Dominion to invest $277M in unauthorized revenue from 2018 in offshore wind, smart meters

Dive Brief:

A new report from the Virginia State Corporation Commission (SCC) finds Dominion Energy collected $277.3 million more than it was authorized, boosting its return on equity (ROE) for 2018 to 13.47%. Regulators had approved an ROE of 9.2%.
Dominion says it plans to use the excess on an offshore wind pilot project and smart meters, and is looking at cyber and physical security enhancements to its energy grid. The utility says Virginia's Grid Transformation and Security Act of 2018 allows it to invest surplus revenue in projects lawmakers have "already deemed in the public interest."
At least one customer advocate disagrees and says the utility is "cheating" customers. The group, Clean Virginia, notes Dominion's rates have risen substantially in recent years and the utility is currently seeking to raise its ROE.

Dive Insight:

The over collection is significant, but Dominion officials say that much and more has essentially already been designated for spending.

"We've already identified more than $750 million in projects that we plan to use this reinvestment model to help fund," Dominion spokesperson Audrey Cannon told Utility Dive in an email. "Those include the Coastal Virginia Offshore Wind project, full deployment of smart meters to our Virginia customers, and a new customer information platform.

"Our customers are telling us they want more solar and wind, and a more secure energy grid," Cannon said. The SCC has already approved Dominion's investments in the offshore wind pilot project, as well as for cyber and physical security enhancements to the energy grid.

"Reinvesting the revenue identified by the SCC yesterday will enable us to give our customers what they want while also keeping rates low," Cannon said.

But while average customer bills are down $2.76 from last year, the SCC's Aug. 29 report notes bills have risen more than 25% between 2007 and 2019.

"Virginians are already overburdened by their energy bills and this report shows why," Clean Virginia Executive Director Brennan Gilmore said in a statement. "Dominion Energy is cheating Virginia customers out of hundreds of millions of dollars in refunds."

Dominion is continuing to add clean energy projects to its grid: Last week, the utility announced an electric transportation initiative aimed at replacing all diesel school buses in its Virginia service territory with electric buses capable of operating as a grid asset.