The work of utility and energy companies can be so ubiquitous that it’s often taken for granted, fading into the background of the urban landscape. Powerlines bring our homes, offices, and businesses the electricity we need to check emails, run machinery, brew coffee and charge our cars.
Pipelines deliver natural gas that keeps us cozy, powers next generation cargo ships, fuels heavy manufacturing and power plants. Still, most of us pay our bills at the end of the month and as long as the lights stay on, we rarely give it a second thought.
Yet the role energy companies play in driving regional economic development is immense—and the impacts are far-reaching.
Richmond-headquartered Dominion Energy, for instance, employs 2,000 people in Hampton Roads and northeastern North Carolina alone, contracts with thousands more, serves 760,000 area customers, and invested approximately $1.2 billion in transmission related projects in Virginia in 2022. The Fortune 500 company is currently building the largest offshore wind energy facility in the U.S. about 23.5 miles off the coast of Virginia Beach. The 2.6 gigawatt, 176-turbine Coastal Virginia Offshore Wind farm (CVOW) will cost $9.8 billion to build and it will power an estimated 660,000 homes. About 750 Virginia-based workers—530 of them in the Hampton Roads region—have been working on the project directly or through supporting businesses. Once fully operational, the facility will create more than 1,000 permanent, full-time jobs.
Meanwhile, the region’s largest natural gas provider, Virginia Natural Gas (VNG), has more than 400 full-time employees and contracts with about 600 others, with most of the latter being highly skilled, unionized laborers. The company spends approximately $75 million annually in pipeline modernization, expansion and maintenance, and serves 300,000 customers in southeast Virginia. Natural gas accounted for 54% of Virginia’s in-state energy generation in 2022, with VNG providing a significant portion of that fuel.
And the above is just the tip of the iceberg.
“I don’t think very many people understand what a big part [companies like ours] play in driving economic development,” says VNG president and CEO, Robert Duvall, who was recently elected chair of the Virginia Chamber of Commerce board of directors. He and his counterparts at other utilities work behind the scenes with state and local governments, regulatory agencies and developers to pave the way for major new businesses to move into the region. They also help ensure existing companies—manufacturers in particular—have ready access to the competitively priced energy they need to expand operations.
Here, we offer a backstage glimpse into a few of the ways utility companies help to underpin and spur our regional economy with
Attracting New Businesses
One of the first questions a large company asks when they’re thinking about moving into a new area or expanding existing operations is: “Will we have ready, affordable and reliable access to the energy resources we need to be successful,” says Dominion Energy Economic Development Manager, Bryan Smith.
He works hand-in-hand with state and local governments, and groups like the Virginia Economic Development Partnership (VEDP) and Hampton Roads Alliance (HRA) to ensure the answer is always a resounding yes.
“I’d say a good 75 % of [new business projects] that come into the state originate from VEDP,” says Smith. The rest tend to pass through local organizations like the HRA. “So, we have very close relationships with all those groups,” he continues. “We’re working with them on an almost daily basis to understand what they have or may have coming down the pipeline, and to just generally make sure we’re never the reason that a project gets delayed or doesn’t move forward.”
The process typically begins years in advance with helping municipalities assess and develop sites for potential industrial or commercial projects. Duvall, the VNG CEO, points to the 4,000-acre Coastal Virginia Commerce Park industrial mega-site as an example.
Negotiations around the zoning and purchase of the former farm have been underway since at least 2016. The city’s economic development authority updated its 2035 master plan and entered into an agreement to pay $37 million for 1,420 acres of land with an option to buy the rest in late 2022. Given the size of the site and its convenient access to the Port of Virginia, Chesapeake hopes to capitalize on funding from 2022’s federal CHIPS and Science Act to attract a large semiconductor or microchip manufacturer, Deputy manager for community development Brian Solis said in a related statement.
Representatives from utility companies were looped in early on to assess existing electrical and pipeline infrastructure around the site and make plans for how they can accommodate the kinds of companies developers hope to attract. They also offered input for how to get the site closer to being shovel-ready.
As the process advances, interested prospects will send requests for information to development authorities, which then turn to teams like Smith’s to get cost estimates, timetables and incentive packages addressing the company’s energy needs.
