Bacon's Rebellion

Democracy Thrives in Sunlight

Dominion Breaks Ground on Greensville Plant

—

by

James A. Bacon
in ,

Construction at the Greensville County power station is well advanced. The gas-fired facility is expected to commence operations in 2018. Photo credit: Richmond Times-Dispatch
Construction at the Greensville County Power Station is well advanced. The gas-fired facility is expected to commence operations in 2018. Photo credit: Richmond Times-Dispatch

Construction has been underway at Dominion Virginia Power’s $1.3 billion Greensville County Power Station for several months now, but the company held its official ground-breaking ceremony yesterday. The event gave Dominion an opportunity to extol the virtues of the plant to its corporate family and friends. Among the key points noted by Robert Zullo with the Richmond Times-Dispatch:

The 1,600-megawatt power plan will be the largest gas-fired combined-cycle facility in North America. Construction will employ 1,000, and when that work is done, the station will employ 40 “good-paying jobs” permanently. Employing the latest gas-burning technology, Greensville will work under the strictest air pollution limits of any combined-cycle facility anywhere.

Dominion and local officials describe the plant as an economic development boon to one of Virginia’s poorest counties. Expansion of the Transco pipeline and construction of the proposed Atlantic Coast Pipeline, both of which will serve the plant, will boost supplies of natural gas to the area, putting Greensville County in the running for energy-intensive industry it could not compete for before. Furthermore, the plant will generate about $8.2 million in tax revenue, a huge sum for a county whose 2017 General Fund budget is $16.6 million.

The power company estimates that power station will save $2.1 billion over its multi-decade lifetime compared to the cost of alternative sources of electricity.

While natural gas might be the lowest cost source of electricity right now, Dominion critics question whether it will continue to be in the decades ahead as solar energy becomes increasingly cost competitive. Rather than build massive, billion-dollar power plants that could become obsolete in a decade, they say the utility should strive to maintain its flexibility in its electric-generation fleet so it can take advantage of more cost-effective technologies when they emerge.

Share this article

ADVERTISEMENT

(comments below)

ADVERTISEMENT

(comments below)

Comments

26 responses to “Dominion Breaks Ground on Greensville Plant”

  1. Acbar Avatar
    Acbar

    That’s a pregnant last paragraph, there, JB!

  2. Peter Galuszka Avatar
    Peter Galuszka

    Forgive me for missing something, but is this a “merchant” plant?

    It will produce electricity? Will that go right into Dominion’s system?

    Can this plant be supplied by Transco alone?

    If you look at the fact that this plant generates electricity how does it improve the availability of natural gas supplies locally? The ACL would do this, right? WOuld the expanded Transco pipeline be enough?

    What types of news industries are they talking about?

    Did you know that Pennsylvania alone has seen proposals for nearly 50 new gas-fired plants of this type?

    Do you think that all of them will be necessary?

    Did you now that crude prices are starting to rise, thanks, in part, to OPEC’s moves to tighten supply?

    Won’t that affect natural gas prices and make them rise, too?

    I really don’t get this. This piece and the one in the Richmond paper this morning (a fawning PR spread across the front page) seem to say that Dominion has a new gas plant to generate electricity. There will be more natural gas in the area. How are the two related?

    1. James A. Bacon Avatar
      James A. Bacon

      The Greensville and Brunswick plants will consume enough natural gas to justify the building of the Transco spur to that part of the state, bringing additional supplies of gas that can be sold to new industrial customers. ACP will provide a competitive source of gas, tapping somewhat different supply sources than Transco. Without Greensville and Brunswick, there would be no pipelines to that area, and no extra gas to sell.

  3. Peter Galuszka Avatar
    Peter Galuszka

    But are these plants “merchant” plants?

    Will either plant use ACP gas? How can they if the pipeline hasn’t been built yet and, perhaps, may not be. You say two things. That Transco will provide gas to the plants. Then you say Transco and ACP will “serve” the plants.WHat is it?

    How is this a big economic development for the local areas? Taken by itself, the Greensville combined cycle plant will employ only 40 permanent coworkers. That’s not a lot, although the jobs are likely to pay well. The labor force of 1,000 construction workers will help temporarily, but their contribution to the local economy will probably be limited to motel rooms, meals and a six pack or two of beer.

