Publication Date: 4/24/2009
Author: Sharon Flanery
Contact: sharon.flanery@steptoe-johnson.com
Supreme Court of Virginia Gives Green Light for Dominion Power Plant
The Supreme Court of Virginia has affirmed that the construction and operation of coal-fueled generation facilities in Virginia is in the public interest. In rejecting challenges raised by environmental groups, the court found that the statute permitting construction of the facilities does not violate the Commerce Clause of the United States Constitution because the statute does not require the use of Virginia coal at the expense of coal produced from any other source.
In a ruling handed down on Friday, the Supreme Court of Virginia rejected challenges to Dominion Virginia Power's proposed 585-megawatt carbon capture compatible, clean-coal powered electric generation facility, known as the Virginia Hybrid Energy Center, which is currently under construction in Wise County, Virginia. The court's ruling eliminates any requirement that the State Corporation Commission conduct individual reviews of public interest with respect to future applications. Moreover, the ruling effectively precludes constitutional Commerce Clause challenges from serving as potential avenues to contest the future construction of similar facilities in Virginia.
After the Commission granted Dominion's application for approval to construct the facility in 2008, four environmental groups appealed the decision, arguing that the statute upon which the application was premised violated the Commerce Clause of the United States Constitution. Specifically, the environmental groups based their challenge on the statutory phrase "coal-fueled generation facility that utilizes Virginia coal." The groups argued that the statute violated the Commerce Clause because it gave preference to Virginia coal at the expense of coal produced out of state.
The court unanimously rejected this argument, stating that "the statute in question does not require - and the Commission did not order - that any amount of Virginia coal be used in the proposed coal-fired plant. . . . What is required is the technology to be able to burn coal found in Virginia. Consequently, the phrase 'utilizes Virginia coal' is descriptive and not prescriptive in content." Moreover, the court held that the use of Virginia coal is not favored over use of out-of-state coal: "Not only is there no economic incentive to use Virginia coal under the Virginia statutory scheme, there is a statutory disincentive to utilization of Virginia coal if use of out-of-state coal is more economical." The court rejected the remainder of the environmental groups' challenges, including their argument that the Commission erred in failing to conduct an independent "public interest" determination, because such challenges were predicated upon the court finding that the statute in question was unconstitutional.
Under the court's ruling, Dominion may continue with construction of the Virginia Hybrid Energy Center, which is expected to be fully completed in 2012. Upon completion, Dominion anticipates that the facility will provide electricity to more than 170,000 homes in Southwest Virginia.
Sharon O. Flanery
P.O. Box 1588
Charleston, WV 25326-1588
Phone (304) 353-8000
Fax (304) 353-8180
sharon.flanery@steptoe-johnson.com
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