What If… Dominion Pursued a Solar+Smart Grid Strategy?
After proposing an end to the freeze on base electricity rates and a reinvestment of excess profits into modernization of the electric grid, Dominion Energy Virginia has produced an ad touting renewable energy and the smart grid.
What if more of the energy we used came from renewable resources?
What if the electric grid could detect, fix and even prevent power outages?
What if our grid were less vulnerable, more secure?
What if all these “what ifs” became a reality?
Well, they are. At Dominion Energy, we’re completely transforming our power grid and the way we think about energy to move from “what if” to “what’s next?”
The ad appears on Youtube. I don’ t know if Dominion has purchased any air time yet. (Hat tip: Steve Haner.)
Bacon’s bottom line: As I read the tea leaves, Dominion’s push to modernize the electric grid may represent more than a tactical bid to shore up short-term profits and may reflect a deeper change in strategic thinking about the shift in the relative advantage of solar versus other sources of electric power.
Critics have asserted that the 2015 rate freeze has allowed Dominion to retain hundreds of millions of dollars in profits that it otherwise would have had to reimburse to rate payers. Dominion’s response was to concede that, yes, it has enjoyed higher profitability since the freeze but that critics over-emphasized the amount and under-emphasized the risks the company faced from absorbing the cost of massive weather events and regulatory burdens such as coal ash disposal.
Thus, it came as a surprise two weeks ago when Dominion executive Mark O. Webb announced that it was time to “transition away from the rate freeze as the outlines of state carbon regulation have become more clear and the need and the opportunity to reinvest in grid transformation becomes more pressing.” He proposed plowing back surplus profits into investments in the electric grid, which are needed to maintain reliability as more solar generation comes online and also to guard against cyber-security threats.
There is more at stake than a couple hundred million dollars (depending on whose estimate you believe) in excess profits. A bolstered commitment to solar energy and the smart grid would affect billions of dollars of future investment. Only a couple of years ago, emphasizing the difficulty of integrating intermittent renewable energy sources into the electric grid, the utility saw only a modest future for solar. In its 2017 Integrated Resource Plan, however, Dominion outlined a long-term future in which 5,200 megawatts of electric capacity would be produced by solar — the equivalent of four or five state-of-the-art natural gas power stations. Could Webb’s comments indicate a willingness by Dominion to tilt even more aggressively toward solar?