Dominion says it is open to buying off-system power

Virginia Electric and Power, d/b/a Dominion Virginia Power, told the Virginia State Corporation Commission that it approached Doswell Limited Partnership about the extension of an existing power supply contract with Doswell.

The Dominion (NYSE: D) subsidiary goes on to say it has “not closed the door” on buying electricity from Doswell.

Doswell on Aug. 16 had asked the commission to let it file a post-hearing brief in Dominion’s latest integrated resource plan (IRP) case, begun in September 2011. Doswell said it wanted to add testimony well after the deadline because it had failed to win an electricity contract extension from Dominion, raising doubts about whether Dominion was truly committed to buying off-system power as an alternative to its own self-built generation.

Doswell owns a natural gas-fired facility in Hanover County, Va., with an aggregate capacity of about 760 MW (summer rating), consisting of a 605 MW combined-cycle facility and a 155 MW simple-cycle combustion turbine generating facility. The capacity and electrical output from the combined-cycle facility is committed to Dominion under a power purchase agreement (PPA) that expires in 2017.

Dominion said in its Aug. 22 response that it does not oppose allowing the filing out-of-time should the commission determine that good cause exists to do so. “However, the Company does not believe that Doswell’s assertions with respect to the power purchase agreement (‘PPA’) between it and the Company are a valid basis for such a good cause finding,” it added. “In fact, Doswell’s assertions are unfounded, and Dominion Virginia Power files this Response to correct mischaracterizations contained in the Motion.”

Dominion added: “Contrary to Doswell’s statements, the Company fully evaluated Doswell’s recent PPA extension offer in good faith and in pursuit of the long-term best interests of its customers. As the evidence in this case demonstrates the Company has engaged in discussions with its non-utility generators (‘NUGs’) including Doswell, as part of its normal business practices, contrary to the Motion’s suggestions.”

As a general matter, Dominion said it does not believe that this proceeding is an appropriate forum to review specific PPA-related activities between the Company and a NUG. “Airing the counterparty views with respect to current or potential PPA extension activities on the public record in the IRP docket is clearly misplaced,” it added. “Rather, the IRP, as the Commission has recognized, is a resource planning tool and not a request for approval of any particular resource.”

Doswell stated that it has attempted to engage Dominion in discussions to extend the PPA, and Doswell has indicated that it maintains considerable flexibility as to terms and pricing of a PPA extension. However, Doswell said that Dominion recently confirmed that it was not interested in negotiating a PPA extension with Doswell. Dominion said that statement isn’t accurate. Likewise, Doswell erroneously asserts that it only shortly prior to the Aug. 8 deadline for filing post-hearing briefs of Dominion’s decision not to engage in negotiations with Doswell with respect to extending the PPA, Dominion added.

“In point of fact, the Company approached Doswell (not the other way around) in March of 2012 to solicit terms for a potential PPA following the expiration of the existing Doswell PPA approximately five years from now in 2017,” Dominion wrote. “Doswell subsequently submitted a written offer in April of 2012 which was carefully considered, but ultimately not accepted by the Company, as it was not in the best interest of its customers. The Company, however, has not closed the door to future opportunities to explore an extension of the Doswell PPA. All of these facts have been clearly and plainly expressed to Doswell’s representatives.”

In his prefiled rebuttal testimony in the IRP case, Dominion witness Gregory Morgan explained the company’s ongoing efforts with the NUGs have been, and will continue to be, part of the company’s commitment to meet its service obligations in the best interests of customers, the company said. Morgan also provided confidential information in his testimony which included the restructuring/extension status for each of the NUGs, including Doswell, demonstrating the company has engaged in discussions and solicited offers from NUGs as part of its normal business practices, said Dominion.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.