    If Greensville is not a merchant plant, then its true output — electricity — will go into Dominion’s grid and PJM’s. How does that specifically “benefit” the locality any more than putting solar or wind somewhere in the grid? You can’t track electrons that closely, can you? Can you say that electron “A” came from Chesterfield and “B” came from Bath County Pumped Storage?

    If both pipelines pump gas through the area, what kinds of industries would benefit for the gas? Do the local officials have any specifically in mind? Are they talking to any of them? Does the local county have the trained labor force available for them?

    And why, if construction at Greensville began some time ago, is this a “groundbreaking” event?

    When you roll it all together, you get another gushy, free press release for Dominion (whoops, sorry, not free on this blog!) for a bunch of disconnected and uncertain events.

    COuld you take one more shot at explaining this to me? Thanks!

    1. James A. Bacon Avatar
      James A. Bacon

      As I understand it (subject to verification) the Transco spur will provide enough gas for both Brunswick and Greenville. ACP will provide an alternative source of gas supply to both plants, increasing their options. Flexibility in fuel purchasing is very important to Dominion.

      As for economic development, 40 permanent jobs is one benefit. A $8 million boost to the tax base is another (50% increase in revenue for Greensville). Yet another is the opportunity (no guarantees) to recruit new, energy-intensive manufacturing to the region.

    2. Rowinguy Avatar
      Rowinguy

      Neither of these plants is a merchant plant. Both will be owned and operated by Dominion Virginia Power for the benefit of its customers.

      The plants may, from time to time, have excess energy to provide through PJM’s wholesale markets to other purchasers, but in the main they are needed to satisfy DVP’s capacity requirements and own-customer load.

  4. TomH Avatar
    TomH

    The Warren, Brunswick and Greensville plants are all rate-based plants not “merchant” plants. Dominion found out that the “merchant” business can be risky and they would rather have the ratepayers assume the risk. They do sell all of the output to PJM and DVP buys electricity back from PJM to serve its customers.

    To be clear, the 98 mile connection to the Transco corridor has been in service since September 2015 to allow for pre-commercial testing of the Brunswick plant. It will be extended 4 miles to serve the Greensville plant by 2018. Extra capacity from this line is currently serving a Local Distribution Company for natural gas in North Carolina. This new pipeline followed an existing Transco corridor that had a pipeline in it well before the power plants were built.

    Dominion has said the ACP will also serve these same two plants. Providing enough gas to fuel both plants would cost $218 million per year more to transport it using the ACP compared to using the existing Transco connection. The price of the gas could be $91 million per year more expensive too, since Dominion’s supply source is currently more expensive than Transco’s. But this is not really the plan, since Dominion has only reserved 300,000 Dth/d from the ACP which is not enough to meet the 500,000 Dth/d requirements for the two plants.

    In public meetings the past two years Dominion has made it clear that the ACP is a “wholesale” pipeline and not intended to be used for local industrial or residential use. Lately, they have changed their tune because making it sound like the ACP is bringing a new source of gas to town gains them greater acceptance. They have created an understanding with Columbia Gas to extend a pipeline from the ACP to one industrial customer in Buckingham County. Usually, the tap-in fee is at least $500,000 plus valves, pipe, etc. Columbia Gas estimates the 1.5 mile pipeline will cost $7-8 million to serve this customer. Dominion is telling the Supervisors in Buckingham that they could use this for potential industrial development. This agreement is non-binding and might fall apart once the County issues the Special Use Permit needed to build the compressor station.

    According to Dominion’s forecasts for the price of natural gas (300% higher in 2025, 400% higher in 2030), energy from the Brunswick station will cost at least 100% more 10-15 years from now. Dominion admitted that the cost of solar is now on par with that from new gas plants. While the cost of energy from new natural gas-fired plants will only go up, the cost of solar and storage is decreasing by 50% every 4-5 years and will continue to do so.

