* Dominion to shut Kewaunee reactor in Wisconsin next year
* Glut of natural gas from shale depressing power prices
* Builds thousands of megawatts in Virginia to meet growth
By Scott DiSavino
NEW YORK, Oct 25 Dominion Resources Inc
said potential buyers have shown high interest in the three
power plants it is offering for sale in the U.S. Midwest and
"We've had many, many parties express interest," Tom
Farrell, Dominion's chairman, president and chief executive
officer, said Thursday on the company's third-quarter earnings
The three plants Richmond, Virginia-based Dominion is
looking to sell are the 1,536-megawatt (MW) Brayton Point coal,
natural gas and oil-fired plant in Massachusetts; the 1,158-MW
Kincaid coal plant in Illinois; and the company's 50 percent
stake in the 1,424-MW Elwood gas plant in Illinois.
Earlier in the week, Dominion said it would shut the 566-MW
Kewaunee nuclear power plant in Wisconsin next year after the
company failed to find a buyer for the reactor.
A glut of natural gas, primarily from increases in shale
production, has depressed power prices to levels not seen in a
decade, making it tough for generators to earn enough money to
keep some power plants such as Kewaunee running.
"I don't think you should compare Kewaunee to Kincaid,
Elwood or Brayton Point. Kewaunee is a very unfortunate
situation. We couldn't make it work and, apparently, nobody else
could either since we found no buyers," Farrell said.
"It's a ... relatively small nuclear facility and there are
no capacity payments (in the Midwest power grid), gas prices
have reduced energy prices there. It is very difficult for a
single unit nuclear facility to work in that market," Farrell
The Midwest power grid, where Kewaunee is located, has no
capacity market. Generators make money in the capacity market
just to keep their plants available for reliability reasons -
like an insurance policy - even if they are not needed to
The three plants the company is looking to sell are either
located in or sell their capacity to the PJM or New England
grids, which have capacity markets.
PJM is the biggest U.S. power grid, serving more than 60
million people in 13 Mid-Atlantic and Midwest states and the
District of Columbia.
The demand for power in Virginia is growing faster than much
of the rest of the nation, in part due to a rapid rise in
computer data centers and other growth in the Northern Virginia
suburbs near Washington, D.C., Dominion has said.
To meet this growth, Dominion is adding thousands of
megawatts of new or repowered generating capacity.
Over the summer, the company's 585-MW Virginia City coal and
biomass plant entered service. Farrell said the $1.8 billion
project was on budget and on schedule following four years of
He said construction of the 1,329-MW natural gas-fired
Warren County plant in Virginia was also on budget and on
schedule. The $1.1 billion combined cycle plant will have three
combustion turbines and one steam turbine and was scheduled for
commercial operation in late 2014.
Farrell said the company was in advanced development of
another 1,300-MW combined cycle, natural gas plant in Brunswick
County, Virginia, which was expected to enter service in 2016 at
a similar cost to Warren County.
He said the company was also working to convert units 3 and
4 at the 227-MW Bremo Bluff plant from coal to gas in 2014.
And he said the plans to convert the three coal units at
Altavista, Hopewell and Southampton into biomass units were on
budget and on schedule to be complete by the end of next year.
In the past, Dominion said it would convert the 63-MW
coal-fired peak demand units at Altavista, Hopewell and
Southampton into 51-MW baseload biomass plants at an estimated
total cost of about $165 million.