Category Archives: Energy

Regulators Grant Water Permit for Chesterfield Power Station

chesterfield-power-station

by James A. Bacon

The State Water Control Board approved today the reissue of a waste-water permit at the Chesterfield Power Station, the largest fossil-fueled power plant in Dominion Virginia Power’s generating fleet. Among other features, the permit covers the de-watering of coal ash as the utility moves toward a long-term disposal of the potentially toxic coal-combustion byproduct.

The permit incorporates treatment processes approved for the de-watering of coal ash at Dominion’s Bremo and Possum Point power stations, reached after extensive negotiation between the company, environmental groups and the Department of Environmental Quality.

Cathy Taylor, Dominion’s senior environmental and sustainability advisor, said the $80 million investment in waste-water control sets “new stringent limits” on the level of potentially toxic heavy metals that can be released into the James River. “We’re committed to doing this right. We live here, too, and want to ensure our neighbors and the community know exactly what we’re doing, when we’re doing it, and why.”

In a statement during the permit hearing, Brad McLane, an attorney for the Southern Environmental Law Center pressed for even tighter limits, especially on arsenic. The 6-to-0 vote to approve the permit with only minor changes was disappointing, he said after the vote.

“We proposed common-sense revisions to the Chesterfield water discharge permit, including an expedited implementation of newly-required pollution controls (from a 4-to-6 year time frame to a 2-year time frame), and an expedited process to address thermal pollution and water withdrawal impacts in the reasonable future instead of five years or more in the future,” McLane said. “Unfortunately, the Board rejected our proposed revisions and moved forward with the permit as recommended by DEQ with only one very minor change.”

The Virginia Chapter of the Sierra Club was harsher. “The permit allows Dominion to use minimum requirements for thermal discharge and water intake, and allows for more stringent limits on toxic pollutants like arsenic and lead to be delayed until March 2022, rather than requiring Dominion to meet the federally suggested date of November 2018,” said Kate Addleson, director of the Sierra Club-Virginia Chapter. “We are concerned that DEQ is unjustifiably willing to bow to the wishes of corporate polluters like Dominion.”

The Chesterfield Power Station began operation in 1944. The coal- and gas-burning facility supplies about 12% of the electricity in Dominion’s service territory. Dominion has spent about $1 billion over the decade to meet tough air pollution standards designed to cut emissions of mercury, nitrogen oxide and sulfur dioxide. Now the company expects to spend another $80 million to upgrade its industrial wastewater treatment.

The plan involves closing two coal ash ponds where the company deposited the residue from coal combustion, and converting to a “dry ash management” system. The old way of handling coal ash was to mix with water to prevent it from blowing away. That method raised concerns that heavy metals could leach from the coal ash into the water, and eventually into underground water supplies or rivers and streams. The Environmental Protection Agency has mandated all electric utilities de-water their coal ash ponds and dispose of the residue safely.

Dominion tackled coal ash disposal at its Bremo and Possum Point power stations first. After considerable controversy, the Bremo transition has gone so smoothly that McLane was moved to say, “Dominion has established a strong track record of effective treatment of these waters over the last several months. In our view, this is absolutely a good thing.”

Dominion has adopted the Bremo template for treating coal ash at the Chesterfield facility. But de-watering is only the first step. State regulators still have to approve a permit for the disposal of the dry coal ash.

Dominion’s Taylor described the ultimate disposition of the coal ponds this way:

Chesterfield is unique because unlike the other generation stations where we are closing coal ash ponds in Virginia, we continue to burn coal at this station. Dominion is constructing a new onsite state-of-the-art lined landfill to safety manage future ash that is generated. The conversion to dry ash management will result in the elimination of future wastewater discharges associated with the station’s coal ash ponds and a reduction in the station’s water requirements by over 5 million gallons per day. Only after the new state-of-the-art landfill is constructed can we begin closing the ash ponds.