    Bloomberg studies in California show that gas plants cannot run profitably for the year with the current penetration of solar in Calfornia. We are probably no more than 10 years away from that being true in Virginia. As storage comes down in price, it would probably make sense to use the new highly efficient gas-fired plants to run at their optimum setting and have them charge batteries or pumped storage when solar output is high. Energy from storage would meet variations in load and after-daylight-hours peaks. This would displace peakers and older intermediate load units. However this works out, the drastically lower price of new technologies will severely disrupt the current schemes. It does not make sense to continue to invest in projects that take 40 years to pay off when there is only a 10-year window of opportunity. We will all pay a heavy price for this lack of foresight.

    I have no idea what assumptions Dominion is using to claim $2.1 billion in savings over the life of the plant. Once it gets in print everyone thinks that it is the truth. They probably used the same calculator that developed the $377 million per year savings from the ACP, instead of the actual experience of hundreds of millions per year in higher costs.

    They have succeeded in creating the public perception that this will save us all money. Any voices to the contrary are barely heard.

    I am concerned about Dominion too. I care for the well-being of utilities. We need them in the right role. When all of this comes home to roost, the shareholders will have to share a portion of the burden too, I would think.

    I am also concerned about the scramble by local governments to spend development dollars or make great concessions to get access to a source of natural gas. I know new industries say they want access to gas, but that will not be the case for very much longer as gas prices rise. It would be far better if we invested in energy sources that had a fixed cost that lasted for 25-35 years.

  5. Peter Galuszka Avatar
    Peter Galuszka

    Tom
    Brilliant explanation

  6. LarrytheG Avatar
    LarrytheG

    interesting analysis by TomH and Peter… None of the ACP nor the locations of the two gas plants – so far away from the source of the gas makes much sense – especially if they’re selling the electricity to PJM – and on top of it’s cost out of the ground- you have to add the price of the pipeline transport …

    and again – if Dominion is going to sell this electricity at a bid price to PJM – why are ratepayers in Va paying for the capital costs of the pipeline and plants instead of investors?

    1. TomH Avatar
      TomH

      Larry,

      The ratepayers are not paying for the pipeline directly. Equity will be contributed by Dominion, Duke, and Southern Company. ACP, LLC might issue its own bonds or get loans from banks for the remaining 50% of the capital needed.

      This investment will be repaid (plus a profit) by charging for the service of transporting natural gas. This charge will be eventually passed on to the utilities burning the gas in their power plants and will become part of the fuel charge that is passed on to ratepayers. Let’s say the cost to transport natural gas to fuel the Brunswick and Greensville in 2019 is $X. If the ACP transported all of this gas rather than the existing connection to Transco, the transportation charge would be $X + $218 million. This would be added to the cost of the natural gas and automatically passed through to ratepayers, subject to later review by the SCC.

      This is the conundrum I notified the SCC Commissioners about. If we wait until after the pipeline is built, there are two outcomes possible. Either the ratepayers are forced to pay more than they would pay to use existing pipelines (hundreds of millions more per year) or Dominion is limited to recovering only the cost of what the ratepayers would have paid to use the lower cost connection to existing pipelines. Someone loses one way or the other. That is why I recommended that we address this issue now before the pipeline is built so the ratepayers have a voice ahead of time, or the pipeline developers will know whether their revenues will be limited.

      The SCC Commissioners thought their normal fuel factor review in 2019 or 2020 would be enough, but it seems to me it will only allow them to choose the winner and the loser. Senior staff in the AG’s office felt that it would be difficult for the SCC to create a special proceeding to hear this issue in advance.

      What it seems to boil down to is that it is not politically prudent to raise the issue that the ACP will cost ratepayers hundreds of millions per year more to transport natural gas using the ACP compared to using connections to existing pipelines. Transport fees are higher for new pipelines because existing pipelines have been mostly paid for by previous users. This is contrary to the widespread media story that the ACP will save Virginians $377 million per year.

      I am a utility guy. I am not opposed to the development of necessary utility projects that serve the ratepayers. But the ACP is not that type of project. We can get all of the gas we need using existing pipelines. The Department of Energy agrees. Using the ACP to transport the gas will cost ratepayers hundreds of millions more per year compared to existing alternatives. Even though the ACP will make $135 million per year, with the coming disruption in utility business models, the ACP might not be a good long-term deal for Dominion either.

