Archive for July 2011

Can The LADWP Make a Feed-in Tariff Work?

The folks at the Los Angeles Department of Water and Power (LADWP) are talking about creating a Feed-in Tariff (FiT) program in their service area, but if the information provided so far is any indication, they have a very long way to go before this program is ready for prime time.

First, before trying to describe what LADWP is doing, we should make clear what they are not.  In particular, this is not a German-style FiT where anyone can put up solar panels and get paid for every kilowatt hour that they produce.  (Ah, for such a program here in California – you would literally see solar panels everywhere!)  To the contrary, this FiT will be entirely unavailable to regular customers.  Instead, this program is designed for systems where all of the energy produced is delivered directly to the grid instead of first off-setting a local load.  In that regard this looks much like a solar farm program, except that participating systems can be as small as 30 kW, but no larger than 1 MW (solar farms are usally in the 1-5 MW range).

http://www.solarfeeds.com/ad3/fit-flowchart.png
Draft FiT Flowchart – it only looks complicated!

Since no local load is being offset, this is not a net metering arrangement.  Instead, LADWP is looking for project developers to enter into a “Standard Offer Power Purchase Agreement” (SOPPA) based on a “bid base price of energy” that is subject to Time of Delivery adjustments.  The initial demonstration program will consist of 5 MW of selected systems.  Project developers must submit a prescribed FiT Application and pay a non-refundable $1,000 application fee.  If the application is deemed to be acceptable based on LADWP’s “Technical Screening” (more on that later) the project developer must then pony-up a $1,500 Interconnection Study Fee to determine how much it will cost to interconnect the proposed project into LADWP’s grid.  Once that amount is known, the project developer can opt to continue – and pay 10% of the anticipated interconnection cost plus a refundable Development Deposit of $50 per kW – or fold their cards and eat their costs.

When pressed for some guiding parameters, staff was vague.  What, we wondered, was the possible range of interconnection costs?  And without knowing what the worst case cost might be in advance, how could a rational project developer know what to propose for their “bid base price of energy”?  For that matter, what was the anticipated range that would be acceptable to LADWP for the bid base price?  After all, you simply cannot produce energy from a 30kW system as cheaply as you can from a 1MW system.

LADWP indicated that it will likely create some sort of small system (30-150kW) carve out to insure that some smaller systems will be built.  This is important since LADWP’s top priority for selecting which systems can proceed is getting the lowest cost energy.  A possible bid energy price for small systems was in the $0.20-0.22/kWh range whereas larger systems (>150kW) would need to be in the $0.15-0.175/kWh range.  Even so, without knowing in advance what interconnection costs might be – or better still – having a way to choose a site so as to minimize those costs – it is next to impossible to make a rational proposal without being at substantial risk of losing your deposits – to say nothing of your time investment.

As presented at the public workshop, the present design includes a number of “Technical Requirements”  and process steps which could use some clarification.  In particular:

  • Developer Experience – “At least one member of development team has developed one or more similar projects.”  What constitutes a “similar project”?  If the team had previously developed a 75kW system, would they be deemed to have adequate experience to propose a 100 kW system?  What about 150 or 500?  And what sort of experience is key here?  The development team will need to bring together many talents – system design, construction, electrical, financial, legal – does it suffice that the team’s lawyer has papered together “similar” projects in the past?
  • Site Control – “Must demonstrate site control over proposed site” – if the entire proposal is speculative until the SOPPA is signed, how much control must the developer actually have over the site at the time the application is submitted?  Would a lease or purchase agreement with appropriate contingencies suffice?  Given the degree of uncertainty with this process, it doesn’t seem reasonable to require full control at the time the application is submitted.
    (This was not explained during the workshop, but it appears from the Draft Guidelines that a contractual option for lease or purchase will suffice.)
  • Inspection & Maintenance Reporting – “Provide Inspection & Maintenance Reports Every Other Year” – staff could not explain what the full scope of this requirement would be and the Guidelines aren’t much more help other than to indicate that the inspection must be done by someone not associated with the project.  This seems unduly burdensome – after all, the project owner has as much of a vested interest in keeping the system performing according to expectations as does LADWP.  Since they will need to be doing their own maintenance anyway, the requirement for an unrelated party to do the inspections simply adds unnecessary cost to the project.

