Bob Blue

Bob Blue is chair, president, and CEO of Dominion Energy, Inc., an integrated energy utility headquartered in Richmond that operates in 15 states and provides energy to 7 million customers. He started his career with Dominion in the company’s public policy department and held several positions before being named CEO in 2020. VEDP President and CEO Jason El Koubi spoke with Blue about the company’s history serving commercial and residential customers and its efforts to shift the balance of its portfolio toward clean energy sources as it works toward its goal of net zero carbon emissions by 2050.

Jason El Koubi: Tell us a little bit about Dominion Energy — the organization, its footprint, and its various capabilities.

Bob Blue: We serve 7 million homes and businesses with electricity and natural gas. About half of those customers are electric customers in Virginia, North Carolina, and South Carolina, while the other half are natural gas customers in Ohio, Utah, and the Carolinas. We also operate some electric generation in states where we do not serve homes or businesses directly, but we sell that electricity to utilities who do. All that adds up to a diverse portfolio of energy that we strive to ensure meets our mission, which is providing reliable, affordable, and increasingly clean energy.

El Koubi: You’re charged with meeting the energy needs of people and businesses, reducing carbon emissions, and keeping rates affordable for those customers. How do you strike that balance and manage those different competing imperatives?

Blue: We think we’re doing pretty well. On the reliability front, let’s talk about Virginia, for example. At the end of October, a little more than 300 days into the year, in terms of hours — about 7,300 hours so far — our customers have been without electricity, on average, for three hours. If you subtract major weather events over which we have no control, we’re at about an hour and 45 minutes. Now, being without electricity for three hours, or one hour and 45 minutes, or one minute, can be very frustrating, and we intend to drive that number down as much as we can. But we’re proud of our record of reliability.

On the affordability front, when we compare ourselves to national averages, we have been below the national average for residential customer rates for the last 18 years. Our residential rates have grown by a little bit, more than 1% a year, and our commercial rates by a little less than 1%, since 2010. The rate of inflation over that period has been about 2.6%. Relative to other things that our customers are paying for, our rates are declining.

This summer, we were 21% below the national average. We’re 36% below the East Coast regional average. That’s for residential customers, but the story is the same for our industrial customers. We’re 16.7% lower than the national average and we’re 38.7% lower than the East Coast rate. That’s important when we think about trying to attract businesses to Virginia. 

We’ve reduced our carbon emissions since 2005 by 46%. That’s 18 years of growth — we’re serving more customers and we’re serving more electric demand — but we’ve reduced carbon emissions by 46%. And we’ve reduced the other emissions that people think of by generating electricity. Whether it’s sulfur oxides or nitrogen oxides or mercury, we’ve slashed those by 90% or more over the course of the last 30 years.

The way we do that starts with a diverse mix of sources that we use to provide electricity to our customers — nuclear, natural gas, solar, hydro, biomass, coal, and now offshore wind. If we have those diverse sources and then we invest in the infrastructure needed to get our customers reliable service, and we’re efficient in our operations, that adds up to effectively achieving that critical mission that we have of reliable, affordable, and increasingly clean energy.

We’ve got work to do. Growth in demand is expected in Virginia, and that’s exactly what we want. We need to make sure we’re smart about investing in new generation, we’re smart about investing in new infrastructure, and we’re being innovative in thinking about the way we provide service to our customers.

El Koubi: I believe Dominion has a goal of net zero carbon emissions by 2050. That’s going to require careful management of everything that you’ve just described. How do you achieve that net zero carbon emissions goal by 2050 while also keeping up with the demand projections that we’re seeing in Virginia and elsewhere?

Blue: When I started working at the company in 2005, we generated about half the electricity that we provided to our customers from coal. Today, that’s closer to 10%. We have added in cleaner natural gas — highly efficient natural gas units that have helped reduce carbon emissions. Now, they’re lower carbon than coal, but they’re not carbon-free. What they give us, however, is the confidence to be able to add in more renewables going forward, largely meaning solar and wind. 

Why do I say they give us that confidence? Solar and wind are not, in the industry parlance, dispatchable. Solar operates when the sun is shining, wind operates when the wind is blowing. It’s dark at night and it’s cloudy sometimes during the day. The wind doesn’t always blow consistently. If we have these natural gas units that we can operate, they can fill in when the wind isn’t blowing and the sun isn’t shining. As we go forward, we’ll add in more of these carbon-free sources like solar and wind and we’ll operate those gas units differently, or we may have a different mix of those gas units. 

Some of the gas units we operate today are designed to run all the time. We’re proposing to add, for example, adjacent to our existing Chesterfield Power Station, what’s called a natural gas peaking plant — one that’s not designed to operate all the time but is designed to operate when demand is high and other generation sources are not there.