“Whatever it is, we’re going to find a way to meet it,” says Duvall. Because at the end of the day, “attracting great companies and helping to create jobs and revenue that ultimately boosts the quality of life for everyone in the community is what it’s all about. So, whether its Chesapeake, Virginia Beach or Gloucester that gets a new project, everyone wins.”
However, getting that win often involves creative short-term bridges to a permanent solution and significant infrastructure investment from the utility. Most modern semiconductor fabrication plants, for instance, require tremendous quantities of natural gas to make hydrogen, which is vital to production. They also use upward of 100 megawatt-hours of electricity an hour—which, over the course of a year, is enough to power about 50,000 homes.
Connecting a facility like that to the existing electrical grid would cost the utility tens of millions of dollars at minimum, says Smith. And while the Coastal Virginia Commerce Park is technically within Columbia Gas of Virginia territory, Duvall says they’ll need to source gas from VNG to meet demand. That will require the installation of miles of new pipeline, additional compressor stations, and more.
“There’s definitely a lot that goes on behind the scenes to get these projects moving, but we make sure it all gets done as quickly and efficiently as possible,” says Smith. “We realize we’re a vital part of a much bigger team, and our goal is to be a great teammate. I’m proud to say I’ve yet to see a situation where a company comes in and we can’t get them hooked into the grid on time.”
Having this kind of strong support from utility companies to get mega-sites ready is imperative for growing the economy, Virginia Economic Development Partnership President and CEO Jason El Koubi told Virginia Business last April. He estimates the Commonwealth has missed out on $124 billion in capital investment and 55,000 new jobs since 2016 due to a shortage of feasible 250-plus-acre sites.
Energy Reliability and Environmental Impact
Another key component of keeping major businesses in and attracting them to the region is having reliable, uninterrupted sources of energy. But the vast majority are also concerned about their carbon footprint.
“We have a diverse portfolio of energy generation sources that we are constantly expanding to meet and exceed projected demand,” says Smith. He explains that Dominion is actively planning 5, 10, 20, 30 years ahead to lay the groundwork for meeting its 2050 net zero emissions commitment, “while ensuring we have the infrastructure to make that transition without compromising reliability.”
Dominion has reduced carbon emissions by 47% since 2005, with methane emissions falling by 38% since 2010, according to its 2022 Sustainability & Corporate Responsibility report. Its energy generation portfolio consisted of 5% renewables, 43% Nuclear, 41% Natural Gas and 11% Coal. It sees renewables backed up by carbon-free nuclear and always-ready natural gas as the most viable path to the future, and is investing heavily to make that happen.
Moving to the natural gas side of the reliability equation, natural gas plants produce half the emissions compared to coal, are highly flexible, and can be quickly ramped up or down based on fluctuations in demand, says Duvall. They can also help fill in gaps when inclement weather causes performance declines from renewable sources like solar or wind. “The ability to respond in real time creates a more stable and reliable grid,” Duvall continues. “Especially during periods of peak load.”
Aggressive updates like replacing more than 500 miles of pipeline with more durable, leak-resistant materials and the use of technologies like artificial intelligence monitoring and cross-compression that captures then reinserts gas during maintenance activities, have further reduced emissions by preventing leakages, and helped VNG surpass sustainable natural gas consortium ONE Future’s current target rates for leakages by about 60 percent.
The company has also upped its commitment to certified “responsibly sourced” natural gas. About 51% of the utility’s supply now comes from facilities that have pledged to reduce greenhouse gas emissions to less than 1% across the natural gas value chain. They’ve also undergone third-party assessments to certify they’re below a certain threshold for methane emissions intensity and using best practices for mitigating it; minimizing community and environmental impacts; responsibly managing water, waste and more.
These and other measures have enabled VNG to reduce overall emissions by 46%, even as its overall distribution network grew by about 36% since 2012. Duvall says research and development around carbon offsetting and renewable sources like sewage plants, farms and landfills will also play a big role in helping the company achieve its own 2050 net zero greenhouse gas emissions commitment.
“We are committed to reducing greenhouse gas emissions across our value chain, both upstream through the gas production and transmission systems that supply our gas and downstream to our customers,” says Duvall. “Our customers can feel good knowing we have strong relationships with environmentally conscious producers focused on reducing methane emissions efficiently and effectively during the production cycle.”
