Shareholder Resolution at Dominion Resources, Virginia: Biopower Investments Need Scrutiny

A shareholder resolution asking Dominion Energy to conduct a study on the greenhouse gas and investment risks of biomass energy received substantial shareholder support at Dominion’s annual meeting yesterday in Glen Allen, Virginia (download the resolution and supporting memo here.) Presented by Dusty Horwitt, an attorney for the nonprofit Partnership for Policy Integrity (PFPI), the resolution was submitted by a Dominion shareholder.

 

Burning wood in power plants emits about fifty percent more climate-warming carbon dioxide than coal, per megawatt-hour of electricity generated.  Scientists recognize that offsetting these emissions with future forest growth will take decades, if it occurs at all, making wood-burning power plants far inferior to wind and solar energy for addressing climate change. Despite these facts, Dominion has made significant investments in wood-burning power plants, including converting three Virginia coal plants to burn wood. Dominion projects that almost 70 percent of its renewable energy will come from burning wood in 2020.

 

The shareholder resolution received 22 percent of the vote, holding steady from the 21 percent that a similar resolution received last year. Along with Washington, DC’s recent decision to eliminate renewable energy subsidies for low efficiency biomass power, the vote serves as further evidence that Dominion should rethink its reliance on this form of energy.  The resolution can be downloaded here.

 

2015 Resolution

 

Whereas,                                                                                   

 

The Intergovernmental Panel on Climate Change states “Continued emission of greenhouse gases will cause further warming… increasing the likelihood of severe, pervasive and irreversible impacts”;

 

About half of anthropogenic CO2 since 1750 was emitted in the last 40 years;

 

And, “Inertia in the economic and climate systems and the possibility of irreversible impacts from climate change increase the benefits of near-term mitigation efforts”;

 

The U.S. Environmental Protection Agency (EPA) has proposed to regulate CO2 emissions from electricity generation under Rule 111(d), with reductions in carbon intensity (pounds CO2 per MWh of electricity) required by 2030;

 

Dominion has stated that a "highly uncertain" energy policy and regulatory environment, influenced by 111(d), calls for “sharp reductions in carbon intensity[1];

 

Dominion has significantly invested in wood-burning plants, which, as the Company acknowledged to the Virginia State Corporation Commission,[2] have a higher carbon intensity than coal plants, emitting more CO2 per MWh on a day-to-day basis.  Holdings include the 83 MW Pittsylvania plant, the Hopewell, Altavista, and Southampton facilities (converted from coal to wood – 153 MW), and the Virginia City Hybrid Energy Center, which can generate up to 60 MW by co-firing wood with fossil fuels.  Dominion states 74.4% of its renewable energy will come from bioenergy in 2029;[3]

 

Dominion claims bioenergy reduces CO2 emissions,[4] but states that economic viability of the coal-biomass conversions depends on a regulatory assumption of carbon neutrality, without which the net present value of operation is less than if the plants burned coal;[5]

 

EPA does not automatically consider bioenergy to be carbon neutral, counting all CO2 from biomass co-fired at fossil fueled plants, such as the Virginia City Hybrid Energy Center, as subject to Rule 111(d).  Treatment of emissions from standalone bioenergy facilities is not finalized, but EPA’s carbon accounting framework recognizes logging waste, the fuel Dominion states it burns for bioenergy,[6] as having significant net greenhouse gas emissions.[7]

 

RESOLVED: Shareholders request that the Board of Directors prepare a report on bioenergy by November 1, 2015, at reasonable cost and excluding proprietary information, evaluating the net greenhouse gas impact from each of the company’s biomass-burning facilities on a timeframe relevant to the near term need to reduce CO2 emissions, and assessing risks to the company's finances and operations posed by emerging public policies on bioenergy and climate change.

 

Supporting Statement:

Among other things, the report should evaluate:

·         For each facility burning biomass, major factors relevant to achieving carbon neutrality, and the time frame that must be considered for the facility and its fuel sources to achieve carbon neutrality;

·         Any proposed State or federal policies that might consider CO2 emissions from Dominion bioenergy facilities or fuel sources in determining subsidies or tax credits.

 

 

 

 


[1] Introduction to Dominion’s 2014 Integrated Resource Plan.

 

 

 

[2] SCC Case No. PUE-2011-00073. Vol. III 01-12-2011.  

 

 

 

[3] Appendix 6A of Dominion 2014 IRP.

 

 

 

[4] http://bit.ly/1wQ7nHJ

 

 

 

[5] SCC Case No. PUE-2011-00073.

 

 

 

[6] https://www.dom.com/corporate/what-we-do/electricity/generation/biomass.

 

 

 

[7] Framework for Assessing Biogenic CO2 Emissions from Stationary Sources.  EPA, 11-19-14.

 

(Picture: Google Earth image of Dominion's Altavista coal plant, which has been converted to burn wood). 

 

 

 

 

 

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