Environmental groups also were disappointed that the permit does not immediately address the issue of thermal pollution, a potential threat to endangered sturgeon. The James River Association has measured water temperatures near the Chesterfield outlet at 105 degrees Fahrenheit, high enough to kill fish, destroy habitat, cause algae blooms and reduce dissolved oxygen levels, said Nate Benforado with the SELC. The permit requires Dominion to study the water intake and discharge issues, but the company doesn’t have to provide DEQ the findings until 270 days before the expiration of the permit.

A Matter of Public Necessity

gas_pipelineby James A. Bacon

Two years ago, four electric and gas utilities announced the formation of a joint venture, the Atlantic Coast Pipeline. The 600-mile project, the partners said, would connect Virginia and North Carolina with the Marcellus and Utica shale basins, tapping abundant natural gas supplies to benefit residential customers, spur economic development, and enable power companies to shift generation from dirty coal to cleaner-burning gas. If all went according to schedule, the pipeline would receive a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission (FERC) in the summer of 2016.

The project is rolling forward but it has encountered delays: A FERC ruling is not expected until next year. Intense opposition has arisen in Virginia mountain communities through which the pipeline would cross. Foes have raised concerns about the threat of gas explosions, harm to rare species, disruption to viewsheds, and pollution of rivers, streams and water supplies.

There is no legitimate public need to build the pipeline, opponents argue. Virginia and North Carolina can get plenty of natural gas through existing gas infrastructure. In their view, the ACP represents a bold play by four monopoly utilities — Dominion Virginia Power, Duke Energy, Piedmont Natural Gas and Southern Company Gas, owner of Virginia Natural Gas — to leverage their buying power to create a captive pipeline that will generate higher investment returns than they could get from their own regulated businesses.

FERC cannot approve any pipeline project “unless it is absolutely necessary,” said Joe Lovett, executive director of Appalachian Mountain Advocates in a press release issued last week in conjunction with a study disputing the need for the pipeline. “In cases like this, where the government allows for-profit companies to take private property — family farms, people’s homes — that protection is especially crucial. … The pipelines are not needed, so there should be no eminent domain for private gain.”

Pipeline foes have been hammering home this message to regulators and the public. ACP officials counter that the argument is based upon a profound misunderstanding of pipeline economics and how the project originated. The four partner companies issued Requests for Proposal in 2014 and compared the proposals — real submissions, not theoretical alternatives thrown out by pipeline foes. Plain and simple, company spokesmen say, the ACP best met the utilities’ needs. The four partners backed the venture because it made the most economic sense.

The story of how the Atlantic Coast Pipeline came to be has never been told to the public. Given the way the debate was focusing increasingly on the pipeline’s public necessity, I thought the public could benefit from a clearer understanding of the thinking behind the enterprise. At my request, Aaron Ruby, a spokesman for Dominion Transmission, managing partner of the ACP, set up a phone-conference interview with executives from the four partner companies. During a 45-minute interview, they made several key points:

  • Duke and Piedmont foresaw an increasing demand for natural gas. Totally dependent upon the Transco pipeline, they wanted to diversify their sources of gas supply and transport. In 2014 they issued an Request for Proposal.
  • Thinking along parallel lines, Dominion Virginia Power issued its own RFP around the same time.
  • Instead of building separate pipelines, Duke, Piedmont and Dominion agreed that joining forces in a single pipeline would be far more economical than any other alternative. By signing up Virginia Natural Gas and Public Service of North Carolina as customers as well, the proposed pipeline would enjoy economies of scale that no one else could match.

The natural gas revolution

The Obama administration has presided over a regulatory makeover of the electric power industry. In March 2011 the Environmental Protection Agency (EPA)  proposed regulations designed to reduce electric utility emissions of mercury and other toxic chemicals. The so-called Mercury and Air Toxic Standards (MATS) compelled many power companies to shut down their oldest and dirtiest coal- and oil-fired plants and replace them with generators powered by cleaner-burning gas. By 2014, electric utilities were in the midst of implementing MATS when the EPA rolled out its Clean Power Plan (CPP), which aimed to achieve a major reduction in carbon-dioxide emissions blamed for global warming. The CPP gave state regulators leeway in how to achieve the cuts by means of such strategies as energy conservation and efficiency and switching to natural gas and renewable fuels.

