Corporate

Executive Update

Gov. Bob McDonnell announced on Oct. 1 that 2013 has been the cleanest air year on record in Virginia. The improvement in air quality had much to do with a voluntary agreement Dominion Virginia Power made with the U.S. Environmental Protection Agency 10 years ago to reduce its emissions. As a result of that agreement, Dominion installed state-of-art control equipment on five coal-fired power stations, driving down emissions of sulfur dioxide (SO2) and nitrogen oxide (NOX) and mercury by 80 percent or more. Millions of tons of those emissions were kept out of the air and the company did not raise its rates to pay for the more than $1 billion in control equipment. The company's carbon emissions are down as well. (> View additional data.)

Remarks of Pam Faggert
Vice President & Chief Environmental Officer – Dominion
October 4, 2013

"A 10-Year March to Cleaner Air in Virginia"

The air we breathe in Virginia is cleaner now than it has been in many years.

The Virginia Department of Environmental Quality’s most recent report shows significant reductions in the pollutants responsible for acid rain and smog from 2002 to 2011.  And just recently, Gov. Bob McDonnell announced that 2013 was Virginia’s cleanest air year on record, with the Commonwealth seeing a 97 percent decrease since 1999 in the number of days exceeding national air quality standards statewide.

It is no coincidence that it was exactly 10 years ago that Dominion Virginia Power entered into an important and unique agreement with the U.S. Environmental Protection Agency to reduce power station air emissions that contribute to acid rain and smog.

While dozens of other electric utilities around the country dug in their heals to fight the EPA, Dominion voluntarily chose to work with the agency and go  beyond what the law then required regarding emissions of sulfur dioxide (SO2) and nitrogen oxide (NOx), both by-products of burning coal to generate electricity.

It was not a decision made lightly.  The goals the company agreed to would involve major new costs and take nearly a decade to complete.

Today, the results are in – and they are nothing short of extraordinary.

The installation of the latest environmental control technology at five large, coal-fired power stations in Virginia and West Virginia has reduced emissions of SO2, NOX and mercury more than 80 percent, preventing nearly 1.9 million tons of these chemicals from entering the air since the agreement was signed.

This historic accomplishment has helped make Virginia’s air cleaner and clearer, healthier to breathe and easier on the state’s lakes, streams and rivers. Not unimportantly, the reduction in our power station emissions did not result in any rate increases for our customers.  The bulk of the $1.2 billion spent for emissions controls was absorbed by the company -- achieved by cost reductions and efficiency gains even as we continued to improve electric reliability for our customers.

It is almost impossible to imagine the equipment necessary to achieve emission reductions on this scale.  As one of our engineers once told a group of visitors, in each location it was like putting a large chemical plant on the back end of a power station.

But while these emission reductions are truly historic, because of the constant drumbeat for ever tougher environmental laws, most Virginians are unaware that they or other clean air improvements have been made.

Since the first U.S. Clean Air Act was passed in 1970 -- Dominion was an early supporter -- the air in Virginia and around the country has been made significantly cleaner and healthier despite extraordinary growth in population, power generation, vehicular traffic and industrial output.

It is an amazing and yet traditional American success story, born of a mixture of technology, science, law, business, environmental advocacy, and as our CEO said at the time, a commitment “to do the right thing.”

For us and our customers, it was also smart business – and that has to be part of the equation because environmental improvements cannot be achieved without economic considerations.

In undertaking this program, we saw that an agreement would give us an opportunity to chart our own course and get ahead of constantly changing environmental regulations. This gave us some needed certainty about our future environmental costs, allowing us to plan for them in a sound, business-like way.  This ultimately helped hold down costs while allowing us to meet increasingly strict environmental regulations.

Today, Dominion remains fully committed to operating in an environmentally responsible manner, and we believe we have a record that backs that up. We strive to obey the law and even go above it when it makes good business and environmental sense to do so.

Overall, not only are our SO2 and NOx emissions down substantially, our greenhouse gas emissions are falling as well as we close certain older stations and convert or replace them with cleaner burning natural gas units or renewable biomass fuel.

Even so, a continuing environmental challenge facing our company and other utilities today is adding new generation to meet growth.  Some environmental groups have gone so far as to assert that it can be done exclusively with wind and solar energy.

As a company responsible for supplying reliable and reasonably priced power to 2.4 million customers, we believe that advanced fossil fuel plants – fitted with the proper environmental control technology -- must be part of the generation mix, along with emission-free nuclear power and renewable energy and conservation.

It is an approach that is balanced, environmentally responsible and best economically for our customers – much like the agreement we signed with the EPA 10 years ago.

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