Renewables will get us a long way toward achieving our goal of net zero by 2050, but they’re not going to get us all the way. They’re going to need help from battery storage. Most of the batteries that are used across the industry today are lithium-ion batteries, which are good for about four hours. That’s great, but we’re looking to get something longer-duration. So, we’ve just announced a pilot with a battery that is closer to 100 hours’ duration. We’re looking to make sure that we’re thinking about all other possible technologies that will help us close the gap to 2050.

We operate a very important nuclear fleet that is carbon-free around the clock. Those plants were initially licensed for 60 years — many of them were built in the 1970s. They will meet the end of their current licenses in the 2030s. We’re now in the process of licensing those out to 80 years. In fact, the Surry Power Station is currently the only nuclear power station in America that is licensed from 60 to 80 years. North Anna will be, not too long from now, licensed out to 80 years. Continuing to operate those nuclear plants is going to be critical to our ability to achieve net zero by 2050 because they provide so much carbon-free electricity.

We’re looking at supplementing that existing nuclear fleet with what are called small modular reactors. Many of the component pieces of the reactors themselves are manufactured offsite and then installed on the site where we may want to put them. The Navy uses small modular reactors on submarines and aircraft carriers. They have not been deployed commercially yet in this country, but we’re examining that possibility. 

We’re also looking at the possibility of using hydrogen. When hydrogen is combusted, it does not produce greenhouse gases. It can be created by taking water and, through electrolysis, separating out the oxygen from the hydrogen. It’s possible that we might be able to blend hydrogen into an existing natural gas plant. It’s possible, someday, that we might be able to operate a power plant with hydrogen.

We have an opportunity, because of the way this project is advancing, to become known as a hub for offshore wind along the East Coast. That could provide even more economic benefit to the Hampton Roads region and to Virginia.

Bob Blue Chair, President, and CEO, Dominion Energy, Inc.

El Koubi: The Coastal Virginia Offshore Wind project is said to be the largest project Dominion has ever undertaken, and it’s going to be one of the largest offshore wind farms in the world once it’s completed. Can you talk a little bit about what it means for Dominion and the renewable energy supply for Virginia and the nation?

Blue: We’ve undertaken big projects before. I mentioned those nuclear power plants. When we built those back in the 1970s, those were huge projects for the company. When we built our hybrid energy center in Southwest Virginia that went online in 2012, that was a large project for the company. We have a history of building large infrastructure projects for the benefit of our customers, and that’s what this is. 

Because the fuel is free, we expect it to save customers about $3 billion in fuel costs. We have to buy fuel for the other ways we generate electricity, whether it’s fuel for our nuclear stations, natural gas for our gas plants, or coal for our coal stations. [The Coastal Virginia Offshore Wind project] is taking advantage of free fuel. It emits nothing. When it’s operating, starting potentially in late 2025, with full completion expected by the end of 2026, it will prevent up to 5 million metric tons of carbon emissions per year that would otherwise be generated from different sources of electricity generation. But beyond the benefits to our customers from fuel savings and reduced emissions, the economic benefits of this project will also be substantial. 

There are already 750 Virginia-based workers, nearly 530 of them in the Hampton Roads region, working on this project. When it’s in service, there will be about 1,000 jobs supporting this project. It’ll create millions of dollars in tax revenue, tens of millions of dollars in pay and benefits, and hundreds of millions of dollars in total economic impact. And we have an opportunity, because of the way this project is advancing, to become known as a hub for offshore wind along the East Coast. That could provide even more economic benefit to the Hampton Roads region and to Virginia.

Our company thrives when the communities in which we do business thrive, and the way for those communities to thrive is to grow their economic base. Our objective is to be as good a partner as we possibly can. We’re going to do that by continuing to be reliable, continuing to be affordable, and continuing to make the way that we generate electricity cleaner and cleaner as we go forward.

Bob Blue Chair, President, and CEO, Dominion Energy, Inc.

El Koubi: Can you talk a little bit more about how nuclear power fits into Dominion’s plans in Virginia and elsewhere?

Blue: About 30% of the total electricity we generate today is from nuclear, including 87% of the carbon-free electricity. I’m not sure that the folks building them could have predicted the profound impact that those plants would have in Virginia. People weren’t thinking about climate change and the warming of the planet back then, but for us in Virginia to have the benefit of those plants today is remarkable. 

We need to keep them operating. We invest in them and have throughout their lifetime. I joke that there’s probably not a lot in a nuclear plant today that was there when it was first constructed, and we’ll have to make additional investments to keep those plants operating reliably and safely. We’re in the process of doing that now.

