SD41 - Report of the Virginia Coal and Energy Commission


Executive Summary:
The Virginia .Coal and Energy Commission is established pursuant to Chapter 22.1 of Title 9 of the Code of Virginia, and is directed to "generally study all aspects of coal as an energy resource and endeavor to stimulate, encourage, promote, and assist in the development of renewable and alternative energy resources other than petroleum." (Va. Code § 9-145.1)

The Commission fulfilled its statutory charge in 1992 by holding three meetings and authorizing five subcommittee meetings. In addition to its statutory duties, the Commission was directed by House Joint Resolution 69 of the 1992 Session of the General Assembly to examine the policies necessary to promote greater use of wood wastes for fuel by state facilities. The Commission coordinated the conduct of the study by the Virginia Center for Coal and Energy Research and the Brooks Forest Products Center at Virginia Polytechnic Institute and State University. The report of the study has been published as House Document No. 23 (1993).

The most important event affecting patterns in energy use and conservation in 1992 was the enactment of the Comprehensive National Energy Policy Act. This far-reaching law, which was the subject of two Commission meetings, established new federal policies and standards in the areas of alternative fuels, renewable energy sources, natural gas pipeline licensing, electrical power transmission, and coal research and technology.

The Commission received briefings by the Department of Mines, Minerals and Energy on the first year of implementation of the Virginia Energy Plan. The Plan, announced by the Wilder Administration in August 1991, focuses on achieving energy efficiency and conservation in state and local government operations. The Plan also directed the Department of Mines, Minerals and Energy to examine opportunities for increasing the use of clean coal technology in the Commonwealth. The Department presented a report on possible strategies to enhance the technology's implementation.

The Virginia State Corporation Commission reported on its two-year preliminary study of conservation and local management (CLM) opportunities in Virginia. The Commission heard how CLM programs treat increased energy efficiency as a potential offset to the need to establish new power generating capacity resulting from growth in power demands.

The Commission continued to monitor the development of the Toms Creek IGCC project. The project was awarded a grant of approximately $100 million from the federal Department of Energy, subject to obtaining a buyer for its electrical power. Difficulty in obtaining a long-term power purchase agreement led the Commission to establish a special subcommittee, which brought together interested parties for three meetings to discuss methods of satisfying the conditions to the grant.

The Coal Subcommittee heard testimony on the impact of the proposed high-voltage transmission line from Wyoming, West Virginia to Cloverdale, Virginia. The subcommittee's study focused on the effect the line would have on the development of electrical generating facilities in Southwest Virginia.

The export market for Virginia coal was the subject of four reports received by the Commission. A shift in demand from metallurgical coal to steam coal, coupled with downward pressure on prices for U.S. coal, does not bode well for continued growth in the export market for Virginia coal. However, the lifting of the iron curtain has created new opportunities for exports to Eastern Europe.

The Commission's Energy Preparedness Subcommittee received reports on the operational and funding status of statewide energy assistance programs, including the Low-Income Home Energy Assistance Program and the Weatherization Assistance Program. The Subcommittee also heard testimony on the progress of the Clover power plant in Halifax County, which represents a major investment by Old Dominion Electric Cooperative, together with Virginia Power, in generating electrical power. Another trend in Virginia's energy program was reflected in a report by the Virginia Gas and Oil Board on implementation of the coalbed methane gas provisions of the Gas and Oil Act.