by Paula C. Squires and Garry Kranz
Editor’s note: This is an edited version of the July cover story package on energy.
A vote could come as early as June 25 on the most significant power plant proposed in Virginia in decades: a $1.8 billion, 585-megawatt coal-fired facility that Dominion Virginia Power wants to build in the coalfields of Wise County.
Over the past year, debate on the “clean coal” plant has played out in a high-stakes drama pitting the state’s energy needs and economic development of one of its poorest regions against concerns about increased pollution.
The cast has been wide and diverse. Everyone from Virginia Gov. Timothy M. Kaine (a supporter), to the U.S. Forest Service (an early critic), business leaders, environmental groups, and local residents have weighed in on the pros and cons of building the plant at a time when many states, including Virginia, are trying to limit greenhouse gases.
Meanwhile, demand for electricity continues to grow. The battle here provides a timely look at the complexities of the changing energy landscape. Virginia and other states are struggling to find ways to meet future demand while balancing economic prosperity and environmental protection.
Throw in public angst over global warming and record-high prices at the gas pump, and it’s easy to see why a large crowd is expected when the state’s five-member Air Pollution Control Board meets next week at J.J. Kelly High School in Wise County for a two-day hearing on the proposed coal plant.
On Tuesday, June 24, the board is scheduled to hear public comment on the Virginia City Hybrid Energy Center. Presentations by Dominion Virginia Power and the Department of Environmental Quality will follow on Wednesday, June 25, with a possible vote at that time.
The meeting follows other public hearings held around the state and an outpouring of public comment on a Web site created by the DEQ at (http://www.deq.virginia.gov/info/vchec.html. In what is a first for a power plant project in Virginia, the site gave the public an easy way to access information and post comments. During a 30-day period that ended in mid-May, about 13 environmental groups, 28 individuals and one business took advantage of the opportunity to air their views.
A majority of the Wise County-area residents who responded urged the state to deny the plant. Many said they worry about the emission of pollutants such as sulfur dioxide and mercury and as much as 5.37 million tons of carbon dioxide into the air a year.
Resident Jerry F. Couch of Castlewood questioned the wisdom of putting a new coal-fired plant so close to an existing one. Nine miles away in Russell County is Appalachian Power Co.’s 51-year-old Clinch River Plant. “… Nowhere else in Virginia are two coal-burning power plants located within such close proximity,” he wrote.
Resident Edward Breeding of Lebanon favors the plant. “I welcome this with open arms. I feel the need for our society to search for newer and cleaner ways of producing energy to maintain our current lifestyle while doing so within the budgets of average citizens. This clearly is a step in the right direction.”
Three of the pollution board’s five members filed detailed inquiries on the Web site with questions on everything from mercury emissions to the plant’s technology.
DEQ is recommending that Dominion be granted the necessary air permits to proceed if the company agrees to cut emissions of sulfur dioxide, a major cause of acid rain, and mercury, a toxic pollutant known to cause neurological damage in humans. According to agency spokesman Bill Hayden, DEQ is recommending that sulfur dioxide emissions be dropped from 3,300 to 2,469 tons per year and mercury from 72 pounds to 8 pounds a year. “There is a growing concern about mercury which, so far, is not regulated in Virginia,” Hayden said.
DEQ’s conditions are stricter than ones proposed in an earlier draft permit.
Richmond-based Dominion promotes the plant as a way to boost the economy of Southwest Virginia — where nearly 20 percent of the population lives below the poverty level — while generating a significant portion of the 4,000 new megawatts of power the company says Virginia will need over the next decade.
Situated near the Clinch River Valley in St. Paul, the 1,700-acre plant site features abundant seams of Virginia’s highly prized bituminous coal. Dominion officials say the facility would use the latest technology for blending freshly mined coal, waste coal and up to 20 percent of biomass, a renewable fuel.
“Traditional facilities cannot burn these fuels in this kind of combination,” James K. Martin, Dominion Virginia Power’s senior vice president of business development and generation construction told Virginia Business. “So we believe it’s a very good environmental success story.”
