By Peter Galuszka
Last week, State Corporation Commission drew attention when its staff wrote to the U.S. Environmental Protection Agency, at the EPA’s request, to respond to one of the biggest proposed steps the nation has seen in cutting carbon dioxide emissions.
The report sparked considerable interest and confusion over what the SCC staff actually meant when it predicted that proposed EPA rules to cut carbon emissions 30 percent below 2005 levels by 2030.
The staff report, written by William H. Chambliss, SCC general counsel, said that EPA’s proposed limits would cost Virginia ratepayers from $5.5 billion to $6 billion extra. It claims that the state would have to shut down fossil-fuel, predominately coal-fired, plants producing 2,851 megawatts and replace it with only 351 megawatts of land-based wind power. This would badly impact the reliability of the state’s power supply, the staff said.
My immediate question was why so much and where, exactly? Precisely what power stations would have to be shut down? Where did the ratepayer increase numbers come from? Is there is a list of all the coal-fired plants affected? Dominion Virginia Power, the state’s largest utility, has long-standing plans to shut down two aging power stations at Yorktown and Chesapeake with about 920 megawatts of power? How does that factor in?
So, I contacted Ken Schrad, the spokesman for the SCC, by phone and email and asked some questions. He kindly provided the following answers (in italics):
Where are the affected plants precisely?
“The numbers come directly from the EPA’s own spread sheets and the EPA does not identify the specific units.”
How many plants are coal-fired?
“ Of the 2,851 MW, EPA predicts 2,803 MW of coal units and 48 MW of combustion turbines which could be natural gas or oil-fired CTs. Assuming Yorktown and Chesapeake are included in the EPA estimate, SCC staff knows that those planned retirements total approximately 920 MW. The output of those units varies depending on when operating (summer or winter).”
Where does the 351 megawatt of land-based wind power, the only available replacement source for the lost fossil-fuel power, come from?
“The 351 MW figure is also direct from the EPA’s analysis which does not identify where EPA believes these undeveloped projects would ultimately materialize. As staff noted in its comments, the SCC has approved the only request the Commission has received for a certificate for a wind project (Highland New Wind). Approved in December 2007, the project envisioned up to 20 turbines with each turbine capable of producing up to 2MWs. That project has not been built. DEQ now has regulatory responsibility for permitting most solar and wind projects in Virginia. “
How do you answer criticism from environmental groups that Virginia has already attained 80 percent of the EPA’s carbon reduction already?
“Staff has no information regarding this assertion, the costs incurred to reach such a figure, how that attainment level was achieved, or the starting point from which such has materialized.”
The SCC staff recommends that the EPA adopt “an alternative carbon emission rate of 1,216 pounds of carbon dioxide per Megawatt hour of power. The EPA is proposing tighter limits of 843 of CO2/MWh for plants to attain by 2020 and levels of 810 pounds of CO2/MWh for plants to comply by 2030 because it would be more affordable. How much more affordable would the SCC’s suggested rate be?
” Staff recognizes there will be a considerable amount of expenditures to achieve the alternative emission rate. It is a level envisioned in the integrated resource plan (IRP) filed by the utility company and reviewed every two years by the Commission. The projected cost to achieve that level has not been quantified. Instead, staff made a conservative analysis of the impact of the EPA proposed standards resulting in its determination that the alternate carbon emission rate would not require an additional expenditure of $5.5 to $6 billion.”
The SCC staff says that attaining EPA goals could cost ratepayers an extra $6 billion. Dominion is considering a third nuclear unit at North Anna that might cost from $10 billion to $14 billion. Wouldn’t the ratepayers have to pay for that, too?
“If built, the costs of another nuclear unit would be recovered over the expected life of the unit which could be 60-80 years. There is a disconnect between taking a net present value figure (staff comments) and comparing it to something that is not. Also, the added nuclear unit is envisioned in one of the IRP compliance plans. So, that was factored into the conservative analysis performed by staff which produced the projected additional $5.5 – $6 billion figure.”
I also asked Ken why the SCC did not issue a press release about the SCC reply to the EPA. He said that the SCC does not normally issue a press release when it responds to requests by federal agencies for comment.
Fair enough, but I have a few takeaways on the other answers. I am still not exactly sure where the 2,851 megawatts-to-be-shut-down figure comes from.
Next, the SCC staff complains that when this amount of generation goes offline (assuming it actually does), there will be pitifully little left on the renewable side to replace it. The only plant sited is a 40 megawatt one in Highland County that was approved by the SCC in 2007 (a lifetime in renewable energy terms) and has yet to be built.
What about plants for offshore wind farms, not to mention Dominion’s own plans for an experimental offshore wind station? The answer seems to be that we don’t know because another agency (DEQ) now licenses that sort of thing. If that’s the case, one wonders why the SCC staff didn’t give the DEQ a ring on their phone and ask for a seven-year update on what’s doing in wind and solar? Instead, they used seven-year old figures, apparently to minimize the importance of renewable power in rather sweeping terms.
One reason why Virginia’s renewable percent is a low 6 percent, compared to its neighbors, is that the General Assembly has refused to set mandatory renewable portfolio standards that require 20 percent or so of future generation to come from renewables.
Why so? The first ones to ask are the utilities – Dominion, Appalachian Power and the cooperatives. It seems that they don’t want any threat to their grids that they have poured billions into over the decades. Talk renewable and they’re like babies crying for the base-loaded bottles.
In any event, Virginia is not the only state to question the EPA rules. Oklahoma has as well. Big industry doesn’t like the proposed rules either. And the EPA is asking regulators like the SCC for input. One can’t blame them for responding. Forgive me if I don’t understand their response.
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