Regional Greenhouse Gas Initiative (RGGI)

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Regional Greenhouse Gas Initiative(RGGI)

• Electricity Restructuring Roundtable
• June 17, 2005

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Dominion Footprint
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Dominion Generation - Virginia Power Portfolio
(as of January 27, 2005)
Current - 18,400 MW
NEPOOL
MAIN
NYPP
PJM
Existing Generation
Mt Storm
ECAR
Remington
Coal
Possum Point
Natural Gas
North Anna
Gordonsville
Nuclear
Bath
Ladysmith
Hydro
Yorktown
Bremo
Surry
Oil - Gas Capacity at plant
Clover
Elizabeth River
Chesapeake
Pittsylvania
Gaston
Other
Entergy
TVA
Chesterfield
VACAR
Roanoke Rapids
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Dominion Generation - Merchant Portfolio (as of
January 27, 2005)
Current - 9,700 MW Kewaunee - 545 MW
NEPOOL
Kewaunee
Salem Harbor
MAIN
NYPP
Manchester Street
Brayton Point
Millstone
Elwood
State Line
Troy
PJM
Armstrong
Existing Generation
ECAR
Fairless Works
Kincaid
Morgantown
Coal
Natural Gas
Pleasants
Nuclear
Growth Generation
Nuclear
Entergy
TVA
VACAR
Pending
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Dominion New England Generation Assets 4,643 MW
Salem Harbor 312 MW Coal (3 Units) 431 MW Oil (1
Unit)
Brayton Pt. 1,078 MW Coal (3 Units) 435 MW Oil
(1 Units)
Manchester Street 426 MW Gas CC (3 Units)
Millstone 1,953 MW Nuclear (2 Units)
Excludes 8 MW of diesel capacity
Source Dominion Internal Database
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Dominion New England Generation Diversity
Dominion New England Generation Portfolio 4,643 MW
Fuel Diversity
Dispatch Diversity
Source Dominion Internal Database
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Climate Change

• Multi-sector, long-term environmental, economic
  and energy issue
• Global issue - will not be resolved by an
  individual state or region
• Technology-based solution
• Burden should not fall upon a single sector

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Power Plant CO2 Emissions

• Power plants in the RGGI region generate only 5
  of the national power plant emissions of CO2
• They generate 9 of the national megawatt hours
• Emissions in RGGI region (2003) were 3 below
  1990 levels average emission rate is about 900
  lbs/mwh.
• National emissions (2003) were 24 above 1990
  levels average emission rate is 1400 lb/mwh.

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Power Plant CO2 (million tons)
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Power Plant CO2 (lb/mwh)
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Compliance Options

• Robust offsets program essential for flexible,
  low-cost compliance options
• Lack of commercially available end-of-pipe
  controls limits reduction opportunities for
  fossil-fuel plants
• Fuel switching
• Efficiency improvements
• Unit shutdowns
• More costly - reliability, fuel diversity issues

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Offsets - Least Cost Compliance Options Are
Critical to Success of Program

• RGGI currently focused on limited short list
• Needs to focus on process and development of
  criteria for identifying and evaluating offset
  projects to expand list of low-cost opportunities
• Allow case-by-case projects/demonstrations
• Avoid/limit geographic constraints
• Include all greenhouse gases
• Evaluate price/stabilizer cap (circuit breaker)
• From viewpoint of system operations and
  reliability compliance flexibility is key for
  assuring reliability (ISO-NE - Nov 2004)

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Modeling Is Key Component

• Cost-benefit analysis essential to process
• RGGI needs to address issues raised by
  stakeholders regarding unrealistic sector
  modeling (IPM) reference case assumptions
• Stakeholders should have access to all detailed
  modeling outputs/results for sector and
  macroeconomic analysis in a timely manner
• Given funding/resource constraints, RGGI must
  focus on modeling runs that will provide decision
  makers with meaningful information from which to
  formulate well-informed policy decisions

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How Will RGGI Affect Region?

• Electricity prices
• Jobs
• Local tax revenues
• Additional reliability on natural gas as a source
  of fuel for electric production
• Fuel diversity erosion and grid reliability
• Additional reliance on electricity imports
• Impact of leakage
• What are the benefits . At what cost?

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What Makes Sense for a Region Where .

• CO2 emissions are a small portion of national
  total
• Average source emission rates are much below U.S.
  average
• A relatively large portion of electric generation
  (40) is from non-emitting nuclear and hydro
• Electricity prices are already among nations
  highest.

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What Makes Sense !

• To extent a regional cap is imposed
• Stabilize cap at current levels
• Design program that provides reasonable, flexible
  compliance mechanisms that minimize the cost
• Establish a minimum state adoption requirement
  for implementation
• Provide mechanism to interface/transition to a
  national program
• Provide means to interface with any existing
  state programs

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Benefits

• Captures RGGI region emission reductions, actions
  since 1990
• Hedges economic risk for Northeast
• Maintains electric system reliability, fuel
  diversity, energy affordability
• Allows time to evaluate RPS impact
• Creates more workable format that other regions
  may be willing to consider/adopt
• Allows time for national program to emerge

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