Dive Brief:
- The Virginia State Corporation Commission (VSCC) staff filed a guidance study for Dominion Virginia Power and the Commissioners that compares the risks of base load generation from natural gas, which is presently the state’s least cost option for the utility, and the risks of nuclear power, which is an emissions-free base load option that would support the state in meeting the EPA’s proposed carbon reduction rule.
- There is a risk trade-off, the staff analysis of Dominion’s 2013 IRP said, between the low fixed price but potential price volatility of natural gas and the fixed low operating costs but high development costs of a nuclear plant.
- Dominion’s IRP follows the least cost option but includes a fuel diversity plan that increases low-emissions options and decreases natural gas reliance because, it concluded without supporting data, natural gas price volatility adds more risk to future planning than nuclear’s uncertain development cost.
Dive Insight:
The VSCC staff recommended a more detailed Dominion risk analysis and said that if it concludes nuclear development cost uncertainty is preferable to natural gas price uncertainty, the utility should do a timing analysis for its 2015 IRP on the building of a third North Anna nuclear facility unit.
Staff recommended that Dominion also include in its 2015 IRP a comparison of the cost of retiring its four Surry and North Anna nuclear units with the cost of renewing the units’ operating licenses and staff also recommended Dominion get input from the Nuclear Regulatory Commission on the feasibility of the 80-year license renewals.
The staff found the costs of Dominion’s demand-side management proposals compared favorably to new generation costs “when viewed from a utility cost test perspective, which represents the direct costs to the company."
