Dominion Power 2007 Annual Report Download - page 56

Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued
E NVIRONMENTAL S TRATEGY
Dominion is committed to being a good environmental steward.
Our ongoing objective is to provide reliable, affordable energy for
our customers while being environmentally responsible. Our
integrated strategy to meet this objective consists of four major
elements:
• Conservation and efficiency;
• Renewable generation development;
• Other generation development to maintain our fuel
diversity, including clean coal, advanced nuclear
energy, and natural gas; and
• Improvements in other energy infrastructure.
Conservation plays a critical role in meeting the growing
demand for electricity. Virginia re-regulation legislation enacted
in 2007 provides for incentives for energy conservation and sets a
goal to reduce electricity consumption by retail customers in 2022
by ten percent of the amount consumed in 2006 through the
implementation of conservation programs. We announced plans
in September 2007 for a series of pilot programs focused on
energy conservation and demand response.
The pilots will be offered to a selection of 4,550 customers in
our central, eastern and northern Virginia service areas. To help
ensure that the results are representative, customers will not be
able to volunteer for the pilots nor participate in more than one
pilot. We will report results from the pilots at least quarterly to
the Virginia Commission staff to help evaluate their effectiveness.
The pilots approved by the Virginia Commission include:
• 1,000 residential customers in each of four different
energy-saving pilots. The pilots are designed to cycle
central heating and air conditioning units during peak-
energy demand times, inform customers about their
real-time energy consumption patterns, promote pro-
grammable thermostats that allow customers to control
their use of electricity, and educate customers about the
value of reducing energy use during peak-use times.
• Free energy audits and energy efficiency kits to 150
existing residential customers, 100 new homes meeting
energy efficiency guidelines set by the EPA, and 50
small commercial customers. In addition, 250 new
homes will receive energy efficiency welcome kits that
include compact fluorescent light bulbs.
• Incentives for commercial customers to reduce load
during periods of peak demand by running their gen-
erators to produce up to 100 Mw of electricity. This
would be in addition to existing Dominion options in
which commercial and industrial customers have
reduced demand by more than 300 Mw during peak-
demand periods.
Renewable energy is also an important component of a diverse
and reliable energy mix. Both Virginia and North Carolina have
passed legislation setting goals for renewable power. We are
committed to meeting Virginia’s goal of 12 % renewable power
by 2022 and North Carolina’s renewable portfolio standard of
12.5 % by 2021.
We are actively assessing development opportunities in our
service territories for renewable technologies. In November 2007,
we issued a request for proposals (RFP) for renewable energy
projects in Virginia, North Carolina or elsewhere in the PJM
Interconnect region. The RFP seeks the purchase of renewable
energy generation projects, as well as renewable energy credits.
Our regulated utility currently provides approximately two per-
cent of its generation from renewable sources. In addition,
Dominion is a 50% owner of a wind energy facility in Grant
County, West Virginia. When operational, our share of this proj-
ect will produce 132 Mw of renewable energy. Dominion has also
acquired a 50% interest in a joint venture with BP to develop a
wind-turbine facility in Benton County, Indiana. The facility is
expected to be built in two phases and generate a total of 750 Mw
of which we will jointly own 650 Mw with BP.
We also anticipate using up to 20% biomass (woodwaste) at
the proposed Virginia City Hybrid Energy Center.
We have announced a comprehensive generation growth
program, referred to as Powering Virginia, which involves the
development, financing, construction and operation of new
multi-fuel, multi-technology generation capacity to meet the
growing demand in our core market of Virginia. We expect that
these investments collectively will provide the following benefits:
expanded electricity production capability; increased techno-
logical and fuel diversity; and a reduction in the carbon dioxide
emissions intensity of our generation fleet. A critical aspect of the
Powering Virginia program is the extent to which we seek to
reduce the carbon intensity of our generation fleet by developing
generation facilities with zero CO2and low CO2emissions, as
well as economically viable facilities that can be equipped for CO2
separation and sequestration. There is no current economically
viable technological solution to retro-fit existing fossil-fueled
technology to capture and sequester greenhouse gas emissions.
Given that new generation units have useful lives of up to 50
years, we will give full consideration to CO2and other greenhouse
gas emissions when making long-term investment decisions.
Finally, we plan to make a significant investment in improv-
ing the capabilities and reliability of our electric transmission and
distribution system. These enhancements are primarily aimed at
meeting our continued goal of providing reliable service. An addi-
tional benefit will be added capacity to efficiently deliver elec-
tricity from the renewable projects now being developed or to be
developed in the future.
54 Dominion 2007 Annual Report