Meanwhile, thanks to the fracking revolution, natural gas production was booming in the Ohio-West Virginia-Pennsylvania area where the Marcellus and Utica shale fields were concentrated. The price of gas had plummeted, and it looked like supplies would stay abundant and relatively cheap for a long time. East Coast markets were served by a relatively small number of gas pipelines, most notably the massive Transco pipeline system that delivered gas from the Gulf Coast to markets as far north as New York. Connecting the Marcellus fields to East Coast populations centers was shaping up as a once-in-a-lifetime business opportunity for the gas industry, and by 2014 FERC was fielding an unprecedented number of pipeline proposals.

As utility planners in Virginia and North Carolina looked into the future, they had to figure out how to do two things: replace the old coal-fired power plants and accommodate economic growth in one of the faster-growing regions of the country. While they saw a role for solar and wind power, electric utilities also were responsible for maintaining the reliability of the electric grid. Because renewable energy sources are intermittent, not always generating electricity to match demand, planners leaned toward natural gas, whose production they could dial up and down as needed.

In the winter of 2013-2014, a North American cold wave known as the polar vortex drove home the urgent need for more gas. A change in the jet stream sent temperatures plunging and natural gas consumption soaring in the East Coast. “We saw winter peaks that were eye-popping to us,” said Greg Workman, Dominion’s director of fuels. “The winter peak eclipsed our previous winter and summer peaks.” Continue reading

Should Terry McAuliffe Heed This Poll?

poll_results

by James A. Bacon

A poll commissioned by the Chesapeake Climate Action Network shows strong public opposition to the Atlantic Coast Pipeline and strong support for tougher restrictions on the disposal of coal ash.

Twenty-eight percent of Virginia voters support Governor Terry McAuliffe’s backing of the Atlantic Coast Pipeline and the Mountain Valley Pipeline while 44% oppose it, found a poll conducted by the Cromer Group in a run-up to a planned picketing of the governor’s office in October.

Meanwhile, 71% of voters polled said McAuliffe should follow the example of other southern states by requiring coal ash to be deposited in lined landfills rather than buried in place near rivers.

“This poll shows that Governor McAuliffe’s cheerleading for fracked-gas pipelines is not only dangerous for communities and the climate, but decidedly unpopular in Virginia,” said Mike Tidwell, director of the Chesapeake Climate Action Network in a press release. “The Governor likes to dismiss both the pipelines and coal ash as ‘federal issues’ beyond his influence, but that’s untrue. He has direct executive power to act on behalf of Virginians facing direct harm now. Governor McAuliffe has the means and the moral responsibility to reject the pipelines and to reform coal ash disposal, and his legacy depends on it.”

Bacon’s bottom line: This poll of 732 registered Virginia voters asked two questions. The questions were not laughably slanted, as in some push polls I’ve seen.

(A great example is a American Civil Liberties Union poll sitting on my desk that I actually may respond to, just for yuks. Sample question: “Across the country, we’re seeing efforts to twist the meaning of religious liberty to allow people and businesses to use religion as a license to discriminate and a means to impose their religious beliefs on others. How serious a problem do you think the use of religion to discriminate is in our country today?”)

Though the Cromer Group questions don’t sink to the level of the ACLU’s risible push poll, that’s not to say the phrasing of the questions didn’t nudge respondents toward the desired answers. The first question reads as follows:

Governor McAuliffe supports building two long pipelines that would bring gas from West Virginia into Virginia and send it across the state. He says the pipelines will create jobs, lower bills, help manufacturing, and help the environment. This gas would be extracted through hydraulic fracturing drilling, or fracking. Opponents say these pipelines will allow energy corporations to take hundreds of miles of privately owned land from citizens for private corporate gain. Opponents also say the pipelines will harm Virginia farms, worsen pollution, and damage drinking water and local wells. Weighing the pros and cons, do you support the Governor’s efforts to build these pipelines for fracked gas across Virginia, or not?

The statements within the question are accurate, or at least arguably so. The questions do not contain obviously biased language. They mention reasons to both support and oppose the pipeline. However, the question devotes only 14 words to the “pro” side while giving 41 words to the “con” side. In addition, it refers twice to “fracking” and “fracked gas,” which one could argue are loaded phrases.

