EPA Clean Power Plan

Robert M. BluePresident

Dominion Virginia PowerSeptember 9, 2014

EPA State Goal Formula

Virginia Interim Goal: 884 lbs CO2/MWh 2030 Final: 810 lbs/MWh

Best System of Emission Reduction  (BSER) Building 

Blocks  Goal‐setting EPA's view of commercially available, technically feasible and cost effective measures

Calculation of emission rate and emission reductions/avoided  4 building blocks:

1. Coal plant heat rate improvements ‐ 6%2. Increased NGCC dispatch ‐70% capacity3. Expanded use and new renewable energy and nuclear generation

• 6% credit for existing nuclear• Renewable energy based on existing generation and potential growth

4.   Demand‐side energy efficiency – 1.5% annual savings rate • Virginia annual savings1.2% in 2020 to 9.3% in 2029

Region States 2030 Target

East Central DE,DC,MD,NJ,OH,PA,VA,WV 16%

State Goal Compliance

Not all generation eligible to comply with state goals

Hydro, pumped storage, megawatt hours not included in 2012 adjusted 

base and not eligible for compliance

Existing nuclear generation (except 6%) not eligible

New nuclear generation and nuclear uprates post‐2014 eligible 

Existing renewable generation in base. Existing and new renewable 

MWh eligible for compliance

New NGCC units, not under construction, at state’s discretion 

VA has a Stricter 111 (d) Goal than Key Competitors

 ‐

 200

 400

 600

 800

 1,000

 1,200

 1,400

 1,600

 1,800

 2,000

VA‐38% GA‐44% DE‐32% NC‐40% PA‐31% TN‐39% MD‐37% OH‐28% WV‐20% KY‐18%

810  834  841 

992 1,052 

1,163  1,187 

1,338 

1,620 

1,763 

Source: U.S. EPA Clean Power Plan, Technical Supporting Document State Goal Computation5

Dominion Virginia Power is Closing or Converting Seven Coal Plants

Conversions:Altavista (coal to biomass) – 51MWBremo (coal to natural gas) – 227MWHopewell (coal to biomass) – 51MWSouthampton (coal to biomass) – 51MW

Closures:North Branch (WV) – 74 MWChesapeake Energy Center – 595MWYorktown, Units 1-2 – 323MW

Altavista

Bremo

Yorktown

Hopewell

Chesapeake Energy Center

Southampton

North Branch

6

Dominion Virginia Power already has a clean, balanced fuel mix

7*Electric Production by Fuel proportions exclude Non-utility Generation (NUG) under contract and pumping.

Electric Production by Fuel Type*

37%

41%

20%

2%

Coal

Nuclear

Natural Gas

Renewables

29%

36%

32%

3%

2013 2017 (projected)

Dominion: Low Carbon Intensity Due to Nuclear Fleet

0

500

1,000

1,500

2,000

2,500

Dominion

Dominion is among the lowest for CO2 emissions for the largest U.S. power producers.

Source: Benchmarking Air Emissions Report: May 2014 (2012 data). Study supported by NRDC and others.

100 Largest U.S. Power Producers(Pounds CO2 per MWh Output)

8

Modifying Assumptions

Revise Building Block assumptions• Heat rate efficiencies block 1 ‐ not “technically feasible”• Regional renewable targets block 3 inflated  – not “commercially 

available”• Energy efficiency potential block 4 – not “cost effective” or sustainable

Adjust Interim Target• No Clean Air Act requirement for an “interim” target• Obtain credit for any emission reductions achieved 2014‐2020

Effective recognition for nuclear • Credit for recent nuclear uprates• Relicensed nuclear units treated as “new” units for compliance

9

State Implementation Plans for 111 (d) are due 2016‐2018

10

June 2014:Draft rule issued

2013 2014 2015 2016 2017 2018 2019 2025 2030

120‐day public comment period ends October 2014

June 2018: States participating in 

multi‐state programs submit SIPs to EPA

June 2017: States that were granted one‐year delays 

submit SIPs to EPA

June 2016: State implementation 

plans submitted to EPA (in most cases)

2021‐2029: States must meet interim 

goals

2020: States must begin meeting 

interim goal

June 2015: EPA issues final rule

2030: States must meet final goal

2020

2014 IRP:Alternative Plan Comparison

11Note: 2014 IRP reflects initial analysis only of draft Clean Power Plan; company recommends parallel development of base case and fuel diversity planSource: Dominion’s Integrated Resource Plan, Docket No. E-100, Sub 141, Case No. PUE-2014-0087

Plan A:  Base

Plan B:Fuel Diversity

Plan F:EPA GHG Plan

Scen

arios a

nd Sen

sitivities

1 Base Case 7.73% 9.52%

2 No CO2 Cost Scenario ‐16.61% ‐7.35% ‐3.71%

3 High Fuel Cost Scenario 7.93% 14.81% 16.70%

4 Low Fuel Cost Scenario ‐6.25% 2.27% 4.13%

5 High Load Growth 11.29% 18.99% 20.44%

6 Low Load Growth ‐8.46% ‐0.66% 1.64%

7 High Construction Cost 0.64% 11.52% 13.63%

8 Low Construction Cost ‐0.64% 3.94% 5.41%

9 High T&D Costs ‐0.09% 7.63% 9.42%

10 Low T&D Costs 0.09% 7.82% 9.61%

Portfolio Evaluation Scorecard with Scores

12

Portfolio

System Cost Compared to A. 

Base (%)

Cost Increase in High Fuel Cost Scenario 

(%)

Cost increase in High Cost Combination Sensitivity (%)

CO2 Intensity (short ton / 1,000 kWh)

Total System CO2 Emission Compared to Base (%)

Reliance on Single Fuel Source (Percent of Energy from 

Natural Gas and Market 

Purchases)

Total Score

A.  Base 1 ‐1 1 ‐1 ‐1 ‐1 ‐2

B.  Fuel Diversity 0 0 0 0 0 1 1

F.  EPA GHG Plan (884 limit between 2020 and 2029, and 810 limit after 2030)

0 0 ‐1 1 1 0 1

Source: Dominion’s Integrated Resource Plan, Docket No. E-100, Sub 141, Case No. PUE-2014-0087