Proposed 340 MW Charles City Solar Project would need no allowances

From an Article by Sarah Vogelsong, Virginia Mercury, February 27, 2020

As Democrats bring home one of their top-line energy goals of the session, joining Virginia with the cap-and-trade Regional Greenhouse Gas Initiative, the caucus is holding firm against one company’s efforts to bring down its compliance costs even as it’s quietly cleared the way for two power producers to pay less.

In committee and on chamber floors, Democrats have repeatedly voted down bill amendments that would allow LS Power, the company that owns the Doswell Energy Center in Hanover County, to pay less for the carbon allowances it will have to purchase at auction from the state under RGGI during a five-year transition period.

At the same time, however, Democratic senators have largely turned a blind eye toward exceptions that would be carved out for two as yet unbuilt natural gas plants in Charles City County. Those carveouts, which are outlined in a bill sponsored by Sen. Lionell Spruill, D-Chesapeake, passed the Senate and will be taken up by the House Labor and Commerce Committee Thursday afternoon.

But while Democrats in the General Assembly have shown mixed concern for the impacts RGGI compliance will have on business, Gov. Ralph Northam’s administration has vigorously opposed any dilution of the revenues the state is set to receive under RGGI.

“Giving one company a bailout to the tune of tens of millions of dollars just isn’t something that we think is appropriate,” Secretary of Natural Resources Matt Strickler told the House Labor and Commerce Committee Feb. 20.

Transitioning business or ‘blowing a hole’ in state revenues?

LS Power, a major electric generation, transmission and distribution company with tens of billions in financing, has proved a thorn in the administration’s side this session. The company has sought to insert a provision into the RGGI legislation Democrats are pushing to cap the costs they would have to pay as the state enters the carbon market.

Under RGGI, Virginia will be subject to a carbon emissions cap that declines each year. Carbon emitters will be required to purchase annual carbon allowances at a state-run auction, with 97 percent of revenues — estimated by the state to be between $104 and $109 million annually but by some industry analysts using SCC estimates to be as high as $163 million — going to flood preparedness and energy efficiency programs. (The remaining 3 percent would cover administrative costs.)

The premise of RGGI is straightforward: put a price on emissions and companies looking toward their bottom line will reduce them.

States that participate in the cap-and-trade market have endorsed that framework, accepting carbon prices as a feature, not a bug, of the system. But they have struggled to determine exactly how pre-existing contracts — those signed by emitters prior to the enactment of carbon pricing — should be handled.

Of the 10 states that participate in RGGI today, four have made some provision for such contracts. New York, New Jersey, Maryland and Connecticut have all at different times taken steps to protect power generators locked into long-term power contracts from absorbing large costs in the remaining years of their contracts.

LS Power has argued that Virginia should do the same, contending it stands to lose about $42 million over the next five years because of four contracts it signed in 2016 and 2017. The generator has proposed that Virginia set up a reserve account from which eligible companies could purchase carbon allowances at 25 percent of the auction price for the next five years until their contracts expire. That, the company says, could save it some $32 million over the next five years.

Bea Gonzalez, a lobbyist for LS Power, contended that such an accommodation is a matter of fairness, particularly because a 2017 carbon rule developed by the VA Department of Environmental Quality included a provision that would have covered the company’s compliance costs related to its pre-existing contracts. “We’re asking for the allowances that we thought were contemplated in the work group,” Gonzalez told a Senate panel Feb. 18. “I’m willing to take anything at this point.”

Republicans have been sympathetic to the company’s stance, with Sen. Ryan McDougle, R-Hanover, arguing that LS Power’s recent $100 million investment in Hanover justifies cost reduction. “We have encouraged companies to come and locate in Virginia, build, spend their money,” he said in the Senate Feb. 11. “This is a very limited example of how the policy we are changing, relatively dramatically, is going to be very expensive to an entity.”

Sen. Siobhan Dunnavant, R-Henrico, agreed. “These contracts were entered into with a stable business environment with the expectation that they knew what the costs relevant to that investment would be,” she said. “By changing code this year, we are changing the game rules for them without the ability for them to renegotiate their contracts.”

But Democrats have resisted the measure, saying the state should not lose revenue because of a company’s lack of foresight, and that the losses would “blow a hole” in the funding Virginia has for coastal resiliency and energy efficiency.

Carbon regulations have been discussed for more than 15 years, legislators and the administration have argued. RGGI held its first allowance auction in 2008, and in June 2016, then-Gov. Terry McAuliffe issued an executive order calling on the state to begin studying carbon reductions, noting that “electric companies are including carbon regulation projections in their long-term plans.” LS Power participated in an early work group and began including provisions to recover RGGI-related costs in its contracts in December 2018.

“This is a very large, very sophisticated company with a plethora of lawyers and sophisticated utility regulation folks who made a bad decision,” Democratic Sen. Lynwood Lewis of Accomack, the RGGI bill’s Senate patron, told the chamber Feb. 11. “Nobody was unaware that this commonwealth was discussing the Regional Greenhouse Gas Initiative.”

