December 18, 2007
RICHMOND, Va. – Dominion (NYSE: D) announced Tuesday that it has reached an agreement with the U.S. Forest Service and the Virginia Department of Environmental Quality that protects sensitive environmental areas and advances the company’s proposed Virginia City Hybrid Energy Center in Southwest Virginia.
The agreement protects all Class 1 areas surrounding the Wise County project, including the 12,000-acre Linville Gorge Wilderness of the Pisgah National Forest in western North Carolina. Class 1 federal lands include areas such as national parks, national wilderness areas, and national monuments. These areas are granted special air quality protections under the U.S. Clean Air Act.
Marisue Hilliard, Forest Service supervisor for North Carolina, said in a Dec. 14 letter to the Virginia DEQ that the plan protects the beautiful, rugged, Linville Gorge Wilderness – often called the "Grand Canyon of the East."
"We recognize Dominion’s efforts to meet the growing electrical needs through new and more efficient and less polluting projects such as the (proposed power station)," Hilliard wrote. "We believe with the additional efforts agreed to by Dominion that it will be possible to prevent further degradation to the AQRV (Air Quality Related Values) at Linville Gorge while meeting the rising demand for energy."
Hilliard went on to write that, assuming the mitigation measures work as planned, "We do not believe the (proposed power station) will cause an adverse impact to any Class I area managed by the USDA Forest Service."
Under the terms of the accord, Dominion will limit or otherwise mitigate the station’s annual sulfur dioxide emissions so that the net total is no more than 1,684 tons, or half of the permitted level.
"We appreciate the willingness of the U.S. Forest Service and the Virginia DEQ to work with us to find a solution that both protects the environment and allows us to meet the growing demand for electricity," said James K. Martin, senior vice president-Business Development and Generation Construction. "It will take a mix of energy conservation and new generation to meet a projected 4,000-megawatt increase in demand for electricity in the next decade. Virginia remains a fast-growing state, and we will honor our obligation to meet that demand with reliable generation that protects the environment."
Dominion will use a three-tiered process to reduce or mitigate emissions. Dominion’s first efforts will be to lower its emissions from the station as much as possible.
Dominion’s secondary efforts will be to obtain permanent sulfur dioxide emissions reductions from other facilities that affect the region.
If necessary, Dominion will purchase sulfur dioxide emissions allowances to achieve the remainder of the reductions. The purchases would be made from facilities that have reduced their sulfur dioxide emissions below allowable levels.
In her letter, Hilliard said that with implementation of these provisions, the air quality concerns cited by the Forest Service "should be fully addressed to our satisfaction."
The proposed Virginia City Hybrid Energy Center is a 585-megawatt electric generating power station that will use circulating fluidized bed technology, which is recognized by the U.S. Department of Energy as a clean-coal technology for reducing sulfur dioxide and nitrogen oxide.
The center is being designed to make it carbon-capture compatible, meaning that technology to capture carbon dioxide could be added to the station when it becomes commercially available. Dominion is sponsoring research at Virginia Tech to see if it is possible to sequester carbon dioxide in unmineable coal seams in Southwest Virginia. If possible, greenhouse gasses from the power station could eventually be sequestered. Carbon capture technology is entitled to extra incentive premiums under Virginia's regulatory framework.
The center also will be capable of using a wide range of coal qualities, including waste coal, and up to 20 percent biomass. Piles of unused waste coal can lead to acidic leaching that causes environmental problems in Southwest Virginia. The station will reduce water usage by nearly 90 percent when compared to typical coal-fired power stations by using air-cooled condensers.
Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 26,500 megawatts of generation, 7,800 miles of natural gas transmission pipeline and 1 trillion cubic feet equivalent (Tcfe) of proved natural gas and oil reserves. Dominion also owns and operates the nation's largest underground natural gas storage system with about 960 billion cubic feet of storage capacity and serves retail energy customers in 11 states. For more information about Dominion, visit the company's Web site at http://www.dom.com.
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