Dominion's Skiffes Creek Project Is Up The Proverbial Creek

What's been happening in transmission news this week?  The Virginian Pilot took a look at Dominion's Skiffes Creek 500kV transmission project... and it sort of looks like the project itself is up the creek.  Dominion has lots of excuses for why it needs to build a ginormous transmission line across the James River, but none of them are exactly logical.  Skiffes Creek is not really the only option to ensure reliability, it's just the one that regional grid planner PJM Interconnection approved a long time ago in an uncompetitive environment.  If the transmission project is not approved by the U.S. Army Corps of Engineers, then PJM will have to go back to the drawing board and re-engineer another solution to what it views as a reliability problem.

Gotta wonder... if this problem was put out for bid in PJM's new competitive transmission process, would other companies have better solutions?  Solutions that solve the problem without creating an eyesore and river hazard of an aerial crossing of the James River?  Probably.

Dominion contends that the technology doesn't exist to run a reliable line of the caliber and kind needed under 4 miles of riverbed - at least not without a price tag in the billions.

Oh, baloney, Dominion!  Take a look at the Artificial Island project that is proposed to cross underneath the Delaware River just a couple states to the North.  When transmission solutions are evaluated in a competitive environment, a submarine crossing suddenly becomes viable, not only from a cost standpoint, but also with an eye toward "constructability," a measure of the ease of getting a project approved and constructed with minimal opposition.  In the case of the Artificial Island project, PJM ultimately selected a proposal by LS Power that uses a 3.5 mile submarine crossing of the river in which the company capped its construction costs.  Dominion needs to re-evaluate its submarine options.

The Skiffes Creek project is a cash cow for incumbent utility Dominion.  Under PJM's old, pre FERC Order No. 1000 transmission project selection process, the incumbent was allowed to propose all solutions.  The incumbent could propose only those solutions that would provide a healthy shot to its balance sheet.  FERC recognized that this process didn't necessarily inspire the best and cheapest solutions and has revolutionized the way regional grid planners select new transmission projects.

Dominion tries to hide behind an aura of concern for ratepayer issues.

Curtis said the Skiffes over-the-river plan, at $60 million, is indeed on the lower cost end of the dozens of routes and options the company considered. Whatever the expense, though, customers will reimburse Dominion. Rate hikes are automatically allowed for utilities that build infrastructure to strengthen the grid.

"So these are rate-payer dollars, not Dominion dollars," Curtis said. "But the opposition is still committed to the conspiracy theory."

Curtis tells only part of the truth here.  The part he leaves out is that Dominion will be earning a double-digit return on its $60M investment in the project over its useful life of approximately 40 years.  The more the project costs, the more Dominion makes in pure profit.  Dominion is hardly agnostic about ratepayer costs.   Also, if Dominion had to compete to build this reliability solution, it would face giving up this potential profit entirely to another company with a cheaper, less intrusive proposal.  There IS a conspiracy... because the investment is Dominion's dollars, not ratepayer dollars.  And Dominion earns a healthy return on every dollar it invests in this project.

So, are there other solutions?  Opponents accuse Dominion of not examining and considering all options. 

"What's frustrating is that people think we're being disingenuous," Curtis said. "They don't believe we've looked at all the alternatives, or they think we're only concerned about making the most money for our shareholders."

The article reveals

Several lines already feed outside power to the Peninsula, but it won't be enough without the Yorktown plant, which Dominion says is too costly to upgrade in the face of new federal clean-air standards.

Did Dominion consider upgrading and rebuilding the existing lines to increase capacity before settling on an entirely new transmission line?  C'mon, Dominion, you're no stranger to this plan... after all, your plan to rebuild the 500kV Mt. Storm-Doubs transmission line to increase its capacity is what killed the entirely new 300-mile PATH transmission line.  Or are much cheaper rebuilds only considered when Dominion finds itself in a competitive environment?

How much time and money will Dominion's effort to keep itself from being propelled "up the creek" with Skiffes Creek cost ratepayers?  Dominion's blind pursuit of this project in the face of better alternatives is what may cause "rolling blackouts" on the peninsula.  The longer Dominion delays by backing a lame horse, the closer the peninsula gets to a genuine reliability issue.  Get with it, Dominion, and switch to a solution that everyone can agree upon.  Don't you have a legal obligation to keep the lights on?  Or only one to increase shareholder dividends every quarter?