Dominion analyzes Obama power plant rules

Stephen Igo • Jun 2, 2014 at 8:47 PM

WISE — President Obama's decree for reductions in carbon dioxide emissions from coal-fired power plants thrills his supporters and fires up a host of those in opposition, and leaves utilities like Dominion Virginia Power poring over the details to see what it all means — not just for the company, but its consumers.

The new regulations issued Monday by the Environmental Protection Agency (EPA) compel coal-fired power plants to cut emissions by 30 percent from 2005 levels by 2030. The agency estimates the rule will cost $5.5 billion in 2020 but claims net climate and health benefits of between $26 billion to $45 billion.

Two years ago Dominion brought online a $1.8 billion, 585-megawatt primarily coal-fired power plant in Wise County. The Virginia City Hybrid Energy Center is touted as a state-of-the-art generating station equipped with the latest in fossil fuel consumption technologies — the facility also uses waste coal and biomass in its fuels stock — and operates under the most stringent emissions standards devised by Virginia's Department of Environmental Quality.

Dominion is still studying the details of the new standards but likes how flexibility to conform is part of the package.

"Although we are still reviewing EPA's decision, in principle we support the proposal to give the states flexibility to implement the guidelines in a fashion that is best for the states. We have always been committed to a diverse fuel mix for our generating units, a strategy that helps reduce costs for our customers, enhances reliability and reduces our impact on the environment," said Dominion spokesman David Botkins.

"Dominion already is a low carbon producer of electricity, thanks in part of our diverse mix of generating sources. In fact, a report issues by CERES just last week showed that while we are the 10th largest producer of electricity in the United States, we rank among the lowest emitting third for carbon intensity or the amount of CO2 emitted per megawatt hour."

On another front, Obama's move on his climate change agenda provided another stark challenge to Virginia's already struggling coal industry, with export markets the only potential upside in the current economic and political environment.

Critics of the issue and the president were torrid in their displeasure on Monday, while environmentalist groups and Obama supporters rejoiced. Virginia Sen. Tim Kaine, a Democrat, applauded the president's decree, while the Virginia Chamber of Commerce likened the policy to economic suicide.

Kaine said "reducing this carbon pollution is in our national interest, but we have an obligation to do it in a way that makes economic sense." Virginia Chamber of Commerce President and Chief Executive Officer Barry DuVal claimed there isn't any economic sense to be made.

"The proposed emissions targets cannot realistically be met without forcing substantial closures of existing plants and taking major energy options off the table in the U.S. The resulting impacts on Virginia jobs and the economy could be devastating," DuVal said.

"In addition, the EPA's regulations will cause substantial reliability concerns and will ensure higher electricity prices, resulting in a heavy toll on the economy, manufacturing, small businesses and families."

Kaine said the nation "does not have to choose between a clean environment and economic growth. We just have to make sure that we adopt balanced rules that advance environmental goals by spurring economic innovation."

The Republican National Committee countered the only innovation will be in the form of families figuring out how to balance tight budgets hit by escalating power bills.

"Make no mistake, Obama's War on Coal is a war on America's middle class, who will see fewer job opportunities and higher energy costs as a result of these new EPA rules," the RNC said in a statement issued Monday, an opportunity the RNC also used to slam another of Virginia's Democratic U.S. senators, Mark Warner, who is running for re-election this year.

The political fallout had Democrats in other coal-producing states scrambling for cover, including West Virginia Democrat Rep. Nick Joe Rahall, a long-serving congressman considered vulnerable this election year as the popularity of his party in the Mountain State plummets to new depths.

On Monday, Rahall announced he was joining with another West Virginia congressman — a Republican — to pose a bipartisan challenge to the new standards in Congress. Meanwhile, Republican Party of Virginia chairman Pat Mullins said the new standards "will be nothing short of a disaster for Virginia."

Mullins asserts a typical family of four will spend an additional $1,200 a year on the power bill under the rules. He said the standards will destroy more than 200,000 jobs each year over the next 15 years.

"Virginia's coalfields are already in trouble," Mullins said. "This will reduce aggregate demand for coal even more. More coal and coal-related jobs will disappear, doing more damage to an already tough economy in Southwest Virginia."

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