Greenhouse Gases and Climate Change

Greenhouse gases and the impact on climate change continue to be a focus both nationally and worldwide. Dominion stays abreast of potential legislation and regulations while at the same time taking steps to reduce its carbon footprint.

The U.S. Environmental Protection Agency has created a database of greenhouse gas data reported directly from large facilities and suppliers across the country, including all of Dominion’s fossil power stations.

Dominion has a mixed portfolio of generating units, including carbon-free nuclear, hydro and wind, and  natural gas, biomass coal and oil. As a result, Dominion has a smaller carbon footprint as compared to other energy companies. According to a Natural Resources Defense Council study, Dominion emits almost one-third less carbon per unit of energy than the median of the nation’s 100 largest power producers.

Dominion has been reducing its carbon dioxide emissions for several years. In 2003, the company retired two oil-fired units at our Possum Point Power Station in Northern Virginia, replacing them with 550 megawatts of new state-of-the-art, natural gas, combined cycle technology. We also converted two coal-fired units (322 megawatts) at Possum Point to natural gas firing.

Natural gas units emit up to 60 percent less carbon dioxide than a similar sized coal-powered generating unit.

Since 2000, Dominion has added nearly 3,600 megawatts of new gas-fired generation (excluding Possum Point), more than 2,500 megawatts of non-greenhouse gas emitting nuclear generation. It also has added additional renewable biomass and wind generation to its overall mix.

Additional Changes for CO2 Reduction

Dominion will further reduce its CO2 emissions through changes planned to occur by 2016, as outlined below: (> View related news release.)

  1. Converting three 63 megawatt coal stations to renewable biomass.
  2. Beginning operation of the Virginia City Hybrid Energy Center in 2012. The station will be able to produce up to 120 megawatts of its total 585 megawatts by burning renewable and sustainable biomass.
  3. Closing the 600-megawatt coal-fired Chesapeake Energy Center in 2015.
  4. Retiring a 159 megawatt unit at Yorktown Power Station and converting a 164 megawatt unit to natural gas.
  5. Converting the 227-megawatt Bremo Power Station to natural gas.
  6. Closing State Line Power Station in Hammond, Ind., in 2012.
  7. Closing Salem Harbor Power Station in Salem, Mass., in 2014.
  8. Planning for the addition of a 1500-megawatt nuclear unit at North Anna.
  9. Pending SCC approval, conservation programs will reduce peak demand by 650 megawatts over the next 15 years.
  10. Pursuing the development of offshore wind resources through a study to determine the cost and design of transmission facilities and leading a DOE funded study to find ways to reduce the cost of offshore wind to customers.

Additional GHG Details

Climate Change Policy Principles

Dominion believes that Congress is likely to pass legislation that imposes requirements on greenhouse gases.  We believe that climate change policy must be developed hand-in-hand with a sound U.S. energy policy that provides fuel diversity, a reliable energy supply and affordable electric service.  The optimal approach should effectively promote the development and deployment of technology-based solutions, including renewable energy, advanced nuclear, gas and clean coal technologies as well as energy efficiency and conservation.

In the event Congress acts on federal climate change legislation, Dominion supports the following provisions:

  • Regulation of greenhouse gas emissions economy-wide;
  • Establishment of a system of tradable allowances that can be banked or borrowed from future years;
  • Allowances should be wholly allocated to those who will be required to reduce emissions when the program begins to keep costs low while needed technology is developed; the percentage of allowances auctioned should be gradually increased over time as needed technology is developed;
  • Expanded use of domestic and international offsets;
  • Slowing the growth of greenhouse gas (GHG) emissions in the near term and reducing GHG emissions in the long term;
  • Setting a realistic baseline year and schedule of compliance;
  • Promoting technology development; and
  • Including a "safety valve" or "price collar" to protect consumers from dramatic and potentially ruinous rate increases.

Need for a Consistent National Standard: Dominion believes that one consistent, international approach is needed to respond to the global problem of climate change and that this approach should supersede state and regional programs. Dominion further believes that a flexible, market-based program that limits then reduces emissions, allows for the trading of emission allowances, provides an effective cost-containment mechanism, ensures that emission reductions are compatible with the commercialization of new technologies, and stimulates international participation is necessary for a sustainable transition to a low-carbon economy while ensuring a reliable and affordable power supply for consumers.

Importance of Technology Development: Dominion also supports efforts to fund technology deployment, such as Congressman Boucher’s Carbon Capture and Storage Early Deployment Act. Furthermore, Dominion is actively pursuing research on carbon capture, transport, and storage technologies.

