Amid uncertainty, Dominion Virginia Power plans transition to new energy generation methods

Energy Associated Press

Dominion Virginia Power on Wednesday suggested how it may transition to new ways of generating energy, citing the uncertainty of new U.S. environmental rules.

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Virginia's largest utility said in a regulatory filing that its short-term energy plan includes natural gas and some renewables, but for the first time Dominion did not file a long-term, or preferred, plan. Instead, it listed plausible long-term options that include utility-scale solar and nuclear, among others.

Dominion outlined its vision in what is called an integrated resource plan, which offers a 15-year window into its likely generation future. It was filed with the State Corporation Commission.

In a letter submitted to the SCC, Dominion executive Robert M. Blue said the 2015 plan arrives amid "a period of change and uncertainty," due in large part to U.S. Environmental Protection Agency regulations to be outlined in August.

"The company maintains that the proposed Clean Power Plan requires Dominion, its regulators, and other stakeholders to pause and fully re-evaluate the company's strategic path forward ...," wrote Blue, Dominion's senior vice president of regulation, law, energy solutions and policy.

President Barack Obama's climate change rules are aimed at reducing power plant greenhouse gas emissions which are linked to climate change.

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The EPA signaled the upcoming rules in 2014, and Dominion has reduced coal emissions in response. It has retired coal plants and converted many to cleaner natural gas.

Wednesday, for instance, Dominion asked the SCC to approve a proposed $1.3 billion gas-fired plant in Greensville County. The power plant would generate about 1,600 megawatts of energy, or enough power for 400,000 homes during peak demand. If approved, construction would begin next year, employing up to 1,000.

Natural gas is viewed as a "bridge" fuel to achieving lower emissions.

Besides the Greensville County plant, Dominion also has plans to develop 400 megawatts of utility-scale solar power over the next five years. It also expects to bring on line the natural gas-fired Brunswick Power Station.

In its filing, Dominion outlined alternative plans that offer long-term plausible paths for compliance with the new EPA rules. They are:

— Utility-scale solar development.

— Co-firing, including natural gas to partially fire eight Dominion coal-powered units.

— Design and construction of Unit 3 at the North Anna nuclear power plant.

— Wind, including land and off-shore.

In assessing each plan, Dominion must weigh other factors, such as reliability, cost, and growing customer needs.

"The new element and the new constraint — and it's a big one — is also trying to do it in a way that's going to lower carbon intensity," Thomas Wohlfarth, senior vice president of regulatory affairs, said in an interview.

Each plan also comes with its own challenges.

Solar power, for instance, requires 10 acres per megawatt of power, Wohlfarth said. Offshore wind is extraordinarily expensive, he said, and "sticker shock" compelled Dominion to temporarily abandon plans to install two test turbines about 24 miles offshore. The estimated cost was well above the utility's estimate of $230 million.

"We're kind of working through that, how to get those costs down," he said.

At present, Dominion has a strong interest in developing solar power, which is the least expensive.

All the long-term, or preferred, options will be analyzed before the next plan is submitted on May 1.

"We will then be in a position to give more clarity about what our recommended options are," Wohlfarth said.

Dominion has 2.5 million customers, including some in North Carolina.

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Steve Szkotak can be reached on Twitter at http://twitter.com/sszkotakap.