Dominion is latest utility to challenge EPA Clean Power Plan

Dominion has become the latest company to weigh in on the Environmental Protection Agency (EPA) Clean Power Plan, according to GenerationHub.

Groups like the Electric Reliability Council of Texas (ERCOT), the North American Electric Reliability Corp. (NERC), the Regional Greenhouse Gas Initiative (RGGI) and Midcontinent ISO (MISO) have already filed either comments or public assessments on the EPA policy to have states cut carbon dioxide emissions from the power sector 30 percent by 2030.

The head of the National Mining Association on Nov. 26 called for EPA to withdraw the proposed rule.

Some groups including the American Public Power Association (APPA), Nuclear Energy Institute (NEI) and Natural Resources Defense Council (NRDC) are expected to announce the filing of their comments on Monday, Dec. 1.

Dominion said Nov. 26 that some states, such as Virginia and North Carolina, are treated unfairly in the proposal because of the "greater and unreasonable" reductions required in emission rates relative to other nearby states. The proposed regulations could penalize states that already have reduced their carbon intensity, the company said.

"We are supportive of policies and programs that will achieve meaningful emission reductions and environmental benefits while maintaining electricity reliability, minimizing effects on customer rates, and recognizing and appropriately accounting for measures states and affected entities have already undertaken to reduce carbon emissions," the company wrote in comments signed by Pamela F. Faggert, Dominion vice president and Chief Environmental Officer. "However, we are concerned the (Clean Power Plan) proposal falls short of these principles in many respects."

Dominion said it has reduced its average carbon dioxide emissions rate – or carbon intensity — for all the company's owned generation by about 39 percent from 2000 to 2013. The carbon intensity for the power stations serving affiliates Dominion Virginia Power and Dominion North Carolina Power fell by about 19 percent during the same period.

While EPA's efforts to avoid a "one-size-fits-all" approach are laudable, the Clean Power Plan must do better to provide consistency, reasonableness and equity among the states. For example, Virginia already is a low-carbon state, but would have to reduce its emissions intensity by 38 percent, yielding a state goal for Virginia that is significantly stricter than all of its neighboring states and at least twice as strict as two of its neighboring states. "This dichotomy creates an economic and competitive advantage to those states that have done the least and a disadvantage to those who have done the most," Dominion said.

Robert M. Blue, president of Dominion Virginia Power, testified earlier this month before a joint meeting of the Virginia House and Senate Commerce and Labor committees that customers would see an increase in their electricity rates and in their bills by 2025 under the EPA proposal. Blue also said that despite the company's concerns, it must begin preparing immediately for the new targets because of the short lead time for compliance, which begins in 2020 under the draft rule.

Dominion spells out a number of potential changes

Some of the arguments raised by Dominion had also been mentioned earlier in the process by staff of the Virginia State Corporation Commission (SCC).

Dominion made the follow recommendations:

• Consider a more-representative baseline for states by using an average of multiple years and allow compliance through multi-year averaging.

• Adjust state goals to recognize emissions improvements, efficiencies and uprates accomplished in recent years. Also adjust state goals to reflect state-specific renewable potential and state-specific energy efficiency potential.

• Recognize the value of all existing nuclear generation, including Dominion's four nuclear units located in Virginia. Last year, Dominion's carbon-free nuclear units generated 41 percent of its power to service its customers in Virginia and North Carolina.

Nuclear plants whose licenses are extended beyond 60 years should be counted as new sources of carbon-free generation.

• Do not count emissions from natural gas combined cycle generating facilities now under construction in the state reduction targets. Dominion has two large, modern natural gas power stations under construction in Warren and Brunswick counties in Virginia. These clean, modern units should count for compliance, not to make compliance more difficult.

• Eliminate the interim reduction target and allow states more flexibility in reaching the ultimate reduction goal. This includes the addition of a compliance mechanism that accommodates longer installation times for low- and non-emitting generation.

• Clarify rules regarding waste wood products as a carbon-neutral generation and for supply-side efficiency programs. Dominion is the nation's leading utility operator of renewable biomass, having converted three coal plants to biomass and designed the Virginia City Hybrid Energy Center to co-fire with up to 20 percent biomass.

• Allow states to seek adjustments in their targets based on changing circumstances and include a safety valve, or "off ramp," to address both unexpected scenarios and to address situations where implementation of the rule threatens service reliability or leads to rate shocks for customers.

The 68 pages of EPA comments were filed by Dominion on Docket ID No.EPA-HQ-OAR-2013-0602.

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