The Demonstration phase is supposed to kick-off this Fall.  We will continue to monitor the development of this program and provide additional information as we get it.

Italy Passes 7,000 MW of Total Installed Solar PV

 

Leaps Ahead of Both Spain & Japan to Become Second in World in Total Solar Capacity

July 21, 2011

by Paul Gipe

The interactive web page Atlasole created by Italy’s Gestore dei Servizi Energetici (GSE) indicates that the country surpassed 7,000 MW of total installed solar photovoltaics (solar PV) from nearly one-quarter million systems sometime mid year.

In 2009, Italy became the world’s second largest market for annual installations of solar PV capacity, a position it held in 2010 and will likely hold again in 2011.

Italy has quickly overtaken one-time leaders in total installed capacity Spain and Japan.

According to GSE, Italy installed 2,300 MW in 2010. This is up from the 1,850 MW reported at the end of the year.

GSE had said previously that there were an additional 4,000 MW of solar PV from 55,000 systems in the pipeline that potentially will bring total installed capacity to 7,000 MW and this appears to be the case.

On May 2, 2011, GSE issued a 48-page statistical report on Italy’s solar PV development.

In 2010, solar PV generated 1.9 TWh of electricity. Solar PV currently installed may generate as much as 10 TWh in 2011 or 3% of Italy’s 320 TWh annual consumption.

Italy is three-fourths the size of California, with which it is often compared because of their similarly-sized economies. Italy has a population of 60 million, to California’s 40 million people.

California has installed approximately 1,000 MW of solar PV to date. Current installed capacity of solar PV in California is capable of generating approximately 1.5 TWh per year or less than 1% of California’s electricity consumption.

Abington eyes solar power to generate electricity and revenue

By Allan Stein

ABINGTON —

Town Manager John D’Agostino is eyeing a possible “solar farm” as a way to generate enough renewable electricity to reduce Abington’s dependence on the power grid.

There might even be enough extra solar-produced electricity to sell back to the grid, boosting town revenues, he added.

But one selectman said the issues of paying for and maintaining a solar field need to be addressed before any proposal is put forth.

A solar farm is one of several renewable-energy ideas that town officials are contemplating to save taxpayers’ money and help preserve the environment.

“I would like to cover the demand in use the town has with renewable energy,” D’Agostino said. “We want to go to the next level. We want a return on the investment on solar panels.”

The town currently has a two-year contract with Constellation Energy to purchase 8.7 kilowatts of electricity per hour to run town-owned buildings.

Each year, the town consumes 2.5 megawatts of electricity to power the schools, police and fire stations, library, senior center and other town buildings, he said.

With a solar farm spanning no less than nine acres of land, he said, the town could produce 2.5 megawatts of electricity.

Griffin’s Dairy is one possible location, but a number of its abutters cite the existence of wetlands and the desire to preserve the 64-acre former dairy farm as pristine open space.

Other areas in town for the solar panels may also exist, the town manager said, including the rooftops of town buildings. D’Agostino said he can see many opportunities for the town with a solar farm. For one, the town could obtain energy credits by selling solar-generated power back to the grid. The town could also solicit a third-party investor to set up the solar panels.

Both parties would then sign a long-term purchase power agreement at a set fee. The average life span of a solar panel is 30 years, the town manager said. As an added benefit, he said, the broad use of solar energy might work to attract businesses that develop renewable energy products.

The final goal of a solar farm would be for Abington’s municipal buildings to be made “wholly reliant” on solar power, D’Agostino said. Town officials have held talks about the use of solar energy.

