Corporate

Emerging Regulations

Electric Generation

Dominion is actively engaged with regulators, industry, and other interested parties in providing input in the development of new regulations to reflect experience, scientific understanding and expectations.

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Multi-Pollutant Legislation

Over the last several years, the U.S. Congress has considered a number of multi-pollutant legislative proposals that would require Dominion to comply with more stringent pollution control standards for air emissions from our fossil fuel-fired generation fleet.

Interest has declined to some degree at the federal level with EPA's promulgation of the Clean Air Interstate Rule (CAIR) to address power plant SO2 and NOx emissions and the Clean Air Mercury Rule (CAMR). However, Dominion will continue to be actively engaged through open dialogue and public stakeholder processes with regulatory and policy decision-makers, environmental groups, the electric utility industry and other stakeholders at the national and state levels to advocate policies and approaches governed by these principles.

EPA Clean Air Rules

In March 2005, the Environmental Protection Agency (EPA) finalized the Clean Air Interstate Rule (CAIR) aimed at reducing emissions of SO2 and NOx from fossil fuel-fired electric generating facilities in 28 Eastern U.S. states and the Clean Air Mercury Rule (CAMR) to reduce mercury emissions from coal-fired electric generating facilities across the entire U.S.

The SO2 and NOx emission reduction requirements under CAIR are in two phases with initial reduction levels targeted for 2009 (NOx) and 2010 (SO2 ), and a second phase of reductions targeted for 2015 (SO2 and NOx). The mercury emission reduction requirements are also in two phases with initial reduction levels targeted for 2010 and a second phase of reductions targeted for 2018.

The new rules set state-specific emission caps for each pollutant and allow the states to opt in to federally administered emission trading programs. The states are required to develop regulations implementing the federal emission limits and must submit state implementation plans, called SIPs, to EPA for approval.

Dominion owns and operates fossil fuel-fired electric generating units in several states that are subject to the new EPA rules. The company supports the EPA regulations, and is already taking aggressive steps to comply with these new rules.

In November 2005, the Company announced initial plans to spend up to $500 million to install additional emission controls on its coal-fired stations in Virginia over the next 10 years to comply with these rules.

Once these projects (described below) are completed, Dominion will have reduced its SO2 emissions by about 80 percent from 2000 levels for its coal-fired units serving Virginia. Nitrogen oxide emissions will decrease by 74 percent and mercury emissions by 86 percent.

  • Environmental Improvement Projects -- The projects will include the installation of SO2 scrubbers on all four coal-fired units at the 1,660-megawatt Chesterfield Power Station, the Company’s largest fossil-fueled power station in Virginia. Dominion completed construction on a scrubber for the largest unit and it began operating in Spring 2008. The company also constructed equipment to reduce particulate emissions and a new chimney for the unit. A scrubber to clean the emissions on the other three coal units at Chesterfield will be completed and in operation in 2011.

These new environmental controls follow more than $2 billion Dominion has invested in or committed to since the mid-1990’s in clean air improvements. View a list of air quality improvements completed or in construction.

The states within which Dominion owns and operates facilities subject to the new EPA requirements are in the process of developing their rules to implement CAIR and CAMR, and the Company has been actively working with our states to encourage the adoption of regulations that embrace the market-based compliance elements of the federal model rules.

Such market based compliance approaches encourage companies to over-and-early comply by providing for early emissions credits and emission allowances.

For instance in Virginia, Dominion worked successfully with multiple stakeholders to support legislation in Virginia to use a cap and trade approach that will result in more stringent mercury reductions than the federal rules as well as for sulfur dioxide and NOx. Mercury reductions will be achieved sooner than the federal regulation requires.

Under state regulations developed pursuant to this legislation, those emitting more than 900 pounds of mercury in 1999, such as Dominion, will not be allowed to buy allowances in order to comply with the new mercury standards. This means that compliance for these generators can only be met by reductions in emissions and not by purchasing allowances. These sources will be allowed to sell their excess allowances.

