Dominion preps grid for renewables, surging electric demand
State regulators pump brakes on some programs, citing cost burden
On a bright October morning, contract lineworkers from Carolina Power & Signalization were in buckets high above a south Richmond alley, installing a distribution transformer on a brand-new electric pole.
It’s noticeably more robust than the previous pole, which leans at an angle a few feet away. The wires on that one are covered by “rubber goods,” a common name for the blaze orange protective equipment that keeps workers safe around high voltages – 32,500 V, in this case.
“They'll repeat this process dozens of times,” said Aaron Tickle, manager of grid improvement at Dominion Energy Virginia.
The new poles are thicker and buried deeper into the ground. They use fiberglass crossarms instead of wood, and they’re being outfitted with technologies that meet the latest standards in electrical distribution. Tickle said grid hardening projects like these are targeted to areas that have frequent outages.
“If we can protect [some] poles from breaking, then you, in effect, shorten the overall duration of the restoration event and that really benefits everyone on the system,” Tickle said.
The work is part of a main feeder hardening initiative that has so far covered about 200 miles, with 800 more planned. Main feeders are the power lines that make up the distribution system, which brings electricity to your home. The project is itself part of an even bigger program — the Grid Transformation Plan, which is being approved in chunks by state regulators.
The GTP was required by state lawmakers in the 2018 Grid Transformation and Security Act. The plan seeks to make the electric grid more reliable and secure – and flexible for ever-growing distributed renewable energy sources. Regulators just approved Phase III of the plan in September, which runs from 2024 through 2026.
The sections of the plan approved so far are estimated to cost $1.9 billion, according to State Corporation Commission filings. Most of that cash will come out of rates paid by customers. According to the SCC, that comes to about 28 cents a month for a standard residential customer using 1,000 kWh in a month as of July 1, 2023.
The plan has been criticized by ratepayer advocates and environmentalists over concerns with renewable planning and cost.
A rapidly changing system
Political will to rapidly increase the adoption of renewable resources in Virginia led lawmakers to pass the GTSA in 2018, giving Dominion broad permission to improve its grid and bring on renewable resources.
The grid transformation plan has to consider the projected increase in electrical demand for Dominion’s service area and the fundamental change that renewable energy sources pose in the power system.
Traditionally, the grid has been designed for centralized power stations. That requires a system where electricity almost exclusively flows in one direction – out from the power plant and into homes and businesses. Some new centralized sources, like Coastal Virginia Offshore Wind – which recently took another step towards final approval and will power up to 900,000 homes – are planned to come online over the next decade.
The addition of distributed generation resources like community solar and rooftop solar panels change that dynamic. Now, areas as small as individual homes are pushing electricity onto the grid – or, at the very least, reducing the demand for power from a centralized plant.
“It's creating a situation where you have hundreds, if not thousands of little power plants, and they're all turning on and off at different times,” Tickle said.
That can be a headache for grid engineers, who increasingly need to closely track voltages and electrical frequencies across the system. Without specialized, connected technology to monitor those things, power interruptions can occur, equipment can be damaged and lineworkers can be hurt.
Dominion has received approval from the SCC for voltage optimization improvements which the company says will improve efficiency by 1% across their system, a Distributed Energy Resource Management System to balance power flows, and other technologies across the grid.
The company also received approval for projects to mitigate voltage islands — areas of the commonwealth that are served by one transformer substation. If that substation goes offline, there is no other route for electricity to take to those homes and businesses.
That can lead to long outages — substation equipment is expensive and often slow to acquire and deploy. Mitigating those voltage islands means connecting those parts of the grid to another substation, allowing another path for electricity to flow.
Regulators also recently approved more installations of smart meters, which allow for real-time energy usage and outage monitoring by Dominion and its customers.
Dominion’s also received approval to spend millions on physical and cyber security programs.
The GTP also includes the main feeder hardening approved by regulators – though regulators denied much of Dominion’s proposal on that front, citing costs.
An expensive project
The 2018 GTSA received pushback during discussions among lawmakers before its passage. SCC staff members, along with ratepayer advocates, argued that lawmakers were guaranteeing potentially large bill increases for Dominion customers.
In an effort to “stimulate the stakeholder interest and engagement required for cost-effective grid modernization,” a 2018 report by GridLab laid out some environmental and cost concerns in response to the GTSA, Dominion’s GTP roadmap, and its then-proposed phase I.
The authors argued that capital bias – the incentive to “maximize profits by maximizing investment” — is baked into Virginia’s regulatory system. Basically, every dollar spent getting electricity to customers or improving and modernizing the grid is paid for by customers, along with a legislature- or regulator-determined profit margin. That profit margin incentivizes investment in the company, which allows them to take on big projects.
They said a good remedy for this “bias” would be regulatory reform – or, barring that, strong regulatory oversight and planning transparency. They also urged the adoption of planning and monitoring programs like DERMS before major infrastructural investments could be made.
State regulators have denied portions of the first and third phases of Dominion’s GTP. For phase III of the GTP, Dominion proposed spending $508.3 million to harden 111 main feeders. SCC staff argued that data provided by Dominion did not show improvements to outage times and the number of crews dispatched after phase I improvements.
“Simply put, the Company has not sustained its burden of proving these costs are reasonable and prudent,” the commission wrote.
Still, regulators allowed for a $182.7 million spend on 44 main feeders.
Regulators have ordered Dominion to seek grant funding to reduce GTP’s impact on ratepayers.
The company received $33.7 million from the Grid Resilience and Innovation Partnerships program, a Bipartisan Infrastructure Law program administered by the U.S. Department of Energy.
According to a fact sheet, Dominion will use the cash to expand “critical grid management capabilities needed to responsibly and effectively steward the energy transition” in Virginia and North Carolina.
That will go towards installing a 2-4 MW battery storage system in a rural community, installing monitoring technology that will allow for more renewables to connect to the grid in high-demand periods, controlling voltage fluctuations caused by distributed sources and more.
The company did not respond to requests for comment about where the GRIP funding will be spent, or if it will be used directly on GTP projects.
Disclosure: Dominion Energy is a VPM donor.