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Regional Greenhouse Gas Initiative (RGGI). Electricity Restructuring Roundtable June 17, 2005. 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. - PowerPoint PPT Presentation
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Regional Greenhouse Regional Greenhouse Gas InitiativeGas Initiative
(RGGI)(RGGI)
Electricity Restructuring Electricity Restructuring RoundtableRoundtable
June 17, 2005June 17, 2005
Dominion DeliveryDominion Delivery
Plus 1.2 million unregulatedretail energy customersin 8 states
4 million franchise gas and electric delivery customers in 5 states
Dominion Exploration and Production
Dominion Exploration and Production
~6 trillion cubic feet equivalent of provedgas and oil reservesApproximately 1.2 billion
cubic feet equivalent of
daily production
~ 28,100 Mw of electric generation
Dominion GenerationDominion Generation
Dominion EnergyDominion Energy
7,900 miles of naturalgas pipeline
Nearly 1 trillion cubic feetof natural gas storageCove Point LNG Facility
6,000 miles of electric transmission
Dominion FootprintDominion Footprint
Existing Generation
Surry
Gaston
Bath
Clover
Chesapeake
Possum Point
Yorktown
Chesterfield
Mt Storm
North Anna
Coal
Natural Gas
Nuclear
HydroBremo
Remington
Oil - Gas Capacityat plant
Ladysmith
NEPOOL
MAIN
ECAR
VACAR
PJM
NYPP
Roanoke RapidsTVA
Entergy
Gordonsville
OtherPittsylvania
Elizabeth River
Dominion Generation - Dominion Generation - Virginia Power PortfolioVirginia Power Portfolio
(as of January 27, 2005)(as of January 27, 2005)Current - 18,400 MWCurrent - 18,400 MW
Existing Generation
Elwood
KincaidMorgantown Coal
Natural Gas
Nuclear
Millstone
Pleasants
Armstrong
Troy
NEPOOL
MAIN
ECAR
VACAR
PJM
NYPP
State Line
TVAEntergy
Kewaunee
Fairless Works
Brayton Point
Salem Harbor
Manchester Street
Dominion Generation - Merchant Dominion Generation - Merchant
PortfolioPortfolio (as of January 27, 2005)(as of January 27, 2005)
Current - 9,700 MWKewaunee - 545 MW*
Current - 9,700 MWKewaunee - 545 MW*
Growth Generation
Nuclear
*Pending
Dominion New EnglandGeneration Assets : 4,643 MW
Salem Harbor312 MW Coal (3 Units)
431 MW Oil (1 Unit)
Manchester Street426 MW Gas CC (3 Units)
Brayton Pt.1,078 MW Coal (3 Units)
435 MW Oil * (1 Units)
Millstone1,953 MW Nuclear (2 Units)
Source: Dominion Internal Database
* Excludes 8 MW of diesel capacity
Dominion New EnglandDominion New England Generation DiversityGeneration Diversity
Source: Dominion Internal Database
Peaking9.0%
Intermediate19.0%
Base72%
Coal30%
Oil19%Gas
9%
Nuclear42%
Dominion New England Generation Portfolio4,643 MW
Fuel Diversity Dispatch Diversity
Climate ChangeClimate Change
Multi-sector, long-term environmental, Multi-sector, long-term environmental, economic and energy issue economic and energy issue
Global issue - will not be resolved by an Global issue - will not be resolved by an individual state or region individual state or region
Technology-based solution Technology-based solution Burden should not fall upon a single sector Burden should not fall upon a single sector
Power Plant COPower Plant CO22 Emissions Emissions
Power plants in the RGGI Power plants in the RGGI region generate only 5% of region generate only 5% of the national power plant the national power plant emissions of CO2emissions of CO2
They generate ~9% of the They generate ~9% of the national megawatt hoursnational megawatt hours
Emissions in RGGI region Emissions in RGGI region (2003) were 3% below 1990 (2003) were 3% below 1990 levels; average emission rate levels; average emission rate is about 900 lbs/mwh.is about 900 lbs/mwh.
National emissions (2003) National emissions (2003) were 24% above 1990 levels; were 24% above 1990 levels; average emission rate is average emission rate is 1400 lb/mwh. 1400 lb/mwh.
