The Virginian-Pilot, June 19, 2008

by Carolyn Shapiro

Dominion Virginia Power unveiled a range of initiatives on Thursday to reduce electricity usage across its territory, including a plan to use new meter technology to better control the flow of power.

Dominion, the dominant electricity provider in Hampton Roads, said it will submit a proposal for state regulators' approval that it estimates would save customers $1 billion over 15 years. However, the initiatives also would involve an increase in customer rates, though Dominion officials declined to discuss the specific rate changes they intend to propose.

While customers will pay higher rates to cover the cost of the programs - including about $600 million to install the smart meters systemwide - they would face even higher charges if demand continues to grow at its current pace, said Mary Doswell, Dominion's senior vice president of regulation and integrated planning.

"Over the duration, over the time period," she said, "your bill will be lower than it would have been."

The cost increases associated with the new plan are unrelated to a separate Dominion proposal to raise its fuel supply rates. The State Corporation Commission will hear from the public Tuesday on that proposal, which addresses the company's costs to purchase fuel to run power plants.

The measures include the installation of a "smart grid" system of advanced meters that would communicate a customer's power usage electronically to Dominion's distribution operations, allowing greater control and efficiency in response to real-time demand.

If approved by the commission, the proposals could reduce usage by as much as 2.6 million megawatt-hours a year by 2013, said David Heacock, president of Dominion Virginia Power. That amount would supply enough electricity for 216,000 average single-family homes - more than those in Virginia Beach.

Dominion designed the package of 17 initiatives to comply with a new state law requiring utility companies to develop plans for addressing and managing electricity demand over 15 years. Companies must submit those plans to the commission by Sept. 1, 2009.

The expected energy savings would eliminate the need for two power plants the company would otherwise have to build and delay the need for two other plants, Heacock said.

Environmental groups have pushed for more conservation efforts in Virginia. "We really welcome Dominion moving forward in this area," said Glen Besa, Virginia chapter director for the Sierra Club.

He said he would like Dominion to implement and assess these efficiency measures before embarking on additional power plants, such as a new coal-burning generator proposed for Wise County.

Even with the proposal's expected energy savings, however, power use is expected to jump by 4,000 megawatts over the next decade and will require more production, Heacock said. "Our demand for energy is growing," he said. "And trends show no signs of changing."

If Dominion receives commission approval for the initiatives, it would begin installing about 200,000 of the smart meters next year, Heacock said. Customers would see no difference at home, but the company could use the meters to try new payment plans in the future that would allow them to adjust their usage for different rates at different times of day.

Other measures included in Dominion's proposal would provide incentives for residential and commercial customers who install energy-efficient appliances and lighting and usage-monitoring systems. It also would allow residents to receive discounts for letting Dominion watch and control their air conditioners and heat pumps during peak demand times.

A smarter grid

An advanced meter system would allow for quick communication between a customer and Dominion. A substation would then be able to control efficiency and supply in real-time.

More power

Even with expected energy savings in the proposal, however, power use is expected to jump by 4,000 megawatts over the next decade and will require more production.