Dominion Virginia Power Proposes To Convert Bremo Power Station From Coal To Natural Gas

- Fuel switch at existing site will provide economical generation

- Proposal included in Virginia City Hybrid Energy Center air permit

- Annual economic benefit would be $24 million once completed

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Sep 05, 2012, 09:05 ET

RICHMOND, Va., Sept. 5, 2012 /PRNewswire/ -- Dominion Virginia Power is proposing to convert Bremo Power Station from using coal to natural gas as fuel to generate electricity. This would be the ninth company-owned, coal-fired power station announced in recent years with units to be closed or converted to alternative fuels.

In its application filed with the Virginia State Corporation Commission (SCC), Dominion noted that it had agreed to stop using coal and convert the 227-megawatt, two-unit power station by spring 2014 as part of the air permit for the Virginia City Hybrid Energy Center. Virginia Center went into service in July. If the SCC approves the estimated $53.4 million conversion, the company would cease burning coal at the station in the fall of 2013.

These emission reductions would be in addition to Dominion's efforts already under way in Virginia to reduce emissions of sulfur dioxide, nitrogen oxides and mercury from existing stations by 75 percent to 85 percent by 2015.

The conversion is projected to save customers about $32 million when compared with the cost of building new generation and will save them $155 million when compared to continued operation on coal. Bremo entered service in 1931, and the two units now in use were put into service in 1950 and 1958, respectively.

During construction, the conversion is expected to have a total economic benefit to the state of about $7 million and create up to 42 new jobs. The station will have a total annual economic impact of about $24 million once it is completed.

Dominion has announced plans to shut down or convert all or part of five other coal-fired power stations and convert three small units to biomass. Coal-fired power stations that are scheduled to close by 2015 are Chesapeake Energy Center and two units at Yorktown Power Station in Virginia, and the North Branch Power Station in West Virginia. The three small Virginia stations being converted to biomass by 2014 are in Altavista, Hopewell and Southampton County.

The company this year closed a merchant coal-fired power station in Indiana and announced the closing by June 2014 of a merchant coal- and oil-fired power station in Massachusetts, which it subsequently sold.

New environmental regulations that would have required costly expenditures to retrofit emission control equipment plus the low price and availability of natural gas as an alternative fuel has made operating smaller, older coal-fired stations uneconomical.

Dominion Virginia Power is a subsidiary of Dominion (NYSE: D), one of the nation's largest producers and transporters of energy, with a portfolio of approximately 28,000 megawatts of generation, 11,000 miles of natural gas transmission, gathering and storage pipeline and 6,300 miles of electric transmission lines. Dominion operates the nation's largest natural gas storage system with 947 billion cubic feet of storage capacity and serves retail energy customers in 15 states. For more information about Dominion, visit the company's website at www.dom.com.

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SOURCE Dominion Virginia Power