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South Boston Energy Project South Boston, VA. Who is NOVEC?. NOVEC stands for Northern Virginia Electric Cooperative NOVEC was formed in 1983 by the consolidation of Prince William and Tri-County Electric Cooperatives.
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Who is NOVEC? • NOVEC stands for Northern Virginia Electric Cooperative • NOVEC was formed in 1983 by the consolidation of Prince William and Tri-County Electric Cooperatives. • NOVEC serves more than 150,000 customers located in the counties of Clarke, Loudon, Fairfax, Fauquier, Prince William and Stafford all located in northern Virginia. • Prior to 2009, NOVEC received all of its power supply through an all requirements contract via an alternate wholesale power supplier. • Starting in 2009, NOVEC began providing for its own power supply requirements.
Power Supply Portfolio • With this new responsibility, NOVEC embarked on evaluating various options for meeting the power supply requirements. The following were the initial main sources: • Power Purchase Agreements (PPAs) with existing resources • Bilateral Contracts and PJM Market Purchases • While these sources allowed us to sufficiently meet our load requirements; NOVEC continued to consider other opportunities given the dynamic nature of its on-going load responsibilities. • As part of its on-going resource consideration, NOVEC investigated numerous resource alternatives. Included were PPAs with new and existing resources, slice of system options, partnering arrangements and self-build options.
Other Factors • At the same time NOVEC was evaluating these opportunities, the federal legislators were working on language for a federal renewable energy program. • The metric that was being discussed as to which utilities would be under this federal requirement was any utility who had sales of 4 terawatts or greater. • Based upon NOVEC’s forecast over the next few years, NOVEC would meet that metric in short order. • Due to this potential requirement, NOVEC included in its evaluation renewable energy projects. • A developer from Michigan, NOVI Energy, brought forth a proposal for a wood-burning biomass plant located in South Boston, VA.
Decision to Move Forward • With the potential of a federally mandated renewable energy standard, and the evaluation of a multitude of other offers, NOVEC decided to move forward with a renewable project. • NOVEC evaluated PPAs with existing biomass and wind projects, new biomass projects, the opportunities of buying an existing renewable project and the South Boston project. • The results of these preliminary evaluations showed that NOVEC could construct the South Boston project at a cost equal to or lower than all of the other offerings whether they were renewable energy projects or not. • As decision was made to move forward and perform a detailed review of the South Boston Project.
Due Diligence Undertaken • A forest industry expert, the Parton Group, was hired to conduct a detailed review of the wood basket in and around the South Boston region. Parton met with the local loggers in this area as part of their evaluation and came to the conclusion that the local wood basket would be sufficient to fuel the plant. • A PJM Feasibility Study was filed to determine what upgrades would be necessary to connect to the power grid in the area. • Air permit requirements were developed and filed with the VDEQ. Public meetings were scheduled and held and no opposition was present. • Sargent & Lundy was hired as the Owner’s Engineer to begin development of specifications and costs for construction.
Final Decision • Once NOVEC received all of the results from the various studies and design, we analyzed the cost impacts and the societal impacts and the finding suggested that the project should be moved forward. • One of the remarkable outcomes that we discovered was how much support was received from the local public for this project. We did not have any opposition filed by any member of the public through the various meetings and/or regulatory proceedings. • VDEQ worked with us in an expeditious manner to finalize and approve the necessary air permit. • The towns of South Boston, Halifax and the County of Halifax stood solidly behind this project and provided significant support as we moved through the final regulatory requirements for approval. • In the fall of 2010, NOVEC began preliminary construction of the South Boston Energy project and South Boston Energy, LLC filed an Application for approval to construct, own and operate a 49.9MW biomass facility.
Next Steps • South Boston Energy, LLC requested a waiver from the VSCC to begin construction in December 2010 even though the approval of CPCN application was is process. This was necessitated due to the requirements of the American Recovery and Reinvestment Act (ARRA) Grant provisions . Under the then rules of the ARRA, a cash grant in lieu of taxes was available for certain renewable projects as long as construction was started in 2010. • The VSCC issued a Certificate for Public Necessity and Convenience on April 28, 2011. • Negotiations for selecting the EPC contractor were completed and a contract to proceed was approved in May 2011. Fagen, Inc was selected as the EPC contractor. • The facility is now nearing completion going through final commissioning and performance tests.
