Virginia Power drops interconnect deals for delayed North Anna 3 project

PJM Interconnection on April 29 notified the Federal Energy Regulatory Commission of the cancellation of an Interconnection Service Agreement (ISA) and an Interconnection Construction Service Agreement (ICSA) with Virginia Electric and Power for the North Anna Unit 3 nuclear project.

The agreements were with Virginia Electric and Power as both the power project developer and the interconnecting transmission owner. “The Virginia Electric SAs are being cancelled because Virginia Electric has decided not to move forward with the interconnection project,” PJM wrote.

The December 2013 ISA was for the North Anna Power Station Unit 3 project, located at the existing North Anna nuclear plant in Louisa County, Virginia. The project under the ISA was to have a Maximum Facility Output of 1,594 MW. The project consists of one nuclear reactor, two 14-MW diesel generators and two 1.1-MW diesel generators.

The ISA said that on or before March 15, 2024, Virginia Power must demonstrate commercial operation of all the generating units.

Said Virginia Electric and Power parent Dominion Resources (NYSE: D) in its Feb. 26 annual Form 10-K report about this project: “Virginia Power is considering the construction of a third nuclear unit at a site located at North Anna. If Virginia Power decides to build a new unit, it must first receive a [combined operating license] from the NRC, approval of the Virginia Commission and certain environmental permits and other approvals. The COL is expected in 2017. Virginia Power has not yet committed to building a new nuclear unit at North Anna.”

A Dominion spokesperson said in an April 29 e-mail to Generation Hub: “We continue to move forward with prudent development activities to support North Anna 3 with a primary focus on those activities which support issuance of the Combined Operating License (COL) which is expected in mid 2017. We continue to make progress on the COL which is in the final review stages by the NRC staff.

“The Integrated Resource Plan filed today projects a commercial operations date of 2029 at the earliest, if a decision is made to build the new unit soon after the Nuclear Regulatory Commission issues the combined operating license in 2017.

“Based on the timing of the evaluation and implementation of the Clean Power Plan, the company believes it is prudent to slow development of NA3 over the next few years to allow the CPP evaluation to evolve. In addition, slowing development will allow resources to focus on supporting the final reviews by the NRC for the COL.

“Activities, such as durable engineering to support near term construction, have been slowed. In addition, we have decided to withdraw the project’s electrical interconnect from the PJM process in the near term – so that we can file it at a more optimum time to meet the in service date when determined.

“Early evaluation of the Clean Power Plan (CPP) has indicated NA3 would not be the least cost CPP-compliant plan based on the 2016 Integrated Resource Plan (IRP) analysis due largely to forecasted long term low natural gas prices and low carbon alternatives such as solar, although NA3 is expected to provide other benefits, such as large baseload dispatchable generation, historical rate stability and long asset life, and virtually no CO2 emissions during operation.

“The decision to slow work on North Anna 3 does not mean that the company won’t eventually build the unit. The work we have done toward licensing Unit 3 is prudent and valuable for our customers to maintain a diverse, carbon-free source, baseload source of electricity for the future.

“The COL, once received, would provide a indefinite option to build the unit (initial license is good for 40 years from date it is constructed and granted approval to load fuel, with additional 20 year extension allowed]. As has been shown through history, forecasts change over time, and fuel diversity is a key component of any energy plan. Our customers enjoy some of the lowest rates in the United States, due in large part, to the safe, reliable, clean, and dependable nuclear units at Surry and North Anna.”

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.