Dive Brief:
- Legislators in southwest Virginia are pushing to extend the life of one of the newest coal plants in the country, Dominion Energy’s Virginia City Hybrid Energy Center, within a large clean energy package.
- The Virginia General Assembly’s version of the Clean Economy Act would retire coal plants in the state by 2030. The Senate passed its own version on Thursday, including an amendment by Sen. Ben Chafin, R, to exempt Dominion's newer coal plant from the deadline, and the legislation packages will head to conference committee to reconcile the differences.
- Del. Terry Kilgore, R, who argued for a longer life for the plant in the General Assembly, accused the owners of not caring about the economy of the Southwest region where his district is, as they receive payout either way. Dominion did not respond to requests for comment about the bill or the potential retirement of the plant.
Dive Insight:
The coal plant in question generates about $6 million in annual property taxes to Wise County and St. Paul, Virginia, and $25 million annually for the local economy, according to Dominion Energy. Southwest Virginia legislators say that contribution is crucial to the region.
"The Southwest delegation has raised a very important point, which is that the tax revenue for Wise County comes from that power plant is a large portion of that county’s revenue," William Cleveland, senior attorney with the Southern Environmental Law Center (SELC), told Utility Dive.
The 600 MW hybrid energy center in Wise County generates up to 20% of its power from biomass such as wood waste and wood chips, but it primarily burns coal. SELC and other environmental groups have opposed the plant since Dominion proposed the project.
On Thursday, Sen. Ben Chafin, R, who represents the Southwest region, proposed an amendment to the House version of the Clean Economy Act to delay the closure of the Dominion plant. He announced on Facebook that evening that the amendment passed with bipartisan support, while other coal plants will be directed to close by 2030, as in the House version of the bill.
Dominion had worked with Chafin on the amendment to extend the plant's life through 2050, the senator told Associated Press. Chafin did not respond to Utility Dive's request for comment.
On Feb. 12, Kilgore asked stakeholders to come together for a solution in Southwest Virginia, adding that keeping the plant alive was not in the utility's best interest. "Dominion ... is still going to get paid for investing in that coal plant, and they're not going to care," he said.
Some stakeholders also remain doubtful that market economics will extend the plant's life.
"That plant is in serious trouble, it's only operating around a 24% capacity factor right now," Cleveland said. "I would hate for the Southwest delegation to feel like they have guaranteed that this plant will operate until 2050 by this amendment, because Dominion preserves its ability to retire it whenever they want to."
While the area receives millions in tax revenues, Dominion also makes money. Regulators approved a rate rider in February, allowing the utility to recover $195 million throughout the year, $20 million less than 2019, according to Dominion’s annual filing.
Dominion will collect about $4.08 per monthly residential bill in 2020 for the plant, according to Dominion spokesperson Rayhan Daudani.
The return on the Virginia City Hybrid Energy Center/Wise County Coal Plant "is expected to decrease this spring and continue on that trajectory in coming years" due to depreciation, Daudani told Utility Dive.