Selectmen Chairman Christopher Aiello, however, said questions still remain, such as who would pay for the solar farm, who would own and maintain it and at what cost to the town.

“I like the idea. I would have no problem with a solar farm occupying a part of the Griffin’s Dairy Farm. We have a long way to go before we go with solar panels,” Aiello said.

California’s Solar Program Costs More Than German Feed-in Tariffs

 

Should California Simply Adopt German Solar Tariffs?

Germans Paying Nearly One-Fourth Less per Kilowatt-hour for Solar than Californians

July 6, 2011

By Paul Gipe

Newly installed solar photovoltaic (solar PV) projects in Californian were paid an average of approximately $0.34/kWh last year, according to a privately-commissioned study. Germans paid substantially less, taking into consideration the amount of solar energy their country receives.

Germans paid an average of €0.26/kWh ($0.38/kWh) for the first six months of 2011, according to data from the country’s grid manager, the Bundesnetzagentur.

If the Golden State applied German feed-in tariffs to solar PV under its bright, clear sky, Californians would only pay the equivalent of $0.24/kWh.

Data on the cost of German feed-in tariffs is from publicly available sources and is adjusted for California’s sunnier climate relative to cloudy Germany.

Unfortunately, data on the total cost of solar PV in California is more difficult to analyze, as it derives from numerous sources.

The study on California’s solar program, by private consultant Robert Freehling, examined the cost of the California Solar Initiative, federal tax credits, depreciation deductions, and the value of electricity offset from net-metering. Freehling is an expert in the arcane world of California renewable energy policy.

California Solar Initiative

The California Solar Initiative (CSI) is one of the state’s premier renewable energy programs, even though it only governs solar PV. CSI issues an up-front payment or “rebate” for residential solar systems and a payment per kWh for commercial systems, from a pool of money collected from ratepayers. The CSI funds are being rapidly depleted and in 2011 most of the funds for the program will be exhausted.

Because payments under the CSI, federal tax credits, and depreciation deductions necessary for investments in solar PV in the US are all of short duration, it was necessary for Freehling to pro-rate these benefits over the typical 20-year life of a solar system. Only by pro-rating these benefits over 20 years and including the value of the electricity offset from net-metering was he able to estimate the total cost of electricity per kilowatt-hour.

The average value of rebates under the CSI program in 2010 was $0.058/kWh. Residential customers were paid the least. They received $0.05/kWh while non-governmental and governmental organizations received as much as $0.09/kWh.

One unique feature of the CSI program, unlike many other such programs in the US, is that it makes special provisions for non-profits and governmental agencies.

Non-taxable entities cannot use the 30% federal tax credits. Accordingly, the CSI issues a higher payment for non-profits and governmental agencies to compensate for their inability to use the federal tax credits.

However, Freehling concludes that “in 2010 the benefit of this higher rebate was lost due to the higher price paid for solar projects by government and non-profit entities.”

Federal Subsidies

In addition to the CSI, a state program, residential and commercial solar projects in California qualify for federal tax credits and depreciation deductions. The costs of these subsidies are borne by all US taxpayers, not just those living in California.

Last year, the value of the 30% federal tax credit was as high as $0.096/kWh for residential customers and $0.071/kWh for commercial customers, according to Freehling’s study. Non-profits and other non-taxable entities received no benefit from the federal tax credit.

Freehling estimates that commercial projects received an additional benefit worth $0.07/kWh from accelerated depreciation.

Net-Metering Value

Net-metering is not a direct payment, nor a tax deduction. Net-metering is the ability to offset electricity consumption. Its value is that of the electricity offset.

The value of being able to “spin your meter backwards” varies widely across the state and by customer.

California is among the few states that use a “reverse block” rate structure that requires consumers to pay a higher price per kilowatt-hour the more electricity they consume. Many states and Canadian provinces use the archaic “declining block” rate structure that charges less per kilowatt-hour the more electricity a customer consumes.

