Coal to biomass conversion plan filed by Dominion Virginia

Dominion Virginia Power, a unit of Dominion (NYSE:D) asked the Virginia State Corporation Commission on June 27 for approval to convert three 63 MW coal-fired  power stations  to biomass at a cost of $165 million. The plan was announced earlier this year.

The conversions of the power stations in Altavista, Hopewell and Southampton County would result in a generating capacity of 50 MW at each unit. The proposal is part of the company's commitment to have 15 percent of its electricity come from renewable sources by 2025.

The company said the planned switch to biomass – in this case, using primarily waste wood left over from regional timber operations – would reduce nitrogen oxides, sulfur dioxide, mercury and particulate emissions.

Dominion Virginia is requesting an initial annual rate increase of 14 cents to the monthly bill of a typical 1,000 kilowatt-hour per month residential customer, effective April 1, 2012. Rate adjustment clauses allow utilities to collect financing costs over time as projects begin. The conversions would be complete by the end of 2013.

The stations have been primarily peaking power units, operating 25 percent of the time. If the conversions are approved, they would be expected to generate electricity about 90 percent of the time.

The company also filed its annual updates and rate adjustment requests for the Bear Garden Power Station, which began commercial operation in May, and the Virginia City Hybrid Energy Center, which is more than 88 percent complete and on schedule for a summer 2012 startup. The company has requested an increase in the existing rate adjustment clauses of $1.17 per 1,000 kilowatt-hours; 10 cents for Bear Garden and $1.07 for Virginia City.

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