LAST month, the State Corporation Commission rejected the majority of the provisions in Dominion Energy’s grid modernization plan, citing “high costs to customers outweigh(ing) … any proven benefits.”
In other words, the SCC concluded that much of Dominion’s grid mod filing lacked justification when asking for ratepayers to foot a multi-billion-dollar bill.
Following the SCC decision, Dominion watchdogs in the General Assembly, as well as environmental and consumer advocates from every corner of Virginia, reveled in seeing the utility so publicly rebuked. But their celebration tells only half the story.
While it is significant that the SCC so bluntly said that Dominion lacked a “well-reasoned plan” that had “little to no benefit to customers,” the commission also gave the utility a set of clear and reasonable suggestions for future filings that detail how they may invest in grid modernization while ensuring that ratepayers see a return on such investments.
At Virginia Advanced Energy Economy, we believe that the commission’s thoughtful denial of Dominion’s proposal presents an opportunity – for the utility and the commonwealth as a whole – to go back to the drawing board and develop a modernization proposal that works for everyone.
To understand how, though, it helps to first understand what “grid modernization” is.
A truly “modernized” grid is a platform built on smart hardware and software. This platform can empower the utility, consumers, and third-party service providers with new data and tools to transform how we generate, manage, and conserve energy. With the right plans and policies, grid modernization can help Virginians save money, reduce emissions, and more reliably keep the lights on.
Notice that caveat: “with the right plans and policies.” That is essential.
Dominion’s proposal had all the technology necessary for grid modernization, but when it came to the corresponding plans and policies, their proposal fell short. In everyday terms, the utility asked the SCC if it could move from a flip-phone to an iPhone. But they failed to lay out a clear plan for how they or customers would use the iPhone for anything other than making calls.
What are the plans and policies that fully realize grid modernization and make it a good deal for consumers?
We would start by recommending that the utility, with the input of industry, consumers, and other stakeholders, develop a deliberate plan to drive widespread adoption of time-variant electricity rates (TVRs).
The cost of electricity varies throughout the day. TVRs raise consumer awareness of this variation and incentivize behaviors and technologies—such as demand response, energy conservation, and battery storage—that help us use energy more efficiently.
Done right, this rate structure can help lower electricity costs across the board for Virginians and improve grid reliability.
It is critical that the utility also provide consumers with greater access to data regarding their energy use. Virginians cannot take advantage of more efficient rates, like TVRs, if they don’t know when they’re using energy.
Data access can also help sophisticated consumers—like businesses, industry, colleges and universities—identify the best services and technologies, from energy performance contracting to rooftop solar energy, for their needs.
Most consumers do not have the time to analyze their granular energy data and determine whether solar or smart thermostats make sense for them. That is why data access should be paired with insight and analysis, providing consumers with concrete steps to invest wisely, save money, and meet their sustainability goals.
The utility should make such analytics as part of any modernization plan while also providing access for third parties to offer such services direct to consumers.
Finally, any modernization plan should have the flexibility to accommodate a diverse and distributed energy future. Technologies like rooftop solar, electric vehicles, and home automation have the potential to benefit not just the consumers who use them, but all Virginians. Our dollars should be invested in a platform with the flexibility to take full advantage of these benefits.
These are just a few of the policies a good grid modernization proposal should include. By incorporating these suggestions into its next modernization proposal, Dominion can build broad support for a grid that truly benefits all Virgini
To close on the previous analogy, last year Dominion asked the SCC to move from a flip-phone to an iPhone. The commission said “No” because Dominion had failed to define how it would fully use all of the new capabilities of the iPhone.
That doesn’t mean we should stick with an old flip-phone; it just means we need a better plan to get our money’s worth from the iPhone.
We paid for it, after all.
Harrison T. Godfrey is the executive director of Virginia Advanced Energy Economy.