Virginia Electric and Power d/b/a Dominion Virginia Power told the Virginia State Corporation Commission in a Feb. 19 post-hearing brief that it has adequately proven that its 1,588-MW Greensville project is the right solution to its power generation needs as of 2019.
The utility, which is a unit of Dominion Resources (NYSE: D), is in the home stretch of a case begun last July where it sought certificates of public convenience and necessity (CPCN) to construct and operate a 1,588-MW (nominal) natural gas-fired combined-cycle (CC) facility to be located in Greensville County, Virginia. It is also seeking approval of related transmission infrastructure necessary to interconnect the generating facility with the company’s transmission system and for rate rider coverage to pass along project costs to ratepayers.
The utility said in the Feb. 19 brief: “The evidence shows that the Greensville County Project is the optimal economic and operational solution to meet a significant capacity and energy gap for the Company’s customers over the next several decades compared to all alternatives, including third-party market alternatives. When constructed, the Greensville Facility will be one of the most efficient natural gas electric generation plants in the country, operating with state-of-the art environmental controls and providing large amounts of dispatchable low-cost energy – enough to power nearly 400,000 homes. In fact, this facility alone is projected to meet an average of 10% of Dominion Virginia Power’s customers’ total energy needs annually between 2019 and 2030.”
The company added: “Greensville’s 3×1 natural gas CC technology has not been questioned. There is no dispute that the Project’s estimated capital costs of $1.33 billion ($837/kW), excluding financing costs, are reasonable. No party has challenged the Company’s execution plans for the Project, which carry minimal risk due to more than 83% of the costs of construction being fixed. And there is no dispute that the Project will bring economic benefits to the locality, the region and the state both during the development and construction period and once in commercial operation, as affirmed by numerous public witnesses appearing at the hearing.”
The company also wrote: “The Company continues to experience load growth in its service territory and the Dominion Zone (‘Dom Zone’) remains the fastest growing zone in the PJM Interconnection, L.L.C. (‘PJM’) footprint. The Company’s projections show a weather-normalized peak load for the Dom Zone of 4,580 MW over the next fifteen years with an annual growth rate of 1.5%. Over this same period, the Company projects that energy requirements will increase by approximately 20,599 GWh in the Dom Zone – a 1.4% average growth rate – of which approximately 18,049 GWh is attributable to the Company’s service territory. This load growth, coupled with planned and potential retirements in the next five years, leads to a growing need for both capacity and energy by 2019. In each of the Company’s Integrated Resource Plans (‘Plans’) since 2011, a natural gas-fired 3×1 CC facility in the 2019 timeframe was identified as part of the optimal mix of resources to meet future customer capacity and energy needs.”
State Consumer Counsel, commission staff don’t oppose this project
Also filing a Feb. 19 post-hearing brief was the Division of Consumer Counsel of the Office of the Attorney General. It noted: “The Company plans that the Greensville project will be in operation by December of 2018. The size and cost of the Greensville project is comparable to the Brunswick and Warren County projects approved by the Commission in 2012 and 2013, respectively. Consumer Counsel does not oppose the Company’s request to construct and operate the proposed Greensville project.”
It added: “At the hearing, Consumer Counsel noted that the capital cost of the Greensville generation facility appear to be reasonable when compared to published planning estimates and recently reported construction costs for new combined cycle facilities. Consumer Counsel understands that the Company’s proposal to self-build the Greensville project came after the conclusion of a formal solicitation process. Consumer Counsel does not herein object to that process.”
Commission staff in their Feb. 19 brief said they do not oppose the issuance of Dominion’s requested CPCNs if the commission determines that the company “adequately considered” third-party market alternatives to this self-build proposal. The term “adequately considered” was used earlier this decade in another commission review of a Dominion power project and there have been arguments since then about what it exactly means.
Staff said that in combination with development of the project, Dominion conducted a formal request for proposals (RFP) for incremental dispatchable intermediate or baseload generation to commence in the 2019 to 2020 timeframe. The RFP requested “Unit Firm Capacity” limited to baseload or intermediate resources for a term of ten to twenty years, commencing no earlier than Jan. 1, 2019, and no later than May 31, 2020. In its RFP, Dominion requested a quantity of up to approximately 1,600 MW from facilities directly connected to the PJM system. According to the company, it received 11 proposals and evaluated each of these proposals on both price and non-price criteria.
In its analysis of the company’s application, commission staff focused on price criteria. “Staff concluded that, ultimately, the Commission must determine if Dominion’s formal RFP process satisfies the 2013 legislative requirement regarding third-party market alternatives and the Commission’s ‘adequately considered’ standard,” said staff. “Should the Commission determine that Dominion has adequately reviewed and assessed market alternatives, Staff is not opposed to the approval of Dominion’s requested CPCNs for the Project.”