Here is the second question:

For decades, Dominion Power has burned coal to create electricity, resulting in an accumulation of millions of tons of coal ash waste near the banks of the Potomac, James, and other rivers. This waste must now be disposed of. Dominion wants to leave its coal ash waste in the ground, covering the top of the ash and not placing protective barriers or linings along the bottom. Dominion says this is safe. North and South Carolina and Georgia have rejected this method as unsafe. They have required the coal ash be moved away from rivers and drinking water into protected, lined landfills. Do you think the Governor should support Dominion’s approach, OR, follow the example of other Southern States to remove the ash to modern landfills?

Again, the statement is accurate and it contains no loaded language. Yet it frames the issue in such a way as to ask the respondent, who likely has no independent knowledge to draw from, to choose between believing Dominion or believing three state governments regarding the best way to dispose of coal ash. The question clearly leads the respondent to group’s preferred answer.

That’s not to say that the question is illegitimate. Virginians should take into consideration the regulatory approaches of other states when pondering how best to regulate coal ash in Virginia. But that is only one way to frame the question. Alternatively, the poll could have focused respondents on the cost of the coal ash disposal. Dominion has estimated the bill could total $3 billion. Environmentalists say it would cost less. I dare say that a question focusing on cost would have yielded different results.

Are those biases in the questions sufficient to skew the findings? Is this a poll that Governor McAuliffe should take seriously? Now that I’ve biased you with my analysis, you tell me. Please respond in the comments section.

Update: Dominion spokesman David Botkins has issued the following statement: “Dominion’s plans for closing coal ash ponds as well as building the ACP protect the environment. To say otherwise is untrue. Over the last many months Dominion has developed plans to close our ponds by consolidating the ash on station property.  EPA endorses that approach. The poll is an obvious effort to use biased questions based on incorrect information to slant the results.”

Atlantic Coast Pipeline Hires Construction Contractor

pipelineA decision by the Federal Energy Regulatory Commission (FERC) regarding the Atlantic Coast Pipeline isn’t expected until next year. But Atlantic Coast Pipeline LLC, a joint venture whose managing partner is Richmond-based Dominion, announced today that it has signed a construction contract with Spring Ridge Constructors International (SRC) to build the 600-mile project.

SRC, a joint venture comprised of four companies with extensive natural gas construction experience, was selected after an extensive competitive bidding process, ACP said.

“The members of SRC are aligned in purpose with the common goals of safe construction practices, a commitment to environmental stewardship and quality construction,” said project director Dam Plume.

The project has aroused furious opposition among environmentalists opposed to the expansion of natural gas-generated electricity and landowners along the route of the pipeline concerned about safety, environmental damage and loss of property values. Foes have contested the public necessity for the pipeline, claiming that a combination of solar, wind, energy efficiency and gas delivered by existing pipelines can meet the energy needs of Virginia and North Carolina.

Showing every outward sign of confidence that it will win regulatory approval, ACP has made significant financial commitments. It has contracted with a Pennsylvania manufacturer to deliver high-quality steel pipe, and now it is contracting with a construction enterprise. In early August, FERC issued a Notice of Schedule, which established a timeline for the remainder of the project’s federal environmental review process. Based on that schedule, ACP expects to receive a FERC certificate in the late summer or fall of 2017, with construction beginning shortly thereafter.

— JAB

Testing the Impact of Solar

Solar panels at Dominion's Philip Morris USA site with warehouses in the background.

Solar panels at Dominion’s Philip Morris USA partnership program site.

Virginia has been slow to embrace small-scale solar energy, but Dominion’s Solar Partnership Program could show how to integrate variable solar generation into local distribution systems.

by James A. Bacon

The biggest solar farm built in Virginia to date isn’t very big by anybody’s standards — only 2.5 megawatts, enough to power about 500 homes. But Dominion Virginia Power, which owns and operates the facility on land leased from Philip Morris USA, says it will apply what it learns from the project to smooth the integration of larger volumes of solar power into Virginia’s electric grid in the future.