Thus, in California, the value of net-metering is much higher for “energy hogs” who use the most electricity, and least to frugal consumers who conserve electricity. The value, reports Freehling, can vary from a low of $0.08/kWh for low-income consumers to as much as $0.38/kWh for those using the most electricity. The average value of net-metering across the state was substantial–$0.18/kWh–accounting for more than half of overall payments.

“Frugal customers that only pay 12 cents/kWh for all their electricity,” says Freehling, “will get little benefit from installing solar projects on their homes, while energy hogs that use 3 or more times the average amount of electricity will get the most benefit because the solar will be valued at nearly 30 to 40 cents/kWh.”

Overall Payments & Value

Average payments for solar PV in California in 2010 total $0.34/kWh for a system with a 20-year life, though total payments ranged from a low of $0.27/kWh for non-profits and governmental entities to a high of nearly $0.38/kWh for commercial projects.

Germany’s Feed-in Tariffs

Freehling’s report did not specifically examine Germany’s feed-in tariffs for solar PV. However, data on the cost of the German program is much more readily available than data on solar PV installed in California.

There are no tax credits, rebates, grants, or other subsidies in the German program. There is no net-metering, though there is a small program that attempts to approximate a similar result that has not proven popular. There may also be depreciation deductions.

The posted tariffs vary from a high of €0.29/kWh ($0.41/kWh).for rooftop systems less than 30 kW to a low of €0.21/kWh ($0.30/kWh) for systems mounted on the ground at, for example, brownfield sites.

German tariffs are based on the cost of generation plus a reasonable profit. If German tariffs were applied directly to California without adjustment to the state’s greater solar intensity, the tariffs would pay more than necessary and result in windfall profits.

German Tariffs in California

To compare Germany’s solar PV tariffs to those that would be appropriate in California, it is necessary to reduce the tariffs by an amount equivalent to the difference in the solar resource.

The solar resource in California is not uniform across the entire state. The rainy north coast, for example, has much less insolation than the blisteringly hot San Joaquin Valley. Any solar feed-in tariff program for California would have to take these differences into account.

Nevertheless, for the sake of a simple comparison, we can assume that a simple solar feed-in tariff for California would be about 64% of that currently paid in Germany.

Thus, German solar tariffs today applied to California would range from a low of $0.20/kWh for groundmounted systems on brownfield sites to nearly $0.27/kWh for rooftop systems less than 30 kW.

Average Cost of German Solar FIT in 2011

According to data from the Bundesnetzagentur, Germany installed 717 MW of solar PV from January through April, 2011. The average weighted payments per kilowatt-hour under the German program were €0.26/kWh ($0.38/kWh). Under California conditions, these payments would be equivalent to $0.24/kWh.

Germans Pay Less than Californians

A comparison between Freehling’s data on the total cost of solar PV in California and data from public sources in Germany shows that Californians are paying substantially more for solar PV than Germans, despite claims to the contrary.

Excluding the benefits of the depreciation deduction to California investors in solar PV, Germans are paying $0.03/kWh less for installations by non-profits and government agencies than Californians, and nearly $0.07/kWh less for commercial projects.

Overall, Germany paid $0.07/kWh or 23% less for the 717 MW installed in the first part of 2011 than California paid for 200 MW of solar PV in 2010.

Germans Have Cut Solar Rates 50% Since 2004

Germany launched its Renewable Energy Sources Act in 2000. Included in the act was provision for a solar feed-in tariff. It was a simple tariff without size differentiation.

From the year 2000, when total installed solar PV capacity across all of Germany was only 90 MW, capacity grew steadily to 1,000 MW by 2004. However, this growth was insufficient to renewable energy advocates in Germany’s House of Commons, the Bundestag. During the scheduled revisions of the Renewable Energy Sources Act in 2004, tariffs for solar PV were increased and differentiated by size. The revisions also included annual decreases in the tariffs (degression) of from 5% to 6.5% per year.