2043
145
2550
136
0
500
1000
1500
2000
2500
3000
U.S. RGGI
1990
2002
Power Plant CO2 (million Power Plant CO2 (million tons)tons)
Power Plant CO2 (lb/mwh)Power Plant CO2 (lb/mwh)
0
200
400
600
800
1000
1200
1400
1600
1800
2000
U.S. RGGI
All Generation
Fossil Generation
Compliance OptionsCompliance Options
Robust offsets program essential for Robust offsets program essential for flexible, low-cost compliance optionsflexible, low-cost compliance options
Lack of commercially available end-of-Lack of commercially available end-of-pipe controls limits reduction pipe controls limits reduction opportunities for fossil-fuel plantsopportunities for fossil-fuel plants Fuel switchingFuel switching Efficiency improvementsEfficiency improvements Unit shutdowns Unit shutdowns More costly - reliability, fuel diversity issuesMore costly - reliability, fuel diversity issues
Offsets - Least Cost Compliance Offsets - Least Cost Compliance Options Are Critical to Success of Options Are Critical to Success of
ProgramProgram
RGGI currently focused on limited “short list”RGGI currently focused on limited “short list” Needs to focus on process and development of criteria for Needs to focus on process and development of criteria for
identifying and evaluating offset projects to expand list of identifying and evaluating offset projects to expand list of low-cost opportunitieslow-cost opportunities
Allow case-by-case projects/demonstrationsAllow case-by-case projects/demonstrations Avoid/limit geographic constraintsAvoid/limit geographic constraints Include all greenhouse gasesInclude all greenhouse gases Evaluate price/stabilizer cap (“circuit breaker”)Evaluate price/stabilizer cap (“circuit breaker”)
““From viewpoint of system operations and reliability: From viewpoint of system operations and reliability: compliance flexibility is key for assuring reliability” (ISO-NE compliance flexibility is key for assuring reliability” (ISO-NE - Nov 2004)- Nov 2004)
Modeling Is Key ComponentModeling Is Key Component
Cost-benefit analysis essential to processCost-benefit analysis essential to process RGGI needs to address issues raised by RGGI needs to address issues raised by
stakeholders regarding unrealistic sector stakeholders regarding unrealistic sector modeling (IPM) reference case assumptionsmodeling (IPM) reference case assumptions
Stakeholders should have access to all detailed Stakeholders should have access to all detailed modeling outputs/results for sector and modeling outputs/results for sector and macroeconomic analysis in a timely mannermacroeconomic analysis in a timely manner
Given funding/resource constraints, RGGI must Given funding/resource constraints, RGGI must focus on modeling runs that will provide focus on modeling runs that will provide decision makers with meaningful information decision makers with meaningful information from which to formulate well-informed policy from which to formulate well-informed policy decisionsdecisions
How Will RGGI Affect Region?How Will RGGI Affect Region?
Electricity pricesElectricity prices JobsJobs Local tax revenuesLocal tax revenues Additional reliability on natural gas as a Additional reliability on natural gas as a
source of fuel for electric productionsource of fuel for electric production Fuel diversity erosion and grid reliability Fuel diversity erosion and grid reliability Additional reliance on electricity importsAdditional reliance on electricity imports Impact of leakageImpact of leakage
What are the benefits …. At what cost?What are the benefits …. At what cost?
What Makes Sense for a What Makes Sense for a Region Where …….Region Where …….
COCO22 emissions are a small portion of national emissions are a small portion of national totaltotal
Average source emission rates are much below Average source emission rates are much below U.S. averageU.S. average
A relatively large portion of electric generation A relatively large portion of electric generation (~40%) is from non-emitting nuclear and hydro(~40%) is from non-emitting nuclear and hydro
Electricity prices are already among nation’s Electricity prices are already among nation’s highest.highest.
What Makes Sense !What Makes Sense !
To extent a regional cap is imposed:To extent a regional cap is imposed:
Stabilize cap at current levels Stabilize cap at current levels Design program that provides reasonable, flexible Design program that provides reasonable, flexible
compliance mechanisms that minimize the costcompliance mechanisms that minimize the cost Establish a “minimum” state adoption Establish a “minimum” state adoption
requirement for implementation requirement for implementation Provide mechanism to interface/transition to a Provide mechanism to interface/transition to a
national programnational program Provide means to interface with any existing Provide means to interface with any existing
state programs state programs
BenefitsBenefits
Captures RGGI region emission reductions, Captures RGGI region emission reductions, actions since 1990actions since 1990
Hedges economic risk for NortheastHedges economic risk for Northeast Maintains electric system reliability, fuel Maintains electric system reliability, fuel
diversity, energy affordabilitydiversity, energy affordability Allows time to evaluate RPS impactAllows time to evaluate RPS impact Creates more workable format that other Creates more workable format that other
regions may be willing to consider/adoptregions may be willing to consider/adopt Allows time for national program to emergeAllows time for national program to emerge