Dominion News

Dominion Sets Schedule to Close Salem Harbor Power Station

- Units 1 and 2 to cease operations by end of this year

- All Salem Harbor units and station to retire on June 1, 2014

- Pending environmental regulations, market conditions led to decision

SALEM, Mass., May 11, 2011 /PRNewswire/ -- Dominion (NYSE: D) will cease operating two of the 

four units at Salem Harbor Power Station by the end of the year and plans to retire all four units on 

June 1, 2014, because pending environmental regulations and market conditions are making the 

power station uneconomical to operate.

Company officials today told ISO-New England, the independent system operator for the region's 

electric grid, that it will not seek to negotiate an agreement that could keep the station operating 

beyond existing commitments.

"This was a decision we had to make given the significant costs required to keep the station in 

compliance with pending environmental regulations and the falling margins for coal stations selling 

electricity in New England," said David A. Christian, chief executive officer of Dominion Generation. 

"Salem Harbor employees are dedicated professionals who will continue to operate the station safely 

as we move toward retirement in 2014."

Dominion has operated Salem Harbor safely, economically and in compliance with existing 

environmental regulations since it purchased the power station in 2005.

Dominion said last year that it would not invest the funds needed to comply with new environmental 

regulations that would go into effect in 2014 and beyond. The company would have been required to 

spend millions of dollars on new controls at the power station to comply with new regulations from 

the U.S. Environmental Protection Agency. 

Dominion last fall submitted a permanent delist bid for all four Salem Harbor units in the ISO-New 

England's Forward Capacity Auction 5, covering June 1, 2014 to May 31, 2015. ISO-New England 

rejected that bid and offered a mitigated price that did not guarantee full cost recovery of the 

environmental controls. In response, the company submitted a non-price retirement bid for all four 

units in February. On May 10, the ISO informed Dominion that it had accepted those bids for Units 1 

and 2, but rejected the non-price retirement bids for Units 3 and 4 because they were needed for 

system reliability during the FCA5 commitment period. 

"We would have been faced with spending millions to comply with new environmental regulations 

without assurance of full cost recovery before committing to support the ISO's reliability needs," said 

Christian. "We could not take that risk."

Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of 

approximately 27,600 megawatts of generation, 11,000 miles of natural gas transmission, gathering 

and storage pipeline and 6,200 miles of electric transmission lines. Dominion operates the nation's 

largest natural gas storage system with 947 billion cubic feet of storage capacity and serves retail 

energy customers in 15 states. For more information about Dominion, visit the company's website at 

www.dom.com.

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SOURCE Dominion

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