COAL WARS HEAT UP

Consider this a skirmish in the coming coal wars. The warring factions: Coal companies versus electricity rate payers. Notice that environmentalists are no longer one of the factions (consider them an independent militia on the rate payers' side).

The incident setting off this skirmish: Dominion Virginia Power lowered its projected profits for a new coal-fired power plant from 13.75% to 12.12% because either it will have to incur the cost of installing carbon-capture-and-sequestration (CCS) technology or it must expect to pay a premium on the plant's power after a cap-and-trade system or other form of emissions constraint is instituted in the foreseeable future.

Dominion wants to proceed with the plant, figuring it will pass the increased prices on to its rate payers. The people of Virginia are understandably miffed.

Dominion’s lowered profit projection is viewed by the militia (environmentalists) as a de facto admission the plant will not be capturing its emissions. Cale Jaffe, attorney, Southern Environmental Law Center: "Dominion is absolutely failing to plan for federal laws on global warming that are just around the corner…if Dominion does not build this plant to capture greenhouse gases, ratepayers will be left holding the bag."

In response, Dominion says CCS technology is being developed, implying the plant will be able to incorporate it at some unspecified later time.

Dominion lowered their profit projection precise1y 1.63% in anticipation of the cost for technology that is not yet developed? Not likely. They were probably able to arrive at a specific profit reduction figure from projected costs for emissions, using numbers from the cap-and-trade systems now before Congress and the European Union’s Emissions Trading Scheme as a basis for estimates.

The coal industry's dream - as yet unrealized. (click to enlarge)

Power plant agreement removes bonus for carbon capture
March 8, 2008 (DailyPress)

WHO
Dominion Virginia Power (Dan Genest, spokesman), Virginia State Corporation Commission (SCC)

From Chesapeake Climate Action Network. (click to enlarge)

WHAT
Dominion applied to SCC for permission to proceed with a new coal-fired power plant but could not specify whether clean coal technology would be incorporated.

WHEN
- Dominion’s application indicated that carbon dioxide emissions capture capability at its new plant is "unresolved at this time" because the technology is not presently available.
- The plant is expected to go on line in 2012.

Dominion Virginia's turf. (click to enlarge)

WHERE
The plant is planned for Wise County, Virginia.

click to enlarge

WHY
- The 585-megawatt coal-fired plant is projected to cost $1.6 billion. Including CCS technology would no doubt up the cost.
- Without CCS technology, the plant will not get a state subsidy written to incentivize the installation of emissions capture equipment in new plants.

QUOTES
Dan Genest, spokesman, Dominion: "We continue to believe that the technology is advancing…"