2014-2015 Citizenship & Sustainability Report

Climate Change

Dominion is fully committed to meeting the challenge of climate change by working for a sustainable solution that balances the interdependent goals of environmental stewardship and economic prosperity.

Our Position on Climate Change

A national climate change policy should be developed legislatively, together with a sound national energy policy that provides for fuel diversity, a reliable energy supply and affordable electric service, as well as regulatory certainty and compliance flexibility for industry. This policy should promote the development and deployment of technology-based solutions, including renewable energy, advanced nuclear, natural gas and clean-coal technologies, as well as energy efficiency, conservation and demand-side management programs.

Our Carbon Management Strategy

Dominion has an integrated, voluntary strategy for reducing greenhouse gas (GHG) emission intensity. The cornerstone of the strategy is diversification. The principle components of Dominion’s strategy for reducing GHG emissions include initiatives that address electric energy management, production and delivery, as well as natural gas storage, transmission and delivery as follows:

  • Enhance conservation and energy efficiency programs to help customers use energy wisely and reduce environmental impacts (See Energy Conservation);
  • Expand renewable energy resources especially wind power, solar, fuel cells and biomass, to help diversify the company’s fleet, meet state renewable energy targets and lower our carbon footprint (See Operations);
  • Evaluate other new generating capacity including low-emission natural gas-fired and emissions-free nuclear units to meet customers’ future electricity needs;
  • Construct new electric transmission infrastructure to modernize the grid, promote economic security and help deliver more green energy to population centers where it is needed the most;
  • Construct new natural gas infrastructure to expand the availability of this cleaner fuel, reduce emissions and promote energy and economic security in the U.S. and abroad; and
  • Enhance voluntary methane mitigation measures through EPA’s Natural Gas STAR Program (See Methane Reduction Initiatives section below)

Minimizing Carbon Intensity

Dominion continues to produce fewer carbon emissions per unit of energy than almost three-fourths of the nation’s 100 largest power producers.

According to the 2015 Environmental Air Emissions Benchmark Report published by MJ Bradley & Associates, Dominion ranks 26th on the list of the 100 largest power producers in the U.S. based on emissions intensity (pounds per megawatt-hour). The report compares the companies’ emissions performance based on their generating output, plant ownership and emissions data. The 2015 report uses 2013 generation and emissions data.

We attribute this achievement to the balance and diversity of our generation fuel mix, combined with the addition of new low- and non-emitting generating resources, such as solar power; sustained productivity improvements at existing power stations; a number of aging coal unit retirements; and a growing reliance on energy conservation and efficiency programs.

Comparing 2014 to 2008, we have reduced the total equivalent carbon dioxide emissions (CO2e) of our generating fleet, which includes carbon dioxide, methane and nitrous oxide emissions, by more than 37 percent. Over the same period, we have lowered our carbon intensity rate – the average CO2e emissions rate per unit of electric output – by about 28 percent.

Improving the generating efficiency of our utility fleet has been a strategic focus over the past several years. Efficiency improvements allow us to squeeze more power out of our units while using roughly to same amount of fuel – and avoiding additional atmospheric emissions – a plus for our customers and for the environment.

EPA Clean Power Plan Regulations

In June 2014, the EPA proposed the Clean Power Plan (CPP), which will likely result in Dominion being required to reduce carbon emissions from the company’s generating fleet. If finalized as currently proposed, the CPP will impose higher emissions reductions on states such as Virginia that have already diversified their fleets and achieved emissions reductions.

In Dominion’s most recent Integrated Resource Plan, which the company filed with regulatory authorities in July 2015, we evaluate four alternative scenarios benchmarked on the proposed CPP as plausible strategies for meeting our customers’ future electricity needs. The four scenarios focus on adding additional solar energy resources; new nuclear generation; the co-firing of coal units with natural gas; and onshore wind generation. These alternative scenarios also include additional coal unit retirements, new natural gas-fired combined-cycle units, and demand- and supply-side energy efficiency measures.

The company will revisit its options after the CPP is finalized and may ultimately choose to blend different aspects of these scenarios to provide the optimal combination of reliability and affordability for our customers while complying with the CPP and other environmental regulations.

Methane Reduction Initiatives and Research Support

The EPA estimates that natural gas transmission and storage activities account for about 7.5 percent of all domestic methane emissions. Methane is the primary component of natural gas and is considered a greenhouse gas many times more potent than carbon dioxide.

In 2013, Dominion partnered in a nationwide field study led by Colorado State University to quantify methane emissions from natural gas transmission and storage systems. As part of the study, we provided historic emissions and operating data to complement measurements taken by the research team during the second half of 2013.

Study measurement results were published in the Environmental Science and Technology journal in February 2015. Based on the study results, a second article projecting a national methane emissions inventory was published in the journal in July 2015. These articles will help inform industry, regulators and other stakeholders in targeting methane reduction strategies and refining reporting requirements for the gas transmission and storage sector going forward.

Dominion Transmission, Inc., our interstate natural gas pipeline and storage business, has joined the EPA’s Natural Gas STAR Program. Dominion East Ohio Gas, our gas distribution business, joined the program in 2014. This voluntary partnership between government and industry was created to reduce methane leakage and emissions to the environment. We have adopted a number of best practices from the program, along with internal best practices and guidelines, to document and lower methane emissions at Dominion facilities.

Other Actions

At our Cove Point LNG Terminal on the Chesapeake Bay, we have begun constructing facilities for exporting liquefied natural gas to markets around the world. (See Operations/Infrastructure Modernization).

The high-efficiency design of the liquefaction facility will help to minimize the environmental impact of the LNG export operations. Waste heat will be used to create steam for the generation of electric power for use on site. Process gas will be used to fuel the facility instead of flaring it to the atmosphere, thereby reducing emissions.

Reducing Our Carbon Footprint Minimizing Carbon Intensity