PUR-2024-00184

This docket (Case No. PUR-2024-00184) before the Virginia State Corporation Commission concerns the review of Virginia Electric and Power Company's (Dominion Energy's) 2024 Integrated Resource Plan (IRP). The proceeding evaluates Dominion's long-term electricity resource planning, focusing on its approach to projected load growth—especially from data centers—compliance with the Virginia Clean Economy Act (VCEA), environmental impacts, and system reliability.

Key points addressed in the docket include:
- Stakeholders argue Dominion's IRP does not adequately address environmental threats or the impact of rapidly expanding data center demand on reliability and electricity costs, and some request the Commission reject the plan as contrary to the public interest under Virginia Code § 56-599(e) 1.
- The IRP's treatment of data center load is scrutinized, with concerns about its effects on other customers and the system. However, the docket distinguishes between resource planning (IRP) and cost allocation, with the latter being addressed separately in Dominion’s 2025 biennial review proceeding (Case No. PUR-2025-00058) 2, 2.
- Procedural elements include requirements for parties to provide testimony, modeling, and exhibits, and compliance with established Commission rules 3, 4.
- The docket featured participation from major data center operators (such as Microsoft, Google, and Amazon), consumer advocates, environmental groups, and large customers, each with differing views on Dominion’s planning assumptions, sustainability targets, and regulatory compliance 5.

In summary, the docket is a regulatory review of Dominion’s 2024 IRP, focusing on how the company plans to meet future electricity demand, VCEA mandates, and system reliability amidst unprecedented data center-driven load growth, while separating cost allocation issues for adjudication in a different proceeding.

The stakeholders in this docket include:

- Data center companies: Dominion serves approximately 50–52 discrete data center companies, including major firms such as Microsoft, Google, and Amazon. These companies have their own renewable energy targets and have requested Dominion to help them meet their sustainability goals by providing renewable energy. Dominion has partnered with these entities and, when necessary, filed new programs or tariffs with the commission to support their requests. The majority of these companies are interested in reliable, affordable power and renewable energy options, and they work collaboratively with Dominion on forecasting and planning. Data center stakeholders are generally supportive of infrastructure buildout and fair cost allocation but want to ensure other large-load customers are also fairly represented in planning and cost allocation decisions 1, 2, 3.

- Environmental and advocacy organizations: The Sierra Club and the Natural Resources Defense Council have participated by providing testimony focused on resource planning and environmental compliance. Their representatives have submitted testimony in multiple related Dominion resource planning dockets, often advocating for more aggressive adoption of renewable energy and demand-side management 4.

- Large retailers: Walmart is a party in the case, represented by legal counsel, and has actively participated in cross-examination. Walmart has questioned the application of renewable requirements and modeling constraints in Dominion's IRP, indicating an interest in least-cost optimization but subject to regulatory and model-imposed ceilings. Their position is to ensure compliance with statutory mandates while also advocating for cost efficiency 5.

- Technology companies: Microsoft, Google, and Amazon, as noted above, are explicitly referenced as parties to the docket. These companies have communicated their renewable energy goals to Dominion and requested specific actions to help achieve them. Their stance is generally supportive if Dominion facilitates access to renewable energy, but their precise position on other aspects of the IRP is not detailed in the excerpts 1, 2.

- Other stakeholders: Stakeholders also include participants in the structured stakeholder process established by Dominion for its IRP, involving a diverse range of parties, including those providing feedback on load forecasts, energy efficiency targets, and scenario modeling 6, 7.

Positions for or against proposals:
- Data center companies appear supportive of expanded infrastructure to meet growing demand and renewable integration but want equitable cost allocation.
- Environmental organizations push for more aggressive renewable adoption and inclusion of social cost of carbon in modeling.
- Large retailers and corporate buyers want cost-effective and compliant resource planning.
- All these stakeholders provide feedback that is incorporated into Dominion's scenario analyses; however, Dominion often views some stakeholder-proposed scenarios (such as the stakeholder input case with higher renewables and imports) as infeasible or not achievable as a preferred path 8, 6, 5.

In summary:
- Data centers, tech companies, and large retailers are largely supportive of proposals that ensure reliability, affordability, and renewable energy access.
- Environmental and advocacy groups generally support more aggressive clean energy targets.
- Dominion tends to view stakeholder-requested aggressive renewable buildouts as unrealistic but values the input for scenario analysis.

