RD682 - Combined Reports: Annual Report on Grid Modernization, Reliability, and Integration of Renewables, and Annual Report on the Transmission Line Undergrounding Pilot, and Annual Report on Construction of New Solar and Wind Projects Pursuant to Chapter 296 of the 2018 Virginia Acts of Assembly; and Biennial Report on Third Party PPA Pilot Program Pursuant to Chapter 382 of the 2013 Virginia Acts of Assembly – December 1, 2023

Executive Summary:

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

Grid Modernization, Reliability, and Integration of Renewables (The Grid Transformation and Security Act ("GTSA"), 2018 Virginia Acts of Assembly Chapter 296) and Infrastructure Investments to Improve Reliability (2022 Virginia Acts of Assembly Chapter 653):

Concerning reliability, Virginia electric utilities continue to 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. Under certain circumstances, the projects are also subject to Commission approval.

Concerning grid security and grid hardening activities, the Commission has previously given approval for Virginia Electric and Power Company d/b/a Dominion Energy Virginia ("DEV" or "Dominion") to implement, among other things, mainfeeder hardening, targeted corridor improvement, voltage island mitigation, hosting capacity analysis, and physical and cyber security.

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 the generation, transmission, and distribution of electricity. During 2022, such annual investments were:

Company: Dominion Energy Virginia
Generation: $407.0 million
Transmission: $1,274.0 million
Distribution: $1,060.0 million

Company: Appalachian Power Company
Generation: $92.9 million
Transmission: $160.4 million
Distribution: $249.7 million

With respect to infrastructure investments to improve reliability, as part of recent GTSA filings, Dominion is performing: (i) mainfeeder hardening projects targeting improvements for poorly performing mainfeeder segments; (ii) targeted corridor upgrades that remediate ash tree mortality and apply herbicides for ground floor maintenance; (iii) substation technology deployment projects; and (iv) fault location, isolation, and service restoration projects ("FLISR").

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

The GTSA established a pilot program for underground electric transmission lines ("Undergrounding Pilot"), consisting of two qualifying projects to be constructed in whole or in part underground. Dominion's Haymarket Project – specifically, its I-66 Hybrid Route – was the first project the Commission approved as part of the Undergrounding Pilot. According to DEV, this project has been energized and is currently in service as of the end of March 2022.

The Commission also approved, on June 24, 2021, another DEV construction project – Dominion's Partial Line #2010 230 kilovolt ("kV") Single Circuit Transmission Line Underground Pilot Project (Tysons-Future Spring Hill Substation) – as the second qualifying project under the Undergrounding Pilot program. This project is currently under construction, with DEV trenching along the line route and installing electrical duct banks. The project cost, originally estimated to be approximately $30.4 million, is currently estimated at $32 million, which represents an increase of approximately 5.3% over the original estimated cost. The projected in-service date of December 31, 2025 remains unchanged.

Construction of New Solar and Wind Projects (GTSA, 2018 Virginia Acts of Assembly Chapter 296) and Storage Projects (2020 Virginia Acts of Assembly Chapter 1190):

Between July 1, 2018, and June 30, 2023, Virginia utilities placed into operation solar facilities totaling 1,062 megawatts ("MW") of nameplate generation capacity in the Commonwealth. Dominion also has under development approximately 2,878 MW of nameplate solar generation and 2,587 MW of nameplate offshore wind generation capacity off the Commonwealth's Atlantic shoreline.(*1) APCo currently has 5 MW of nameplate solar generation capacity under development as of June 30, 2023. Third parties are also developing facilities that may provide approximately 4,611 MW of additional nameplate solar generation capacity in the Commonwealth. DEV has constructed the Hanover Battery Storage Pilot (2 MW) Project, for a total of 16 MW of energy storage in operation.(*2)

Third Party Power Purchase Agreement Pilot Program (Chapter 382 of the 2013 Virginia Acts of Assembly):

The Third Party Power Purchase Agreement ("PPA") Pilot Program is underway for each investor-owned electric utility in Virginia. This program enables the owner or operator of a solar-powered or wind-powered electricity generation facility, located on premises owned or leased by an eligible customer-generator, to sell the electricity generated from such facility exclusively to the eligible customer-generator under a PPA. The pilot programs are limited to aggregated capacity not exceeding: (i) 500 MW for Virginia jurisdictional and 500 MW for Virginia non-jurisdictional customers; and (ii) six percent of each Pilot Utility's adjusted Virginia peak-load forecast for the previous year.

As of October 1, 2023, the cumulative capacity of facilities participating in the Third Party PPA Pilot Program has not yet reached the participation caps for any utility. Notices of intent for each PPA program currently estimate about 76.3 MW, 7.9 MW, and 7.2 MW of total solar generating capacity for DEV, APCo and Kentucky Utilities Company d/b/a Old Dominion Power Company ("ODP"), respectively. It is worth noting that ODP has received notices of intent for almost 63% of its available capacity, the largest percentage of the three utilities.
(*1) These figures refer to data provided by Dominion as of June 30, 2023. In next year's report, the Commission will update these amounts to include additional projects and purchased power agreements ("PPAs") proposed in Dominion's 2023 RPS Filing, Case No. PUR-2023-00142, filed on October 3, 2023.
(*2) Application of Virginia Electric and Power Company, to participate in the pilot program for electric power storage batteries pursuant to § 56-585.1:6 of the Code of Virginia, and for certification of a proposed battery energy storage system pursuant to § 56-580 D of the Code of Virginia, Case No. PUR-2019-00124, 2020 S.C.C. Ann. Rept. 304, Final Order (Feb. 14, 2020).