Since 2004, Germany has revised its tariffs for solar PV several times. Today solar PV tariffs in Germany are about one-half those of 2004.

Germany has effectively reached parity for groundmounted solar PV with the residential retail rate, though it has been at grid parity for wind energy for more than a decade.

German Costs Fell Faster than US Costs

In contrast to the experience in Germany, Lawrence Berkeley National Laboratory (LBL) found that during the period from 2004 through 2009, the installed cost of solar PV in the US dropped only 10%. In Tracking the Sun III: The Installed Cost of Photovoltaics in the U.S. from 1998-2009, LBL also found that the installed cost of residential solar PV in Germany was 61% of that in the US. That is, Germans were paying 40% less to install solar PV on their homes than Americans were.

Based on German experience, it could be argued that California, and the US as a whole, would have proceeded much more quickly toward grid parity for solar PV–and saved taxpayers and ratepayers money–by simply adopting the German feed-in tariffs and letting the industry drive down costs for solar PV on both continents.

What’s Next for California?

As the CSI program winds down, the question becomes, “What should California do next?”

During the 2010 campaign, Governor Jerry Brown said he wants to develop 12,000 MW of distributed generation with feed-in tariffs. If he carries through on his campaign promise, then California’s solar program may morph into just one of many components of a comprehensive feed-in tariff program for multiple technologies.

And if Congress carries through on its threats at belt-tightening, future solar tax credits could be at risk.

California may be wise to create a renewable energy program that’s not only adaptable to future federal action but also fairer to all Californians. The state could, for example, create two feed-in tariff tracks–one for those who can use federal tax credits and another for those who can’t use federal tax credits, or choose not to.

Should Congress eventually axe solar subsidies, California homeowners, farmers, and businesses could then simply use the feed-in tariff track not dependent on federal tax credits.

Adopting German Solar PV Tariffs in California

California has an international reputation for an overly bureaucratic and cumbersome regulatory process. The state’s Public Utility Commission has still not implemented SB 32, the California solar industry’s attempt at moving toward a simple feed-in tariff in the state that was signed into law in the fall of 2009.

While interminable hearings on SB 32 drag on, the PUC has instead launched another bidding scheme masquerading as a feed-in tariff.

Governor Brown could short-circuit the PUC’s administrative apparatus and simply declare that as part of the state’s new feed-in tariff program for distributed generation, California would simply adopt German tariffs, adjusted for the Golden State’s better solar resource. He could do so on the grounds that the German tariffs are cheaper and fairer to all Californians than the current hodgepodge of programs.

 

 

 

 

California Feed-in Tariff: Renewables Portfolio Standard Rulemaking at the CPUC Takes First Step

You just knew that this Renewables Portfolio Standard (RPS) rulemaking at the California Public Utilities Commission in San Francisco was going to be a monster when they assigned not 1, not 2, but 4 administrative law judges to it.  I’m not 100% sure, but I do think that’s some sort of record for the PUC… 4 concurrent ALJs working in the same rulemaking.  Insanity!

Happily given the complexity and breadth of the rulemaking, Commissioner Ferron and the ALJs have decided that the Commission will prioritize the issues to be discussed in the rulemaking so that there will be a series of interim rulings and decisions throughout the rulemaking.  A scoping memo setting forth that prioritization is anticipated soon.

However, the first of those interim rulings came out last night focused on the adopted, but not yet enacted, Section 399.20 of the Public Utilities Code which increases the eligibility cap for new facilities for the California feed-in tariff  from 1 MW to 3 MW and increases the total program cap to 750 MW from its previous 500 MW.

The implementation of these changes, especially the derivation of the rate (or rates) that will be included in the California feed-in tariff, will have a significant impact on the continued roll-out of distributed generation facilities throughout California.  It’s important to note that the California feed-in tariff is not supposed to be like the often-debated feed-in tariffs in Spain or Germany that included a subsidy within the feed-in tariff rate.   The California feed-in tariff is only supposed to ensure that if you build a small renewable facility in California that you will be allowed to interconnect and at least receive the market price for the value of your generation.

