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Researched by Industrial Info Resources (Sugar Land, Texas)--Power and natural gas energy company Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia) is planning $19.2 billion in capital expenditures (capex) through 2020 as it beefs up generation capacities and contends with new environmental rules, company executives said Monday.
Industrial Info is tracking 106 Dominion projects worth $10.98 billion. This includes 68 power projects valued at $4.36 billion, 23 pipeline projects valued at $1.01 billion, and 15 oil & gas production projects valued at $5.6 billion. Forty-five projects valued at $2.88 billion are under construction; eight projects valued at $4.22 billion are in the engineering stages; and 53 projects valued at $3.87 billion are in the planning stages, where factors could increase, decrease or totally eliminate the expected spending.
With a total investment value of $4 billion, the grassroot Cove Point liquefied natural gas (LNG) plant near Lusby, Maryland, is the largest item among Dominion's planned expenditures. Dominion, with a consortium including IHI Corporation (Tokyo, Japan) and Kiewit Corporation (Omaha, Nebraska) as the engineering, procurement and construction contractor, have performed site preparation for the plant, which would have the capacity to produce 1.8 billion cubic feet per day (Bcf/d).
Thomas Farrell, Dominion's president and chief executive officer, said during a meeting with analysts Monday that engineering for Cove Point is 77% complete, with an expected in-service date in late 2017.
The U.S. Federal Energy Regulatory Commission (FERC) gave final approval in fourth-quarter 2014 for the Cove Point LNG and export terminal. Dominion received permission to export LNG to countries without a free-trade agreement with the U.S. from the U.S. Department of Energy (DoE) in 2013.
For related information, see October 2, 2014, article - Dominion Cove Point LNG Export Facility Gets Green Light from FERC.
Growth capex for electric transmission will total $4.4 billion through 2020, Farrell said. This includes more than 100 growth and reliability projects, including $450 million to strengthen the physical security of facilities with items such as ballistic-proof fencing, he said.
Electric distribution capex will increase $2.8 billion through 2020, Farrell said. This includes a project to bury 4,000 miles of vulnerable distribution tap lines in Dominion's service area to protect them from weather-related disruptions.
To help meet a load growth forecast of 1.7% in Dominion's service area by 2024, the company last year completed a 1,342-megawatt (MW), 3-on-1 combined-cycle power plant in Warren County at a cost of $1.1 billion, Farrell said.
Also, construction is under way on a 1,358-MW, 3-on-1 combined-cycle plant in Brunswick County, with an estimated cost of $1.2 billion. The plant was 52% complete as of January, and it is expected to be in service in mid-2016, Farrell said.
Finally, a request for proposals is out for a 1,600-MW, gas-fired combined-cycle plant in Virginia. If Dominion wins the contract, the plant would be built in Greenfield County, Virginia, with an expected in-service date of December 2018, Farrell said. The plant would be the largest natural-gas fired facility in the U.S., he added.
Proposed carbon emission regulations cloud the future, however, according to Farrell. "It is inescapable that there will be a final rule regulating carbon" as early as this summer, he said. He added that the Power Industry has many concerns about the rules and different emissions targets for each state.
Farrell said that, as of 2020, Virginia could have the most stringent emissions target in its region at a limit of 1,302 pounds of carbon dioxide of per megawatt-hour (lbs/MWh). That limit would fall to 810 lbs/MWh by 2030. In comparison, neighboring Kentucky could see a limit of 2,158 lbs/MWh in 2020, which would fall to 1,763 lbs/MWh by 2030.
Farrell said that the state of Virginia estimates compliance with carbon emissions rules could cost it $5 billion to $6 billion, but added that amount does not does not include $2 billion in estimated plant retirement costs.
To help it comply with future carbon emission limits, Dominion recently announced plans to build a utility-scale solar power facility in Virginia, Farrell said.
Dominion has reported $243 million in fourth-quarter 2014 net earnings, down 44% from $431 million in fourth-quarter 2013. Earnings for all of 2014 totaled $1.31 billion, down 22% from $1.69 billion in 2013. Dominion said the net earnings included a charge associated with Virginia legislation permitting recovery of costs related to the development of a third nuclear unit at North Anna and offshore wind facilities through base rates; call premiums on early debt redemptions; a charged related to a settlement offer stemming from future ash pond closure costs; and charges related to repositioning of Dominion's Producer Services businesses.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three 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.
