The Virginia State Corporation Commission has approved Dominion Virginia Power's plan to build a 1,588 MW, natural gas-fired combined-cycle plant in Greensville County, rejecting the assertion by groups representing independent power producers and environmentalists that the utility failed to fully explore cost-effective alternatives.
In its order Tuesday, the SCC said Dominion "has established a need for the capacity and energy the project would provide," and -- despite claims to the contrary -- "we find ... the company undertook serious and credible efforts to assess the cost and availability of third-party alternatives."
In January, PJM Power Providers and the Electric Power Supply Association told the SCC that it should reject Dominion's application for a certificate of public convenience and necessity because the utility's November 2014 request for proposals for 1,600 MW "was not designed to elicit competitive bids." The IPP groups expressed similar concerns about the RFP the month after the solicitation was issued.
Several environmental groups, including Appalachian Voices, the Chesapeake Climate Action Network and the Natural Resources Defense County, also questioned the validity of Dominion's RFP, saying the utility also failed to adequately consider other types of capacity Dominion itself could have built, such as a utility-scale solar project or a solar/gas hybrid plant.
Dominion countered that its RFP netted 11 proposals for eight separate generation units or combination of units, calling the proposals "a robust cross-section" that included power from a mix of gas-fired, coal-fired and oil-fired assets in three states.
The SCC agreed with the utility, finding its RFP "adequate for the purpose of this proceeding" and noting Dominion also compared the Greensville County project with "multiple unsolicited offers for solar, wind, landfill gas, and coal resources that were received outside the RFP."
PROJECT 'REASONABLE AND PRUDENT' IN RELATION TO FUEL DIVERSITY: SCC
The commission also found that the Greensville County project to be "particularly reasonable and prudent in relation to [Dominion's] overall fuel diversity. Specifically, by 2020" -- the year after the new plant is scheduled to come online -- "natural gas generation is expected to make up about 39% of the company's energy mix, with nuclear at 30%, coal at 19% and the balance provided by renewable generation, contracts with non-utility generators, market purchases and demand-side management."
"Moreover, the company's choice of a natural gas facility appears prudent given the current natural gas market and forecasted gas prices," the SCC said.
In its order, the SCC also approved a short 500-kV transmission line to connect the new power plant to the utility's transmission grid. The total cost of the plant and transmission connection is $1.33 billion. Finally, the SCC said that a fair rate of return on common equity for the project is 9.6%.
In a statement issued after the SCC released the order, Dominion said its Virginia customers "will save $2.1 billion over the life of the power station through fuel savings versus the projected cost of purchasing electricity on the open market." The utility noted that, while it has no immediate plans to install solar capacity at the project site, "solar is already part of the conditional-use permit for this property."
The Greensville County project is the latest of several new, gas-fired combined-cycle plants Dominion has been adding to its fleet. The utility's 1,329 MW Warren County plant started operating in December 2014, and its 1,360 MW Brunswick County plant -- located only a few miles from the Greensville County project -- is expected to come online in April.