The ruling requests comment on a number of implementation issues for the California feed-in tariff (how do you calculate payments and pricing, how do you ensure that all other ratepayers are indifferent to those payments and pricing, etc.) by July 21.

So if you want to get involved in the CPUC RPS rulemaking with regard to the 3 MW California feed-in tariff subissue, this is your opportunity.

Solar Europa Plans Council and Housing Association Solar Program

07.04.2011
Barnsley ,   United Kingdom

Yorkshire-based Solar Europa has unveiled what it claims is the UK’s biggest-ever deal for free solar power after securing financial backing from a market-leading project finance specialist. The £1.2 billion deal has been struck that will see around 200,000 council and housing association tenants across the UK getting free solar panels installed on their homes.

Over the next four years, the deal is expected to create up to 3,000 jobs for installation and maintenance teams all over the country.

It could slash every tenants’ electricity bill by up to fifty per cent – and could also be a financial lifeline for cash-strapped councils and housing associations who will earn substantial rental incomes for the next 25 years.

The deal will help social landlords take a huge steps towards tackling the escalating problem of fuel poverty, while at the same time confirming their commitment to hitting the Government’s carbon reduction targets.

Solar Europa is now set to open discussions with councils and social landlords, with the first installations due to start as soon as September.

Spokesman David Hawkins described the deal as a ‘win win’ situation for local authorities, housing associations – and their tenants.

He said: “With spiralling electricity costs hardly ever out of the news, fuel poverty is an important issue facing every social housing provider.

“Financial constraints have, until now, meant many housing associations and local authorities have been unable to invest in much-needed renewable technologies.

“Installing solar photovoltaic panels as part of a wider energy efficiency programme can help alleviate the problems of high energy costs for tenants.

“The average tenant who has solar panels installed can save as much as 50 per cent off their annual electricity bill and that saving can make a massive difference to the lives of many householders across the country.

“This deal will go a long way towards helping housing providers meet the requirements of the Government’s White Paper on reducing fuel poverty while at the same time, help them meet carbon reduction targets – and all at no cost to the tenant or landlord.”

In Barnsley, where the company is based, it will mean an extra 25 new jobs working in distribution and support roles.

The company has already invested in a new 75,000sq ft northern warehouse and distribution depot in the village of Barugh Green, a few miles from its headquarters in Dodworth. And it has also secured a southern distribution depot in Sunbury-on-Thames.

All properties fitted with the solar PV kits will benefit from the latest generation of micro-inverter technology, meaning the systems are 25 per cent more efficient than conventional kits.

A spokesman for AD-ECO which is providing the funding for the partnership said they were delighted with the outcome of several months of negotiations.

He added: “AD-ECO bring many years of financial experience and understand the importance of being able to deliver extremely flexible solutions to the end user – something that is vital in a sector which increasingly insists on a “one size fits all” mind-set.

“The flexibility and innovation that Solar Europa brings to the design of individual projects was key to our choice.”

Further details about: Solar Europa

Solar Energy: Made in America

A Solar Revolution – Coming Soon

There’s a reason solar advocates love Independence Day. The bright July sunshine means that solar energy systems from Maine to California are pumping out free, clean energy for their owners. These solar pioneers are harnessing our abundant solar resources and are helping make America energy independent this Fourth of July.

Most people don’t know that America is the birthplace of the modern solar energy industry. In 1891, an inventor from Baltimore named Charles Kemp filed the patent for the first commercial solar water heater. The Carnegie Steel Company modernized the design a few decades later.

In the 1950’s, Bell Labs created the first modern solar electric cell using silicon, which is still the semiconductor of choice for many solar panel manufacturers. Bell’s technology leap helped the U.S. win the space race by providing the “killer app” for satellite power generation.

