Dominion Unveils Plans for Another $1 Billion-plus NGCC

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Dominion Virginia Power (Richmond, Virginia), a unit of Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia), plans to build a second $1 billion-plus natural gas combined-cycle (NGCC) generator in southern Virginia. The Greensville County Power Station will have 1,600 megawatts of generating capacity and a total investment value (TIV) of $1.4 billion. It will be built about five miles from a large NGCC that Dominion is building in Brunswick County, a 1,358-MW plant that is about 58% complete. The Brunswick County project has a TIV of about $1.3 billion.

If Virginia's utility regulators approve Dominion's application to build the Greensville generator, construction can begin next summer, and the plant can be online by 2019. Fluor Corporation (NYSE:FLR) (Irving, Texas) will provide engineering, procurement and construction (EPC) services for the project, which will employ more than 1,000 workers during peak construction time. The Greensville plant is needed to meet strong electric demand growth, reportedly as high as 9.5%, according to recent news reports.

Dominion's application to Virginia regulators also included a provision for constructing a large-scale solar generation facility on the 1,143-acre site for the Greensville NGCC. For more on Dominion's growing commitment to solar power, see April 13, 2015, article - Dominion Commits to Build 400 MW of New Solar Generation in Virginia.

Dominion's electricity business--both its utility unit and its merchant power business--has a significant capital program planned for the next few years. In a February 9 earnings guidance report to investors, Dominion outlined about $5.84 billion of planned capital spending on generation for 2015-17:

• 2015: $2.16 billion
• 2016: $1.98 billion
• 2017: $1.7 billion

Dominion also plans to invest about $4.5 billion in its electric transmission and distribution (T&D) system during the next three years--about $1.5 billion each year--and another $5.5 billion in its gas transmission and distribution network over the 2015-17 period. For more on Dominion's planned capital outlays, see April 7, 2015, article - Dominion Expects to Spend $8.5 Billion to Meet Growing Electricity Demand, and February 11, 2015, article - Dominion Targets $19.2 Billion Capex Through 2020.

"We are proposing to construct the largest and most efficient natural-gas fueled power station in Virginia to bring our customers reliable, low-cost energy," said David Christian, chief executive officer for Dominion Generation, on March 26 in announcing plans to build the Greensville NGCC.

In supporting the Greensville NGCC, Virginia Governor Terry McAuliff said: "This project is another great step toward the clean energy portfolio we need to build a new Virginia economy. This plant will offer clean, reliable and low-cost energy to Virginia homes and businesses, and at the same time, the jobs and tax revenue generated will be a positive boost for Greensville County and all of Southside Virginia."

"In its electricity business, Dominion is facing the double whammy of needing to replace coal-fired generation while building additional new generation to meet the needs of its fast-growing service area," said Brock Ramey, Industrial Info's North American power specialist. "Those forces, plus its recent commitment to build about 400 megawatts of solar generation in Virginia, have really increased the company's planned capital spending."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.