Built for $4.9 million, the Philip Morris facility is one of ten projects either completed or underway under Dominion’s “Solar Partnership Program.” The scale is tiny: Projects conducted in cooperation with various Virginia universities and corporations total 6.7 megawatts, about one two-hundredth the capacity of the new gas-fired power station the utility is building in Greensville County.

The purpose of the program is experimental. Dominion’s system, like those of most electric utilities, is dominated by huge power plants that rely upon high-voltage transmission lines to move electric power long distances and lower-voltage lines to complete the connection to local homes and businesses. Anticipating a surge of solar power, much of it small-scale and scattered, Dominion wants to see how solar impacts the reliability of its distribution system.

“What happens when you put a new power source on a lightly loaded circuit?” says Brett Crable, director-new technology and energy conservation: “Do our traditional power grid components handle it well?”

Dominion has come under intense criticism from environmentalists who say the power company is biased toward building massive, gas-fired power stations instead of more distributed, smaller-scale solar power. Dominion has dragged its feet on solar, argues Ivy Main, author of the Sierra Club-Virginia’s Power to the People blog.

The Commonwealth had only about 22 megawatts of solar installed as of the end of 2015, but by the end of this year, we should be comfortably into the triple digits. That’s still trivial compared to neighboring North Carolina, which added over 1,000 megawatts last year alone, but it’s grounds for celebration here in the “dark state.”

Dominion counters that it is moving slowly but deliberately in order to preserve the integrity and the grid and the reliability of service. Solar is an intermittent power source — it generates power only when the sun shines. Its output can fluctuate dramatically over the course of a day as clouds sail by. While the high-capacity transmission grid is robust — PJM Interconnection maintains that its service territory, which includes Virginia, could accommodate up to 30% renewable energy sources — Crable says less is known about the impact of variability on local distribution systems. “We want to do it the most effective way possible by learning on a small scale.”

After a few months of operation at the Philip Morris location, Dominion has already made one finding: Electric power is flowing the opposite direction the circuit is designed for. That’s not necessarily a bad thing, says Crable, but only time will tell.

The Philip Morris project is one of ten small solar facilities either completed or underway in partnership with Virginia corporations and educational institutions. Participants include Canon Virginia, Old Dominion University, Capital One, Virginia Union University, Prologis, Randolph-Macon College, Western Branch High School, Merck and the University of Virginia.

Dominion approached Philip Morris, which operates a major tobacco de-stemming operation in eastern Chesterfield County. The cigarette manufacturer provided 11 acres of vacant land in a 20-year lease. Aside from wanting to be a good partner with Dominion, which has always been responsive to power outages and other issues, Philip Morris thought the solar farm would complement its reclaimed wetlands and cogeneration facility, says Greg Ray, senior vice president of manufacturing. The company saw “an opportunity to educate people about ways to make manufacturing more sustainable.”

While Dominion leases the land, it owns and operates the solar farm itself. Power from the Philip Morris facility will feed into a “lightly loaded” circuit in a rural corner of Chesterfield County, which has different conductive characteristics than more heavily loaded circuits. Dominion also is interested in how roof-mounted and ground-based solar might have different effects. Continue reading

Solar Farm 101

Brett Crable, director-new technology and energy conservation for Dominion Virginia Power.

Brett Crable, director-new technology and energy conservation for Dominion Virginia Power.

A book entitled “Solar Farms for Dummies” would never sell. Once constructed, solar farms are so simple to maintain that the biggest job is cutting the grass.

by James A. Bacon

Does anyone wonder how a solar farm works? From an electro-mechanical standpoint, it’s remarkably simple — nothing like a gas-fired power plant with its profusion of ducts, pipes, fans and vents. But there’s more to it than is evident to the casual observer. I got a primer this morning at the unveiling of Dominion Virginia Power’s “Solar Partnership Program” plant outside the Philip Morris USA manufacturing facility in Chesterfield County.

The 11-acre facility produces two megawatts of electricity at peak output, enough to power 500 homes. Though small by utility-scale standards, the solar farm is the biggest producer of solar electricity in Virginia today. That distinction won’t last long, for bigger solar farms are in the project pipeline. Still, it was large enough to give me an education.

