RD612 - Combined Reports: Annual Report on Grid Modernization, Reliability, and Integration of Renewables; Annual Report on the Transmission Line Undergrounding Pilot; Annual Report on Construction of New Solar and Wind Projects; Annual Report on Solar Demonstration Programs; and Biennial Report on Third-Party PPA Pilot Program – November 27, 2019

Executive Summary:

This document contains the combined reports (“Report") of the Virginia State Corporation Commission pursuant to five provisions of law. The Commission has reviewed and investigated each of these areas or topics listed below, and reports as follows:

Grid Modernization, Reliability, and Integration of Renewables (2018 Acts of Assembly Chapter 296):

Chapter 296 directs the Commission to assess (i) the reliability of electrical transmission or distribution systems; (ii) integration of renewable resources onto the utility’s distribution grid; (iii) the utility’s level of investment in generation, transmission, and distribution; (iv) the need for more generation during times of peak demand; and (v) distribution system hardening projects and enhanced physical security measures.

Concerning reliability, Virginia electric utilities participate in regional transmission planning through PJM Interconnection, LLC (“PJM"), the entity that manages the electric grid primarily at transmission-level voltages. At the distribution level, the Commission monitors reliability in part through utility reports on measures related to tree-trimming and indices that measure frequency and duration of electricity service outages.

Utility-owned and third-party owned renewable generation resources are being added to the electric distribution grid. Before connecting utility-scale resources to the electric grid, owners must coordinate with the affected local utility and with PJM. Typically, the Commission also must grant approval for such projects. The Commission is revising its regulations for small electrical generators to interconnect to the electric grid.

Company: Dominion Energy Virginia
Generation: $1,675.0M
Transmission: $1,060.0M
Distribution: $634.0M

Company: Appalachian Power Company
Generation: $62.7M
Transmission: $297.8M
Distribution: $225.6M

Transmission Line Undergrounding Pilot (2018 Acts of Assembly Chapter 296):

Dominion Energy Virginia’s Haymarket Project, specifically the I-66 Hybrid Route, is the first of up to two projects approved under this Pilot. The company reports this project is in the final engineering and construction phase, with estimated completion by the end of 2021. The cost estimate of $172 million is $5 million more than was projected at the time of Commission approval but has remained steady for the past year. The Commission has received no request for a second transmission line to be constructed underground pursuant to the Pilot.

Construction of New Solar and Wind Projects (2018 Acts of Assembly Chapter 296):

Chapter 296 directs the Commission to report on the need for and new construction and development of utility-owned and -operated renewable resources. Since July 1, 2018, Virginia utilities have placed in operation a total of 72 MW of solar facilities. Dominion Energy Virginia also has approximately 900 MW of solar generation under development, as well as a 12 MW off-shore wind pilot. Third-parties also are developing approximately 801 MW of solar facilities. Chapter 296 sets forth a goal of 5,000 MW of new solar facilities

Solar Demonstration Programs (2011 Acts of Assembly Chapter 771):

Chapter 771 directs the Commission to report annually on certain solar demonstration programs. Dominion Energy Virginia’s Solar Purchase Program features tariffs designed to facilitate customer-owned distributed solar generation. As part of the Solar Partnership Program, qualifying commercial, industrial, high school, and university customers representing 11 solar projects were constructed, with a total capacity of 7.7 MW. Total capital expenditures to date are approximately $25 million of the $80 million program cap.

Third-Party PPA Pilot Programs (2013 Acts of Assembly Chapter 382, amended by 2017 Acts of Assembly Chapter 803):

Chapters 382 (from 2013) and 803 (from 2017) direct the Commission to review pilot programs whereby third parties may sell energy from certain renewable generation facilities to qualifying customers pursuant to power purchase agreements. In the service territory of Appalachian Power Company, the program limit of 7 MW is sufficient; currently, no one is participating in the program. In the service territory of Dominion Energy Virginia, the program total is 50 MW. The subscription level is 8.3 MW as of mid-November 2019. Nine providers at 144 facilities have submitted notices of intent to participate in this program; total expected capacity related to these notices is approximately 41.2 MW.

The Commission Staff has received multiple letters from companies, counties, and para-governmental organizations expressing interest in the program in Dominion Energy Virginia’s service territory and who are concerned that the program limit will be reached before their specific projects can be approved for program participation. In the view of this growing interest, the Governor and General Assembly may wish to consider increasing the program limit for Dominion Energy Virginia.