Regional Greenhouse Gas Initiative RGGI Electricity Restructuring Roundtable
Regional Greenhouse Gas Initiative (RGGI) Electricity Restructuring Roundtable June 17, 2005
Dominion Footprint Dominion Exploration and Production ~6 trillion cubic feet equivalent of proved gas and oil reserves Approximately 1. 2 billion cubic feet equivalent of daily production Dominion Generation ~ 28, 100 Mw of electric generation Dominion Energy 7, 900 miles of natural gas pipeline 6, 000 miles of electric transmission Nearly 1 trillion cubic feet of natural gas storage Cove Point LNG Facility Dominion Delivery 4 million franchise gas and electric delivery customers in 5 states Plus 1. 2 million unregulated retail energy customers in 8 states
Dominion Generation Virginia Power Portfolio Current - 18, 400 MW (as of January 27, 2005) NEPOOL MAIN NYPP PJM Mt Storm ECAR Remington Possum Point North Anna Gordonsville Bath Ladysmith Bremo Clover Entergy Pittsylvania TVA Gaston Yorktown Surry Elizabeth River Chesapeake Chesterfield VACAR Roanoke Rapids Existing Generation Coal Natural Gas Nuclear Hydro Oil - Gas Capacity at plant Other
Dominion Generation - Merchant Portfolio (as of January 27, 2005) Current - 9, 700 MW Kewaunee - 545 MW* Kewaunee NEPOOL Salem Harbor MAIN NYPP Manchester Street Elwood Brayton Point Millstone State Line Troy Armstrong Kincaid ECAR Morgantown PJM Fairless Works Existing Generation Coal Natural Gas Pleasants Nuclear Growth Generation Entergy Nuclear TVA VACAR *Pending
Dominion New England Generation Assets : 4, 643 MW Salem Harbor 312 MW Coal (3 Units) 431 MW Oil (1 Unit) Manchester Street 426 MW Gas CC (3 Units) Brayton Pt. 1, 078 MW Coal (3 Units) 435 MW Oil * (1 Units) Millstone 1, 953 MW Nuclear (2 Units) * Excludes 8 MW of diesel capacity Source: Dominion Internal Database
Dominion New England Generation Diversity Dominion New England Generation Portfolio 4, 643 MW Fuel Diversity Dispatch Diversity Source: Dominion Internal Database
Climate Change n n Multi-sector, long-term environmental, economic and energy issue Global issue - will not be resolved by an individual state or region Technology-based solution Burden should not fall upon a single sector
Power Plant CO 2 Emissions Power plants in the RGGI region generate only 5% of the national power plant emissions of CO 2 n They generate ~9% of the national megawatt hours n Emissions in RGGI region (2003) were 3% below 1990 levels; average emission rate is about 900 lbs/mwh. n National emissions (2003) were 24% above 1990 levels; average emission rate is 1400 lb/mwh. n
Power Plant CO 2 (million tons)
Power Plant CO 2 (lb/mwh)
Compliance Options n Robust offsets program essential for flexible, low-cost compliance options n Lack of commercially available end-ofpipe controls limits reduction opportunities for fossil-fuel plants Fuel switching n Efficiency improvements n Unit shutdowns n More costly - reliability, fuel diversity issues n
Offsets - Least Compliance Options Are Critical to Success of Program n n n RGGI currently focused on limited “short list” Needs to focus on process and development of criteria for identifying and evaluating offset projects to expand list of low-cost opportunities Allow case-by-case projects/demonstrations Avoid/limit geographic constraints Include all greenhouse gases Evaluate price/stabilizer cap (“circuit breaker”) “From viewpoint of system operations and reliability: compliance flexibility is key for assuring reliability” (ISO-NE - Nov 2004)
Modeling Is Key Component n n Cost-benefit analysis essential to process RGGI needs to address issues raised by stakeholders regarding unrealistic sector modeling (IPM) reference case assumptions Stakeholders should have access to all detailed modeling outputs/results for sector and macroeconomic analysis in a timely manner Given funding/resource constraints, RGGI must focus on modeling runs that will provide decision makers with meaningful information from which to formulate well-informed policy decisions
How Will RGGI Affect Region? n n n n Electricity prices Jobs Local tax revenues Additional reliability on natural gas as a source of fuel for electric production Fuel diversity erosion and grid reliability Additional reliance on electricity imports Impact of leakage What are the benefits …. At what cost?
What Makes Sense for a Region Where ……. n n CO 2 emissions are a small portion of national total Average source emission rates are much below U. S. average A relatively large portion of electric generation (~40%) is from non-emitting nuclear and hydro Electricity prices are already among nation’s highest.
What Makes Sense ! n To extent a regional cap is imposed: n n n Stabilize cap at current levels Design program that provides reasonable, flexible compliance mechanisms that minimize the cost Establish a “minimum” state adoption requirement for implementation Provide mechanism to interface/transition to a national program Provide means to interface with any existing state programs
Benefits n n n Captures RGGI region emission reductions, actions since 1990 Hedges economic risk for Northeast Maintains electric system reliability, fuel diversity, energy affordability Allows time to evaluate RPS impact Creates more workable format that other regions may be willing to consider/adopt Allows time for national program to emerge
- Slides: 18