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EPSA Files Expert Testimony To Bring Benefits Of Competition To Virginia
WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) today filed expert witness testimony by Michael M. Schnitzer, a Director of The NorthBridge Group, an economic consulting firm, with the Virginia State Corporation Commission (VSCC) challenging Virginia Dominion Electric and Power Company's pending integrated resource plan for unfairly dismissing competitive market alternatives to Dominion's preferred wholly self-built plants at greater risk to consumers.
EPSA President and CEO John E. Shelk said, "Dominion is a major participant as a seller of generation in competitive wholesale markets in the Northeast, touting the benefits of competition to consumers there, yet denies those same benefits to those of us who are their consumers in the Commonwealth of Virginia. Virginia's consumers and economy are as deserving of those benefits as are those of any other state, particularly in a challenging economy. Today's expert witness testimony demonstrates in detail why the self-serving integrated resource plan now under review should be put to a true competitive market test if Dominion actually has confidence in their own plan's critical assumptions."
Mr. Schnitzer summarizes his conclusions in his testimony as follows (full text available at www.epsa.org):
"1) the Dominion IRP fails to appropriately consider competitive market alternatives available to Dominion customers through its membership in the PJM RTO and the related customer benefits that competitive markets provide. On the contrary, rather than relying on the evidence from competitive markets to support its findings, the resources selected in the IRP are justified by a single long-term forecast of market prices, which, if incorrect, could cost Dominion’s captive customers billions of dollars of pre-mature or unnecessary investment; 2) Dominion fails to adequately analyze the costs and risks associated with moving from its current portfolio mix, which includes market purchases, to its recommended portfolio based almost exclusively on building and owning capacity; 3) the Commission should subject any significant generation investment, whether new build, retrofit, or environmental control, to an open and transparent market test; and 4) the "need" determined in Dominion's IRP is not a physical reliability need and should not be construed to mean that all of the new resources it identifies are required to maintain the reliable operation of the system for Dominion customers. As such, resource decisions should be made based upon the costs and risks of a broad set of alternatives including market purchases.
As a result, the 2011 IRP filed by Dominion does not appropriately incorporate the available advantages of competitive markets for the benefit of Virginia customers. Although Dominion has reinforced its commitment to meet future customer needs at the lowest reasonable cost while maintaining reliability, its preferred plan is to self-build nearly 8 GW of new generation ("IRP Preferred Plan") without fully considering market purchases and without conducting a transparent, competitive market test to determine whether such a plan would in fact provide its customers the lowest reasonable cost resource solution."
CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660
EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.