Virginia wind farm job applications questioned by state regulators

RICHMOND, Va. (AP) — As Virginia-based Dominion Energy seeks to build what it calls the nation’s largest offshore wind farm in the Atlantic Ocean, the company and its supporters have touted economic development opportunities which should accompany the project of 176 turbines. .

But state regulators, who are currently considering granting approval for the massive project, say the economic picture may not be so rosy.

In testimony filed earlier this month, regulators said that in saying the wind farm will create jobs and tax growth, the company relied on an “outdated” study that did not take into account the impact of its Virginia electric utility ratepayers bearing the cost of the nearly $10 billion Project. The State Corporation Commission’s own analysis found that the project was expected to come at an economic cost – including 1,100 lost jobs over the project’s first five rate years – that could negate any “speculative” benefits.

“Any economic benefits that may arise will be through new investment in Hampton Roads and Virginia industries that support the development of offshore wind facilities. The extent to which this new investment occurs is speculative,” according to the Commission analysis by Mark Carsley, Head of Utilities in the Utilities Regulation Division.

In a rebuttal filing Friday, Dominion disputed Carsley’s testimony and argued that under a 2020 law called the Virginia Clean Economy Act, or VCEA, which helped pave the way for the wind farm, such cost-benefit analysis need not be considered.

The Dominion Wind Farm, believed to be located about 27 miles (43 kilometers) offshore from Virginia Beach, took years to develop. The company announced its specific plans for the commercial-scale project in September 2019. At the time, Dominion had a two-turbine offshore wind pilot project underway.

Dominion then filed its application for the full project with the commission in November. Interested parties ranging from the Sierra Club to Walmart have since joined the case as intervenors, and an evidentiary hearing is scheduled for May 17. The commission’s decision on whether to approve the project and allow it to be recovered from ratepayers is due Aug. 5, a spokesperson said, and a separate federal review process is also underway.

The project will help Dominion achieve the goals of the VCEA, a sweeping overhaul of the state’s energy policy enacted by Democrats that included a number of renewable energy mandates intended to help address the threats of climate change. The wind farm will also help the company meet its own pledge to achieve net zero greenhouse gas emissions by 2050.

The VCEA asked Dominion to submit a plan to the commission for review that addresses the economic development benefits the project is expected to bring to Virginia.

Instead of conducting an independent study, Dominion satisfied that requirement by relying on a study prepared for a nonprofit economic development organization, the Hampton Roads Alliance, Carsley wrote.

The company, citing that 2020 report, estimated that the project would support around 900 jobs per year and more than $143 million in annual economic output during the construction phase. Once in service, the report predicted that the wind farm would create 1,100 jobs and bring in $209.8 million in annual economic output.

But CSC staff were unable to verify those results, Carsley wrote. They searched for data supporting the conclusions of Dominion’s report and were told that the company had no such models or data.

The SCC called the report Dominion relied on “outdated” and noted that the cost data it used came from UK data.

In a rebuttal, John Larson, director of public policy and economic development for Dominion, responded that “the assertion that the information is ‘somewhat out of date’ does not present an argument against the reliability of the data or its analysis. background”.

Larson wrote that relying on UK data should not be a problem and was practical and necessary, given that the US offshore wind industry is nascent. Larson also wrote that the commission’s analysis was based on an “oversimplified” assumption that a rate increase will cause Virginia residents to reduce household spending in other areas.

Some customers might not change their spending if the increase is small, or some might just cut their savings, he wrote.

Additionally, nothing in the VCEA requires the company to conduct its own analysis of “economic development costs” or compels the commission to consider such an analysis, Larson wrote.

“The General Assembly has set clean energy standards and targets for the Commonwealth and, based on the inherent nature of public service, there will be costs borne by customers,” he wrote.

Other testimony in the case from outside parties raised concerns about the price of the project and Dominion’s relative inexperience in the offshore wind industry. There have been calls for the commission to consider a range of taxpayer protections, including a possible independent monitor, a performance guarantee and a cost cap.

In rebuttal testimony, a Dominion executive opposed each of these proposals and defended the company as a “recognized leader in the development of offshore wind in the United States”.

Company spokesman Jeremy Slayton said in a statement Monday that Dominion was pleased that “all parties to the case have focused on how to have the best project possible and none have. opposite”.

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