The Virginia State Corporation Commission on Sept. 10 approved the conversion of Virginia Electric and Power’s Bremo coal plant to natural gas, with that conversion to be completed by July 1, 2014.
In August 2012, Virginia Electric and Power d/b/a Dominion Virginia Power filed with the commission for approval and certification of the proposed conversion of Bremo Power Station, located in Fluvanna County. Bremo has been in operation since 1931, and it has two active units.
Commercial operation of Unit 3, with net capacity of 71 MW, commenced in 1950. Unit 4, with net capacity of 156 MW, was put in commercial operation in 1958. Although they no longer operate as baseload units, Dominion Virginia Power told the commission that it has a continuing need for Bremo’s generating capacity and energy.
According to this Dominion Resources (NYSE: D) subsidiary, conversion to natural gas operation will preserve 227 MW (net) of generating capacity. Columbia Gas of Virginia would extend a natural gas lateral from Dominion’s Bear Garden Generating Station on the south side of the James River to supply natural gas to Bremo, which is adjacent to the north bank of the river. Gas-fired operation at Bremo is planned to meet summer 2014 peak demand needs.
“Our analysis of the Bremo conversion must take into account a novel situation,” the commission noted. “The Bremo units do not have the environmental controls needed to comply with U.S. Environmental Protection Agency requirements now in effect and anticipated. Further, the Commission approved the construction and operation of the Virginia City Hybrid Energy Center in 2008. Condition 30 of the Company’s DEQ air permit for the Virginia City facility provides that ‘[t]he permittee shall convert the Bremo Power Station to natural gas within two years of commencement of commercial operation of the Virginia City Hybrid Energy Center, subject to Virginia State Corporation Commission approval.’ According to the Company, commercial operation, as defined by DEQ, commenced at the Virginia City facility on March 7, 2012. Dominion Virginia Power has stated that, if Bremo is not converted, the air emissions requirements and the related DEQ permit condition will require both units’ retirement.”
Commission again says no outside power bids were needed
Studies provided in the application show that the capital investment for the conversion, approximately $53.4m (net of financing costs), is expected to provide significant customer benefits in comparison to building new generation or purchasing in the market. These studies lead the company to expect customer savings with a net present value of approximately $32m when compared to building new generation.
It had come up, based on complaints from independent power producers, within the commission’s recent review of Dominion’s gas-fired Brunswick County greenfield plant project that a prior commission approval of a Dominion integrated resource plan (IRP) indicated the company should consider taking outside bids when planning new self-built capacity. But the commission in the Brunswick County approval said, and reiterated in the Bremo approval, that this was more a suggestion than a mandate.
“Although the IRP Order reflects the Commission’s view that the Company ‘should adequately’ consider third-party alternatives, what may or may not be adequate or necessary – and what evidence is sufficient to meet the applicable statutory requirements – remains a unique factual question attendant to each [certificate of public convenience and necessity] case,” said the Bremo order. “In short, the plain language of the IRP Order did not reverse Commission precedent and create a new mandatory legal threshold (i.e., some undefined third-party solicitation requirement) for all CPCN applications.”
Bremo not the only coal capacity headed for the exit at Dominion
The outright retirement in 2015 of six coal-fired units at the Yorktown and Chesapeake plants, and the 2014 conversion of Bremo to firing natural gas, are major features of an IRP filed Aug. 30 at the Virginia commission by Dominion.
Dominion plans these changes to existing generation:
- Bremo Unit 3 conversion from coal to gas, 2014;
- Bremo Unit 4 conversion from coal to gas, 2014;
- Possum Point Unit 5 (fired with fuel oil) selective non-catalytic reduction (SNCR) installation, 2018; and
- Yorktown Unit 3 (fuel oil) SNCR installation, 2018.
The company plans these plant and unit retirements, with summer MW ratings:
- Chesapeake Unit 1 (coal), 111 MW, 2015;
- Chesapeake Unit 2 (coal), 111 MW, 2015;
- Chesapeake Unit 3 (coal), 156 MW, 2015;
- Chesapeake Unit 4 (coal), 217 MW, 2015;
- Possum Point CT (fuel oil), 72 MW, 2015;
- Yorktown Unit 1 (coal), 159 MW, 2015;
- Yorktown Unit 2 (coal), 164 MW, 2015;
- Lowmoor CT (fuel oil), 48 MW, 2016;
- Mt. Storm CT (fuel oil), 11 MW, 2016; and
- Northern Neck CT (fuel oil), 48 MW, 2017.
The company recently completed its Altavista coal-to-biomass conversion. It expects to complete major unit modifications to convert the Hopewell and Southampton stations from coal-fired to biomass, with all three converted plants rated at 51 MW each, by the end of 2013.
The majority of the company’s coal generators are equipped with scrubbers and NOx controls. However, the remaining small coal-fired units are without needed emission controls to comply with new and anticipated regulatory requirements. The company’s coal-fired units at the Chesterfield, Mt. Storm, Clover, Mecklenburg and Virginia City Hybrid Energy Center (VCHEC) facilities have flue gas desulfurization to control SO2 emissions. The company’s Chesterfield Units 4-6, Mt. Storm, Clover, Chesapeake Units 3-4, and VCHEC coal-fired units also have selective catalytic reduction (SCR) or SNCR to control NOx.