Dominion Energy to deploy electric school buses; utility exceeds 2018 Virginia authorized ROE

New York — Dominion Energy plans to deploy 1,050 electric school buses by 2025 in its Virginia service territory and replace all diesel school buses with electric versions by 2030.

Dominion estimates the buses' batteries could provide enough power to power 10,000 homes, spokeswoman Samantha Moore said in an email Friday.

The electric school bus deployment's initial phase targets having 50 buses operational by the end of 2020 and phase two of the project would expand the program to bring 1,000 electric school buses online by 2025, according to a Thursday statement.

Phase three would set the goal of 100% electric school buses by 2030, the utility said.

Bus manufacturers can begin submitting bids "in the coming weeks" through a request-for-proposal process and school districts can express their interest in participating, according to the statement.

Dominion will offset the higher costs of an electric school bus, including charging infrastructure, above the standard cost for a diesel bus, the company said, adding there could be up to a 60% reduction in operational and maintenance costs for municipalities because electric vehicles are cheaper to maintain.

"We're committed to lowering our carbon emissions, but we can't do it alone," Thomas Farrell, Dominion's chairman, president and CEO, said in the statement.

"Transportation is the number one source of carbon emissions in the US, and by partnering with this industry, we can expedite the development of innovative, cleaner, more sustainable solutions," Farrell said.

The electric school buses will also serve as an energy storage grid resource by supporting the company's integration of distributed energy resources like solar and wind power. If power demand spikes or if renewable resources are intermittent, the batteries can provide stability to the grid, the company said on its website.

The vehicle-to-grid technology uses the bus batteries to store and inject energy onto the grid during high-demand periods when the buses are not needed for transport, the company said.

Dominion plans to reduce its carbon dioxide emissions by 80% by 2050 and plans to have 3,000 MW of solar and wind power generation capacity in operation or under development by 2022.

The company's power generation fuel mix is roughly one-third natural gas, one-third nuclear and about 26% coal, with the remainder consisting of renewable energy resources and oil-fired units.

Dominion operates the six-unit 3,000-MW Bath County Pumped Storage Station and has identified Tazewell County, Virginia, as a potential site for a new pumped storage facility. The company also has four utility-scale lithium-ion battery storage pilot projects totaling 16 MW.

EARNINGS ABOVE AUTHORIZED LEVELS

Dominion was called out in the "Virginia State Corporation Commission's Status Report on Implementation of the Virginia Electric Utility Regulation Act" released Thursday for exceeding its 2018 authorized return on equity level.

Dominion Energy Virginia's base rate financial results for 2018 show an actual earned ROE of 13.47%, combined for generation and distribution, the SCC said. "This earned ROE exceeds the 9.20% base ROE currently approved for DEV's rate adjustment clauses," the commission said.

The company's 2018 earnings were $277.3 million above authorized levels, according to the report.

The SCC also noted that Dominion said in a March investor presentation that it is moving forward with approximately $16 billion of capital investment from 2019 through 2023 and that additional capital spending results in an increase to Virginia jurisdictional net rate base of $12.1 billion and an increase to a typical residential bill of $29.37/month by December 31, 2023.

This increase does not include the costs to customers of coal ash removal required by 2019 legislation or the costs to customers of participating in the Regional Greenhouse Gas Initiative, the commission said.

-- Jared Anderson, jared.anderson@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com