RD584 - 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 Annual Report on Energy Efficiency Programs – December 1, 2020

Executive Summary:

This document contains the combined reports ("Report") of the Virginia State Corporation Commission ("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):

Concerning reliability, Virginia electric utilities participate in regional transmission planning through PJM Interconnection, L.L.C. ("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 projects are also subject to Commission approval. During 2020, the Commission completed a revision to its regulations governing the interconnection of small electrical generators and energy storage resources to the electric grid.

Concerning grid security and hardening activities, the Commission has previously given approval for Dominion Energy Virginia ("DEV" or "Dominion") to implement physical security controls at ten substations, and that activity is still ongoing.(*2)

The Commission has also approved three major components of DEV's proposal to harden parts of the distribution grid, primarily addressing the worst performing distribution feeders, and remote customer locations that face extended outages upon failure of critical substation equipment that lack redundancy.

Both DEV and Appalachian Power Company ("APCo") are expected to have sufficient capacity to meet peak energy demands in the near term, either through company-owned generation or market purchases. Both companies also continue to invest in generation, transmission, and distribution of electricity. During 2019, such annual investments were:

Company: Dominion Energy Virginia
Generation: $718.0M
Transmission: $838.0M
Distribution: $324.0M

Company: Appalachian Power Company
Generation: $54.1M
Transmission: $266.4M
Distribution: $212.3M

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

Dominion's Haymarket Project, specifically the I-66 Hybrid Route, was the first of up to two projects that may be approved under this Pilot. DEV reports this project is in the construction phase, with estimated completion by March 2022, compared to the original completion date of July 2021. On September 29, 2020, Dominion filed an application for a certificate of public convenience and necessity ("CPCN") for a second transmission line project under this Pilot. The application is for a "Partial Line #2010 230 kV Single Circuit Transmission Line Underground Pilot Project (Tysons-Future Spring Hill Substation)." It is proposed to be constructed in Fairfax County, with a cost of approximately $30.4 million, and a projected in-service date of December 31, 2025.

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

Since July 1, 2018, Virginia utilities have placed in operation a total of 214 MW of solar facilities. Dominion also has approximately 821 MW of solar generation and 2,600 MW of off-shore wind generation under development, as well as a 12 MW off-shore wind pilot. APCo currently has 105 MW of solar under development. Third-parties also are developing approximately 1,524 MW of solar facilities. Chapter 296 declares 5,000 MW of new solar and wind facilities to be in the public interest.

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

Dominion's Solar Purchase Program featured a tariff designed to facilitate customer-owned distributed solar generation. As part of the Solar Partnership Program, qualifying commercial, industrial, high school, and university customers representing nine solar projects were constructed and continue to be operational, with a total capacity of 6.4 MW. Total capital expenditures to date are approximately $25 million of the $80 million program cap.

Energy Efficiency Programs (2020 Acts of Assembly Chapter 1193):

No utility has yet submitted plans on how they intend to meet the energy efficiency goals of the Virginia Clean Economy Act ("VCEA" or "Chapter 1193"), as passed by the 2020 Virginia General Assembly ("General Assembly"). It is expected that the VCEA goals will be addressed in DEV's and APCo's upcoming demand side management ("DSM") cases expected to be filed in December 2020. While no new energy efficiency programs have been approved pursuant to this new law, the Commission has previously approved numerous programs. This includes 60 energy efficiency programs and 9 peak shaving programs between DEV and APCo. The cumulative total Commission approved cost cap for spending on all associated programs for both utilities is approximately $1.03 billion. Notably, on August 28, 2020, the Commission established a proceeding to address Dominion's methodologies for conducting evaluation, measurement and verification of energy savings of approved energy efficiency measures.
(*2) The ten substations that received Commission approval for enhanced physical security measures were substations requested by Dominion; the Commission did not select those substations.