A lot of the businesses that are looking to move to Virginia have sustainability goals, and they’re looking for a low-carbon electric grid. We’ve got one here today, as compared to the rest of the country, thanks to those nuclear units, and we’re expanding it rapidly. But going forward, we’re going to see electricity demand grow, a lot of it driven by data centers. We probably serve more of them than any other company like ours in the country. Just operating those existing units isn’t going to be enough, and that’s why we’re looking at those small modular reactors. What we need in order to be able to invest in them is to make sure we understand that the technology will work as advertised by the developers. We need to make sure that we can put them in service in a cost-effective way for our customers.

An interesting thing about small modular reactors is that they could be deployed, potentially, in different places than the reactors we operate today. They do not need as large a safety buffer, if you will, as those units do. Where we have retired older units — maybe coal or oil units that we used to operate — and we have the transmission infrastructure still there, there are possibilities to be able to site them and take advantage of that existing infrastructure. So right now, our focus is technology selection and understanding the costs. 

Coastal Virginia Offshore Wind Project Hampton Roads 12

Coastal Virginia Offshore Wind monopiles, Portsmouth Marine Terminal

El Koubi: Let’s talk about those demands. You mentioned the electrification of the economy, and one of the major drivers of that is electric vehicles. How do electric vehicles fit into Dominion’s efforts to get to net zero carbon emissions?

Blue: Once the purchase price point for electric vehicles starts to get closer to parity with non-electric vehicles, I think you’ll see demand move pretty quickly. Our customers want to know that they’re going to have enough electricity to get to and from wherever they’re going. This idea of range anxiety is real. As people drive these vehicles, though, they tend to get comfortable with the way they operate. 

The important part for us is to make sure that we’re providing the infrastructure for charging. We were participating with other utilities in a coalition to make sure that there are fast-charging stations across the Midwest and South and up and down the Atlantic coast. We try to work with customers who are going to be putting the charging stations in to make sure that we have our infrastructure ready for them, and for customers who may be converting a fleet to electric vehicles.

I’m not sure there’s going to be one silver-bullet strategy; it’s going to be a lot of different pieces. But we’ve built this electric grid out over the course of more than a century. We’ve seen periods where demand went up fast, when people converted to electric appliances and heat pumps, and we were able to meet that demand. I expect that we’re going to be able to do the same thing here, but it’s going to be a different level of demand than we have experienced over the course of the last 20 or 30 years. Our regional grid operator predicts that, in our part of the grid, demand for electricity is going to start going up by about 5% a year. A lot of that is driven by data centers, but a chunk of it will be driven by electric vehicles.

It’s our obligation to make sure we’re ready to meet that demand through the ways that we’ve already talked about, providing a diverse mix of generation and making investments in the grid so that we can continue that reliability.

I think we’ve probably had as much experience with data center customers as any similar company in the country. Just since 2019, we’ve connected 75 data centers, and those are large-capacity customers. That requires us to invest in generation and our electric transmission grid, which we’ve been doing to the tune of better than a billion dollars a year in electric transmission here in Virginia.

Bob Blue Chair, President, and CEO, Dominion Energy, Inc.

El Koubi: Over the last several years, we’ve seen a wave of very large advanced manufacturing and data center projects that are typically big consumers of power, and one of the critical location factors for these projects is the availability of power — and increasingly, these industrial customers are looking for clean power. How are Dominion and other power companies adjusting to some of these high-demand sectors? 

Blue: I think we’ve probably had as much experience with data center customers as any similar company in the country. Just since 2019, we’ve connected 75 data centers, and those are large-capacity customers. That requires us to invest in generation and our electric transmission grid, which we’ve been doing to the tune of better than a billion dollars a year in electric transmission here in Virginia.

Take, for example, a company like Plenty Unlimited Inc., an indoor agriculture company and a big user of electricity. We spent a lot of time working with them ahead of time, making sure we understood how quickly they would ramp up their energy needs, and were able to achieve the schedule that they’re looking for. Similarly, with other projects that we’ve worked — with Amazon, with the LEGO Group, with Procter & Gamble — we’re making sure that we’re meeting their needs. Fundamental to all that is our ability to communicate with those customers.

Our company thrives when the communities in which we do business thrive, and the way for those communities to thrive is to grow their economic base. Our objective is to be as good a partner as we possibly can. We’re going to do that by continuing to be reliable, continuing to be affordable, and continuing to make the way that we generate electricity cleaner and cleaner as we go forward. 

For the full interview, visit www.vedp.org/Podcasts

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