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Tag: energy

SEC files federal suit against Dominion Energy’s South Carolina utility

The U.S. Securities and Exchange Commission (SEC) filed a federal lawsuit Thursday against Dominion Energy South Carolina Inc., South Carolina-based utility provider SCANA Corp. and two former SCANA executives, alleging that “SCANA and its senior executives repeatedly deceived investors, regulators and the public over several years about the status of a $10 billion nuclear energy project,” between 2015 and 2017. Richmond-based Dominion Energy Inc. acquired SCANA Corp. for $7.9 billion in an all-stock deal in January 2019.

Filed in the U.S. District Court of South Carolina, the  SEC lawsuit also seeks to force the utility’s former CEO, Kevin Marsh, and former executive vice president, Stephen Byrne, to pay back any ill-gotten gains and be banned from running any publicly traded companies. The complaint says that.

The complaint, which is not a criminal proceeding but also does not preclude federal criminal charges, refers to a failed nuclear project that led to hundreds of millions of dollars in losses to SCANA and South Carolina investors. “Despite knowing that the schedule was unreliable and the tax credits were at risk, SCANA’s senior management publicly touted the construction schedule and the company receiving $1.4 billion in federal tax credits for the expansion project,” the SEC’s complaint reads.

“This is a disappointing development related to a long-standing investigation by the SEC regarding pre-merger activities,” Dominion Energy said in a statement released Thursday . “Dominion Energy has been fully cooperating with the SEC in this investigation. That cooperation began prior to completion of our merger. We are taking this matter very seriously, and are reviewing the complaint to determine our next steps.”

On Feb. 11, Dominion Energy attributed its $1 billion annual earnings drop last year to costs related to the SCANA acquisition, including refunds to retail electric customers of Dominion Energy South Carolina due to the failed nuclear project. The South Carolina-based utility holding company was a majority partner in a failed nuclear reactor construction project that SCANA abandoned in 2017 due to rising costs, work delays and the bankruptcy of its main contractor, Westinghouse Electric Co.

“A lot of it was customer refunds that we took below the line,” Dominion spokesperson Ryan Frazier says of the difference in annual earnings. “We bought the company after [SCANA] walked away from the project. … We worked on a plan to give ratepayers back a lot of the money they had put into the project previously.”

Dominion released a statement clarifying that in December 2019 the company had executed a settlement agreement with former SCANA shareholders for $192.5 million, which was approved by the federal district court of South Carolina in February this year. 

Dominion Energy has more than 7 million customers in 18 states and has more than $100 billion in assets.

Arlington’s Venture Global LNG signs sales agreement with French utility

A subsidiary of Arlington-based liquefied natural gas producer Venture Global LNG Inc. has entered into a 20-year sales and purchase agreement to provide 1 million tons of liquified natural gas per year to the world’s largest electricity producer, Électricité de France (EDF), Venture Global announced Tuesday.

Venture Global Plaquemines LNG LLC, a 630-acre natural gas facility set to start construction later this year in Louisiana’s Plaquemines Parish south of the Port of New Orleans, is the company’s second exporting project. It has received its final approvals from the U.S. Department of Energy and the Federal Energy Regulatory Commission, according to the company’s news release.

Under the agreement, EDF will purchase liquefied natural gas from Venture Global on a free-onboard basis (meaning that once the cargo is onboard a ship, the buyer assumes the risk) for a 20-year term starting from the commercial operation date of the Plaquemines facility.

 

Dominion proposes $6/month decrease in residential power bills

Dominion Energy Inc. announced Friday a proposed $6/month decrease in customers’ residential electric bills starting in May, pending approval from the State Corporation Commission.

The announcement comes after the House of Delegates overwhelmingly passed the bipartisan Fair Energy Bills Act earlier this month, which would save customers about $10 a month on their power bills and give the SCC authority to direct Dominion to lower its rates and issue refunds if the commission decides it has overcharged customers. The bill is now with the state Senate’s Labor and Commerce Committee, although it was not listed on Monday morning’s docket as of Friday afternoon, which could be an indication that the act may die in the Senate.

Proponents of the Fair Energy Bills Act, including Clean Virginia Executive Director Brennan Gilmore, have emphasized Dominion’s overcharging of customers. The utility claimed excess profits of $277.3 million in 2018, the SCC reported last November.