In 1974, five major industry members decided to form the Solar Energy Industries Association; the first trade association for solar energy businesses in the U.S. In 1979, the White House installed what would be the first of many solar installations at that site. (This article from the Washington Post discusses the first installation during the Carter administration and the recent announcement by President Obama, but doesn’t mention the panels that the Bush administration installed in 2003.)

In 1986, the first large-scale concentrating solar thermal-electricity facility opened in Kramer Junction, California. Beyond the solar thermal collectors, it works just like a traditional steam-turbine power plant.

I won’t take up more valuable fireworks-and-barbeque time with a lengthy dissertation on solar energy in America, but if you’re a geek like me, we’ve got some great resources for you. For example, Solar Works for America tells the stories of regular people across America who have found jobs in the solar industry. As one of the fastest growing industries in the country, we hope that solar can help you be economically independent through “going solar” yourself, training for a solar job or maybe even starting your own solar company.

Solar energy is a classic American success story of technology, innovation and competition. In the coming months, SEIA will be announcing a lot of new ways to help you fight for a solar-powered America. Enjoy the fireworks, but stay tuned: the real solar revolution is just beginning.

Yours in sunny solidarity,
Michael Rader, SEIA

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Treasury Releases Guidance Describing Process for Evaluating Cost Basis for Treasury Grant Purposes

Hunton & Williams LLP
July 1, 2011

Treasury Releases Guidance Describing Process for Evaluating Cost Basis for Treasury Grant Purposes


On June 30, 2011, the Treasury Department released guidance describing the process for evaluating the cost basis of projects qualifying for a Treasury Grant under Section 1603 of the American Recovery and Reinvestment Act. The guidance “outlines the process used by the Section 1603 team to evaluate basis and the principles that guide this process.” Although the guidance addresses only solar PV properties, the guidance states that “the methods used to evaluate cost basis described herein apply to all types of properties.”  Read more…

Dominion to Convert Three Va. Coal Plants to Biomass

Dominion Virginia Power on Monday asked the Virginia State Corporation Commission for approval to convert three Virginia coal-burning power plants to biomass, saying the proposal had “strong customer benefits” and fit well with the company’s commitment to produce 15% of its power from renewable sources by 2025.
The conversions of the power stations in Altavista, Hopewell, and Southampton County would increase Dominion’s renewable generation capacity by more than 150 MW. “The switch to biomass-in this case, using primarily waste wood left over from regional timber operations-would reduce nitrogen oxides, sulfur dioxide, mercury and particulate emissions and meet stringent emissions standards established by the Virginia Department of Environmental Quality and the U.S. Environmental Protection Agency,” Dominion said.

The cost of converting the stations would be about $165 million, or $55 million per station. The company also requested an initial annual rate increase of 14 cents to the monthly bill of a typical 1,000-kWh-per-month residential customer, effective April 1, 2012.
The power stations, which would generate about 51 MW each, are nearly identical. “The incremental statewide economic benefit of converting the stations is estimated to be more than $120 million annually when compared to continued operations on coal, including the creation of more than 300 jobs in the forestry and trucking industries,” Dominion said.

The stations have been primarily peaking power units, operating 25% of the time. “If the conversions are approved, they would be more economic to operate and, therefore, would be expected to generate electricity about 90 percent of the time,” the company added.

The company also filed its annual updates and rate adjustment requests for the Bear Garden Power Station, which began commercial operation in May, and the Virginia City Hybrid Energy Center, which is more than 88% complete and on schedule for a summer 2012 startup. The company has requested an increase in the existing rate adjustment clauses of $1.17 per 1,000 kilowatt-hours-10 cents for Bear Garden and $1.07 for Virginia City. If approved, the two projects would account for $6.36 of the typical 1,000-kilowatt-hour residential monthly bill of $114.67 as of April 1, 2012.

Sources: POWERnews, Dominion Virginia