According to Dominion, the plant would generate about 800 construction jobs, and 75 permanent jobs, with an annual payroll exceeding $4 million. Once it’s up and running, the company expects the plant to consume 2 million tons of local coal, creating 350 mining jobs and providing up to $6 million in local tax revenues.
The General Assembly decided four years ago that building a coal-burning plant in Southwest Virginia would be in the public interest. It passed legislation offering an enhanced rate of return on funds invested in such plants that used Virginia coal. Regulatory approval from the State Corporation Commission came in March with some caveats to protect ratepayers from cost overruns on construction.
Dominion already has negotiated a construction contract for the plant with The Shaw Group of Baton Rouge, La. “We’re ready to go,” says Martin. Construction is expected to take 48 months with the contract’s end date April 2012. So, the clock is ticking.
The only remaining hurdles are the air permits. To avoid costly construction delays, Dominion has asked for a vote by July 1. Another factor is a change in the board’s makeup. One July 1, two new members are expected to join the board, boosting its size from five to seven members, and they would be able to vote on the plant if action comes after that time.
These are gubernatorial appointments, made by Kaine. In a statewide energy plan released last year, he called for increased conservation, a 30 percent drop in greenhouse gas emissions by 2025 and the support of new technologies to expand Virginia’s energy sources, including projects such as the Wise County plant.
Kaine’s position drew scrutiny in the national press. The Wall Street Journal and a blog on The Huffington Post questioned his support for the plant, considering Kaine’s goals under the state’s energy plan. The reports also noted that energy giant, Dominion Resources — the parent company of Dominion Virginia Power — has donated a total of $238,829 to Kaine since 2001. That’s when he ran successfully for lieutenant governor, and following that term was elected governor. Gorden Hickey, a spokesman for Kaine, told Virginia Business the governor continues to back the plant, because it would employ clean-coal technologies, which could have applications in other areas.
Dominion plans to spend nearly $320 million on environmental controls at the plant, or about 18 percent of its price tag. It has been designed for the later installation of carbon-capture technology when it becomes commercially available, Martin says. Those technologies enable utilities to recover carbon and reuse it to produce energy.
The facility would use circulating fluidized bed technology, or CFB. Although certified by the U.S. Department of Energy as a clean-coal technology, some critics claim it is outdated in terms of being the least polluting and prefer what is known as an IGCC facility (integrated gasification combined cycle).
Some environmentalists are upset about the invasive “mountaintop removal” method of mining they say would be used to supply the plant. Representing several groups, the Southern Environmental Law Center filed a 50-plus page comment with DEQ. The filing says this method “has already erased more than 470 peaks from the Appalachian skyline and buried or polluted more than 1,200 miles of Appalachian streams.”
Cale Jaffe, the center’s attorney, asked the board to ignore Dominion’s request for a July 1 decision. He recommends taking up until January 2009 (the period allowed under state law) for a fuller examination of concerns.
Dominion already has had to adjust on the fly. A deal brokered with state regulators calls for the company to limit or offset 50 percent of its permitted emissions of sulfur dioxide. That concession came after complaints from the U.S. Forest Service that coal emissions from the Wise County plant would threaten wildlife and violate federal clean-air laws near Pisgah National Forest in North Carolina. As part of the arrangement, Dominion agreed to convert its Bremo coal-fired plant in Fluvanna County to natural gas once the Virginia City plant opens.
Dominion has spent more than $6 million to acquire land, conduct studies and reroute roads. Simply put, Dominion officials say a coal-fired plant is the most cost-effective way to come up with 585 new megawatts of power in the next four years. That’s enough to power 146,000 homes, or a year and a half of new connections.
The plant will meet or exceed federal standards for protecting health and the environment, say Dominion officials. They defend the CFB technology as being the best suited for the area, because it will burn the coal and waste coal so plentiful in Southwest Virginia while using very little of what the area does not have — water.
If the board denies a permit, “We’ll try to fill the gap with something else that will ultimately cost [consumers] more money than this plant would cost,” says David Heacock, Dominion’s newly appointed president.
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