Dominion asked the SCC last year that its rate of return on equity be set at 10.75%, up from 9.2%, which would allow the utility to invest more money into projects such as its offshore wind farm in Virginia Beach. The SCC rejected the request, maintaining the rate at 9.2%.

Dominion’s announcement Friday proposes that the fuel rate be reduced by an average of $5.89 per month, which would bring the average residential power bill down from $122.07 to $116.18, a 4.8% change. Industrial customers would see an overall rate reduction of about 10%, according to Dominion, which attributes the reduction to “the outstanding performance of our generation fleet in Virginia, particularly our combined cycle power stations,” which reduced carbon emissions.

The SCC must approve any change in energy prices, and, if approved, the Dominion proposal would take effect May 1.

Dominion attributes $1B annual earnings drop to SCANA acquisition

Richmond-based Dominion Energy Inc. reported $1.4 billion in earnings for 2019 — $1 billion less than the utility earned during 2018, the company reported in its fourth-quarter earnings call Tuesday.

The difference in earnings is primarily related to Dominion’s acquisition of SCANA Corp., which closed on Jan. 3, 2019, says Dominion spokesperson Ryan Frazier. The South Carolina-based utility holding company was a majority partner in a failed nuclear reactor construction project that SCANA abandoned in 2017 due to rising costs, work delays and the bankruptcy of its main contractor, Westinghouse Electric Co.

Virginia Business reported in January 2018 that Dominion and SCANA had announced an agreement for the companies to combine in a $7.9 billion all-stock deal — including the assumption of debt, the value of the transaction was approximately $14.6 billion. In Dominion’s reported earnings to operating earnings, approximately $2.3 billion of merger and integration-related costs were attributable to the SCANA acquisition in 2019. About $1 billion of those costs went to refunds to retail electric customers of Dominion Energy South Carolina for the failed nuclear project.

“A lot of it was customer refunds that we took below the line,” Frazier says of the difference in annual earnings. “We bought the company after [SCANA] walked away from the project. … We worked on a plan to give ratepayers back a lot of the money they had put into the project previously.”

Dominion included both operating and reported earnings in accordance with Generally Accepted Accounting Principles (GAAP) in its fourth-quarter release kit to investors. Non-recurring costs, including acquisitions, can cause differences between reported and operating costs.

Dominion sets net-zero carbon goal by 2050

Richmond-based Dominion Energy Inc. announced Tuesday a new goal of achieving net-zero carbon dioxide and methane emissions from its electricity generation and gas infrastructure operations by 2050. The new benchmark significantly raises the stakes for Dominion, which announced in October 2019 plans for reaching 80% carbon reduction by 2050.

The company previously committed to cut methane emissions from its natural gas operations by 50% between 2010 and 2030 and carbon emissions from its power generating facilities by 80% between 2005 and 2050. With only 30 years to achieve the new net zero goal, Dominion has made several announcements in recent months regarding renewable energy projects, but remains connected to its controversial Atlantic Coast Pipeline project.

In September, Dominion filed a proposal to build the nation’s largest offshore wind farm off the coast of Virginia Beach by 2026. The proposed $7.8 billion, 220 wind-turbine farm would build on Dominion’s $300 million, two-turbine Coastal Virginia Offshore Wind (CVOW) pilot offshore wind energy project currently under development 27 miles off the Virginia Beach coast.

And in January, Arlington County and Amazon.com Inc. entered into agreements with Dominion to purchase power offsets for local government operations and Amazon’s HQ2 East Coast headquarters from a solar farm Dominion is building in Southern Virginia. Dominion is constructing a solar farm in Pittsylvania County anticipated to be operational by 2022 and is expected to generate approximately 80% (79,000 megawatt-hours of energy) of Arlington County’s electric energy needs for local government operations. Dominion will sell the solar energy produced into the wholesale electric grid and charge at market rates.

“Dominion Energy already has made important progress on emissions. This new commitment sets an even higher bar that I am confident we can — and will — reach,” said Thomas F. Farrell II, chairman, president and CEO of Dominion, in a statement. “Net zero emissions will be good for all of our stakeholders — for our customers, communities, employees and investors.”