Dominion, meanwhile, is in the process of dramatically scaling up generation capacity from renewables. Most notably, its groundbreaking, 113,000-acre Coastal Virginia Offshore Wind (CVOW) project received the final two major federal approvals needed to start construction on Jan. 30.
“We’re thrilled to see [this] project receive two major approvals that will place the nation’s largest offshore wind farm right off the coast of Virginia,” said senators Mark Warner and Tim Kaine, and congressman Bobby Scott in a related joint statement. The progress “speaks volumes about the level of cooperation between the Biden administration, the Commonwealth and Dominion Energy, and their commitment to the future of green energy in [Virginia]. We look forward to continuing to work together to see this project through to the finish line.” CVOW is expected to generate fuel savings of $3 billion for customers during the project’s first 10 years of operation.
Dominion also just opened a pair of new large-scale solar facilities in Gloucester and James City County this past November. Combined, they span just over 500 acres and can generate enough electricity to power about 10,000 homes. The plants compliment two other solar facilities in the area and join the utility’s 30-farm fleet—which is the second largest in the nation.
Dominion Solar installation, Gloucester.
While Dominion’s 2023 integrated resource plan calls for between one and nine gigawatts of new natural gas-fired capacity over the next 15 years, the vast majority of its planned new power generation “is renewable, including all the offshore wind, onshore wind, solar and battery storage required under the Virginia Clean Economy Act,” spokesperson Aaron Ruby told leading utility, energy transmission and distribution news outlet Utility Dive, last May.
The plan calls for the addition of three gigawatts of wind capacity, up to 24 gigawatts of solar, and between one to 10 gigawatts of battery storage capacity over the course of the next 25 years.
“The IRP is not an application to build specific projects, retire specific power stations, or recover costs from our customers,” Ruby said in response to objections raised by democratic lawmakers and representatives from environmental organizations like the Sierra Club. “It’s a long-term plan based on a snapshot in time of current technology, market conditions and forecasts. As these conditions evolve, so will our long-term plans.”
Community Philanthropy
Virginia Natural Gas and Dominion both have deep-rooted traditions of making philanthropic contributions to the communities they serve.
“We’ve remained committed to our communities and support them through charitable giving that addresses human needs, environmental stewardship, education and community vitality,” wrote Dominion president and CEO Robert Blue in the company’s 2022 Sustainability and Corporate Responsibility Report.
That year Dominion contributed $45 million in energy assistance, support for nonprofits, direct giving, and other initiatives across its 15-state territory. Employees collectively devoted 95,000 hours of company-backed volunteer work to organizations of their choice.
Flagship programs include the Dominion Energy Charity Classic, a PGA tour event that’s raised more than $9 million to support veteran-related nonprofits and causes since its inaugural tournament in 2016. The Dominion Energy HBCU Promise program launched in 2020 and will provide $35 million toward scholarship funds, endowments, operating expenses and clean energy education programs at 11 historically Black colleges and universities—including Hampton University and Norfolk State University—over the next six years.
VNG’s parent company, Southern Company, gave $120 million in grants, sponsorships and impact investments across its six-state territory in 2022. VNG donated $2.1 million to 60 unique Tidewater area organizations in support of charitable causes that same year. Employees volunteered for about 450 hours with local environmental stewardship programs and philanthropic events like the annual Virginia Beach Polar Plunge, which raised a record $1.55 million for Special Olympics Virginia in 2023.
Other significant contributions include a $750,000 non-ratepayer donation to the Salvation Army of Hampton Roads to fund a year-round program that provides energy assistance for customers experiencing economic hardship. VNG also gave $40,000 to the Norfolk-based nonprofit, Garden of Hope, which provides transitional support services to formerly incarcerated individuals and helps them achieve economic and social stability.
These and other efforts helped VNG win a United Way of South Hampton Roads Heart of Hampton Roads community impact award in 2022.
“We take great pride in our legacy as one of Virginia’s oldest corporations and aspire to be a great citizen and neighbor wherever we serve,” says Duvall. Enriching and helping “create equity and ensure the success of the communities we serve is one of our cornerstone values and vital to our work at Virginia Natural Gas.”
