The fate of a proposed coal-burning power plant in Wise County could hinge on whether state regulators allow Dominion Virginia Power 2 percent in extra profit for building it.

If the utility is not granted the extra profit, it would have to assess what its next move might be, Virginia Power Vice President Paul Hilton said at a State Corporation Commission hearing this week.

Some opponents of coal argued that the proposed $1.8 billion plant, which could supply 150,000 homes, would not meet the criteria for the extra profit.

While a 2004 state law determined a coal plant in Virginia's coalfields would be in the public interest, the state commission still must determine whether plans for the plant are reasonable and how much return the company should be allowed on its investment.

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A law last year allows for a 1 percent extra return for a company building a conventional coal-burning power plant. Lawmakers said owners that build a cleaner-burning coal plant that could someday capture carbon-dioxide emissions should instead get an extra 2 percent return.

Virginia Power's plans would qualify for the 1 percent bonus profit. Allowing 2 percent, which would bring the utility's total requested return to 13.75 percent, is another matter.

State law does not define clean-coal technology, and Virginia Power says it is relying on a U.S. Department of Energy definition. The utility plans to use circulating fluidized-bed technology.

Crushed coal would be mixed with limestone and fired in a process resembling a boiling fluid. The limestone would remove the sulfur and convert it into a powder to be removed with the ash. Fluidized-bed boilers are capable of burning a range of fuels, including biomass fuels such as wood waste.

David Schlissel of Energy Economics Inc. in Cambridge, Mass., questioned in the hearing whether fluidized-bed is the most efficient technology. Schlissel testified for the Southern Environmental Law Center of Charlottesville, which is representing environmental groups challenging the plant.

Schlissel also said he doesn't believe the proposed plant or any other coal plant today qualifies as compatible with yet-to-be invented carbon-capture technology.

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Carbon-capture technology may not be commercially available for a decade. However, Virginia Power says that by making allowances for its eventual installation, the plant should qualify for the bonus.

The company says it would use the extra profit, roughly $6 million annually, to conduct research on the technology, including Virginia Tech research on the feasibility of storing carbon dioxide in thin Southwest Virginia coal beds.

Hilton said lawmakers intended the bonus-profit incentive to keep his company focused on the carbon-capture issue and ready to install the technology when available. "Our company believes there is eventually going to be some sort of carbon-capture technology added," he said.

The Department of Environmental Quality holds a public hearing on the proposed plant's air-emissions permit on Monday in Wise County.
Contact Greg Edwards at (804) 649-6390 or gedwards@timesdispatch.com.