In September 2014, however, Dominion announced plans to build and operate a $4.5 billion to $5 billion, 550-mile natural gas pipeline (now expanded to a 600-mile, $7 billion project), which has faced opposition from landowners in the project’s pathway as well as environmental groups. The project would transport fracked natural gas from West Virginia to North Carolina. This fracking process necessary to extract the natural gas that would be passed through pipelines being built by Dominion and other project partners has been linked to increased amounts of methane, National Geographic reported in August 2019. Dominion holds a 48% stake of the project, according to the Institute for Energy Economics and Financial Analysis.

Dominion does not currently engage in hydraulic fracturing (or fracking), says a Dominion gas infrastructure spokesperson, Ann Nallo. 

While Bryan K. Stephens, president and CEO of the Hampton Roads Chamber, said the ACP is “necessary infrastructure that would ensure our business growth is met,” in an October 2019 editorial, courts have challenged permits for the project.

According to a Jan. 7 press release from the Charlottesville-based Southern Environmental Law Center, there have been eight instances since May 2018 that a federal court or agency has revoked or suspended Atlantic Coast Pipeline permits. With permits revoked, Dominion ceased construction with less than 6% of the project in the ground.

“We do remain fully committed to completing the Atlantic Coast Pipeline,” Nallo says. “Natural gas in general is an integral part of our energy portfolio, allowing us to drastically and quickly reduce reliance on coal. It’s also the reliable energy source that is helping us quickly ramp up solar and wind projects since we are lacking the battery storage technology — though we are looking at ways to advance that technology. The Atlantic Coast Pipeline responds to current critical energy shortages in the region, particularly Hampton Roads, Virginia, and eastern North Carolina.”

Dominion supplies energy to more than seven million customers in 18 states and has more than $100 billion in assets. The company also announced Tuesday that its 2019 annual earnings were $1.4 billion, down from $2.4 billion for 2018.

BWX Technologies lands $3.6M nuclear contract

Lynchburg-based nuclear fuel supplier BWX Technologies Inc. (BWXT) has been awarded a $3.6 million contract from the U.S. Department of Energy’s National Nuclear Security Administration (NNSA), the company announced Tuesday.

The BWXT Nuclear Operations Group Inc. (a subsidiary of BWXT) will convert research reactors from high-enriched uranium. Research reactors are used to perform science experiments in nuclear physics, engineering, nuclear chemistry, materials science, biology and medicine. 

BWXT manufactures a uranium-molybdenum alloy called High Assay Low Enriched Uranium (U-Mo HALEU), which can retain reactor performance and prevent the risk of proliferation during experiments. Since 2006, the NNSA has been working with BWXT to develop the alloy, and the $3.6 million contract will also fund engineering work to remove and refurbish parts of the Lynchburg facility for more production.

“We are excited to be selected by NNSA to continue our long and successful history of fueling research reactors,” BWXT Nuclear Operations Group President Joel W. Duling said in a statement. “This development represents the intersection of our missions to enhance global security and lead nuclear innovation.”

In October 2019, the U.S. Naval Nuclear Propulsion Program awarded an $806 million contract to BWXT Nuclear operations, which was in addition to an agreement with the program on new contracts totaling approximately $2.1 billion, including future-year options.

The company has approximately 6,600 employees across 12 major operating sites in the U.S. and Canada. BXWT also provides management and operations at U.S. Department of Energy and the National Aeronautics and Space Administration (NASA).

Amazon HQ2 and Arlington County government will be solar powered

Arlington County and Amazon.com Inc. have entered into agreements with Richmond-based Dominion Energy Inc. to purchase power for local government operations and Amazon’s HQ2 East Coast headquarters from a solar farm more than 200 miles away in Southern Virginia.

The Arlington County Board voted Tuesday to approve the agreement with Dominion to procure power from the solar farm Dominion is constructing in Pittsylvania County. Arlington County is expected to purchase approximately one-third of the solar farm’s output to power county government operations, while Amazon announced it will purchase the remaining output under a separate agreement to power HQ2, as well as other Amazon-owned properties around Virginia, including distribution centers and Whole Foods Market grocery stores.

The solar farm is anticipated to be operational by 2022.

