Dominion wants ‘flexible compliance’ as Virginia considers carbon caps

As Virginia considers ways to cut carbon emissions, including the possibility of joining a regional cap-and-trade system, Dominion Energy has outlined its terms for supporting such a move.

At a workshop Wednesday in Richmond, Lisa Moerner, Dominion’s Director of Corporate Public Policy, told stakeholders “whether it is through federal or alternative state-specific regulation, a carbon reduction program must be designed to provide flexible compliance options to maintain fuel diversity, ensure electricity reliability and minimize cost to customers.”

That struck some clean energy advocates as though Dominion is “hedging” its bets on how much it might have to engage in McAuliffe’s move to set a simple cap on emissions or possibly join a multi-state emissions cap-and-trade system such as the Regional Greenhouse Gas Initiative (RGGI) involving nine northeast states.

“This whole thing will come down to what does Dominion want versus what will RGGI accept,” said Mike Tidwell, executive director of the Chesapeake Climate Action Network (CCAN). “How you reconcile those positions I don’t know. That’s where it’s going to get interesting.”

Will Cleveland, an attorney at the Southern Environmental Law Center who litigates on behalf of environmental groups, said “the rubber meets the road on how stringent the cap is and who is going to profit from it.”

Cleveland was quick to note that Virginia cannot join RGGI without authorizing legislation passing the General Assembly. Efforts in three previous General Assemblies have failed to even get such a bill heard in committee.

Walton Shepherd, NRDC’s clean energy policy advocate in Virginia, said he sensed that Dominion was “hedging” any commitment to cooperating on carbon regulation while refusing to address a cap-and-trade system.

Moerner said that Dominion is not “not stonewalling” the development of carbon regulations. But she said there are “a lot to be evaluated” for the stakeholder process to identify a workable solution the utility might agree to.

“Dominion is committed to working with all state regulatory agencies and stakeholders to achieve workable, cost-effective carbon reductions,” she said.

About 60 stakeholders and interested observers attended the workshop in Richmond organized by William Shobe, an economist at the University of Virginia’s Weldon Center for Public Policy.

Economists from NRDC and Resources for the Future summarized updating their respective computer models that project how states and utility ratepayers stand to benefit from joining RGGI. The models appeared to show how retail electricity prices could decline by reducing the cost of complying with an emissions cap and then selling allowances for reductions achieved below the state’s cap. Some of those states’ electricity rates and customer bills are higher than those charged by Dominion so any projections of significant savings are likely to be challenged by RGGI opponents.

Angela Navarro, Virginia’s Deputy Secretary of Natural Resources, said McAuliffe hopes to have Virginia poised to join RGGI or take some other step for the next General Assembly which begins work in mid-January 2018.

Wednesday’s stakeholder workshop parallels an advisory panel that includes Dominion, NRDC, Virginia’s other investor owned utility – Appalachian Power – and various other energy and industrial parties. They are slated to meet August 3, August 31 and September 6.

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