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Dominion Unit Starts Building Power Station Post Clearance

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Dominion Resources Inc. (D - Free Report) announced that its unit Dominion Virginia Power has started to construct the $1.3 billion, 1,588 megawatt (MW) natural gas-fired combined-cycle Greensville County Power Station. The construction started following the receipt of air permit from the Virginia Air Pollution Control Board. The much needed air permit was received on Jun 17.

Details of the Project

This clean power plant is expected to begin commercial operation from 2019 and will provide power to nearly 400,000 customers. Greensville County Power Station in its expected effective life of 36 years will help Dominion Virginia Power customers to save about $2 billion. Also, the new generation capacity will equip the company to serve its customers independently, without purchasing high-cost power from market sources.

It goes without saying that this new power plant will further lower the carbon footprint of Dominion Resources. The company is working toward increasing its clean generation capacity by adding renewable and natural gas based power units to its portfolio.

Recent Power Project
 
Earlier this year, the company started operation of its 1,358 MW natural gas combined-cycle facility in Brunswick County before schedule. This Brunswick County plant is capable of providing clean energy to 325,000 customers. This plant is just 5 miles away from the 1,588 MW Greensville County Power Station.

Long-Term Plan

Dominion Resources has decided to invest $6.9 billion, $4.8 billion and $4.2 billion in 2016, 2017 and 2018, respectively, in different growth projects. The investments will be spread out among organic electric generation, electric and natural gas transmission projects.

Apart from developing natural gas fired power plants, Dominion is also focused on expanding its renewable power generation portfolio. Dominion also filed an application with Virginia State Corporation Commission for the construction of three solar facilities within the state. If approved, the company will add 56 MW of solar projects in service later this year.

The company aims to add 400 MW of solar generation capacity in Virginia during 2016–2020.

Bigger Picture

In Aug 2015, the U.S. Environmental Protection Agency (EPA) released the final version of the Clean Power Plan. The plan calls for CO2 reduction of 28% by 2025 and 32% by 2030, from 2005 levels.

Utilities are working a way out to meet the emission target set by the EPA. Undoubtedly, the addition of clean generation sources will help Dominion to achieve its renewable goals. Thanks to its investments, Dominion Virginia Power’s carbon intensity has decreased by nearly 28% in 2015 from 2000 levels and will go down further with the addition of new power units.

Another utility NextEra Energy (NEE - Free Report) has made substantial investments over the years to make its electricity generation mix cleaner and eco-friendly.

Zacks Rank

Dominion Resources currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the same space are Avangrid, Inc. (AGR - Free Report) and Spark Energy, Inc. , both sporting a Zacks Rank #1 (Strong Buy).

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