      1. LarrytheG Avatar
        LarrytheG

        Thanks Tom –

        so ratepayers are not on the hook for the capital costs of the ACP any more or less than they would be for paying transport costs for any other pipeline no matter who owned it?

        And apparently Dominion is free to negotiate with it’s own subsidiary for the transport costs and there is no SCC rule for them to seek the lowest cost transport option if it came from a competitor like Transco so they could help their subsidiary recover their costs?

        So how does this make any sense from a business perspective? How will the Dominion subsidiary recover all of it’s capital costs and make a profit if not from sales to the parent company?

        1. TomH Avatar
          TomH

          The issue that many have made is that the Dominion subsidiaries are not “free” to seek the lowest cost option for transporting natural gas. The parent company, Dominion Resources, is forcing their subsidiaries to use the ACP even though it will be more expensive than other options. Virginians are not aware of this because of the effective media campaign by Dominion.

          FERC’s own guidelines say that projects with self-dealing between affiliated companies should not be considered an indication of market need. Although they seem to be ignoring that in this case.

          The SCC reviews the components of the fuel charges to determine if they are prudent. The Brunswick and Greensville plants will be the only place where this will be possible. Since the information about the higher cost of the ACP has been made public, I doubt that the ACP will be used much to serve the Brunswick and Greensville plants so that the higher costs will not be obvious to the regulators. They can get cheaper gas via Transco anyway.

          Dominion made it appear that the ACP was necessary to fuel these plants and was a reason for rapid approval of the pipeline. I think the real reason was to get the pipeline to Southside Virginia to make a straight shot into North Carolina. NC will use 67% of the capacity of the ACP. The termination of the ACP is just short of the South Carolina border. It would not take much to extend the ACP and connect with Dominion’s gas pipeline network in South Carolina. It is a savvy strategy to do this in stages. Build a 600-mile pipeline, increase its capacity to 2.0 Bcf/d, extend it into South Carolina and perhaps eventually into Georgia. This is being done by intelligent people executing long-term goals. Too bad it doesn’t also serve the ratepayers.

          The Dominion plant in 2022, if built, will probably connect to the ACP and no consideration will be made to connect it to an existing pipeline, even though it would be cheaper. In this case, the ratepayers will never know that they could have had a choice for paying lower transportation fees by connecting to existing pipelines.

          “How will the Dominion subsidiary recover all of its capital costs and make a profit if not from sales to the parent company?”

          This is the brilliance of the scheme for the ACP. Over 93% of the subscribed capacity of the ACP will go to customers that are affiliates of the owners of the pipeline. They have guaranteed themselves a captive market. As long as the regulators don’t notice that this is being done at great expense to the ratepayers, all will be well.

          Only the realization that all these gas plants are not needed and once built will not be run at a capacity factor that will be profitable – will overturn the juggernaut of conventional wisdom that is propelling us in this ill-fated direction.

  7. LarrytheG Avatar
    LarrytheG

    It’s interesting that Dominion does not say how many households the two plants will serve (or any of their plants) .. but Fluor , the builder will:

    ” Dominion is building the 1,588-megawatt Greensville County Power Station, which will produce enough electricity to power 400,000 homes in Virginia at peak demand. ”

    ” The Brunswick County Power Station (1358 MW) … will produce enough electricity to power 325,000 homes. {New power output from the Brunswick County facility will replace electricity generated by existing coal units at two stations in eastern Virginia that will be retired.”}

    So the Brunswick plant is said to be intended to replace Yorktown and Chesapeake but now, another company, Matex is planning to build a natural gas plant a quarter-mile north of Dominion Virginia Power’s shut-down Chesapeake Energy that will be about 1,400 megawatts and will serve another 300,000 homes.