Patrick Leonard, senior manager of Amazon’s renewable energy procurement team, led Amazon’s negotiations for the solar project. “My role working with the team in Arlington County involved sharing perspectives on how to strategically assess a renewable energy project that is right for a business or a government and the environment,” Leonard said in a statement. “Once this project is complete, we will continue to look for ways to advance our commitment to sustainability in Arlington.”

This project is part of Amazon’s commitment to The Climate Pledge, an Amazon-cofounded initiative that aims  to meet the Paris Agreement’s goals to mitigate climate change 10 years early. The pledge calls for signatory businesses to reduce greenhouse gas emissions and achieve net zero annual carbon emissions by 2040. 

The Dominion solar farm in Pittsylvania is expected to generate approximately 80% (79,000 megawatt-hours of energy) of Arlington County’s electric energy needs for local government operations, including powering county buildings, traffic signals and water pumping and wastewater treatment facilities. The county’s 2019 Community Energy Plan calls for using renewable energy sources to power at least 50% of county operations by 2022.

“This is a groundbreaking partnership for the county,” said Arlington County Board Chair Libby Garvey. “It will take us a long way toward our goal of 100% use of renewable sources for all electricity used in government operations by 2025.”

Under the new solar agreement with Dominion, the county will not have to pay any capital funding or upfront costs. Rather, the solar farm will generate electricity that Dominion will sell into the wholesale electric grid and charge at market rates. The county says that the solar project will not have any impact on current Dominion customer rates and the agreement was designed to be cost-neutral.

Dominion has more than seven million customers in 18 states and has more than $100 billion in assets.

Ørsted leases space for offshore wind staging at Portsmouth Marine Terminal

Denmark-based energy company Ørsted has agreed to lease a portion of the Portsmouth Marine Terminal from the Virginia Port Authority to stage materials and equipment for Dominion Energy’s offshore wind project, Gov. Ralph Northam announced Tuesday. The Virginia Port Authority Board of Commissioners unanimously voted to ratify the agreement. 

Ørsted will use the space for its work on Dominion Energy’s Coastal Virginia Offshore Wind (CVOW) project, as well as for staging materials and equipment for other East Coast projects. The agreement is for a lease of 1.7 acres at the Portsmouth Marine Terminal (one of the Port of Virginia’s two multiuse terminals in the Norfolk Harbor) with options to expand an additional 40 acres. The entire terminal covers 287 acres and has on-dock rail access.

The CVOW project is a pilot project for Dominion’s larger plans for a $7.8 billion, 220-turbine wind farm 27 miles off the coast of Virginia Beach by 2026. The wind farm, which would be the largest in the nation, is being proposed as part of Dominion’s initiative to reduce its carbon emissions by 55% in the next decade and 80% by 2050. The project would produce enough zero-carbon electricity to power 650,000 Virginia homes. Dominion has selected Spanish renewable energy engineering company Siemens Gamesa Renewable Energy S.A. as the preferred turbine supplier for the proposed wind farm.

“This is a big step towards making Virginia a leader in wind energy and offshore wind manufacturing,” Northam said in a statement. “With the Port of Virginia at its helm, the Hampton Roads region has the trained workforce and the nautical know-how to become a vital hub for offshore wind development.”

The lease could run through at least 2026, and be worth nearly $13 million in lease payments and include more than $20 million in improvements to the terminal’s berth to handle the heavy load capacity necessary for the massive offshore-wind turbine components. 

“This is a strategic decision by leaders in the offshore wind industry to take advantage of Virginia’s world-class port,” John F. Reinhart, CEO and executive director of the Virginia Port Authority, said in a statement. “The result is job creation, economic investment, diversification of the Virginia economy, and clean, renewable energy.”

Bipartisan bill seeks to demonopolize state electric energy market

State Dels. Mark Keam, D-Fairfax, and Lee Ware, R-Powhatan, held a press conference Tuesday to announce a bipartisan legislative effort to demonopolize Virginia’s electric energy market.

The Virginia Energy Reform Act — which does not yet have a bill number —would establish a competitive market for electricity retailers; require monopoly electric utilities to cease business generation; establish a nonprofit independent entity for distribution; remove financing barriers to customer-owned energy resources and build in consumer protections and education in energy choices.

