Dive Brief:

• Renewable energy development could fall between 2017 and 2020, according to Dominion Resources Chairman, President and CEO Thomas Farrell, after federal tax credits for renewables expire.
• Noting that the renewable and efficiency portions of the Clean Power Plan are "slightly convoluted," Farrell said renewables development would pick back up as states file compliance plans targeting emissions reductions.
• Dominion expects that the plan will require new generation and transmission investment, as well as more opportunities for the company's gas infrastructure business.

Dive Insight:

Dominion power sales have risen faster than anticipated this year, leading executives to speculate that more generation will soon be needed in Virginia. But they also said that the company will examine its Integrated Resource Plan (IRP) in the wake of final Clean Power Plan regulations being released, testing to see if options to supply that power will still meet emissions targets.

"We're going to take a hard look at the IRP," CEO Farrell said in a conference call with analsysts. "We will be looking hard at solar. The renewable and energy efficiency parts of the rule are slightly convoluted with the way the timing works."

Farrell predicted a potential gap in incentives to build renewables once the federal tax credit expires next year, but before states begin submitting compliance plans. If a developer constructs a solar plant after the state files its plan, double credits can be earned -- but only in 2020 and 2021.

"You could have a couple of years there where there is a lack of incentive to build renewables when compared to waiting," Farrell said. "It's a complicated rule. All of us have a lot of work to do."

The final CPP regulations target deeper cuts in greenhouse gas emissions, but give states two additional years to comply. Initial compliance begins in 2022, with a 32% emissions reduction targeted by 2030. 

Farrell said he was "encouraged by some of the changes made to the original proposal" and said Dominion is considering options to help Virginia comply. "It is clear, however, that the plan will require significant new investments in generation and electric transmission in our Virginia service territory as well as many new opportunities for all aspects of our gas infrastructure businesses," he said.