    I think all of Virginia is about 15,000 mw for about 3.5 million existing household units….

    so what does all of this mean?

    it “appears” that perhaps more capacity is being built than will be needed unless someone thinks there is going to be a population boom – combined with no new energy-conserving technology…

    Makes me wonder if something changed in between the time that Dominion made commitments to build the two multi-billion dollar gas plants and pipeline … and now.. when there are clearly other players………

    clearly -Dominion is building more plants to provide more electricity –

  8. TomH Avatar
    TomH

    There is a frenzy to build new natural gas-fired plants all over PJM. The Dominion expert testified in the IRP hearing that it was Dominion’s plan to build excess capacity with new combined-cycle plants and sell the excess into PJM for added profits to Dominion. Guess what? Everyone in PJM is expecting to do the same thing, including Independent Power Producers.

    Utility planners are still stuck with 20th-century concepts. Dominion expects a 1.5% annual load growth increase, based primarily on population and economic growth. Their planning model throws in the recent trend of energy use that has decoupled from population and GDP growth and averages those values with others over the past 30 years. This method severely dilutes the influence of recent trends on future forecasts.

    The new trends are firmly established. Here is a graph showing how electricity consumption is actually declining even though our population is rising.

    https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/37639/area14mp/x9dhrxyp-1386892842.jpg

    Bloomberg New Energy Finance reports that energy consumption is no longer in lockstep with GDP growth. Primary energy consumption has been flat since 2000 while indexed GDP has grown by 30% in that same time span.

    Dominion expert witness eventually admitted that the only significant load growth in Virginia is from new data centers. He did not mention that those facilities want to be supplied with solar energy.

    Virginia and the rest of PJM will have a huge overhang of new gas-fired power plants as more energy efficiency and much lower cost solar and storage disrupts the utility landscape. Unfortunately, utilities are extending the old model and sometimes obstructing progress by others to build the new one.

    1. LarrytheG Avatar
      LarrytheG

      re: ” it was Dominion’s plan to build excess capacity with new combined-cycle plants and sell the excess into PJM for added profits to Dominion.”

      Tom – does that mean that ratepayers will pay to build these plants and then the electricity will be so on a low-bid basis to non-ratepayers and that cost might be less than the typical recovery cost timeframe for those plants?

      How can Dominion use ratepayers to pay for what will essentially be “merchant” plants?

      1. TomH Avatar
        TomH

        The re-regulation legislation the GA passed in 2007 (?) effectively ended the deregulation in Virginia that occurred in the 1990s. Now each time a new power plant is built by Dominion in Virginia the ratepayers see a rate increase in their bill (RAC).

        Please review Acbar’s excellent explanations about how the PJM market works.

        Bloomberg New Energy Finance found that in California the contribution from solar displaces intermediate and peaker generation and is also displacing an increasing amount of baseload generation during sunlit hours. This causes owners of conventional generation two problems. The auction clearing prices are lower during these periods and baseload generators are dispatched less or must be able to vary their output. This means conventional generators earn less when they are operating and they operate less often. This disrupts the business model for nuclear and fossil-fueled central station generation.

    2. TooManyTaxes Avatar
      TooManyTaxes

      Tom – what happens to demand for electricity if the majority of motor vehicles are powered by electricity and need a charge, at least from time to time?

      1. LarrytheG Avatar
        LarrytheG

        TMT – We might expect Dominion to state what their projections show in the way of demand in their fillings and actually cite that as rationale for more power but the adoption of electric vehicles is not meeting projections.

        Ask yourself when you plan to buy an electric vehicle and I bet the answer is that you are not. Ask 100 people that same question and 99 will say the same thing. Some day – yes – but by that time houses will be using 1/2 what they use now… and solar will have doubled or tripled or more especially for houses where folks have electric cars and they will have fixed the “range anxiety” problem.

        but the bottom line is that for right now – electric cars are more expensive than regular cars and thus only the more well off want them, usually, to show off their “green cred” and demand has not met projections:

        ” Car (Electrification) Trouble? GM Says Demand For Electric Cars Has Not Met Projections”

        http://www.forbes.com/sites/brookecrothers/2015/05/11/car-electrification-trouble-gm-says-demand-for-electric-cars-has-not-met-projections/#55526e3873d3

        Some day -electric cars will be less expensive and have longer ranges – but by that time – solar will have expanded so much that by that time people will be using residential solar and powerwalls for their cars and their employers will provide solar-powered outlets to recharge workers cars as a free perk or for cheap.

