Dominion Energy is getting blasted for the addition of natural gas infrastructure in its latest integrated resource plan (IRP) from its biggest-growing customers in Virginia: tech companies.

Dominion’s latest IRP “again fails to fully take into account the energy preferences of the data center industry — by limiting the amount of competitively-procured solar energy, neglecting to consider energy storage as a cost-effective and beneficial energy resource, and continuing to plan for the development of additional natural gas infrastructure,” a May 8 letter from Microsoft, Apple, Salesforce and seven other tech companies states.

The 10 companies, organized by the sustainability nonprofit Ceres, demanded more solar and wind power offers for data center operators in Virginia. The boom of data centers in the state has occurred as the tech companies pursue their own carbon reduction goals and add more renewable energy to the grid.

The letter, which specifically references Dominion’s IRP, asks Virginia power providers to take into account the sustainability goals of data center operators and to steer away from adding more cheap natural gas by using competitive procurement of renewable resources instead.

“This was a really unique situation where Dominion mentioned a lot of the new load growth was going to be from data centers, and as a result they suggested the build-out of new natural gas,” Alli Gold Roberts, senior state policy manager at Ceres, told Utility Dive.

The businesses are hoping the next version of the IRP takes into account their feedback.

Dominion refiled its 2018 15-year IRP in March after a December order from the Virginia State Corporation Commission (SCC) rejected the initial version. Another update is due by September 1.

“Obviously, companies are also having direct conversations with Dominion about their needs… and Dominion has been interested in working with customers to find solutions that meet their renewable energy needs. So hopefully we’ll see kind of a movement in the right direction,” Gold Roberts said.

The letter also indicates the growing importance of utility-corporate partnerships in spurring clean energy decisions, including with with monopoly-based utilities like Dominion.

C&I sector stands up for sustainability

Corporations of varying sizes are increasingly supporting a transition to 100% clean energy, according to Ceres. The trend is occurring in tech, health, retail and other sectors. However, data center operators have an outsized leverage over utilities due to their promise of a significant increase in load.

In a market of decreasing demand, utilities are “competing for any new load that they can get,” Gold Roberts said.

“That’s where I see a unique opportunity for the tech sector to lead in greening the grid as they come to utilities, as new customers wanting to gain access to new energy,” Gold Roberts said.

Other tech companies signing onto the Dominion letter included Adobe Systems, Akamai Technologies, AWS Amazon Web Services, Equinix, Iron Mountain, LinkedIn Corporation and QTS. The companies said the data center industry in Virginia creates more than $10.2 billion in annual economic output and provides $349 million in state and local tax revenue in the state.

Akamai, Iron Mountain, Salesforce, QTS, Apple and Microsoft are among the companies that made renewable power purchase agreements (PPA) deals in 2018, according to the Renewable Energy Buyers Association (REBA).

Sustainably-focused companies are increasingly working through their utility account managers or as part of wider collaborative efforts with utilities, according to Priya Barua, senior manager of market innovation and utility engagement at REBA.

“REBA members actively engaged with Georgia Power,” Barua told Utility Dive, contributing to the utility’s planned expansion of green power for the C&I sector. Georgia Power, a Southern Company subsidiary, approved a 200 MW C&I renewables program in its 2016 IRP and added another 950 MW program in its 2019 IRP, with the provision that any unsubscribed portion of the renewable energy will serve all Georgia Power customers. 



Pushing the needle against natural gas use

The letter specifically warns about “the development of additional natural gas infrastructure,” without naming the Atlantic Coast Pipeline.

The companies asked for energy storage to be integrated in grid planning, noting particularly that solar-plus-storage has beat out “the price of new gas plants, and data centers are already proving the effectiveness of storage in our 24/7 operations.”

Environmental advocacy group Greenpeace views the letter as proof that the Atlantic Coast Pipeline is not needed.

Dominion had said the line is necessary to supply future power plants in Virginia as power demand grows, but the companies argued against the addition of natural gas capacity.

“This pipeline has been rejected by the public, the courts, and now the very customers Dominion claimed it was for,” Gary Cook, Greenpeace senior IT sector analyst, said in a statement.

Dominion responded to the tech sector letter by issuing a statement focused on resilience.

“[W]e must be responsible about having base generation available to back up renewable energy when the sun is not shining or the wind is not blowing,” said Dominion spokesperson Rayhan Daudani.

While the utility is working on its first battery storage pilot and providing “a cost competitive reality” for customers, the utility is focused on nuclear and natural gas as a resilience solution, he added.

“Our low-emitting natural gas, and carbon free nuclear units are excellent clean energy options as renewable resources play an increasingly important role in the Company’s generation fleet serving customers in Virginia and North Carolina,” Daudani said.

Green power in Virginia

Dominion has issued a number of green energy deals with companies and has pledged to continue helping its customers meet their clean energy goals.

Virginia is in the top percentile of states that have signed deals for renewable energy according to REBA’s Spring 2019 state of the market report.

Top 5 states where corporations are signing renewable PPAs
States Deals by April 2019 Deals by 2018 Deals by 2017
Texas 50 46 30
North Carolina 18 14 9
Oklahoma 15 14 12
Illinois 13 13 4
Virginia 13 10 6

SOURCE: REBA State of the Market Spring 2019 Report

Most deals signed in Virginia are under existing green tariff offers, according to Barua, which are structured to allow regulated utilities to sell to corporate customers bringing new load to the system while protecting the wider utility customer base.

Dominion has “built various options to try to meet the needs of various customers in the state,” she said, and some of the options represent opportunities to add renewable energy to the grid.

Dominion announced plans to build 20 MW of solar as part of a public-private partnership with Virginia and Microsoft in 2016, which is expected online in 2020. The tech company owns a data center in the southern part of the state.

Amazon Web Services announced in 2016 five new solar farms in Virginia with a total capacity of 120 MW, expected to be online in 2020. And on Earth Day this year, Facebook announced six new solar farms in Virginia and North Carolina, in partnership with Dominion, with a total capacity of 350 MW, planned to be operational in the mid 2020s.

Dominion “has worked to create innovative partnerships with customers statewide to help them meet their energy requirements and sustainability goals, including public-private solar partnerships and several special rate tariffs for large non-residential customers,” Daudani said.

However, “there aren’t options that work for every single energy buyer” in Dominion’s service territory, Barua said, prompting large actors like Microsoft and Apple to push the utility to focus on renewables and battery storage in the state.


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