The Virginia Electric and Power unit of Dominion Resources (NYSE: D) has new gas-fired capacity, the latest of which is due for commercial operation next May, that is helping to drive down its overall fuel costs.
Kelli B. Gravely, a Senior Utilities Analyst in the Division of Energy Regulation, was among the staff at the Virginia State Corporation Commission to supply May 29 testimony in a fuel cost proceeding that the utility began in March.
Virginia Electric and Power d/b/a Dominion Virginia Power (DVP) is requesting to decrease its fuel factor by 0.612 cents per kilowatt hour, from 3.0180 per kWh to 2.4060 per kWh, effective for usage on and after April 1, 2015, on an interim basis. This interim fuel factor is calculated to recover: the company’s projected Virginia jurisdictional fuel expenses of approximately $1.6 billion for the period July 1, 2015, through June 30, 2016 (called the “forecast period”); and its $21.9 million projected unrecovered Virginia jurisdictional deferred fuel expense balance at June 30, 2015, over 15 months.
The company states that the primary reasons for the fuel factor reduction include lower than expected commodity and power prices, particularly natural gas, as well as milder than normal weather in the summer and fall, and the company’s fuel diversity.
Gravely noted that DVP is projecting an aggregate Equivalent Availability Factor (EAF) and an aggregate Net Capacity Factor (CF) for its coal-fired, biomass-fired, and coal/wood-fired generating units of 84% and 56%, respectively. This is a slight increase compared to the aggregate EAF of 81% and similar to the CF of 57% achieved during the Actual Period (February 2014-January 2015). The company estimates 22.7 million MWh, or 25% of its net energy supply will be generated at these facilities, which is less than the levels achieved in the Actual Period.
The company’s largest and most efficient coal-fired units (Chesterfield Units 5 and 6, the two Clover units, the three Mount Storm units, and the Virginia City Hybrid Energy Center) are forecast to achieve an aggregate EAF of 83%; operate at an aggregate CF of 62%; and account for 94% of the company’s total coal-fired generation.
During the forecast period, two coal, biomass, or coal/biomass units are forecast to have an EAF below 80%.
- Mount Storm 3, a 520-MW coal-fired unit in West Virginia, has scheduled outages for boiler maintenance and turbine valve maintenance resulting in an EAF of 67%.
- The Virginia City Hybrid Energy Center has boiler maintenance scheduled twice during the forecast period with a resulting EAF of 77% (slightly higher than the 74% experienced during the actual period).
Dominion projects an average Heat Rate (HR) of 9,902 Btu/kWh for the forecast period for its coal-fired units, an improvement of 2.4% from 10,150 Btu/kWh experienced during the Actual Period. The small coal units are projected to achieve an aggregate EAF of 83%, and are projected to operate at 55% CF, versus the 29% CF experienced during the Actual Period. The four small coal units at the Chesapeake Energy Center (combined capacity of 595 MW) with lower CFs were retired in December 2014. Two coal units at Yorktown were also due to be retired around the time the Chesapeake plant was shut, but have been temporarily reprieved until early 2016 for grid reliability purposes.
The company projects that its natural gas-fired combined cycle units will account for 26% of net energy supply, with an aggregate EAF of 88% and an aggregate CF of 71%. The combined cycle units are projected to generate approximately 23.4 million MWh, nearly 12 million MWh (or 51%) more than during the Actual Period. This reflects the addition of the 1,342-MW Warren County Generating Station, which began commercial operations in December 2014, and the start-up of the Brunswick County Generating Station (summer capacity 1,368 MW).
Brunswick County, the company’s largest combined cycle unit, is scheduled to begin commercial operations in May 2016. The company forecasts an EAF of 88% and CF of 82% for this plant. Warren County, the next largest combined cycle unit, is scheduled to have a borescope inspection and steam turbine valve maintenance during the forecast period. This unit is forecast to have an EAF of 89% and CF of 74%.