$576 Million in Economic Benefits Tied to Pumped Hydroelectric Storage Project in Southwest Virginia
Richmond, Va., Sept. 28, 2017 /PRNewswire/ -- A proposed Dominion Energy Virginia (NYSE: D) pumped hydroelectric storage power station in Southwest Virginia would bring approximately $576 million in economic benefits to the Commonwealth, according to a new study by Richmond-based Chmura Economics & Analytics. More than half of this impact would occur in the coalfield region, the study found.
Commissioned by Dominion Energy, the report also found the hydroelectric project would support nearly 3,000 Virginia jobs during development and construction, including more than 2,000 in the coalfield region. Once in operation, the facility would produce about $12 million annually in tax revenue for local governments in Southwest Virginia, according to Chmura.
“We are very excited about the prospect of bringing another major capital investment to the coalfield region of Southwest Virginia,” said Mark Mitchell, vice president of generation construction. “The entire grid system will benefit from having this new generation once it comes online, and the local area will benefit from the jobs and economic benefits that will come from it.”
As part of a broader expansion of its generation portfolio in the state, Dominion Energy is currently evaluating the potential for a pumped storage project in the coalfield localities. These include the counties of Buchanan, Dickenson, Lee, Russell, Scott, Tazewell, Wise and the city of Norton. The proposed facility comes as a result of legislation passed by the 2017 Virginia General Assembly, which encourages the development of pumped storage technology in the region. To date, all eight localities have passed resolutions supporting the concept and agreeing to a revenue sharing plan.
Pumped hydro-power stations store energy in the form of water. When electricity is in high demand, water is released from an upper to a lower reservoir through tunnels, spinning turbines to produce electricity. At times when energy demand is low, the water is pumped back into the upper reservoir to be stored until additional generation may be needed. The “on-demand” nature of pumped-storage technology makes it an appealing resource that can be called upon at any time.
The actual size and cost of the proposed facility have not yet been determined.
The Chmura study was based on a scenario in which planning and construction costs of a pumped-storage project were estimated at $2 billion. At this investment level, the study found the power station would create nearly $320 million in total economic impact for Southwest Virginia. Construction of the facility would support 2,980 jobs in Virginia between 2017 and 2027, including 2,083 positions in the coalfield localities. The study also found that more than $7.7 million in new tax revenue would be created for the Commonwealth during this phase.
Once in operation, the study predicted the power station would generate about $37 million annually in total economic impact for Southwest Virginia. Chmura projected a completion date for the facility of 2028.
Coalfield area lawmakers have promoted pumped hydroelectric storage as one way of addressing the region’s economic challenges. The legislation passed this year allows a Virginia utility building a pumped storage facility in the coalfields to petition the State Corporation Commission for recovery of its project costs as they are incurred.
Pumped hydroelectric storage is not a new concept for the Virginia-based utility. Dominion Energy operates a 3,000-megawatt pumped storage station in Bath County. It is the largest of its kind in the United States, with the capability of powering about 750,000 homes. At full capacity, it produces more energy than the Hoover Dam. Dominion Energy owns the Bath County facility jointly with First Energy Corp.
Dominion Energy filed a Preliminary Permit Application with the Federal Energy Regulatory Commission on Sept. 6, 2017, identifying a potential project site in Tazewell County, Va. Dominion Energy also has contracted with Virginia Tech to study the feasibility of using an abandoned coal mine in Wise County to construct a pumped storage facility.
Dominion Energy, Inc., is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 25,700 megawatts of generation, 14,400 miles of natural gas transmission, gathering and storage pipeline, and 6,500 miles of electric transmission lines. Dominion Energy operates one of the nation's largest natural gas storage systems with 1 trillion cubic feet of storage capacity and serves more than 6 million utility and retail energy customers. For more information about Dominion Energy, visit the company's website at DominionEnergy.com.
SOURCE Dominion Energy