Dominion Virginia Power suspended a request for proposals for 1,500 MW of new peaking generation units one month after releasing it, stating that market conditions will determine its reissue. The company would explain the suspension, but observers point to state regulators who said the utility has consistently overstated growth in power use by its customers.
“The [State Corporation] Commission has considerable doubt regarding the accuracy and reasonableness of the company’s load forecast for use to predict future energy and peak load requirements,” regulators said when assessing the latest utility integrated resource plan. They also noted higher forecasts than the peak load and sales forecasts of PJM, the regional transmission body that sets Dominion’s capacity obligations.
Exaggerated load growth has been used to justify power projects it did not need, Will Cleveland, an attorney for the Southern Environmental Law Center, told ENR. “Going forward, Dominion has to use PJM’s forecasts” to support need for new power plants, he said, not its own. A year ago, Dominion idled more than 1,200 MW, but despite its move to mothball a large portion of its generating fleet, the company continues to add natural gas generation capacity, S&P Global said in a report exploring power sector oversupply. It plans to add 2,400 MW of natural gas-powered capacity by 2044.
Utilities have been building new gas plants despite flat electricity demand and falling renewable energy prices, which has led to a generation glut in many regions, S&P Global said. New construction continues in part because regulatory structures reward many utilities for building new plants whether needed or not, S&P noted. Overestimating load growth is a chronic issue in the Southeast and other regions, Cleveland says. North Carolina Utilities Commission will hold a technical conference in Raleigh on the issue of load growth on Jan. 8.