Who is NOVEC? NOVEC stands for Northern Virginia Electric
Cooperative NOVEC was formed in 1983 by the consolidation of Prince
William and Tri-County Electric Cooperatives. NOVEC serves more
than 150,000 customers located in the counties of Clarke, Loudon,
Fairfax, Fauquier, Prince William and Stafford all located in
northern Virginia. Prior to 2009, NOVEC received all of its power
supply through an all requirements contract via an alternate
wholesale power supplier. Starting in 2009, NOVEC began providing
for its own power supply requirements.
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Power Supply Portfolio With this new responsibility, NOVEC
embarked on evaluating various options for meeting the power supply
requirements. The following were the initial main sources: 1.Power
Purchase Agreements (PPAs) with existing resources 2.Bilateral
Contracts and PJM Market Purchases While these sources allowed us
to sufficiently meet our load requirements; NOVEC continued to
consider other opportunities given the dynamic nature of its
on-going load responsibilities. As part of its on-going resource
consideration, NOVEC investigated numerous resource alternatives.
Included were PPAs with new and existing resources, slice of system
options, partnering arrangements and self-build options.
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Other Factors At the same time NOVEC was evaluating these
opportunities, the federal legislators were working on language for
a federal renewable energy program. The metric that was being
discussed as to which utilities would be under this federal
requirement was any utility who had sales of 4 terawatts or
greater. Based upon NOVECs forecast over the next few years, NOVEC
would meet that metric in short order. Due to this potential
requirement, NOVEC included in its evaluation renewable energy
projects. A developer from Michigan, NOVI Energy, brought forth a
proposal for a wood-burning biomass plant located in South Boston,
VA.
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Decision to Move Forward With the potential of a federally
mandated renewable energy standard, and the evaluation of a
multitude of other offers, NOVEC decided to move forward with a
renewable project. NOVEC evaluated PPAs with existing biomass and
wind projects, new biomass projects, the opportunities of buying an
existing renewable project and the South Boston project. The
results of these preliminary evaluations showed that NOVEC could
construct the South Boston project at a cost equal to or lower than
all of the other offerings whether they were renewable energy
projects or not. As decision was made to move forward and perform a
detailed review of the South Boston Project.
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Due Diligence Undertaken A forest industry expert, the Parton
Group, was hired to conduct a detailed review of the wood basket in
and around the South Boston region. Parton met with the local
loggers in this area as part of their evaluation and came to the
conclusion that the local wood basket would be sufficient to fuel
the plant. A PJM Feasibility Study was filed to determine what
upgrades would be necessary to connect to the power grid in the
area. Air permit requirements were developed and filed with the
VDEQ. Public meetings were scheduled and held and no opposition was
present. Sargent & Lundy was hired as the Owners Engineer to
begin development of specifications and costs for
construction.
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Final Decision Once NOVEC received all of the results from the
various studies and design, we analyzed the cost impacts and the
societal impacts and the finding suggested that the project should
be moved forward. One of the remarkable outcomes that we discovered
was how much support was received from the local public for this
project. We did not have any opposition filed by any member of the
public through the various meetings and/or regulatory proceedings.
VDEQ worked with us in an expeditious manner to finalize and
approve the necessary air permit. The towns of South Boston,
Halifax and the County of Halifax stood solidly behind this project
and provided significant support as we moved through the final
regulatory requirements for approval. In the fall of 2010, NOVEC
began preliminary construction of the South Boston Energy project
and South Boston Energy, LLC filed an Application for approval to
construct, own and operate a 49.9MW biomass facility.
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Next Steps South Boston Energy, LLC requested a waiver from the
VSCC to begin construction in December 2010 even though the
approval of CPCN application was is process. This was necessitated
due to the requirements of the American Recovery and Reinvestment
Act (ARRA) Grant provisions. Under the then rules of the ARRA, a
cash grant in lieu of taxes was available for certain renewable
projects as long as construction was started in 2010. The VSCC
issued a Certificate for Public Necessity and Convenience on April
28, 2011. Negotiations for selecting the EPC contractor were
completed and a contract to proceed was approved in May 2011.
Fagen, Inc was selected as the EPC contractor. The facility is now
nearing completion going through final commissioning and
performance tests.