These emitters must also comply with the final mercury standards by 2015. This is three years earlier than the deadline in the federal rule. In addition, Dominion must reduce NOx emissions by an extra 5000 tons during the 2007 and/or 2008 control period.

Once the states have finalized their rules, Dominion will develop a more comprehensive strategy to address compliance requirements and options across the entire generation fleet subject to these rules.

Massachusetts Multi-Pollutant Emission Regulations

Coal fired power plants in Massachusetts are subject to some of the most stringent multi-pollutant regulations in the country. Under the rules promulgated by the Massachusetts Department of Environmental Protection, emissions of SO2, NOx, mercury and CO2 from these plants must be significantly reduced in phases between 2004 and 2012.

Initially, plants are subject to 6 pounds of SO2 emissions per megawatt hour, 1.5 pounds of NOx emissions per megawatt hour, and a CO2 cap established for each plant based on their historical operations. The standards become more stringent by incorporating mercury standards, reducing averaging times, and reducing emissions limits. By 2012, the rules will be fully implemented.

Dominion will comply with these new environmental standards through a combination of emission control technology, low emission fuels and market based emission allowance and offset compliance alternatives. At Brayton Point Station in Somerset, Massachusetts, SO2 "scrubber" technology has been installed on Units 1 & 2. Another scrubber is planned on Brayton's Unit 3 at some point in the future. Selective catalytic reduction technology has been installed on Units 1 & 3 to reduce NOx. These SO2 and NOx emission controls combined with the use, if needed, of activated carbon injection into the flue gasses will be utilized to meet the new limits for mercury.

Brayton Point will optimize the application of these technologies and employ the market-based compliance program to meet the new SO2, NOx and mercury emission requirements starting in October 2006. Upon full implementation of the compliance programs, the plant will effectively reduce emissions for SO2 by 75 percent, NOx by 56 percent, and mercury by 95 percent respectively.


Dominion reached an agreement with Massachusetts and 60 other stakeholders on May 26, 2005 on a plan to reduce emissions at Salem Harbor Power Station. The plan included two agreements — one approved by Massachusetts and the stakeholders and the other approved by the Federal Energy Regulatory Commission. 

Under the plan, Dominion reduced sulfur dioxide, nitrogen oxide and mercury emissions at Salem Harbor by burning low-emissions coal and installed an improved fuel handling system while continuing to operate the station to provide the necessary reliability to the New England electric transmission system.

Prior to Dominion's purchase of the facility January 1, 2005, the prior owner had said that it could not justify the cost of environmental improvements at Salem Harbor. However, the ISO-New England, which is responsible for the operation of New England's bulk power generation and transmission system, said closing Salem Harbor would adversely impact the stability of the system and blocked the station's closing.

With that plan in place, Dominion committed to meet stringent air emission requirements while keeping the power station in operation depending on business needs, future environmental control measures and economical operations.

As part of the agreement, Dominion committed to burn low emissions coal in boilers 1, 2 and 3. In order to burn a wider variety of low emissions coal, Dominion installed an improved fuel handling system at the station and developed an optimization protocol to address the combustion of any low emission coal. The facility worked with a local group of stakeholder to revision the coal management procedures to reflect enhanced dust mitigation.

The station complied with the stringent Massachusetts emission requirements through reductions in sulfur dioxide and nitrogen oxides emissions as well as utilizing early reduction credits and purchased allowances. Effective October 1, 2005, the agreement set a limit of 6.0 pounds of sulfur dioxide per MWh (megawatt hour), facility- wide. On October 1, 2007, the station-wide limit dropped to 3.0 pounds of sulfur dioxide on a 12 month rolling average. Beginning October 1, 2005, the station was subject to a 12-month facility-wide rolling average limit of 1.5 pounds of nitrogen oxides per MWh. On October 1, 2007 the station also met a monthly average limit of 3.0 pounds of nitrogen oxides per MWh.

Beginning on January 1, 2008, the power station became subject to the state's stringent mercury requirements of 85 percent reduction in emissions or 0.0075 pounds of mercury per GWh (gigawatt hour).

