Patrick Wilson’s article on the Virginia Clean Economy Act, one of the most far-reaching pieces of climate legislation in the nation and certainly the most far-reaching in the South, operates from the premise that Virginia electricity prices are high today.
That is false as can be demonstrated by looking at state electricity prices published monthly by the U.S. Energy Information Administration (EIA). Virginia’s rates are well below the national average and Dominion Energy Virginia’s rates are lower still.
Wilson quotes several supporters of electricity deregulation to implicitly argue that a deregulation approach to decarbonizing the grid would be less expensive.
That point readily is refuted by comparing prices today in regulated versus deregulated states. Regulated states, like Virginia, have much lower prices on average than deregulated states. He concludes by attacking offshore wind as a new clean resource, without considering the benefits of offshore wind or clean energy generally.
The Clean Economy Act, as introduced, required a carbon-free electricity grid by 2050 and heavily relied on out-of-state energy. As enacted, the law requires a carbon-free electricity grid by 2045 for Dominion Energy Virginia customers — five years earlier — and it focuses on investments in Virginia instead of in other states. That means significant new investments and thousands of good-paying jobs in solar, offshore wind, energy storage and energy efficiency here in the commonwealth.
Dominion Energy Virginia begins this move to a carbon-free grid from a strong position — our prices are more than 10% lower than the national average based on the latest information from the EIA.
Wilson tries to obscure this by mixing apples (states like Virginia where customers typically heat with electricity) with oranges (states to our north where customers typically heat with fuels better suited to a colder climate, such as oil or natural gas). Having your heating costs on a separate bill does not make your heating costs free; it means you are paying two energy bills and not just one.
Wilson cites Charlottesville hedge fund billionaire Michael Bills, who partnered with former Attorney General Ken Cuccinelli to encourage electricity deregulation, as a consumer advocate.
In fact, deregulation has been a disaster for consumers. Deregulated states on average have dramatically higher prices for electricity at 15.66 cents per kilowatt-hour — 34% higher than Dominion Energy Virginia’s current price. And simply search the term “California blackouts” to see the reliability consequences of deregulation in that state.
Wilson then expresses concern that the General Assembly deferred to regulators to set long-term energy efficiency standards, citing a lobbyist unhappy with the final version of the legislation. Notwithstanding this discussion of energy efficiency, it should be noted that Wilson did not account for the benefits of energy efficiency in considering the net costs of the legislation.
Similarly, Wilson gives an exaggerated view of the costs of clean energy investments and does not consider the benefits of no fuel risk, the social cost of carbon, economic development and jobs.
He also attempts to stigmatize offshore wind, the most important economic development opportunity for Hampton Roads since the invention of the aircraft carrier, by misstating an offshore wind cap whereby a change during the 2020 General Assembly yielded a lower overall cost cap for offshore wind than had been the case for previous versions of the legislation earlier in the session.
In summary, the Virginia Clean Economy Act sets a 25-year path for a carbon-free grid with the jobs and economic benefits associated with decarbonization focused on Virginia — not other states. Wilson cites an exaggerated cost of nearly $30 per month by 2030 to accomplish this.
This figure assumes lower commercial growth and more residential growth than we view as reasonable based on recent trends. We estimate a 2030 cost of $18.94 per month for the Clean Economy Act for the typical residential customer, before considering the benefits of energy efficiency, the social cost of carbon, economic development and jobs.
Since the General Assembly’s reregulation of electric utilities took effect in July 2008, Dominion Energy Virginia’s rates have increased less than 1% per year and have remained well below the national and East Coast averages. We have maintained reliable service, bolstered by our efforts to modernize the electric grid, and we have made record investments in clean energy.
Our team of more than 15,000 Virginia colleagues, along with the Virginia-based business, including small, diverse and veteran-owned businesses, that support our operations and growth, will continue to work around the clock to make our service even better for our customers and to build the nation’s leading clean energy portfolio.
William L. Murray is senior vice president of corporate affairs and communications at Dominion Energy. Contact him at: email@example.com