In May 2019, a bipartisan coalition was formed to draft a bill that would address electric energy market competition and consumer choice.

“The bill is a way to make sure our state’s laws are catching up with what’s been going on in the marketplace for many, many years,” Keam said. “In Virginia, we are stuck with a century-old, business-as-usual model that benefits monopolies while suppressing competition and consumer choice. It’s time to reform the rules of the road.”

Dominion Energy and Appalachian Power own and operate all segments of the energy market for the consumers they serve in Virginia, from electricity generation to the distribution system of wires and power poles to retail customer services.

“While we don’t comment on pending legislation, deregulation isn’t the way forward for Virginia’s energy future. In fact, it would be a step backward,” Dominion Energy spokesman Rayhan Daudani said.

A goal of the legislation is to lower electric energy prices, thus making energy bills more affordable for low-income households. Virginia tried deregulating electric utilities 20 years ago and the effort was unsuccessful, largely because competitors couldn’t afford to undersell the consumer electric prices offered by Dominion and Appalachian Power. (See related story from July 2019.)

“Customers in deregulated states pay rates that are more than 40% higher on average and don’t receive nearly as much in return,” Daudani said. “As it stands today, our Virginia customers get a great value. They pay low rates, have great reliability and are getting more clean energy.”

Ware, however, argues that competition will drive down prices.

“We really believe that if we can unleash some of the innovation that’s available, that we can offer opportunities,” Ware says. “We can offer opportunities for both businesses and individuals to see better rates as a result.”

For regions across the state that rely more heavily on energy and electricity production for their economies, Ware says there will be a “reconfiguring” in the number of employees needed at major energy sources — hesitant to call it a disruption.

“There will be a reorientation in the nature of things,” Ware says. “In a sense, it’ll be a disruption, but I would say it’s reform, reconfiguring.”

The General Assembly convenes at 12 p.m. Wednesday, and the bill has been prefiled and will be introduced on Jan. 8. Its committee referral is pending.

Dominion chooses turbine supplier for $7.8B offshore wind farm

Richmond-based Dominion Energy has selected Spanish renewable energy engineering company Siemens Gamesa Renewable Energy S.A. as the preferred turbine supplier for its proposed $7.8 billion offshore wind farm off the coast of Virginia Beach, Dominion announced Tuesday.

Dominion announced plans in September 2019 to build a 220-turbine wind farm 27 miles off the coast of Virginia Beach by 2026. The wind farm, which would be the largest in the nation, is being proposed as part of Dominion’s initiative to reduce its carbon emissions by 55% in the next decade and 80% by 2050. The project would produce enough zero-carbon electricity to power 650,000 Virginia homes.

Biscay, Spain-based Siemens Gamesa manufactured two 6-megawatt turbines for Dominion’s $300 million Coastal Virginia Offshore Wind (CVOW) pilot offshore wind energy project off Virginia Beach’s coast, which is the first step towards building the larger wind farm. Construction on the CVOW pilot project began in June 2019 and is expected to be complete by spring. The turbines will be brought online and producing power for up to 3,000 homes later this year, according to Dominion.

Siemens Gamesa will work with Dominion to evaluate offshore wind supply chain development in Virginia and to determine how many turbines will be required for the project.

The 6-megawatt turbines will be 600 feet tall when measured from the ocean’s surface to the tip of the top blade — or taller than the Washington Monument.

“Virginia aims to become a national leader in offshore wind, and we are encouraged to see progress toward that goal,” Gov. Ralph Northam said in a statement. “For Virginia, it’s about two things: Jobs and a cleaner environment. Wind energy is one of our top economic priorities and a critical component of Virginia’s clean energy strategy, and this is an important step forward.”

Dominion secured a lease from the federal Bureau of Ocean Energy Management in 2013 for the 112,800-acre offshore property where the wind turbines will be built.

“Virginia state agencies have been tasked to develop a plan to produce 30% of its electricity from renewable sources by 2030. Offshore wind is a fast-growing and important contributor to meet this goal,” said Steve Dayney, head of offshore North America at Siemens Gamesa Renewable Energy, in a statement.

Dominion supplies energy to approximately 7.5 million customers in 18 states.