Dominion Power 2014 Annual Report Download - page 15

DOMINION RESOURCES, INC.
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Clean Power Plan Drives Strategic Investments
Much of our long-term growth plan is driven in part by evolving
federal greenhouse gas regulations set to be finalized soon.
The proposed rules recommend that Virginia and North Carolina
cut carbon dioxide emissions by 38 percent and 40 percent,
respectively, from 2012 emissions levels by 2030. The proposal
seems to penalize Virginia—and other states—for having taken
early action to build cleaner, more modern generation. However, I
am optimistic that the Environmental Protection Agency (EPA) and
its administrator, Gina McCarthy, will carefully consider what they
have heard from state commissions, consumer and public health
advocates, utilities, environmentalists and others during their
nationwide listening tour; ameliorate some of the proposed rule’s
impact; and create a more level playing field. We need a final rule
that first and foremost protects the environment but also protects
our customers by maintaining reliable, affordable service.
This much is true: Whatever the final EPA Clean Power Plan yields,
it will lead to cleaner generation across the nation. That means
more renewables—and more natural gas. In areas in which the
sun or wind is not abundant, electric generators must construct
large natural gas-fired combined-cycle stations, such as our own
Warren County plant. These highly efficient stations enjoy a carbon
intensity rate—the amount of carbon emitted per unit of electricity
produced—that is about two-thirds of the carbon intensity of a
single-cycle gas combustion turbine and approximately 45 percent
of that of a coal-fired plant.
In light of a draft EPA plan that says Virginia and North Carolina
will need to sharply reduce their carbon intensity—much more
than neighboring states—electric generators located there will
need sufficient supplies of natural gas to fuel efficient, clean plants
replacing coal-fired ones.
This will accelerate the need for customer-driven gas
infrastructure—particularly in the Southeast—and for new,
state-of-the-art power stations and power lines.
Many of the highlighted projects from our growth plan, found
below, are directly attributable to the EPA’s proposed Clean Power
Plan, including the Atlantic Coast Pipeline.
Proposed Growth Projects Benefit Environment, Reliability
Atlantic Coast Pipeline
The Clean Power Plan will require more and diverse gas supplies
in Virginia and North Carolina. This $4.5 billion to $5 billion,
550-mile pipeline project would meet that need by delivering
gas produced in the Appalachian Basin into Virginia and North
Carolina, for the owner-partners in the project—Dominion, Duke
Energy, Piedmont Natural Gas and AGL Resources—and other
subscribers. The pipeline, as proposed, has an expected capacity
of 1.5 billion cubic feet per day that could be expandable to
2 billion cubic feet of gas per day. We expect to file a FERC
application in fall 2015 and complete the pipeline in November
2018. Our intention is to contribute our 45 percent ownership
stake into Dominion Midstream, beginning in 2018. Additional
information about the project may be found on Page 12.
Supply Header Project
This gas aggregation system project in the Appalachian Basin
is expected to increase access to Marcellus and Utica gas for
Atlantic Coast Pipeline customers and regional producers. If
approved by FERC, the project—with some parallel pipelines
in existing rights-of-way and added compression—would span
Pennsylvania to West Virginia and have a capacity of 1.5 billion
cubic feet of gas per day. It is expected to cost $500 million and
enter service in November 2018.
Producer Outlet Projects
For a relatively small capital investment, Dominion can enhance
its pipeline capacity—through additional horsepower, compressor
stations and/or miles of pipe—and further satisfy the need for new
pipeline infrastructure in the Marcellus and Utica Shale regions.
The company has announced nine such projects—five of which
had entered service in 2013 and 2014. The combined $500 million
projects are expected to increase regional takeaway capacity by
2 billion cubic feet of gas per day.