Virginia wind farm job requirements questioned by state regulators

RICHMOND, Va. (AP) – As Virginia-based Dominion Energy seeks to build what it calls the country’s largest offshore wind farm in the Atlantic, the company and its supporters have announced the economic development opportunities expected to accompany the project with 176 turbines.

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

In testimony filed earlier this month, regulators said that by claiming the wind farm would create jobs and tax growth, the company relied on an “outdated” study that did not take into account the impact that its Virginia electricity costs bear on the nearly $ 10 billion project . The State Corporation Commission’s own analysis found that the project was expected to come with a financial cost – including 1,100 lost jobs in the first five batch years of the project – which could eliminate any “speculative” benefits.

“Any economic benefit that is likely to arise will do so as a result of new investment in industries in Hampton Roads and Virginia that support offshore wind development. The extent to which this new investment is taking place is speculative,” according to the commission’s analysis. Mark Carsley, a supply manager in the public supply regulation department.

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

Dominion Wind Farm, which would be located about 27 miles (43 kilometers) off the coast of Virginia Beach, has been years along the way. The company announced its specific plans for the project on a commercial scale in September 2019. At the time, Dominion had a two-turbine offshore wind pilot project underway.

Dominion then submitted its application for the full project to the Commission in November. Interested parties ranging from the Sierra Club to Walmart have since joined the case as interveners, and a hearing is set for May 17. The Commission’s decision on whether to approve the project and allow its costs to be recovered from the taxpayers must be August 5, a spokesman said, and a separate federal audit process is also underway.

The project will help Dominion meet the goals of the VCEA, a sweeping revision of the state’s energy policy adopted by Democrats, which included a series of mandates for renewable energy to help address the threats of climate change. The wind farm must also help the company fulfill its own promise to reach net-zero greenhouse gas emissions by 2050.

The VCEA instructed Dominion to submit a plan to the Commission for review, addressing the economic development benefits that the project is expected to bring to Virginia.

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

The company, citing this 2020 report, estimated the project would support about 900 jobs annually and over $ 143 million in annual economic production during the construction phase. Once operational, the report expected the wind farm to create 1,100 jobs and provide $ 209.8 million in annual economic output.

But SCC staff were unable to verify these results, Carsley wrote. They searched for data that supported the conclusions of the Dominion report and were told that the company did not have such models or data.

The SCC called the report that Dominion relied on “obsolete” and noted that the cost data it used came from data in the United Kingdom.

In a rebuttalJohn Larson, Dominion’s director of public policy and economic development, replied that “claiming that the information is ‘somewhat outdated’ does not present an argument against the reliability of the data or its substantive analysis.”

Larson wrote that relying on UK data should not be a cause for concern and that it was practical and necessary, given that the US offshore wind industry is emerging. Larson also wrote that the commission’s analysis relied on an “excessively simplified” assumption that a rate hike would cause Virginia residents to reduce household spending in other areas.

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

Moreover, there is nothing in the VCEA that requires the company to perform its own analysis of “economic development costs” or requires the commission to consider such an analysis, Larson wrote.

“The General Assembly has established standards and targets for clean energy for the Commonwealth, and based on the inherent nature of public utilities, there will be customer-borne costs,” he wrote.

Other testimonies in the case from external parties have raised concerns about the project’s price tag and Dominion’s relative inexperience in the offshore wind industry. There have been calls on the Commission to consider a number of taxpayer protections, including a possible independent monitor, a performance guarantee and a cost ceiling.

In contradictory testimony, a Dominion director argued against each of these proposals, defending the company as a “recognized leader in offshore wind development 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 ways to get the best possible project and no one has opposed it.”

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