        I don’t think Dominion is ever going to be major provider of power for electric cars… not in the cards.

        In fact, if powerwall technology ever gets “real” and solar roof and siding technology mature – Dominion is going to find itself between a rock and a hard place and if they actually try to increase rates to be compensated for their too-many-built plants – people are going to demand that they be forced into bankruptcy and let the State issue a PPTA contract for not-for-profit utility to take over.

      2. TomH Avatar
        TomH

        EVs making up a large share of the automotive market could be a boon to a modern electricity system. By 2025 it is expected that that EVs will reach price parity across the main model types. Because EVs have significantly lower fuel costs and minimal maintenance expenses (only 14 moving parts) no oil changes, etc., most new car buyers will favor buying EVs at that time.

        Having devices with batteries already paid for could provide a low-cost advantage for utilities and a revenue opportunity for car owners. With an appropriately designed recharger network, batteries in the EVs could store solar energy generated during peak sunlight hours, stabilizing the variation in solar output. This captured energy could be used as fuel at a later time or be returned to the grid during evening peaks as solar output declines. Car owners would receive a fee for their service. If applied to their car payment this would make EVs affordable sooner. It would also save utilities money by having access to low-cost storage.

        Many believe that by 2025 autonomous driving will be reliable and widely accepted. This would promote a transportation-as-a-service model, especially among younger people. Instead of cars being used 5-10% of the day, they might be used 70-80% of the day. This means fewer cars serving a much greater portion of the population. Just as with utilities, automakers must prepare for this disruption in their historical business model.

      3. TBill Avatar
        TBill

        I see electric cars as analogous as Ethanol in gasoline. It all depends if the government is going to mandate say 10% electric like they government has mandated 10% ethanol. Most electric cars are sold in CA where the sales are mandated, and subsidized. Take away gov’t mandates and subsidies and you have a small maybe modest market.

        It is always possible some new technology comes along that disrupts what we think is the future direction. But take away gov’t forcing I don’t think EV is that disruptive, yet anyways.

        1. TomH Avatar
          TomH

          EVs don’t have a giant lobby behind them the way ethanol does. It is true that California’s regulations have promoted the sale of electric vehicles because it is too big of a market for automakers to write off. The feds provide a rebate for the first 200,000 cars that an EV manufacturer sells. That will disappear soon for Tesla. California is 1/2 of the US electric vehicle market and 1/4 of the world market. But BYD in China is ramping up in a big way. China might soon become the biggest EV market because of their massive air pollution problems.

          The transportation sector now contributes the most CO2 in the U.S. Although, the frenzy to build new gas-fired power plants in America could put the electricity sector back in the lead. If considering total greenhouse gases, the methane leaks along the supply chain make new gas-fired plants equal to coal plants in terms of contribution to climate change.

          The EV revolution has already disrupted the auto industry. Every major manufacturer as an EV program of some sort going on. And as we have seen in Virginia, the EVs do not fit into a traditional dealership’s business model. A bumpy road ahead for all auto manufacturers, especially when the subprime auto loan mess comes home to roost.

          Advances in battery technology will put EVs over the tipping point by 2025. With battery costs reducing by half every 4-5 years, cost and range issues will decline. Superior performance, low operating and maintenance costs, and the “cool factor” of having a computer on wheels, will attract a substantial share of the market when price parity is reached.

  9. LarrytheG Avatar
    LarrytheG

    In other words – Dominion and the SCC are still working off of a 20th century electricity/economic model and in denial of the 21st century realities that are right in front of them?

    That’s why I said that what Dominion wants to do – is what they have done in the past – that’s all they know how to do – which is make money from making and selling electricity.. and now.. to obstruct/neuter any perceived threats to their business model – whether it is evolving to obsolescence or not. And because they are a regulated monopoly – they have essentially co-opted the regulators to do their bidding and protect them from what the market wants to do.

    1. TomH Avatar
      TomH

      To be fair, those are the rules by which we have told them to operate. Build more – earn more. We need to change the rules so that utilities can prosper when they serve us better.

