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Va. regulators approve $154.5M of Dominion's $1.5B grid investment plan

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Va. regulators approve $154.5M of Dominion's $1.5B grid investment plan

The Virginia State Corporation Commission approved the cyber and physical security measures in Dominion Energy Virginia's proposed grid transformation plan while rejecting most of the plan for being "unsupported by the evidence" or too costly for customers.

"While we find the plan elements related to cyber and physical security are well-conceived, well-supported and cost-effective, we find that the remaining plan elements, which will cost customers hundreds of millions of dollars, are not," the SCC said in its Jan. 17 order. "With regard to those elements that have not been approved, we agree with [the Office of the Attorney General's Division of Consumer Counsel] that as a general matter 'the plan as filed is significantly lacking in detail with respect to the proposed investments.'"

Dominion Energy Virginia, known legally as Virginia Electric and Power Co., in July 2018 filed the first phase of its proposed 10-year initiative to "enhance the reliability, resiliency and security of the electric distribution grid," while improving service and options for customers.

Under the first three-year phase of the program, filed in response to Virginia's Grid Transformation and Security Act, the Dominion Energy Inc. subsidiary proposed installing more than a million smart meters and transitioning to a new customer information platform to increase self-service options and improve energy usage management.

Dominion Energy Virginia also proposed grid hardening measures, including replacing and rebuilding distribution lines and new vegetation management programs, as well as automated and advanced grid improvements. This is in addition to physical and cyber security improvements tied to electric infrastructure.

The SCC said Dominion's overall plan would include cost recovery of about $6 billion, including financing. Regulators added that the first three-year phase of the proposal, running from 2019 through 2021, represented a total cost of about $1.5 billion, including financing.

"Dominion's proposed plan is expensive, so it is important that Dominion's customers receive adequate benefit for the costs they will bear in their monthly bills," the SCC said.

The parts of the plan that regulators approved for recovery during the first phase are expected to cost $154.5 million.

In denying recovery of advanced metering infrastructure and related investments, with phase-one costs of about $697 million, the SCC said it sided with environmental groups and the Division of Consumer Counsel, which raised concerns about the costs of the program.

"[D]etailed, accurate, and reasonable cost information attendant to these projects is needed to evaluate whether they are reasonable and prudent before we commit customers to pay for the company's proposals," the SCC wrote.

(SCC docket PUR-2018-00100)