SCC OKs Coal-Fired Plant; Dominion Needs Air Pollution Board's OK

Dominion Virginia Power received one of two permits it needs to build a $1.8 billion coal-fired power plant in Wise County when the State Corporation Commission gave its approval on Monday in Richmond.

The commission granted the controversial 585-megawatt Virginia Hybrid Energy Center a certificate of public convenience and necessity. Dominion must now get a pollution permit from the Virginia Air Pollution Control Board before work can begin on the plant in St. Paul.

The air board voted 5-2 last month to retain control of the pollution permit instead of allowing the state Department of Environmental Quality to make the decision.

In the ruling on Monday, the SCC judges said they could not consider whether the plant was in the public interest because the Virginia General Assembly approved a law in 2004 that basically took that task. In its ruling, the SCC also said its environmental review authority is limited by Virginia law and it has no authority to require any environmental protections because those permits are issued by the DEQ.

Environmental groups opposed to the plant are considering legal action, including appealing the SCC’s action to the Virginia Supreme Court.

On Thursday at St. Paul High School, the DEQ is holding a public hearing on the pollution permit. Some opponents have said they will boycott the hearing because they claim power plant supporters were allowed to sign up early for comment during a February hearing. No opposing statements were made until late in the night and at a continued session the next evening.

DEQ staff say no special treatment was given to any group.

In a news release, Dominion officials said the company is waiting for approval of the air pollution permit to start construction. The plant could begin generating electricity in 2012.

“As the second-largest importer of electricity behind California, Virginia urgently needs a diverse mix of additional generating capacity to meet rising demand and help maintain price stability over the long term,” Mark McGettrick, president and chief executive officer of the company’s generation business unit, said in a news release. “The Virginia City Hybrid Energy Center is a vital and innovative part of the solution.”

Dominion officials claim the power plant – which would burn Virginia coal, waste coal and biomass – would  burn coal cleanly while those opposed say that is impossible.

Monday’s SCC decision also set the initial return rate for Dominion at 12.12 percent, which includes a base return of 11.12 percent and an incentive of 1 percent for new coal-fired plant electricity generation. Dominion originally asked to recoup an additional 1 percent because it said the plant would be designed to capture carbon dioxide when the technology is available.

The SCC decided Dominion could apply for the additional 1 percent later if it can show the power plant can capture carbon dioxide gas. The SCC basically said the power plant is only clean coal as defined by the federal Department of Energy.

Power plant opponents appeared to take the SCC stipulation as a small victory in efforts to stop the facility.

Staff of the Southern Environmental Law Center said Monday the SCC confirmed what opponents have been saying since the project was announced. The center contends that Dominion has no plans to capture the 5.4 million tons of greenhouse gas the plant would produce each year.

“We will continue to make the case that a dirty, old-style conventional coal plant without any plan for future carbon capture does not represent a smart way forward to meet Virginia’s future energy needs,” said SELC attorney Cale Jaffe. “As our evidence to the commission has proven, Dominion has no plan to capture carbon, despite what it says in its radio and print ads and on its Web.”

The SCC also put cost control measures in place regarding the plant’s construction. Dominion says the plant will cost $1.8 million to build. According to the SCC ruling, any costs over $1.8 billion will “not be automatically chargeable to ratepayers,” which means Dominion would have to prove that any cost overruns are reasonable and prudent before it could pass those costs on to customers.

The DEQ public hearing at St. Paul High is scheduled to begin at 6 p.m. Thursday. Dominion is holding an information session on its plant at 4 p.m. at the high school.

Both hearings could draw a large crowd of plant supporters since Friends of Coal, a coal industry booster organization, has aired radio advertisements in Wise County asking that anyone who makes a living in the coal industry or related businesses attend the DEQ hearing to support Dominion.

kstill@bristolnews.com | (276) 679-1338