SD6 - Annual Executive Summary of the Virginia Coal and Energy Commission


    Executive Summary:
    Virginia Coal and Energy Commission

    The Virginia Coal and Energy Commission was established in 1979 to 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. The statutory provisions governing the Commission are set forth in Chapter 25 (§ 30-188 et seq.) of Title 30 of the Virginia Code.

    In addition to its general powers, the Commission is also directed by § 30-189 to (i) act in an advisory capacity to the Governor and executive branch agencies upon energy related matters; (ii) investigate and consider such questions and problems relating to the field of coal and energy utilization and alternative energy sources as may be submitted; (iii) make recommendations to the Governor and General Assembly on its own initiative; (iv) consult with applicable state agencies on all matters regarding energy conservation, including the promotion and implementation of initiatives for the public-at-large to conserve energy; (v) endeavor to encourage research designed to further new and more extensive use of the coal as well as alternative and renewable energy resources of the Commonwealth; (vi) effectively disseminate any such proposals to groups and organizations, both state and local, so as to stimulate local governing bodies and private business initiative in the field of energy related matters; (vii) coordinate its efforts with those of the Virginia Solar Energy Center and the Virginia Center for Coal and Energy Research; (viii) actively seek federal and other funds to be used to carry out its functions; (ix) seek to establish alternative fuel capability within the Commonwealth; and (x) investigate and make recommendations regarding the development of nuclear power.

    The Commission has 20 members: five members of the Senate, eight members of the House of Delegates, and seven citizen members appointed by the Governor. The Commission is chaired by Senator William Wampler of Bristol. The other Senate members are Senators Charles J. Colgan, Charles R. Hawkins, John C. Watkins, and Phillip P. Puckett. The vice chairman of the Commission is Delegate Harry J. Parrish. The other House of Delegates members are Delegates R. Lee Ware, Jr., Terry G. Kilgore, Charles W. Carrico, Sr., William R. Janis, Watkins M. Abbitt, Jr., Jackie T. Stump, and Kristen J. Amundson. The citizen appointees are Barbara Altizer, Harry D. Childress, Frank Henderson, Albert Darrell Holbrook, James K. Martin, John K. Matney, and Dale P. Moore.

    The Commission held one meeting in the 2004 interim, which was a joint meeting with the Commission on Electric Utility Restructuring on September 8, 2004. Topics addressed at the meeting included the provisions of Senate Bill 651 (2004) that created an incentive for the construction of a coal-powered generation facility in Southwest Virginia, Virginia's future energy needs, and alternative and renewable energy sources.

    Senate Bill 651 of the 2004 Session included an incentive for the construction of a coal-fired generation facility in coalfield region of Virginia, which consists of Lee, Wise, Scott, Buchanan, Russell, Tazewell and Dickenson Counties and the City of Norton. The provision authorizes an investor-owned distributor that has been designated a default service provider and that constructs a coal-fired generation facility that utilizes Virginia coal in the coal field region, in order to meet its native load and default service obligations, to recover the costs of the facility, plus a fair rate of return on its investment, through its default service rates.

    Delegate J. Paul Councill, Jr., suggested that an incentive such as is provided for plants in Southwest Virginia would be appropriate for plants in economically distressed Southside Virginia. Eric Crawford of LS Power, confirmed that his company has selected a site for an $800 million, 800-megawatt coal-fired plant near Waverly. He remarked that the incentive in Senate Bill 651 would improve opportunities by providing the ability to recovery the coal plant's capital costs in future default service rates.

    Ralph L. "Bill" Axselle of the Virginia Energy Providers Association stated that the measure offers tremendous benefits for Southwest Virginia while providing a source of in-state power for default service. Mark McGettrick, president and CEO of Dominion Generation, announced that his firm is serious about building a new coal-burning power plant in Southwest Virginia. R. Daniel Carson, vice president of Appalachian Power Company, noted that his firm announced in the previous week that it is committed to build an integrated gasification combined cycle power plant with a capacity of up to 1,000 MW by 2010. Mr. Carson noted that SB 651's cost recovery implications would be critical. His firm may recommend provisions to strengthen the measure and allow a plant to be built in areas of Southwest Virginia that are not included in the 7-county Coalfields region.

    Dr. Michael Karmis of the Virginia Center for Coal and Energy Research (VCCER) at Virginia Tech walked the members through its database on Virginia Energy Patterns and trends, a reference source funded in part by the Department of Mines, Minerals and Energy and the federal Department of Energy. He discussed VCCER's efforts to implement the reductions in carbon dioxide through carbon sequestration. Capturing and storing carbon through these techniques may help coal remain a major component in meeting Virginia's energy needs.

    Michael J. Quillen, president and CEO of Alpha Natural Resources and treasurer of the Virginia Coalfields Economic Development Authority (CEDA), briefed the Commissions on the status of Virginia's coalfields region. Virginia's coalfields have benefited in recent years from rebounding coal prices and increases in natural gas production, with the number of wells jumping from 886 in 1991 to over 3,000 in 2001.

    Other presentations to the Commission were made by:

    • Tom Lamm of the SCC's Energy Regulation Division, who presented a report on the adequacy of Virginia's energy infrastructure.
    • Stephen A. Walz of the Department of Mines, Minerals and Energy, who outlined existing state and local incentives, both financial and otherwise, provided under Virginia law for providers of energy from renewable sources.
    • Jonathan Miles, Associate Professor in the Department of Integrated Science and Technology at James Madison University, George Hagerman of Virginia Tech's Alexandria Research Institute, and Alden Hathaway of the Environmental Resources Trust, representing the Virginia Wind Energy Collaborative. One option under study involves locating wind turbines on ridge top strip mining sites, which could provide advantages of lower costs of development lower land reclamation costs and longer periods for accomplishing reclamation.
    • Scott Keely, director of business development at Enerdyne Power Products, who advocated landfill gas as a viable energy alternative for Virginia.
    • Michel A. King, president of Old Mill Power Company, who briefed the members of the Commissions on the advantages of renewable energy.
    • B. E. (Ed) Brammer, president of Multitrade Group, Inc. of Martinsville, who advocated expanding the role of renewable energy in Virginia's electric power generation mix.

    The Commission does not intend to submit a further report of 2004 findings and recommendations for publication.