We actively participate in the political process to help shape policies that advance our business strategies and goals, promote effective public and government relations, and serve the interests of key stakeholder groups.
By engaging with elected officials, regulators, community and business leaders, and environmental and safety agencies, among others, we strive to conduct our business as transparently as possible in hopes of building public trust and forming lasting partnerships that are mutually beneficial.
With the many dramatic changes occurring in today's energy industry, we believe it is critical to be engaged in the political arena. Making our position known on important issues is essential if we are to be effective in protecting the interests of our shareholders, customers, employees and the communities where we live and work.
Three issues of material interest to our business and our stakeholders are highlighted below.
National Energy Policy
We believe that a clear, coherent and comprehensive national energy policy is essential to the creation of a future energy system that is both environmentally and economically sustainable.
Tom Farrell, Dominion’s chairman and CEO and the 2011-2012 chairman of the Edison Electric Institute, has long been a vocal advocate for a national policy that serves as a reliable roadmap for achieving a more secure energy future for America.
Decrying what he refers to as the federal government’s “piecemeal” approach to energy, Mr. Farrell in a March 2012 speech called for the creation of the position of national energy adviser to the President as a good starting point for better policy. The adviser would work to keep energy “front-of-mind” in the White House and would coordinate energy strategy with the president’s national security and economic advisers.
We believe an effective national energy policy also needs to include the following:
- Provisions to address both sides of the energy equation – the way industry supplies energy and the way consumers use energy;
- Funding for research and development and technological innovation to make our energy sources cleaner and more efficient;
- Affordable, diverse and reliable supplies of energy that sustain economic growth while addressing environmental concerns;
- Supportive regulation that provides industry with financial incentives to invest in needed energy infrastructure; and
- Enhanced energy education and career opportunities in science, technology, engineering and math.
Offshore Wind Power
Dominion continues to investigate the potential of offshore wind energy as a clean, renewable resource to help meet future energy needs. In March 2012, the company applied for federal offshore leases with the potential to generate between 1,500-2,000 megawatts of wind power – enough electricity to serve about 50,000 typical homes. If Dominion is awarded a lease, the company plans to conduct detailed site assessments off the Virginia coast, including construction of a test tower to study wind strength and patterns.
Dominion also has received a two-year, $500,000 grant from the U.S. Department of Energy to help find innovative ways to reduce by 25 percent the cost of offshore wind generation, which remains a significant obstacle to its commercial development.
Federal energy analysts have forecasted that the cost of electricity generated by offshore wind facilities would be 24 cents per kilowatt-hour in 2016 – more than three times the current generation rate paid by Dominion’s residential customers. Offshore wind costs must be reduced significantly before this green option becomes an economically viable source of electricity.
Exporting Natural Gas
Dominion continues to evaluate exporting liquefied natural gas (LNG) from the company’s terminal at Cove Point, Maryland on the Chesapeake Bay. The facility is now used solely to import LNG from producers around the world. Dominion’s proposal would convert Cove Point into a bi-directional facility, giving it the capability to liquefy natural gas brought in by pipeline, store the LNG and load it into specialized tankers for shipment overseas.
Although the company has not reached a final decision to proceed with the project, Dominion has asked the U.S. Department of Energy for permission to export up to 1 billion cubic feet of natural gas per day from Cove Point. We already have received DOE approval to export LNG to countries with which the U.S. has free trade agreements. We are awaiting regulatory approval to enter discussions with other countries, such as Japan, that are not covered by such agreements. Additional regulatory approvals will be needed for actual construction at Cove Point. Dominion continues to hold discussions with natural gas producers and potential customers regarding market opportunities involving LNG exportation.
We believe this project would support domestic natural gas production by opening new overseas markets for LNG. Our Cove Point facility is well positioned via its pipeline connections to provide access to producers in the Marcellus and Utica shale gas areas near the Appalachian Mountains.
Dominion recognizes that proposals to export natural gas are controversial. Some groups assert that domestic production should be used exclusively for U.S. energy needs and not sent to overseas markets. However, studies show the exporting of natural gas would promote price stability for the commodity and encourage continued development of domestic natural gas resources. Other studies indicate the opening of new markets to U.S. gas production has the potential to create thousands of new energy industry jobs, increase state and local tax revenues, and improve the nation’s balance of trade by more than $7 billion a year.
A final decision to move forward with the Cove Point project will be made once all necessary regulatory approvals are obtained, export agreements are executed with potential customers, and the project is approved by the Dominion Board of Directors.
Other Material Issues
Selected other material issues include:
- Executing our multi-year infrastructure construction program, on budget and on time
- Evaluating new nuclear unit construction to help meet future power demand and reduce our carbon footprint
- Complying with new environmental regulations
- Addressing anticipated workforce shortages
- Deploying smart grid and other new technology applications for customers
- Protecting the dividend tax rate for shareholders
Dominion operates a political action committee (PAC) that is strictly voluntary and nonpartisan. It is funded solely by our employees. The Dominion PAC represents our collective voice, ensuring that employee, company and industry interests are upheld and articulated at all levels of the political process.
The Dominion PAC discloses its political contributions on the website of the Federal Election Commission and the electoral board website of each state in which contributions are made to state and local elections. In addition, each year we voluntarily report Dominion's corporate political contributions to tax-exempt 527 organizations, as well as the lobbying portion of trade association payments and dues.
Dominion also has long supported the Virginia Public Access Project, a nonprofit, nonpartisan group dedicated to improved transparency and disclosure of funding sources for state elections.