Virginia Electric EnergyAs in other states, Virginia's electrical industry is in transition due to deregulation. Prior to deregulation, most electrical generation plants, and all electrical transmission and distribution facilities in the state were operated by public utilities - private firms licensed to provide electrical power within the Virginia under state-regulated pricing. The deregulation process has the potential to result in a competitive market for electrical energy supplies. Although the electrical energy distribution remains regulated, both the state's public utilities and non-utility generating firms provide electrical power supplies.
For more information on electrical deregulation in Virginia, see the information on Virginia Energy Supply Competition maintained by the Virginia State Corporation Commission.
Virginia electric utilities operate electrical generating capacity throughout the state. 38% of this capacity is coal-fired; another 24% is nuclear, and 20% is hydroelectric. The state's utilities also operate a number of oil-fired and gas-fired generators to supplement the power available from coal, nuclear units, and interstate power transfers when additional power is needed.
In addition to utility-operated capacity, a number of non-utility generators operate in Virginia. These facilities are owned and operated by non-utility firms. In some cases, the non-utility generators operate under contract to major utilities, such as Dominion Virginia Power. In other cases, they operate primarily for the purpose of generating power for use in large industrial facilities and sell excess power when available to one the utilities for distribution to utility customers.
Over 90% of the electrical energy generated by utilities in Virginia is produced from coal and nuclear sources.
Coal-fired power plants are operated by the state's two major utilities -- Dominion Virginia Power and American Electric Power. Potomac Electric Power, the electric utility serving the northern Virginia area and Washington DC, sold its Potomac River plant in northern Virginia to a Southern Energy, Inc. - a non-utility operator - in American Electric Power operates two coal-fired plants: the Clinch River Plant in Russell County, and the Glen Lyn plant on the New River in Giles County, near the West Virginia border. The Clinch River plant is located close to active Virginia coal mines.
Dominion Virginia Power operates nine coal-fired plants in eastern Virginia, including the Clover plant on the Roanoke River in Halifax County. This plant, owned in partnership with Old Dominion Electric Cooperative, is among the nation's newest and most modern coal-fired generating plants. Dominion Virginia Power purchased three coal-fired plants - at Altavista, Hopewell, and Southampton - from their non-utility developers in 2000,
Approximately half of the coal burned in the state's coal-fired power plants is obtained from Virginia mines; the majority of remaining coal burned in-state by utilities to produce power is obtained from West Virginia and Kentucky.
Dominion Virginia Power also operates two large nuclear plants in eastern Virginia, at North Anna and Surrey.
Large coal-fired and nuclear generators, and hydroelectric plants located on flowing streams, are known as "baseload" power plants; the term indicates that these plants operate most efficiently when generating power continuously - around the clock, seven days a week.
Demand for electricity, however, varies throughout the day and night. Demand for power is usually much higher during the working day than late in the evening, and tends to peak during very hot or very cold weather. Oil and gas-fired plants generally operate to produce power during periods of high demand. These plants generally are smaller than the state's nuclear and larger coal-fired facilities; they also are more expensive to operate, per kilowatthour, but can be brought on-line and off-line more easily than the baseload plants.
Another means by which the state's utilities match supply with demand is by pumped-storage hydroelectric units. Two large hydroelectric facilities are located in Virginia: the Bath County pumped-storage facility, operated by Dominion Virginia Power, and Smith Mountain Lake, operated by American Electric Power on the Roanoke River east of Roanoke. Both of these facilities utilize excess electricity that becomes available during times of excess power supply and/or low demand to pump water into large storage basins above the pumped-storage hydroelectric generator. Later, when that power is needed, the water is released to generate power.
Because the Bath County facility operates strictly in the pumped-storage mode, and because energy conversion is never 100 percent efficient, this facility actually consumes more kilowatthours in a given year than it generates. Therefore, its annual "net generation" is negative. It does provide a benefit to Virginia's electric system, however, by converting electric power generated during periods of low demand to power that can be used by consumers during high-demand periods. The Smith Mountain Lake facility functions as a conventional hydroelectric unit during some time periods, by converting the Roanoke River's flow to electric power; during low-demand periods, it is also used as a pumped-storage hydroelectric generating unit.
Electric power is distributed within Virginia by an electric power transmission system . The "backbone" of this system is its high-voltage, high-capacity transmission components, including 765 kv transmission lines in the western-Virginia service area of American Electric Power and 500 kv transmission lines elsewhere in the state. Bulk power is moved through the state on these large transmission lines. An intricate network of smaller, lower-voltage lines distributes the power from these larger power lines and individual generating facilities to power consumers in urban and rural areas.
Virginia's electrical network is an integral component of the regional transmission system, which serves a number of important functions.
First, in-state electric-power generation is far from sufficient to satisfy the state's consumption, so much of the power used by Virginia residents and businesses is brought in from out-of-state generators on these power transmission lines. On average about 80% of the electrical energy used by Virginia consumers was generated in-state, while about 20% was imported over the interstate transmission network.
Secondly, the state's connection to a regional transmission network helps to keep the state’s electric power rates low. Conditions to the west of Virginia are favorable to low-cost electrical generation, due to the presence of large water bodies, such as the Ohio and Kanawha Rivers, and plentiful coal supplies. Both of the state’s major utilities, American Electric Power and Dominion Electric Power, operate coal-fired generating units in areas west of Virginia and use those units to satisfy substantial portions of their Virginia customers’ demands.
The state’s transmission network allows its utilities to participate in wholesale power markets. When utilities are able to purchase power from generating units located outside the state's borders at times when those units are able to generate power at less cost than in-state generators, this reduces the cost of power to Virginia consumers. Conversely, the regional transmission network allows in-state generators to sell power to customers outside of the state, when transmission capacity is available. Out-of-state generators are also able to use Virginia transmission capacity to transmit power through the state to other out-of-state customers, when that transmission capacity is not being used to satisfy in-state needs. Firms using the transmission network for wholesale power transfers are required to pay fees to the transmission operator.
Finally, the transmission network provides some insurance against power disruptions that might otherwise occur if an in-state generating unit supplying local customers was to go down unexpectedly. Given its critical role in assuring electrical reliability, and the fact that transmission lines themselves are subject to occasional disruptions, the transmission network is designed and constructed so as to assure continued function in the case of an unexpected outage. As a result, most localities are supplied with power by several transmission lines.
Virginia electric power customers are served by a number of electric power distributors including major utilities and a number of smaller providers. Traditionally, those electric distributors that do not own and operate sufficient generating capacity to serve their customers purchased power from the major utility operating the bulk transmission system that supplies its service area, while the larger distributors operated their own generating capacity. Today, virtually all electric distributors purchase power on wholesale markets, and purchase transmission capacity necessary to move that power from generators to customers.
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