BRUNSWICK — The link between the proposed Atlantic Coast Pipeline and the massive power plant rising along U.S. 58 here is all about the price of natural gas — and electricity.
The $1 billion Brunswick Power Station will rely on natural gas from the booming shale fields of West Virginia and beyond when it opens next year to generate 1,360 megawatts of electricity for homes and businesses served by Dominion Virginia Power.
The questions are: How will the gas get there? What will it cost?
The utility is betting that the 550-mile Atlantic Coast Pipeline proposed by a sister company and its partners will deliver the lowest-priced gas available to fuel the plant, as well as a 1,600-megawatt plant the company seeks to build about 6 miles away in Greensville County.
“The (Atlantic Coast Pipeline) is a benefit for all of our customers — from a cost standpoint and a price standpoint,” said Ed Baine, Dominion Virginia Power’s vice president for power generation operations.
That is the central argument that Dominion Transmission Inc., the leader of a limited liability company that wants to build the $5 billion pipeline, makes to justify the need for a project that has aroused strong opposition from people in its path in parts of western and central Virginia.
An economic study commissioned by the pipeline company estimates $236 million in annual savings for Virginia electricity consumers by using the Atlantic Coast Pipeline to serve the Brunswick and Greensville stations, a newly completed gas-fired power plant in Warren County, and other smaller gas units on the system.
“It’s a demand-driven project from our perspective because it gives us flexibility around three different plants,” said Guy Chapman, director of the utility’s gas marketing operation.
The Brunswick plant also will boost the local economy, said Dominion, which estimates the new facility will generate $4 million a year in tax revenues for the county and create 43 permanent jobs earning about $36 an hour, in addition to about 1,000 temporary construction jobs.
Without the Atlantic Coast Pipeline, the Brunswick plant will rely on a 100-mile, 24-inch pipeline being built by Transco to the station from its interstate transmission hub in Pittsylvania County. Dominion said the new Transco line also would allow the company to serve the Greensville plant it announced last month, if it is approved by the State Corporation Commission.
About two-thirds of the 1.5 billion cubic feet of gas that could be carried by the proposed pipeline already is under contract to meet demand in North Carolina for customers of Duke Energy, Piedmont Gas, and Public Service Co. of North Carolina.
“That’s understandable,” said Dominion spokesman Jim Norvelle, who pointed out that Duke and Piedmont made the initial proposal more than a year ago to build a pipeline to serve growing energy demand in the Carolinas.
Duke, like Dominion, also is looking to natural gas as a cleaner-burning alternative to coal to meet more stringent pending federal air-quality standards aimed at reducing emissions of greenhouse gases linked to concerns about climate change.
Dominion owns 45 percent of the pipeline company, which also includes Duke, Piedmont and AGL Resources, the Atlanta-based owner of Virginia Natural Gas, a distribution company that serves the greater Hampton Roads region.
Virginia Power has contracted for about 3 million cubic feet of gas a day from the pipeline, or about 20 percent of its current capacity, and Virginia Natural Gas has contracted for 1 million cubic feet per day to expand supply that it says barely meets peak winter demand.
Charlotte Rea, a Nelson County landowner who is a leader of the “All Pain, No Gain” campaign against the project, said the plants and gas customers in the Hampton Roads area could be served by the new Transco line to Brunswick.
“There is no need for the ACP to cut through the heart of Virginia to provide gas for that area,” Rea said last week.
But Baine considers the Atlantic Coast Pipeline essential to improve reliability and redundancy at the new plants and, most of all, to lower their operating costs by providing direct access to gas produced in West Virginia. Currently, prices fluctuate widely because of limitations on pipelines, especially when demand peaks in extreme cold weather.
“The ACP will help drive prices down during the (non-peak) months,” he said.
In the past, natural gas was more expensive than coal for power generation, so Dominion generally used it to fuel smaller units that run periodically to meet peak demand.
The Brunswick plant will operate almost continuously, much as the utility’s nuclear and big coal units do, because the price of gas is much lower since the production boom began in the Western Marcellus and Utica basins in the past seven years.
The plant also is designed as a combined-cycle operation that generates electricity from three gas-fired turbines and steam heat generators that drive an additional steam turbine. The plant will operate at 60 percent efficiency — much higher than coal units.
“These units are going to run,” Baine promised.