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Dominion sees unexpected jump in year-to-date power sales
DateTime: 2015-8-7 10:31:34    

Dominion saw an unexpected 1.5% jump in its weather-normalized year-to-date power sales, exceeding its expected 1% increase in demand, a company executive said Thursday.

Unadjusted power sales at the company's utility were 43 million MWh in the first six months of the year compared with 41.7 million MWh during the same period a year ago, Mark McGettrick, executive vice president and CFO, said during a conference call with analysts.

The company was encouraged by some of the changes in the final version of the US Environmental Protection Agency's Clean Power Plan, Thomas Farrell, president, chairman and CEO, said during the second quarter earnings call. The EPA's plan is aimed a limiting US greenhouse gas emissions from power generation.

"It is clear that this plan will require significant new investment in generation and electric transmission in our Virginia service territory, as well as many new opportunities for all aspects of our gas infrastructure business," Farrell said.

The company earlier this year filed its integrated resource plan to meet its best guess of what the final plan would be, Farrell said.

"We're going to take a hard look at the IRP," Farrell said. The company is looking at options to help Virginia comply with the new regulations and expects the proposed 1,588-MW Greensville County gas-fired plant to clear all the environmental hurdles set by the CPP.

The company will be looking hard at solar generation, Farrell said. "The renewable and energy efficiency parts of the rule are slightly convoluted with the way the timing works," he said.

Once the renewable tax credits expire, if construction on a solar project begins after the state has filed its final CPP plan, double credits can be earned, but only in 2020 and 2021, and not before 2020, Farrell said.

"You could have a couple of years where there is a lack of incentive to build renewables when compared to waiting," Farrell said.

Gas-fired plants, on the other hand, should be able to meet the latest emission targets, and the company is encouraged by that, Farrell said. The company's 1,358-MW Brunswick County gas-fired plant is about 75% complete and on schedule to begin commercial operations in in mid-2016.

Farrell said the company is looking at last Friday's State Corporation Commission order that denied its proposal to bury certain strategic power lines as allowed by a new state law and will refile their proposal to meet regulators' requests.

The company sought approval to place underground 526 miles of overhead tap lines as the first part of a 10-year program to bury 4,000 miles of overhead tap lines throughout the state.

The first segment would cost $526 million but ultimately cost ratepayers $700 million. The cost of the full 10-year program would be $2 billion, but $6 billion would be collected from ratepayers.

The order said the program's expense was unprecedented, and suggested that a more limited program at a lower cost specifically targeting tap lines with the worst reliability could provide credible measures of improvement in reliability and could be beneficial.

Dominion reported a net income of $413 million, or 70-cents/share for the second quarter of 2015 compared with $159 million or 27 cents/share during the same period last year.

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