Dominion CEO says Virginia power plants on schedule, on budget
* $1.1 billion Warren County plant seen on in late 2014
* Brunswick County plant seen on in 2016
* Sale of coal, oil and gas merchant plants on track
Jan 31 (Reuters) - U.S. power company Dominion Resources Inc's CEO said Thursday construction of several power plants in Virginia was on schedule and on budget and expected to enter service over the next few years to meet growing customer demand for electricity.
"In 2012, we completed several major capital projects ... and made significant progress ... to advance the next round of projects which should sustain our growth plan through the rest of the decade," Tom Farrell, Dominion CEO, said on the company's fourth quarter earnings call.
He said construction of the 1,329-megawatt (MW) Warren County three-on-one combined cycle natural gas plant began in March of 2012. Three-on-one means three combustion turbines and one steam turbine.
All of the major components have been delivered for Warren County and two of the three combustion turbines have been installed on their foundations, Farrell said.
The $1.1 billion Warren County project, located near Front Royal, Virginia, about 70 miles west of Washington, DC, is "on time and on budget" and expected to enter service in late 2014, Farrell said.
At Brunswick County, Farrell said Dominion was also making "considerable progress" on the development of another three-on-one combined cycle gas plant, similar in size and design to Warren County.
He said the company has procured the gas and steam turbines, the agreements with the gas transportation supplier have been signed, and permitting for Brunswick County is under way.
He said Dominion executed the engineering, procurement and construction (EPC) contract for Brunswick County with Fluor Corp in July, and issued a limited notice to proceed.
Farrell said state utility regulators set a hearing date for the Brunswick County project for April 24, and a decision is expected sometime this summer.
Commercial operation of the Brunswick County plant is scheduled for 2016.
COAL TO BIOMASS
Dominion started the conversion of the 63-MW Altavista, 63-MW Southampton, and 63-MW Hopewell power stations from coal to biomass in 2012, and Farrell said all three are progressing on schedule.
He said the three biomass projects are expected to reach commercial operations on budget by the end of this year.
Dominion in August filed with the state for the proposed conversion of the 71-MW Unit 3 and 156-MW Unit 4 at Bremo from coal to natural gas.
Farrell said if the Bremo project is approved, it is expected to begin commercial operations in 2014.
As for its merchant fleet, Dominion in 2012 shut the 515-MW State Line coal plant in Indiana in March and sold it in June.
Dominion also sold the 744-MW Salem Harbor coal and oil-fired plant in Massachusetts in June.
Farrell also said the sale process for the 1,545-MW Brayton Point coal and oil plant in Massachusetts, 1,158-MW Kincaid coal plant in Illinois and the company's 50 percent interest in the 1,350-MW Elwood gas plant in Illinois is on track and should be complete by mid-year.
KEWAUNEE REACTOR TO SHUT
Farrell said Dominion would shut the 566-MW Kewaunee nuclear power plant in Wisconsin later this year as previously announced after the company was unable to find a buyer for the plant.
Dominion said previously it would shut Kewaunee as cheap natural gas from record shale production pressured power prices to decade lows across much of the country, among other things.
Finally, with the 2,103-MW Millstone nuclear plant in Connecticut, the company's CFO Mark McGettrick said since the last earnings call Dominion has increased its hedge positions from 80 percent to 82 percent for 2013, from 40 percent to 59 percent for 2014, and from 24 percent to 37 percent for 2015.
McGettrick said the company's sensitivity to a $5 move in New England power prices in 2013 is only about $0.02 per share.