Dominion is meeting the growing energy needs of our customers through our well-balanced portfolio of assets including electric generation, gas exploration and production, transmission and distribution. With this diverse portfolio, Dominion should be well-positioned under a reasonably implemented domestic climate policy.

If carbon emissions are to be reduced, costs will increase to some assets. However, Dominion's substantial nuclear fleet and natural gas businesses act as natural offsets against such increased costs.

Emission Rates Well Below Industry Average

As of the end of 2006, our generation business’s greenhouse gas emission rate is well below the industry average, primarily due to our diverse generation portfolio. We remain committed to our non-emitting nuclear and hydro-electric assets. Dominion either has completed or is in the process of renewing operating licenses for its existing nuclear and hydroelectric units. In addition, the company co-owns with Shell WindEnergy Inc. a 264 megawatt wind facility near Dominion's Mt. Storm Power Station in Grant County, West Virginia. The project consists of 132 wind turbines along 12 miles of the Allegheny Front, and can generate enough electricity to serve about 66,000 homes and businesses.

In January 2008, Dominion also announced the acquisition of a 325 megawatt interest in the Fowler Ridge Wind Farm from BP Alternative Energy Inc. and in April 2008 announced that the company plans to build a 300-megawatt wind generation facility in Central Illinois.

These efforts, coupled with the deployment of new, highly efficient technologies to meet future energy demands, will continue to diversify our generation portfolio.

In addition, we have undertaken a number of other initiatives to reduce or avoid greenhouse gas emissions, including projects to sequester carbon, reduce gas transmission pipeline emissions, improve efficiency in exploration and production and electric generation operations and reducing emissions of sulfur hexafluoride (SF6 ) in electric distribution operations.

Greenhouse Gas Requirements

Numerous bills have been introduced in Congress that address climate change from different perspectives, including a cap on carbon emissions with emitters allowed to trade unused emission allowances (cap and trade), a tax on carbon emissions and incentives to develop low-carbon technology.

On April 2007, the U.S. Supreme Court ruled that the EPA has the authority to regulate greenhouse gas emissions which could result in future EPA action. Possible outcomes from this decision include regulation of GHG emissions from various sources, including electric generation, gas transmission and gas distribution facilities.

In addition to possible federal action, some regions and states in which we operate have already or may adopt GHG emissions reduction programs. For example, the Virginia Energy Plan, released by the Governor of Virginia in September 2007, includes a goal of reducing GHG emissions statewide back to 2000 levels by 2025. The Governor formed a Commission on Climate Change to develop a plan to achieve this goal. In November 2008, the Commission on Climate Change formulated their recommendations to the Governor.

In July 2008 Massachusetts passed the Global Warming Solutions Act (the "Act"). Among other provisions, the Act sets economy-wide GHG emissions reduction goals for Massachusetts, including reductions of 10% to 25% below 1990 levels by 2020, interim goals for 2030 and 2040, and reductions of 80% below 1990 levels by 2050. Regulations implementing the Act have not yet been proposed or implemented. We operate two coal/oil-fired generating power stations in Massachusetts that are subject to the implementation of the Act.

Dominion will fully comply with all applicable greenhouse gas emission reduction requirements. We already report our emissions to states where such reporting is required, and we voluntarily disclose emissions from generation and our gas transmission and delivery operations in this report.  In addition, we are subject to the CO2 cap and trade program at our Brayton Point, Salem Harbor and Manchester Street power stations (see next topic).

Regional Greenhouse Gas Initiative

The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort by ten Northeast and Mid-Atlantic states to limit greenhouse gas emissions. RGGI is the first mandatory, market-based CO2 emissions reduction program in the United States.

The states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont are signatory states to the RGGI agreement. These ten states will cap CO2 emissions from the power sector, and then require a 10 percent reduction in these emissions by 2018.

RGGI is composed of individual CO2 Budget Trading Programs in each of the ten participating states. These ten programs are implemented through state regulations, based on a RGGI Model Rule, and are linked through CO2 allowance reciprocity. Regulated power plants will be able to use a CO2 allowance issued by any of the ten participating states to demonstrate compliance with the state program governing their facility. Taken together, the ten individual state programs will function as a single regional compliance market for carbon emissions.

Dominion owns and operates five generating facilities in the RGGI region. The Brayton Point and Salem Harbor stations in Massachusetts, which burn coal and oil, and the Manchester St. Power Station in Providence, RI, which burns natural gas and limited oil, will be subject to RGGI.

The Millstone Generating Station in Groton, Connecticut is a nuclear generating station and will not be subject to the reduction requirements of the RGGI program. The electric generating units at Dominion's Cove Point facility are exempt from the RGGI requirements due to their size.

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