CPI Fact Sheet

What is the Old Dominion Electric Cooperative (ODEC)?

ODEC is a non-profit consortium of consumer-owned rural electric cooperative which generates and delivers electrical power to wholesale customers, primarily to its member organizations. As of 2008, ODEC has 11 member cooperatives, 9 of which are located in Virginia, operates almost 400,000 meters serving 1 million member-owners over 51,000 miles of line. Its corporate headquarters are in Glen Allen, VA.

ODEC generates approximately 40% of its own electricity; the other 60% it purchases "from the grid" at the market rate. In order to meet projected demand, ODEC plans to build two 750 MW coal-fired power plants near Dendron in Surry County, VA. The first half of this project, called the Cypress Creek Power Station, will be online in 2016.

What Makes ODEC's Position Unique?

ODEC is a member-owned non-profit cooperative with a community focus, not an investor-owned utility designed to make large profits. As such, it is more responsive to its members' needs, demands, and preferences in power generation technology and resources.

As the product of the rural electric cooperative effort of the 1940s, ODEC is also aware of the need for rural revitalization and its Virginia members participate in the Commonwealth's strong agricultural tradition and economy. There is a current need in these communities for new, stable, and profitable crops. This combination of factors provides a unique pathway for ODEC to become a leader in biomass energy through use of Virginia's ample woody biomass and herbaceous crop potential while bolstering the economies of the member cooperatives it serves.

Furthermore, the energy horizon is changing quickly, with government in both Richmond and Washington now responding to the need to quick fossil fuels to the curb by incentivizing alternative energy. Biomass qualifies as a renewable alternative energy source.

What is CPI and How Does It Relate to ODEC's Plans?

CPI is a campaign to produce distributed generation via a series of 50 MW biomass powered base load facilities located across the ODEC member region that incorporate combined heat and power (often abbreviated CHP) for greater efficiency, profit, and cost savings.

Each plant can go from breaking ground to being fully online in 3 years. The total construction cost would $86.8-$130.2 million per plant, or $2.17 million/MW, compared to $4 million/MW for the currently planned coal-fire plant. Therefore, the construction costs are probably less than, and nor more than comparable to, what ODEC is already prepared to spend.

Each 50 MW biomass plant construction generates $25.4 million into the local economy, and annual operation will bring $18.1 million. This would provide anywhere from 250-400 local jobs, depending upon the location and diversity of biomass feedstock resources supplying the plant, compared to 160-200 jobs generated at the planned Cypress Creek Power Station.

How Affordable Can This New, Green Energy Be for Its Consumers?

Biomass power benefits from federal incentives and the inevitable Renewable Energy Standards which are being considered both on a federal and state level.

The Renewable Energy Production Incentive (REPI) provides annual incentive payments of 1.5 cents/kWh (1993 dollars and indexed for inflation, the actual payment in 2008 is 2.1 cents/kWh) for the first 10-year period of their operation.

Biomass-fired plants will not be subject to the future price fluctuations of carbon pricing, either through a carbon tax or cap-and-trade measures like coal will.

The technology to combust biomass for electricity exists today, it is proven, and it can be used to displace coal at a reasonably competitive price as soon as the plants are built. Furthermore, CHP allows generators using biomass to get 80-90% efficiency from their fuel source, compared to the 30-35% efficiency from coal in standard power plants. Also, there is less loss of power along transmission lines with smaller, local generators, thereby reducing waste and therefore costs.

In short, for the immediate future, a well-planned matrix of 50 MW biomass plants using CHP should not raise electric bills to any great extent. For the long-term future, such biomass energy could be considerably less expensive than coal, oil or natural gas.

What Are the Other Benefits of CPI?

Rural economic development.
CPI would create jobs in economically depressed counties. In 2007, ODEC counties had an average median household income 16% below the state average, and the average unemployment rate increased by 1/3 from 2001 to 2008. For each 50 MW plant approximately 228 jobs are needed for operation and support industries. This does not factor in the economic and employment impact on agricultural industries, which will be 60% of the overall impact.

52 counties in VA are currently served by ODEC. From 1992 to 2007, 2/3 of the counties have a decreased market value of agricultural production; total sales of agricultural products have decreased by 3% in these counties. A strong biomass energy industry would provide a new, stable, and profitable crop for farmers.

Long term stability of electricity costs for ODEC customer-members.
In order to put a floor (and ceiling) in their members' energy prices, ODEC cooperatives need to make a controlled, secure investment in their energy future. Coal cannot provide that over the long-term, given that both Renewable Energy Standards and carbon pricing are likely to effect coal-fired generation before the Cypress Creek Power Station is even built. Locally produced biomass, however, can meet generation needs while benefitting from such legislation.

Member-owners can move forward gradually, with a shorter timeframe and lower investment for each plant as it comes online and avoid the cost risks of overproducing for a projected demand that may not arise. No major initial investment or risk is involved, as bidding, siting, permitting, and construction of early plants is concurrent with the Cypress Creek permitting process. If CPI looks like it will meet the needs, Cypress Creek can be tabled. If CPI appears to be insufficient, Cypress Creek is still poised to move ahead.

In addition, each new facility will utilize the best of current technology as it comes online. The potential for CHP, which will more than double fuel efficiency, will allow the member-owners to sell the thermal energy created from the process for a profit.

Environmental benefits from biomass energy.
Biomass combustion decreases the levels of SO2 and NOx that are emitted in generation compared to coal. Particulate emissions are controllable through standard emission control devices and there is zero net CO2 emission, assuming local providers use sustainable harvesting practices. In a best-situation scenario, biomass energy could even become carbon-negative, because of the amount currently unproductive acreage planted to sustainably and continually support the industry. Where only herbaceous and woody resources are used, the bottom ash is minimal and benign and there is no mercury or lead pollution of local waterways.

Addressing Chesapeake Bay pollution issues.
No other renewable energy source does as much to improve and restore the Bay. Warm season grasses, one of the primary crops for biomass energy, make excellent riparian buffers because they have deep root systems which (1) hold soil in place, preventing streambank erosion and sediment, (2) absorb more nitrates from farmland runoff than other kinds of grasses, and (3) require less tilling, fertilizing, and irrigation than other crops, resulting in fewer ag-related pollutants ending up in the waterways.

In addition, animal waste, such as poultry litter and cow & horse manure, is a valuable resource for biomass energy. A biomass energy industry would provide farmers and animal husbanders a profit motive for fencing in their animals and collecting their waste to sell for energy before it washes into the watershed.

Forestry and woody waste are also essential feedstocks for biomass industry. In Virginia, 80% of all our woodlands are privately owned. Most owners do not use best management practices because there is little financial incentive to do so. However, removing the slash and dead trees in these ecosystems to supplement the supply for biomass energy plants would allow for improved hardwood growth, better wildlife habitat and reduce wildfires. Better forest health leads to better aquatic health in wooded streams, rivers and creeks.

By providing several alternate income streams for current rural uses, one of the end results of an effective CPI campaign could be a reduction in sprawl development, as more rural landowners would be able to realize a decent income from keeping their land undeveloped.

To find out more about CPI, click one of the links below:


• CPI Home

• CPI Presentation (in PDF)