UPDATE: On Aug. 4, 2012, Dominion and Footprint Power of Bridgewater, N.J., closed on the sale of Salem Harbor Power Station to Footprint, which will remediate the site and potentially develop a natural-gas-fired power plant on about one-third of the 63-acre Salem Harbor site.

Mercury

Mercury is a naturally occurring metal in the earth’s crust. It is released into the environment naturally through volcanoes, oceans and soils, and also through human processes. These include medical waste incineration, chemical applications, gold and ore mining, municipal and hazardous waste combustion, cement manufacturing, fossil fuel combustion, and pulp and paper milling.

Mercury exists in a number of chemical forms. The most common organic form, methylmercury, enters the aquatic food chain and bioaccumulates in fish tissue. Concerns about mercury exposure through fish consumption has led EPA and some state government officials to regulate the amount of mercury released into the environment from various manmade sources.

Coal-fired power plants currently emit about 48 tons of airborne mercury annually, comprising about one-third of the man-made emissions in the United States and just one percent of total global mercury emissions. Dominion coal plants emit approximately one ton of mercury per year into the air.

Since the early 1990s, the electric utility industry has reduced mercury air emissions by almost 40 percent through existing control technologies for SO2, NOx and particulate matter. Existing air pollution controls (electrostatic precipitators, fabric filters, scrubbers and selective catalytic reduction) are effective, to varying degrees, in reducing mercury emissions from coal-fired power plants.

Depending on the coal type and mercury content, ESPs may reduce mercury by nearly 50 percent. Fabric filters may reduce mercury by much higher levels — up to 85 percent. Combinations of controls (fabric filter + scrubber; scrubber + selective catalytic reduction, etc.) may achieve high levels of mercury reduction, up to 80 to 90 percent in some cases.

Collection efficiencies of the different control technologies are very much dependent on the mercury species in the coal (elemental or oxidized). Coals with higher elemental mercury (sub-bituminous and lignite) generally have lower total mercury but are also much more difficult to capture with existing control equipment. Bituminous coal generally contains higher levels of total mercury but contains mostly oxidized mercury which can be more efficiently controlled with existing controls.

Development of controls specifically designed to capture mercury are under development. Electric power companies are also helping the Department of Energy (DOE) test the effectiveness of emerging mercury-specific control technologies, and while these emerging technologies have shown promise based on short-term applications, they are still several years away from widespread, commercial application. Some companies, including Dominion, have also partnered with EPA in evaluating emerging mercury stack emissions monitoring technology.

As previously noted, the U.S. EPA has promulgated the Clean Air Mercury Rule (CAMR) to regulate mercury emissions from coal-fired power plants that nationwide will result in a nearly 70 percent reduction in mercury emissions by 2018 through a phased program beginning in 2010. States are currently in the process of developing regulations to implement these reductions, and several states within which Dominion owns and operates coal-fired electric generating stations are developing regulations that will require deeper reductions than the EPA rule.

In addition, states are required to develop mercury loading limits for waterways identified as impaired under the Clean Water Act.

Dominion is committed to reducing mercury emissions. Since the mid 1990s, we have achieved significant mercury reductions at our Clover Power Station with the operation of SO2 scrubber and fabric filter particulate control system and an SO2 scrubber system at the Mt. Storm Power Station in West Virginia.

Over the last several years, Dominion has further reduced mercury emissions through the installation of two additional SO2 scrubbers at the Mt. Storm Power Station and the repowering of two coal-fired boilers to cleaner-burning natural gas at the Possum Point Power Station in northern Virginia.

Additional reductions are being achieved across the Dominion coal-fired generation fleet through existing particulate matter controls and advanced NOx controls. As noted in our earlier discussion of the new EPA Clean Air rules, further reductions will occur with the installation of SO2 scrubbers at the Chesterfield Power Station.

Once these projects are completed, Dominion will have reduced its mercury emissions for units serving Virginia and West Virginia by 86 percent from 2000 levels. Additional mercury reduction will be achieved by controls planned at the Brayton Point Power Station.

