Energy efficiency

In a 2014 energy efficiency effort, Jay Middleton (right), lead HVAC technician with Dutton Equipment Repair Inc., talked with his colleague Eddie Dutton as he checked out a home's heat pump. Dominion Virginia Power offered its residential customers a one-time rebate of $90 for a heat pump tuneup.

Dominion Energy Virginia is rolling out its first set of proposals to promote energy efficiency and reduce peak power demand under a sweeping new state law, but some of the programs are existing initiatives that the utility has redesigned with new technologies for small businesses.

The application filed at the State Corporation Commission on Wednesday would launch 11 energy-efficiency and conservation programs next summer at an estimated cost of $262 million, or about 30 percent of the $870 million the company was directed to spend over the next decade by the Grid Transformation and Security Act.

The law, championed by Dominion and supported by some environmental organizations because of its commitments to energy conservation, makes it easier for the company to demonstrate the proposed investments in energy efficiency are cost beneficial to the monopoly’s ratepayers.

However, a Dominion official confirmed the assertion by SCC staff in another case that the law “only requires the company to propose $870 million of spending on energy efficiency programs.”

“The company agrees with this statement, and also recognizes the commission’s review and authority over these filings,” Brett A. Crable, Dominion’s director of new technology and energy conservation, said in testimony filed with the application.

The 11 proposed five-year programs include seven for residential customers and four for business customers, including three existing programs the company has redesigned to encourage nonresidential customers to invest in energy efficient lighting, heating and cooling, and apply a solar-resistant film to windows to reduce power consumption for cooling.

They include plans to: recycle old, inefficient refrigerators and freezers; help customers find ways to reduce their electricity use; provide rebates for energy-efficient appliances; install conservation measures after assessing home energy use; use smart thermostats on heat pumps and air conditioners to reduce electricity use when demand is peaking; and promote energy-efficiency improvements in offices and small manufacturing facilities.

The company estimates that it would spend $215 million on the new initiatives and $46.7 million on reconstituting the existing programs.

Altogether, the proposals would increase the typical residential customer’s monthly bill by 61 cents under an existing rate adjustment clause Dominion proposes to continue under the expanded energy-efficiency and conservation program.

The costs won’t be borne by the company’s large industrial customers, who aren’t eligible to participate or required to pay under the new law. The law exempts customers that consume 500 kilowatts of electricity at least three times a year, or 5 percent of the previous threshold of 10 megawatts.

“We designed the new programs specifically for residential and small-business customers,” Dominion spokesman Rayhan Daudani said on Wednesday. “The programs are not geared toward the larger commercial and industrial customers and they will not pay for them.”

Dominion filed the application the day after Gov. Ralph Northam released the Virginia Energy Plan, which promotes investments in energy efficiency and renewable sources of fuel for electric power, using the new law as a foundation for its goals.

The filing also comes a day before the SCC holds a hearing on how to judge whether a utility investment is “prudent and reasonable” for monopoly ratepayers if the new law that the legislature adopted and the governor signed declares them to be in the public interest.

The law deems Dominion investments in 5,000 megawatts of renewable energy — including solar, onshore and offshore wind — in the public interest.

This summer, the company filed applications to develop 3,000 megawatts of renewable energy by 2022, including two solar plants proposed in Surry County to offset the power consumed by Facebook’s new data center in Henrico County and a 12-megawatt pilot program to build a two-turbine wind facility 27 miles off Virginia’s Atlantic shore.

The SCC will hear arguments next week on the proposed offshore wind pilot project, but its staff already has filed testimony questioning whether the $300 million investment makes economic sense for utility ratepayers.

The new law also finds in the public interest Dominion investments in grid modernization and burying of residential tap lines in areas prone to repeated power outages. The company proposed $840 million this summer in programs to modernize its electric grid, serving 2.6 million customers. The centerpiece of the proposal is the installation of smart meters for 1.4 million customers.

Dominion estimates that its first round of energy-efficiency investments would reduce peak electricity demand by 329 megawatts over 10 years, or more than 6.9 million megawatt-hours.

The company said the new law “will keep Virginia’s traditional advantage of low electricity prices and reliable service while taking dramatic steps towards the future. It expands renewable energy and broadens the potential for energy-efficiency programs in Virginia.”

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