Dominion CEO says Virginia power plants on schedule, on budget

April 25 Thu Apr 25, 2013 3:33pm EDT

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April 25 (Reuters) - U.S. power company Dominion Resources Inc's CEO said on 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.

"We continue to move forward on growth plans," Tom Farrell, Dominion chief executive officer, said on the company's first quarter earnings call.

He said the 1,329-megawatt (MW) Warren County three-on-one combined cycle natural gas plant was expected to enter service in late 2014.

Three-on-one means three combustion turbines and one steam turbine.

All of the turbines and generators have been installed on their foundations and the air cooled condenser and the three steam generators are being erected, he said.

There are over 900 people presently employed at the site, he said.

The Warren County project is located near Front Royal, Virginia, about 70 miles west of Washington, DC, and is expected to cost about $1.1 billion, the company has said.

In Brunswick County, Farrell said development of a proposed plant continues. Brunswick is another three-on-one combined cycle gas plant, similar in size and design to Warren County.

He said Dominion filed with Virginia utility regulators last November and public hearings began this week. The company expects a ruling from the regulators later this summer.

Farrell said the Virginia Department of Environmental Quality on March 15 issued an air permit for the proposed Brunswick plant.

Brunswick is expected to be in service in 2016, he said.

Farrell also said the conversion of Dominion's three 63-MW coal-fired units at Altavista, Southampton and Hopewell from coal to biomass is progressing on schedule.

He said engineering and procurement of all major equipment has been completed and delivered to the sites and the first biomass fuel deliveries arrived at Altavista in March.

All three conversion projects are expected to be operational later this year, he said.

MERCHANT FLEET

In answer to a question about the future of Dominion's merchant generating fleet, Farrell said, "The assets we have fit well within our strategic plan."

"We want to maintain a stable, strong, relatively small merchant power fleet in a localized region," Farrell said.

Merchant plants are those where the plant owner must recover the cost of operating the plant from energy sales, not from rate payers.

Dominion's remaining merchant plants include the 2,103-MW Millstone nuclear plant in Connecticut, the 447-MW Manchester Street gas/oil plant in Rhode Island and the 1,211-MW Fairless gas plant in Pennsylvania.

Over the past year or so, Dominion has reduced the size of its merchant fleet by shutting or selling several plants, including State Line in Indiana, Salem Harbor and Brayton Point in Massachusetts, and Kincaid and Elwood in Illinois.

Dominion also plans to shut its merchant Kewaunee nuclear plant in Wisconsin over the next few weeks in part due to weak power market conditions.

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