That’s Brett Crable, director of the utility’s new technologies program, in the photo above. He took me on a quick tour — it was quick because, frankly, there is not much to see — and instructed me in solar farm basics.

The most complex part of the farm is the solar panel, which converts sunlight to electricity. There are 8,000 panels, each one generating about 36 volts of electricity under prime conditions. The panels are mounted on stationary aluminum frames, tilted at an angle to optimize exposure to the sun. In some solar farms the panels are mounted on mechanisms that rotate to track the movement of the sun even more closely, squeezing out more energy production but incurring more up-front capital expense and maintenance issues. Dominion decided in this project to keep things simple.

wireSo, where does the electricity go after the panels create it? Wires from the panels (seen at left) feed the low-voltage electricity to a collector box underneath the panel array (below). Those boxes consolidate the flow of electricity into a single underground electric line, which feeds the inverter boxes.

Continue reading

What’s Driving the Sudden Influx of Independent Power Producers?

panda_stonewall

The Panda Stonewall gas-fired plant under construction south of Leesburg. Photo credit: Bechtel

by James A. Bacon

The 1,400-megawatt power plant proposed in Chesapeake by Matex Virginia Power last week is only one several natural gas-fired generating units under development by independent or out-of-state power producers. Panda Power Funds is constructing a 778-megawatt natural gas-fired plant in Loudoun County, while Southern Power has purchased 300 acres in a Pittsvylania County industrial park for yet another gas-fired power plant, reports the indefatigable Michael Martz in the Richmond Times-Dispatch this morning (no link).

News of those projects follows a June ruling by the State Corporation Commission approving a request by Doswell Limited Partnership to expand its combined-cycle gas complex in Hanover County by building two more gas turbines with a capacity of 340 megawatts.

It looks like Dominion Virginia Power isn’t the only power producer that sees a bright future for natural gas. Dominion opened a 1,400-megawatt plan in Brunswick County this summer, and it has started construction of an even bigger facility in nearby Greensville County. The utility’s 15-year Integrated Resources Plan envisions the need for yet another large facility in 2022 at an unidentified location. The company’s plans have come under fire by environmentalists who say that rapid advances in solar and wind technology may render the gas plants obsolete and uneconomical and saddle rate payers with stranded costs.

The Panda Stonewall plant, which received a State Corporation Commission go-ahead in 2014, is scheduled to start generating power in 2017. The company plans to sell electric power into the PJM Interconnection wholesale market. In that market, day-ahead and same-day contracts go to power producers that offer their electricity at the lowest price.

Matex and Southern Power have revealed little information about their intentions, and there is no way to know how serious they are. They may be just keeping their options open in case the market for gas-powered electricity takes off. A major uncertainty is whether the Clean Power Plan, which would force a shift from coal to either gas or renewables, passes U.S. Supreme Court review. Another is which flavor of the Clean Power Plan Virginia chooses to adopt; one of four broad options would make it exceedingly difficult for anyone to build a new gas-fired power station in the state.

But Panda Power Funds is charging full steam ahead, and it looks like the Doswell Limited Partnership is close behind. Independent power producers are not guaranteed a return on investment like electric utilities are. Their willingness to invest represents a bet that they can generate a competitive rate of return on their capital over the lifetime of the plant by profitably under-pricing the competition.

Here’s my big question: Why so many proposed gas-fired plants in Virginia? These facilities would tap the same cheap Marcellus gas that is available in abundance in states to the north. A plant in Pennsylvania or West Virginia could get gas just as cheap. I suspect the answer may involve the layout of the electric transmission grid. PJM incentivizes power producers to add capacity in locations where they can avoid congestion charges caused by insufficient transmission capacity.

Bechtel, a partner in the Panda project, says on its website that the plant will “generate power for up to 778,000 homes in Virginia and the District of Columbia” — an area divided between Dominion, Old Dominion Electric Cooperative and Pepco service territories. The partnership’s willingness to invest there suggests that it foresees tight electricity supplies for a region that has experienced strong population growth as well as an influx of power-hungry data centers.