Dominion reviving plans to build a natural gas peaker plant in Chesterfield

Dominion is reviving pre-pandemic plans to build a natural gas peaker plant in Chesterfield County as part of its recently announced strategy to invest in more gas generation to meet growing grid demand in the coming years.

Four natural gas combustion turbines will be proposed for the facility, which will be similar to one Dominion originally sought in 2019 but put on hold as the utility shifted its focus toward renewable energy sources to comply with the Virginia Clean Economy Act, which seeks to decarbonize the state’s electric grid by 2050.

The four turbines would have 1,000 megawatts of capacity, enough to power 250,000 homes. Dominion has said they will help the company meet an expected increase in demand linked to data center growth and electrification, in line with non-binding long-range plans recently outlined in the utility’s Integrated Resource Plan. 

Dominion says it is committed to the VCEA and pursuing solar, wind and energy storage. The turbines would be used, the company said, when the electric grid is experiencing peak usage and needs more generation to run reliably, giving the facility the name of a “peaker plant.”

“This doesn’t mean we are going to run it all the time, but when it runs, it is needed most,” said Brandon Martin, manager of business development at Dominion. “Whether it is on the hottest or coldest days, or in the event of extreme weather events like we saw with Winter Storm Elliott, dispatchable generation is needed for reliability the most.”

Details on costs to construct the facility are still unknown, Martin stated. The 2019 project previously had a $600 million price tag. 

It’s also not clear how long the turbines will be operational, Martin said. Dominion couldn’t say for certain if it would or wouldn’t petition the State Corporation Commission, which regulates utilities, to keep the new facility running past 2045, when the VCEA mandates the utility must retire all fossil fuel plants. The law allows utilities to petition the commission to keep plants open to ensure reliability of electricity supply.

Martin noted regional electric grid operator PJM, as well as the North American Electric Reliability Corporation and Federal Energy Regulatory Commission have recently aired concerns about reliability at congressional hearings and in reports. 

“We are preparing to support the electric grid with a portfolio of diversified generation assets that can support customers day in and day out,” he said. 

The company plans to petition the SCC for approval of the project next year after securing a conditional use permit from Chesterfield County. 

On average, approvals for generation facilities requested by Dominion have taken about nine months, said Dominion spokesperson Jeremy Slayton. Construction could take two years following SCC approval, which would put the combustion turbines online around the year 2027. 

The facility will include technology to control emissions and is expected to create over 300 jobs through construction and operation and generate roughly $142.6 million in cumulative revenue over a 36-year period for Chesterfield County, according to an analysis company officials said had been conducted by Mangum Economics.

Several environmental groups were sharply critical of the proposal this week.

Dominion is running the risk of having ratepayers foot the bill for a “stranded asset,” said Walton Shepherd, Virginia policy director for the Natural Resources Defense Council.

Unless the SCC grants approval to keep the facility online to ensure grid reliability, customers could be forced to continue to pay for the facility even after it comes offline as the VCEA requires, he said.

“Dominion has cast its lot in with Gov. [Glenn] Youngkin’s anti-climate, anti-renewable crusade,” Shepherd said

Since 2020, when Democrats took control of the legislature for a two-year period, Virginia energy policy has focused on developing renewable energy through solar and offshore wind, discouraging carbon emissions from fossil fuel plants through participation in the Regional Greenhouse Gas Initiative and increasing the pace of the transition to electric vehicles. The Chesterfield plans are the latest sign that the state may not be ready to move away from fossil fuels as rapidly as envisioned. 

Last week, the State Air Pollution Control Board voted to withdraw Virginia from RGGI, despite proponents of participation lauding the over $500 million it has generated for flood resilience and energy efficiency efforts. Youngkin has argued RGGI operates as a hidden tax because state law governing participation allows utilities to recover their costs from ratepayers.

Tim Cywinski, communications manager with the Virginia chapter of the Sierra Club, said Dominion should instead “double down” on renewable energy sources to meet increased grid demand and relieve ratepayers from fluctuating fuel costs for fossil fuel plants.

“You have to have a middle man to supply the fuel,” said Cywinski, adding that those middle men have to be paid and can run into supply chain issues. “You don’t have to have a middle man for sunshine. It doesn’t exist for the wind.”