Industrial Info is tracking 106 Dominion projects worth $10.98 billion. This includes 68 power projects valued at $4.36 billion, 23 pipeline projects valued at $1.01 billion, and 15 oil & gas production projects valued at $5.6 billion. Forty-five projects valued at $2.88 billion are under construction; eight projects valued at $4.22 billion are in the engineering stages; and 53 projects valued at $3.87 billion are in the planning stages, where factors could increase, decrease or totally eliminate the expected spending.
With a total investment value of $4 billion, the grassroot Cove Point liquefied natural gas (LNG) plant near Lusby, Maryland, is the largest item among Dominion's planned expenditures. Dominion, with a consortium including IHI Corporation (Tokyo, Japan) and Kiewit Corporation (Omaha, Nebraska) as the engineering, procurement and construction contractor, have performed site preparation for the plant, which would have the capacity to produce 1.8 billion cubic feet per day (Bcf/d).
Thomas Farrell, Dominion's president and chief executive officer, said during a meeting with analysts Monday that engineering for Cove Point is 77% complete, with an expected in-service date in late 2017.
The U.S. Federal Energy Regulatory Commission (FERC) gave final approval in fourth-quarter 2014 for the Cove Point LNG and export terminal. Dominion received permission to export LNG to countries without a free-trade agreement with the U.S. from the U.S. Department of Energy (DoE) in 2013.
For related information, see October 2, 2014, article - Dominion Cove Point LNG Export Facility Gets Green Light from FERC.
Growth capex for electric transmission will total $4.4 billion through 2020, Farrell said. This includes more than 100 growth and reliability projects, including $450 million to strengthen the physical security of facilities with items such as ballistic-proof fencing, he said.
Electric distribution capex will increase $2.8 billion through 2020, Farrell said. This includes a project to bury 4,000 miles of vulnerable distribution tap lines in Dominion's service area to protect them from weather-related disruptions.
To help meet a load growth forecast of 1.7% in Dominion's service area by 2024, the company last year completed a 1,342-megawatt (MW), 3-on-1 combined-cycle power plant in Warren County at a cost of $1.1 billion, Farrell said.
Also, construction is under way on a 1,358-MW, 3-on-1 combined-cycle plant in Brunswick County, with an estimated cost of $1.2 billion. The plant was 52% complete as of January, and it is expected to be in service in mid-2016, Farrell said.
Finally, a request for proposals is out for a 1,600-MW, gas-fired combined-cycle plant in Virginia. If Dominion wins the contract, the plant would be built in Greenfield County, Virginia, with an expected in-service date of December 2018, Farrell said. The plant would be the largest natural-gas fired facility in the U.S., he added.
Proposed carbon emission regulations cloud the future, however, according to Farrell. "It is inescapable that there will be a final rule regulating carbon" as early as this summer, he said. He added that the Power Industry has many concerns about the rules and different emissions targets for each state.
Farrell said that, as of 2020, Virginia could have the most stringent emissions target in its region at a limit of 1,302 pounds of carbon dioxide of per megawatt-hour (lbs/MWh). That limit would fall to 810 lbs/MWh by 2030. In comparison, neighboring Kentucky could see a limit of 2,158 lbs/MWh in 2020, which would fall to 1,763 lbs/MWh by 2030.
Farrell said that the state of Virginia estimates compliance with carbon emissions rules could cost it $5 billion to $6 billion, but added that amount does not does not include $2 billion in estimated plant retirement costs.
To help it comply with future carbon emission limits, Dominion recently announced plans to build a utility-scale solar power facility in Virginia, Farrell said.
Dominion has reported $243 million in fourth-quarter 2014 net earnings, down 44% from $431 million in fourth-quarter 2013. Earnings for all of 2014 totaled $1.31 billion, down 22% from $1.69 billion in 2013. Dominion said the net earnings included a charge associated with Virginia legislation permitting recovery of costs related to the development of a third nuclear unit at North Anna and offshore wind facilities through base rates; call premiums on early debt redemptions; a charged related to a settlement offer stemming from future ash pond closure costs; and charges related to repositioning of Dominion's Producer Services businesses.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three 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.
