Update: The permit that was approved this week by the state Air Pollution Control Board does not contain the “out clause” for mercury emissions. Information from an SELC statement was incorrect, and they have apologized.

Under heavy pressure from lobbyists for Dominion Virginia Power, Virginia announced yesterday that it will permit the construction of a new coal-fired power plant, even though doing so clearly violates the law.

Just days after NASA’s James Hansen testified that avoiding climate catastrophe will require immediately stopping construction of new coal-fired power plants around the world (and shutting down old ones), and just months after the Supreme Court ruled that carbon dioxide is a pollutant under the Clean Air Act, Virginia decided that what the state and the world really need is another coal fired power plant with no controls on release of carbon dioxide — and gave Dominion the go ahead to build their “Hybrid Energy Center” in Wise County in Appalachia (hybrid because it will burn two different types of dirty coal).

That’s in clear violation of the law, as Cale Jaffe, senior attorney for the Southern Environmental Law Center testified, since the Supreme Court’s ruling in Massachusetts vs. EPA, states are required to implement the best technology available to control carbon dioxide — which were the grounds Kansas used when it rejected a similar power plant proposal. And even though Virginia’s decision did tighten some sulfur dioxide and other pollution limits (Chesapeake Climate Action Network’s Susanna Murley has more on why this is a partial victory), it still includes an “out clause” that would permit Dominion to emit unlimited quantities of mercury — another clear violation of the Clean Air Act.

What makes my jaw drop a little about Virginia’s decision is that it not only screws the environment, but actually explicitly raises power costs to finance plant construction at a time when Virginians are reeling from an 18 percent increase in electricity (and continuing high fuel costs). In fact, state officials actually estimated that the increased electricity bills will cost 1,474 jobs (PDF)as businesses lay people off just so they can pay their electricity bills. The loss will far outweigh the 75 permanent jobs the plant will create.

This seems to create extraordinary political vulnerability for Tim Kaine, who’s said to be on Barack Obama’s short list: Would Democrats really want a vice presidential candidate whose administration just broke the law to raise electricity rates at a time when the national political debate is centered around bring fuel costs down?

The only silver lining here is that there’s some chance that Dominion could spend over a billion dollars building the plant, only to have it rendered financially obsolete by new limits on greenhouse gas emissions. Today’s Washington Post coverage of the decision offered what should be sobering advice for Dominion officials:

“It’s basically, if not stopped dead in its tracks, pretty much close to it,” said Richard Cortright, a managing director in the utility-analysis group at Standard and Poor’s. “Do you want to start a plant in that atmosphere, not knowing what might come down the pike?”