The Virginia State Corporation Commission (SCC) has defended its decision to allow Dominion Energy Virginia to build a new natural gas power plant in Chesterfield County, denying that its approval violated either the Virginia Clean Economy Act or the Virginia Environmental Justice Act.
Environmental and community activists have asked the Virginia Supreme Court to overturn the SCC’s 2025 permit for the 944-megawatt facility, which ratepayers are already being billed for, and which could begin construction before the end of the year. Dominion intends to begin generating power in about three years.
The opponents of the plant filed their appeal in May, and in early August submitted to the Supreme Court two briefs outlining their argument. At the end of August, the SCC filed its response, accompanied by another brief from Dominion’s legal team. The next step could be a formal hearing at the court.
The 2020 General Assembly passed both the Virginia Clean Economy Act (VCEA) and the Virginia Environmental Justice Act (VEJA) as tools to reduce and perhaps eliminate the use of hydrocarbon generation, although the VEJA has broader applications. This is the first time either law has been brought to the Supreme Court for a test of its interpretation.
Contrary to common belief, the VCEA never prohibited any construction of a new natural gas generation plant. The law as signed by Governor Ralph Northam (D) included clear exceptions if the SCC believed a new natural gas plant was needed to maintain reliability. That is Dominion’s justification for this $1.5 billion investment, and another plant now in the planning pipeline.
Neither the brief filed by the Southern Environmental Law Center nor the companion brief from the Sierra Club challenge that basic assertion by Dominion that a pending shortage of electricity would be best relieved by adding this plant. Neither document seeks to overturn the exception created in the law, or the SCC’s reliance upon it in saying yes.
In its own brief, Dominion notes that the appellants do not dispute the Commission’s crucial finding that “there is an imminent reliability threat for Dominion and its customers.”
The opponents are not in full agreement. The Southern Environmental Law Center (SELC) challenges the SCC’s approval on three grounds, but the Sierra Club concurs in only one of the three objections.
They also seek different outcomes. The SELC is asking the court to void the project entirely and to void the method Dominion is using to pay for it, which is a monthly rate adjustment clause already added on customer bills. The Sierra Club is not asking the Supreme Court to void the entire permit but merely focuses on the payment method.
The payment method dispute looks at two provisions in the 3,700-word section on utility rights to collect through such rate adjustment clauses (of which there are now many.) The challengers argue Dominion cannot do it because it has not met energy savings goals which are cited as a necessary condition.
A bill item designated Rider CERC (for Chesterfield Energy Reliability Center) is already collecting 75 cents per 1,000 kilowatt hours on residential bills, and the SCC in another case is being asked to raise that to $1.14 as of January 1. It will rise as the plant goes forward.
While Dominion greatly prefers the process of collecting payments during construction, it would be perfectly legal for it to wait to collect on the capital costs until the plant is finished. That was the process before 2007.
The SELC’s grounds for seeking an end to the project are its complaint that the SCC failed to give due deference to the minority and low-income residents who are near the plant and failed to consider all the future natural gas fuel costs when it deemed the plant to be reasonable and prudent.
The SCC’s brief details the Commission’s effort to assess the project’s impact on neighbors, but notes that the statute itself set no firm standards to use to guarantee that no group of people will bear a disproportionate share of negative environmental consequences.
Within the Virginia Environmental Justice Act, the terms “equitable consideration” and “disproportionate share” are not defined, the brief states. The Commission told the court that it looked at alternatives and concluded that because the plant would be on the site of the retired coal plant, with supporting infrastructure already in place, and with the environmental controls Dominion proposed, “on balance, the Project remained the most advantageous.”
On other questions, the SCC and Dominion point to a broad enactment clause that was included in the Virginia Clean Economy Act six years ago, saying “nothing” in the statute could override the SCC’s authority to approve the use of natural gas if there was a threat to reliability.
“The extensive record establishing the imminent reliability threat in this case that authorizes the approval of CERC, also authorizes the approval of the related cost recovery, to the extent necessary, pursuant to Enactment Clause 9,” the Commission writes in the opening of its brief.