The bill’s House patron, Majority Leader Charniele Herring of Alexandria, took a similar line in the Senate Appropriations Committee Tuesday. “I think unfortunately the company made an error,” she said. “I don’t think Virginians should be in the spot of rescuing the company and losing some funds that could help us with resilience of our shores.”

Let's tell VA-DEQ to protect our planet

Tell VA-DEQ: NO To Dominion’s Giant Gas-Fired Power Plant

From the Sierra Club of Virginia, March 18, 2016

In 2015, Dominion Resources Inc. announced plans to build what could become the state’s biggest fracked gas plant — the proposed $1.3 billion, 1600-megawatt Greensville County gas plant in Southside Virginia.

This plant is yet another project — like Dominion’s risky 590-mile Atlantic Coast Pipeline — that threatens to lock us into decades of continued reliance on fossil fuels when what we need, and what its own customers overwhelmingly support, is clean energy.

Not only would the Greensville gas plant be bad news for the climate, it would put the community of Emporia at risk for increased exposure to toxic air pollutants like beryllium, lead and mercury. And it’s only a few miles from a gas plant that is set to come online later this year.

In January, Virginia’s State Corporation Commission heard Dominion’s plans for the Greensville. Dominion failed to show that Virginia needs this plant, or that it’s the lowest cost option for meeting our future energy needs, but the SEC has yet to decide.

Now Virginia’s Air Pollution Control Board needs to hear from you. The board will soon decide whether to issue the air pollution permit the utility needs to move forward. The Department of Environmental Quality will hold a town hall at the Greensville County Government Building in Emporia on March 16th, and will be accepting written comments through March 31.

Contact information: http://sierra.force.com/actions/Virginia?actionId=AR0037740

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Moundsville Power Project Still On Schedule (Marshall County, WV)

From an Article by Alan Olson, Wheeling Intelligencer, January 20, 2016

Moundsville Power officials assured Marshall County commissioners Tuesday that a proposed natural gas-fired power plant several years in the making remains on track.

Developer Andrew Dorn was joined by Myphuong Lam, accounting manager with Quantum Utility Generation, to provide updates on the construction of the natural gas power plant. Lam said the process of confirming the project’s permits is still underway.

“We’re continuing with the permitting process, because that’s one of the key goals of the financing process,” Lam said. “Once we have that in place, we can get the financing done. Once we sign off on the financing, the construction will start. … We are still on the same projection as far as timelines go. There hasn’t been any change.”

Dorn spoke briefly, only saying that the project is awaiting approval of permits from the West Virginia Department of Environmental Protection. “So much is contingent on getting those permits issued. We’ve got to have the air permit, we’ve got to have the water permit,” Dorn said. “Those permits were issued, now they’re being reviewed again. We’ve supplied all the engineering backup, all the data they wanted, and we’re just waiting for the WV-DEP to move on those. Most of the other pieces have fallen in line.”

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Natural Gas Power Plant Planned For Central West Virginia (March 2015)

From an Article by Casey Junkins, Wheeling Intelligencer, March 5, 2015

Moundsville, WV – Developer Andrew Dorn believes there is enough Marcellus and Utica shale natural gas and ethane to fuel multiple electricity generators throughout West Virginia, starting with the $615 million Moundsville Power facility he plans to have running before June 2018.

Just one day after Dorn’s son, Matt, announced Energy Solutions Consortium’s intention to build two new natural gas power generators near the former Wheeling Corrugating plant in Beech Bottom, the Dorns entered a memorandum of understanding to build another such facility near Clarksburg, WV.

Harrison County Administrator William Parker said the agreement the county’s commissioners entered with ESC Harrison County Power “is very preliminary at this point.”

American Electric Power produces 580 megawatts of natural gas fired electricity at this plant in Dresden, Ohio. Moundsville Power plans to have a similar facility running by 2017.

Curtis Wilkerson, a spokesman for Moundsville Power, Energy Solutions Consortium and ESC Harrison County Power, said the Dorns are the principals for all three firms, but the potential plants are technically separate businesses.

“If this is a 10,000-mile journey, we are on about step three,” Wilkerson said regarding the Beech Bottom and Clarksburg projects. “We have to stress the tentative nature of this.”

Still, Andrew Dorn is “really confident” the Moundsville project will become reality, with earthwork set for the 37-acre portion of land along W.Va. 2 and the Ohio River in “October or November.”

Dorn’s company recently cleared the final construction hurdle for its $615 million generator by receiving its siting permit from the Public Service Commission of West Virginia, as well as the air quality permit from the WV Department of Environmental Protection.

Burning about 100 million cubic feet of natural gas per year, the plant is expected to be the largest consumer of natural gas in West Virginia. It will also be one of the first in the U.S. to burn ethane, according to company officials. “There is currently a glut of ethane in the wet gas area, particularly in Marshall County. There is just so much of it,” Dorn said.