. The utility holding companies want the pipeline because it pays them a 50% higher return than building transmission lines and power plants.
      6. It increases their revenues when load growth for their regulated utility subsidiaries is leveling off (limiting revenue growth).
      7. The risk is borne by the ratepayers of their captive subsidiaries.

      • So the SCC is still on the sidelines on this specific question, but potentially could act to protect consumers. Please advise which statues in the Code of Virginia I need to watch to look out for efforts to decapitate the SCC’s authority in this realm. It is already a major task just to try to keep up with all the moving parts in 56-585.1. Thanks for the seminar, and coupled with some other information elsewhere, I’m getting educated. If indeed the difference between the internal sweetheart contract and other options is that dramatic, and it sticks, this could be the stickiest wicket of them all. The utility doesn’t make a profit on the fuel factor, but of course controlled business arrangements make that meaningless….

        What about the other project? Maybe I stop caring about ACP and start to advocate for Mountain Valley…..

        • Yes, the SCC avoided facing a tough decision. There will be no charges for the ACP in next year’s fuel factor case either, but it is possible that construction will have begun on the ACP. The SCC owes it to the pipeline developers and the ratepayers to make a ruling in principle on this, before construction begins. Otherwise, one party or the other would lose big.

          The Fuel Factor consideration is governed by Section 56-249.6 of the Code of Virginia. This year’s case for Dominion was PUR-2017-00058.

          The case for the MVP is just as flawed. Only 25% of its capacity is committed to potential end-users of the gas. The rest is speculative. They just want to connect to Transco in hopes of finding customers somewhere. Con Ed and NextEra own utilities that could conceivably use the gas. But Con Ed is in New York City and NextEra is in Florida, Georgia and Alabama. Both would be able to transport gas much less expensively using other pipelines. Roanoke Gas could get a small feed from Transco, East Tennessee Natural Gas, or Columbia Gas for a far lower cost than what they will pay to transport gas over the MVP.

          The MVP tariff is $0.98, which is over 30% of the current commodity price of natural gas. And this just gets the gas to Transco. Other shipping charges would be added to serve an actual customer, wherever they might be located. Prices from production zones in the east are all within about 10% from one another, and the gap is closing. Adding a 30%+ transportation premium to the commodity price means that the MVP could not deliver gas that is cheaper to customers than is available by other means. Other choices are 2-5 times cheaper compared to the $0.98 tariff for the MVP.

          The prevailing notion that we need more pipelines to lower energy costs and boost economic activity is the basic flawed assumption that is promoting interest in building new pipelines. You see from the ACP and MVP examples that new pipelines will dramatically increase the cost of natural gas, not lower it.

          Nor do we need more gas supply to promote more economic activity. The Sabal Trail pipeline that just went into service perfectly illustrates this. It was touted as a way to bring gas supplies into central Florida to support economic and population growth. The new pipeline has added new capacity to the region but no new incremental demand. The Florida utility subsidiaries of NextEra and Duke Energy (both part owners of the pipeline) have switched their deliveries to the more expensive new Sabal Trail pipeline, so it is now being subsidized by their utility ratepayers (just as the ACP will be). Sabal Trail is only operating at 25% of its capacity, but all of that has come from the existing pipelines that historically have served the area.

          Florida’s energy demands are being increasingly met by solar power (just as they will be in Virginia). Demand is lower despite population increases. Florida Power & Light’s 10-year plan predicts that solar will continue to take market share from natural gas. Even with the new pipeline, total gas demand in Florida is 4% lower than in 2016.

          This is the basic point about the pipelines that everyone is missing. We have been mesmerized by energy companies’ press releases and our past experience of how important these types of projects were to economic development in the past. But these projects are 20th century solutions to the challenge utility holding companies are having with their revenue streams. They are a bad fit for modern energy systems.

          Choosing pipelines over new technologies will add to our energy costs, reduce economic development and create significantly fewer jobs. We should not ignore the stress on utility business models. But the solution is to revise our regulatory schemes to help utilities prosper doing things that are good for their customers. Building pipelines sets the interests of the shareholders against the interests of the ratepayers and could come back to bite shareholders too through stranded costs or if ratepayers eventually catch on to the scam.

  11. I tend to believe what Tom is saying.. all things equal…

    We already have existing suppliers of natural gas using pipelines built long ago and from all I’ve read – they have the capacity so what is Dominion really doing and how are ratepayers protected from fuel factors higher than market price?

    My bet is that if the SCC required Dom to charge no more than prevailing market price – their pipeline would not be viable.

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