by James A. Bacon
Matex Virginia Power LLC has filed for permits with the City of Chesapeake to build a natural gas-fired power plant near Dominion Virginia Power’s defunct Chesapeake Energy Center, reports the Virginian-Pilot.
The combined-cycle facility, which would use gas to fire three combustion turbines and waste heat to power a steam turbine, would generate about 1,400 megawatts — about the same amount as the three-on-one power station Dominion opened earlier this year in Brunswick County.
Matex said in its application that the power plant would create 400 temporary construction jobs, 26 permanent jobs, and up to $90 million in annual revenue. Demand for local goods and services could reach $50 million. The plant would be built on land owned by International-Matex Tank Terminals, a unit of New York-based Macquarie Infrastructure Corporation.
The Pilot quotes Macquarie CEO James Hooke in a conference call last month as saying that the Chesapeake region was a good opportunity because “we’ve got a relatively unique real estate footprint” with appropriate zoning, access to gas pipelines and electricity transmission cables already in place.
The story poses many questions. First and foremost is where Matex plans to obtain the natural gas. Gas supplies in the region are too tight to add a customer the size of a full-scale gas-fired power station. While the proposed Atlantic Coast Pipeline will bolster gas supplies to Hampton Roads, Matex has not subscribed to any of its capacity, according to an ACP spokesman.
Nor is it clear where Matex plans to sell its electricity. One option would be to sell into PJM Interconnection’s wholesale electricity market. A big question is what that would mean for Dominion, which, according to its Integrated Resource Plan, anticipates the need to build a new combined-cycle gas facility in Greensville County in 2019 and another combined-cycle power station in an unidentified location in 2022. If Matex sells wholesale electricity directly into Dominion’s transmission grid, would the utility be able to justify construction of a nearly identical plant in 2022?
A Dominion spokesman told the Pilot that the company was aware of the Matex project but not directly involved.
I don’t know the answers but I will dig into them. The Matex proposal poses an interesting twist on the economics of electric power in Virginia.
Update: Based upon the Pilot account, the original version of this post stated that Matex would purchase its gas from the proposed Atlantic Coast Pipeline. An ACP spokesman said that information was inaccurate, that Matex had not subscribed any of ACP’s pipeline capacity. It could potentially contract with ACP but it has not done so yet. Significant portions of the post have been re-written to reflect that information.There are currently no comments highlighted.