Dominion supports measures to reduce mercury that are harmonized with other pollutant reduction requirements. This will allow the development of planning strategies that effectively take advantage of mercury reductions that can be achieved through conventional SO2 and NOx control technologies in the near term, and allow for the full development of advanced mercury removal technologies.

Dominion is closely monitoring developments related to mercury through active participation in various efforts involved at the federal and state level in shaping policies and approaches that achieve desired air and water quality goals through cost-effective and flexible mechanisms.

Regional Haze

In 1999, the U.S. Environmental Protection Agency announced a major effort to improve air quality in specific national parks and wilderness areas, known as Class I areas. There are 156 such areas in the US and they are listed in the federal Clean Air Act. The EPA’s initiative resulted in the development of the Regional Haze Rule. This rule calls for state and federal agencies to work together to improve visibility in the listed national parks and wilderness areas.

On June 15, 2005, the Environmental Protection Agency finalized amendments to the July 1999 regional haze rule. These amendments apply to the provisions of the regional haze rule that require emission controls known as best available retrofit technology, or BART, for industrial facilities emitting air pollutants that potentially reduce visibility by causing or contributing to regional haze.

The best available retrofit technology requirements of the regional haze rule apply to facilities built between 1962 and 1977 that have the potential to emit more than 250 tons a year of visibility-impairing pollution. Those facilities fall into 26 categories, including utility and industrial boilers, and large industrial plants such as pulp mills, refineries and smelters.

Under the 1999 regional haze rule, states are required to set periodic goals for improving visibility in the 156 natural areas. As states work to reach these goals, they must develop regional haze implementation plans that contain enforceable measures and strategies for reducing visibility-impairing pollution. States must develop their implementation plans by December 2007. EPA has developed guidelines for states to use in determining which facilities must install controls and the type of controls the facilities must use.

Dominion owns facilities in several states that have been initially identified as subject to the requirements and is working with each state agency to provide needed information to perform appropriate air quality modeling and ultimately an appropriate determination of what constitutes best available retrofit technology for each facility. The Company anticipates that controls planned to meet the US EPA' s Clean Air Interstate Rule will address best available retrofit technology requirements with respect to NOx and SO2 in most of the states within which we operate.

Impingement and Entrainment

In 2011, the Environmental Protection Agency proposed regulations that, if finalized, would establish technology standards for cooling water intake structures at existing power stations. The rule implements a portion of the Clean Water Act that requires that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impacts on aquatic organisms.

The proposed rule governs all existing electric generating stations with water withdrawals above two million gallons per day and would require a detailed analysis for those facilities over 125 million gallons per day. Under this proposal, thirteen Dominion power stations in seven states may be affected by this rule.

Most electric generating power stations are located near large bodies of water because of the need to have access to water for cooling purposes in the production of electricity.

These locations may include estuaries, rivers, or lakes. Impacts from the cooling water intake system include the impingement and entrainment of aquatic organisms.

Impingement occurs when fish or shellfish get caught against the outer part of an intake structure or against a screening device when water is withdrawn through the intake screen.

Entrainment of life stages of fish and shellfish occurs when the organisms enter and pass through a cooling water intake structure and into a cooling water system. Typically, impingement involves adult and juvenile fish, while entrainment involves the young of year and eggs.

The purpose of the regulation is to minimize adverse environmental impact from cooling water intake structures.

If finalized as proposed, Dominion anticipates that it will have to install impingement control technologies, for instance upgraded screens,  at many of its stations that have once-through cooling systems.

Coal Combustion Products Regulation

In 2010, the U.S. EPA proposed to regulate the byproducts from coal combustion (ash) either as hazardous waste or as a special non-hazardous waste. The proposed rule would change how coal combustion products are regulated.

Specifically, the proposed rule would add new requirements for the location, design, construction, operation, closure and monitoring of coal combustion products in landfills and surface impoundments.

Dominion operates stations at nine locations with ash management facilities onsite that are likely to be subject to these regulations. EPA has not published a date for when these rules will become final.

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