Dominion Slates Yorktown Power Plant for Closure by 2022

By Kimberly Lenz Friday, September 02, 2011

Dominion Virginia Power will likely reduce operations at its Yorktown coal-fired power plant by 2015, with a possible shutdown by 2022 if environmental requirements for the plant prove cost prohibitive.

Dominion made the announcement in a plan filed Thursday with the Virginia State Corporation Commission. Employees at the Yorktown plant, as well as the coal-fired Chesapeake Energy Plant in Chesapeake, heard the news this week during meetings at the plants. Dominion has proposed to shut down the four-unit Chesapeake plant by 2016.

In the plan, the Yorktown plant would eliminate one coal-fired unit by 2015 and convert a second from coal to natural gas. Dominion spokesman Jim Norvelle said a third Yorktown unit, which is oil-fired, may need modifications that would make it "uneconomical to operate."

According to the plan, Dominion expects the Yorktown plant to be fully retired by 2022, based on both environmental regulations already on the books or in the works as well as the cost to implement them.

Norvelle said the regulation likely to jeopardize continued operation at Yorktown is an Environmental Protection Agency rule regarding water. That rule, should it continue, could require a cooling tower to be installed on Yorktown Unit 3, the oil-fired unit used for backup during peak electrical demand.

Loss of the power plant would be another economic blow to York County, which lost Western Refinery nearly a year ago to the soft economy. With the refinery's shutdown was a $2 million annual loss to county tax collections.

"Of course the County is very concerned with the potential loss of one of our valued and major corporate citizens. It is our understanding that the potential shutdown might be as early as 2022, and is dependent on EPA regulations currently under consideration," said York County Board of Supervisors Chair George Hrichak. "We will evaluate the situation and work with Dominion Power to do anything we can to secure the future of the Yorktown power plant."

The power plant paid a total of $2.4 million in real estate and machinery and tool taxes in York County during the last fiscal year, Norvelle said.

Dominion said it expects total electricity demand to increase by nearly 30 percent by 2026, even after conservation measures are put in place. The company plans to address demand through a mix of what it calls "cost-effective generation," which includes biomass, new natural gas-fired units and coal-fired units converted to natural gas (like Yorktown Unit 2).

The changes at Dominion will cost money, which customers will feel with higher rates. An annual rate adjustment, approved by the SCC in July, took effect Thursday. For a customer using 1,000-kilowatthours of electricity each month, the monthly bill increases by $3.54, from $108.77 to $112.31.