      With electricity load growth flattening out, the big utility holding companies have been drawn even more into the gas business. FERC provides rates of return for gas pipelines that are 50% higher than the typical rates of return allowed for transmission lines and power plants. If you were a utility executive wanting to please shareholders (and get a bigger bonus), where would you put your investment dollars?

  10. LarrytheG Avatar
    LarrytheG

    I’d put them in home and commercial systems that employ existing and evolving technology … that also makes the grid more robust and reliable – and much more able to absorb solar and even be self-healing.

    I’d be looking to see how best to expand capacity and reliability in Hampton without having to ruin Jamestown.

    I’d be looking on what I could do to attract more industry that wants on-site solar and incorporate 3rd party solar.

    I’d be telling the SCC that people who are actually in the business are better able and more qualified to think strategically about how electricity company monopolies need to evolve their business models to adapt and track technological changes rather than stay mired in decades-old thinking about how electricity monopolies should function.

    This is one of the biggest complaints about regulators.. they prefer to work with fixed rule models… even when they no longer fit the economic circumstances… and that kind of thinking is not only inhibiting innovation and entrepreneurship – it’s causing real damage to the economy.

    Gas plants probably need to be distributed like substations…and wherever those plants are – you can build solar nearby – and when solar is putting out the plants idle – and when solar goes away -the plants fire up.

    PJM should probably be primarily for baseload… and for casualty stand-by.

    Using gas for baseload is dumb when we KNOW the supplies are finite – AND POLLUTING and we KNOW that solar has to have a stand-by fuel that is not baseload if you’re going to be able to harvest it – and still maintain grid reliability.

    If/when ready-for-prime-time storage comes along – fine – then replace some gas plants and add it to solar but for heck-sake we do not want to be running out of gas BEFORE we get a practical storage solution. I’m a big skeptic on storage.. it’s a little like cold fusion… the laws of science don’t support practical or cost-effective storage .. they’re never going to have the energy-density of fossil-fuel …or even one-to-one for solar. You’re probably going to cut the effective capacity of solar by 20% – i.e. will need a 20% bigger solar plant to make up for the transfer loss of sending it to battery then getting it back later.

  11. LarrytheG Avatar
    LarrytheG

    I don’t know if Dominion itself is not really interested in truly branching out into technologies that control and reduce the use of energy or whether the SCC wants to restrict them to the core purpose of their original monopoly but right now we have made innovation and entrepreneurship for energy use – the enemy of electricity generation.

    Whatever limits the use of electricity -has now become the implicit focus of the SCC and DOminion to minimize that impact to Dominion or worse to re-jigger the rules so that Dominion and it’s business model is essentially protected, even compensated for evolving technology that reduces energy use.

    Perhaps it’s the natural way that obsolescence of industry occurs – never graceful and orderly – always chaotic and ugly but with monopolies – it’s almost as if the regulators themselves become co-opted as corporate defenders.

    What we want and need is for Dominion to do what General Electric and other corporations have done – to evolve with the changes to transform themselves into whatever they need to – to stay successful and relevant to the needs of consumers.

    1. TomH Avatar
      TomH

      PJM is making the decision already to pay for grid services such as storage for voltage and frequency regulation, demand response, local generation in congested transmission areas, etc. Dominion’s operations are much more determined by PJM’s policies than by the SCC.

      Other states such as NY, Massachusetts, and California are adapting to this changing scene by creating new regulatory structures to encourage utilities to develop a modern energy system. For example, in NY regulators are leaving the development of solar to third-parties because they do not believe it is fair for utilities to have a guaranteed profit for these facilities (because they would be rate-based) while the third-party providers would have to exist in a competitive marketplace. The NY PSC believes that having competitive solar providers will result in lower costs to the ratepayers.

      It does make sense to have only one provider of the wires (the utilities). That is why monopoly status was originally obtained. Utilities are also uniquely positioned to provide transaction services for the various exchanges of services that will occur over the modern grid, which can become a significant revenue opportunity.

      Cost-of-service, plus profit, would have to remain in place for existing investments until they become fully depreciated to ensure the financial health of the utilities.

Leave a Reply

Read More