The docket discusses several financial and timeline risks and concerns related to resource planning, infrastructure investments, and market conditions:

Financial Risks:
- Elevated near-term capacity prices are expected due to tightening supply-demand balance, risks of existing generator retirements, and delays in adding new capacity. Prices are projected to revert to equilibrium after 2030, but the near-term volatility poses risks for planning and cost allocation 1.
- The upfront capital costs for renewable energy projects, such as solar and energy storage, remain significant, though they are decreasing over time. Tax credits help, but these projects require substantial initial investment 2.
- Higher efficiency vehicles, especially electric and alternative fuel vehicles, are more costly than internal combustion engine (ICE) vehicles, even with incentives. This creates a need for significant city investment and poses financial risk if market prices or incentives change unfavorably 2.
- Prolonged low capacity prices could deter investment in new generation resources, potentially leading to capacity shortfalls and higher consumer costs in the long run if emergency measures or higher-priced resources are needed to ensure reliability 3.
- The risk that regulatory frameworks may leave ratepayers exposed to fuel price volatility, especially if there is continued reliance on fossil fuels 4.

Timeline Risks:
- Delays in adding new generation capacity are caused by permitting, contracting, supply chain issues, and interconnection queue congestion. These are expected to continue for several years, affecting the timely deployment of new resources 1, 5.
- Supply chain concerns, including delivery, transport, and manufacturing of equipment, create uncertainties in project timelines 5.
- Some actions, such as expanding electric vehicle charging infrastructure, depend on market demand and the pace of EV adoption, which introduces uncertainty in timing and implementation 2.
- Modeling in the IRP only covers a 15-year period and does not address compliance with longer-term requirements, such as coal retirements after 2040 or the 2045 retirement requirement, creating future compliance and planning risks 5, 6.

In summary, the docket highlights that financial risks stem from high upfront investment needs, price volatility, and uncertain regulatory frameworks, while timeline risks are driven by supply chain, permitting delays, and modeling limitations that may not align with long-term policy requirements.

Key events and submissions in this Virginia State Corporation Commission proceeding regarding Dominion Energy's 2024 Integrated Resource Plan (IRP) include:

- October 15, 2024: Dominion filed its 2024 IRP with the Commission 1, 2, 3.
- October 21, 2024: Sierra Club filed a notice of participation 1.
- November 15, 2024: Dominion filed supplemental information as directed by a prior Commission order 4, 1.
- November 18, 2024: The Commission issued an order for notice and hearing, established a procedural schedule, directed public notice, scheduled hearings for testimony and evidence, allowed interested persons to file comments or participate as respondents, directed staff to investigate and file testimony, and appointed a hearing examiner for discovery matters 4, 1, 5.
- November 19, 2024: The Commission set the deadline for notices of participation as respondents (e.g., Microsoft’s notice references this order) 3.
- By January 17, 2025: Deadline for filing notices of participation as a respondent in the proceeding 3.
- Hearings were scheduled (dates not specified in excerpts) to receive public comment and evidence on the 2024 IRP 4, 5.

Additional notes:
- The IRP covers a 15-year planning period ending in 2039 6, 2.
- The proceeding includes opportunities for public comment (oral or written), respondent participation, and staff investigation and recommendations 4, 5.
- A statutory nine-month timeline from IRP filing to final decision applies 7.

These are the major procedural milestones based on the available excerpts.

The main areas of growth identified in this docket are:

Data Centers:
- Northern Virginia has more operational data center capacity than London, Tokyo, and the San Francisco Bay Area combined, and this sector is a primary driver of recent and projected load growth in Dominion's service territory 1, 1.
- Key considerations include the uncertainty of data center load forecasts, the impact of their rapid expansion on system reliability, environmental risks, and the significant cost allocation challenges this growth poses for other ratepayers. These cost allocation issues are being handled in a separate biennial review docket, as IRP proceedings focus primarily on resource adequacy, not cost allocation 2, 2, 2.
- There is discussion of creating separate rate classes for large data centers to better isolate their costs from other ratepayers and prevent cross-subsidization 3.

Electric Vehicles (EVs):
- EV adoption is identified as another driver of load growth. Dominion reports over 50,000 customers in its service territory have switched to electric vehicles, with projections of further increases 4.
- Considerations include the need for grid modernization and reliability upgrades to accommodate increased load and charging infrastructure.

Distributed Energy Resources (DERs), including Solar:
- There has been continuous growth in DERs such as solar generation and net energy metering. From 2016 to 2022, net metering customers grew from 2,100 to over 30,800, a 1,400% increase, with projections for continued strong growth in solar interconnections and DER capacity 4.
- Key considerations involve integrating these resources into the grid, ensuring grid resiliency and flexibility, and leveraging incentives from federal policies.

In summary, the docket identifies data centers, electric vehicles, and distributed energy resources as major areas of growth, each with distinct planning, reliability, and cost allocation challenges that are being addressed through various regulatory and utility proceedings.