Dominion Virginia Power seeks approval to convert coal stations to biomass

Dominion Virginia Power, a subsidiary of Dominion, asked the Virginia State Corporation Commission for approval to convert three Virginia electricity-generating power stations from using coal to biomass, a renewable energy source.

The conversions of the power stations in Altavista, Hopewell and Southampton County would increase Dominion’s renewable generation capacity by more than 150 megawatts, enough to power 37,500 homes. The proposal has strong customer benefits and is part of the company’s commitment to have 15 percent of its electricity come from renewable sources by 2025.

The switch to biomass – in this case, using primarily waste wood left over from regional timber operations – would reduce nitrogen oxides, sulfur dioxide, mercury and particulate emissions and meet stringent emissions standards established by the Virginia Department of Environmental Quality and the Environmental Protection Agency.

The cost of converting the stations would be about $165 million, or $55 million per station. The company is requesting an initial annual rate increase of 14 cents to the monthly bill of a typical 1,000 kilowatt-hour per month residential customer, effective April 1, 2012. Rate adjustment clauses allow utilities to collect financing costs over time as projects begin, lessening the larger rate impact that could occur when power stations go into service. The conversions would be complete by the end of 2013.

The power stations, which would generate about 51 megawatts each, are nearly identical. The incremental statewide economic benefit of converting the stations is estimated to be more than $120 million annually when compared to continued operations on coal, including the creation of more than 300 jobs in the forestry and trucking industries. The conversions would also create approximately 160 jobs during the construction period.

The stations have been primarily peaking power units, operating 25 percent of the time. If the conversions are approved, they would be more economic to operate and, therefore, would be expected to generate electricity about 90 percent of the time.