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Va. regulators decline to review Dominion's spending on North Anna reactor

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Va. regulators decline to review Dominion's spending on North Anna reactor

Virginia regulators are standing by their position that Dominion Virginia Power's stakeholders, not customers, are on the hook for spending on the North Anna 3 reactor.

The Virginia State Corporation Commission denied a petition for regulatory review of the Dominion Resources Inc. utility's decision to spend millions on the potential development of the 1,453-MW nuclear unit in Louisa County, Va. The company has not made a formal decision on building the unit.

The Virginia Citizens Consumer Council filed a petition for declaratory judgment in late August 2016 with the SCC. The group urged the commission to "protect Virginia ratepayers from hundreds of millions or billions of dollars in expenditures for development of a wasteful and unnecessary nuclear power plant project."

Dominion Virginia Power, known legally as Virginia Electric and Power Co., has defended spending on the reactor as "absolutely necessary" as it prepares for future environmental regulations, which are now in limbo, and generation needs.

While noting that the "earliest possible in-service date" for North Anna 3 is September 2028, Dominion Virginia Power said in its 2016 integrated resource plan that "it is prudent" to continue focusing on the activities needed to obtain a combined operating license, or COL, from the U.S. Nuclear Regulatory Commission, expected in late 2017. Dominion estimates that spending on the unit will hit $647 million by the time it receives a federal operating permit. NRC staff has concluded that there are no safety aspects that would preclude issuing the license to build and operate the proposed reactor.

"As to costs not mandated for recovery by statute, the Commission has repeatedly noted that 'Dominion is incurring its North Anna 3 costs purely at its stockholders' risk and should have no expectation of future recovery from customers without an approved [certificate of public convenience and necessity ('CPCN')] and/or [rate adjustment clause ('RAC')]," the SCC wrote in its Jan. 10 order.

The commission added that Dominion also has testified that it will spend about $25 million in 2017 in order to obtain the COL, "at which point such spending will materially stop until Dominion decides whether to seek construction approval from the Commission."

For these reasons and the belief that Dominion will not incur material expenses beyond 2017 without regulatory approval, the SCC declined to initiate a case. (SCC docket PUE-2016-00096)