Virginia utility proposes smart grid rollout

Dominion Virginia Power filed an official application with state regulators to implement energy efficiency measures that it says can save customers $1.2 billion over a 15 year period. If approved, the utility will install about 2.5 million smart meters in the state with the goal to reduce peak demand by 43 megawatts a year.

“This plan provides a portfolio of 12 energy-saving and demand-reducing programs designed to meet the needs of our customers and move us toward meeting the 10 percent voluntary energy conservation goal enacted by the Virginia General Assembly and the governor,” said Paul D. Koonce, CEO of Dominion Virginia Power. “It will provide environmental benefits in a cost-effective manner that will also translate into very real financial savings to customers.”

The smart meters will inform customers how and when they are consuming electricity. To help defray the costs of the $600 million installation project, Dominion will apply for a $200 million stimulus fund grant. The utility plans to have all the smart meters installed by the end of 2012.

Dominion has also asked state regulators approval for a dozen incentive programs that promote energy efficiency. Included are rebates for customers that allow the utility to adjust air conditioning during peak hours and rewards for upgrading old heat pumps or replacing inefficient refrigerators. There are also incentives for property developers to build energy-efficient homes and others for businesses that generate their own power, upgrade inefficient lighting, or replace old heating and air conditioning systems.

“The combination of technology, customer-friendly energy efficiency programs, rate incentives and renewable power are important steps we must take as part of Dominion’s ‘Powering Virginia’ strategy,” said Koonce. “These programs complement the full range of investments we are making to ensure reliable and affordable energy for the Commonwealth.”

To pay for the programs, Dominion has asked that it be allowed to raise rates by 9 percent, or $0.95 per kilowatt hour. If approval is granted, the utility expects to have its programs enacted by April 1 of next year. Total customer savings would be $1.2 billion by 2024 – an average of $80 million per year.

According to the utility, its proposal will also address requirements for renewable power. Dominion is purchasing energy credits from suppliers of renewable energy then sells that energy to customers who want it. The utility itself owns about 778 megawatts of renewable energy capacity.

“The previous goal of achieving 12 percent renewable power by 2022 was upgraded by the General Assembly earlier this year to 15 percent by 2025,” said Koonce. “We believe we are on track to accomplish this.”

Dominion manages a total of 27.4 gigawatts of power generation capacity. Just last month approval was given by state regulators to increase rates by about $1.20 on the typical monthly bill. Construction has already begun on two new power plants – one coal-fired and the other natural gas. The utility has applied for rate increases to cover these costs as well – a rate hike of $3.18 for the average residential customer.