Environmental groups say Dominion’s justification for pipeline has “eroded.”
A coalition of environmental groups wants a federal agency to hold an evidentiary hearing on the public need for the proposed 600-mile Atlantic Coast Pipeline (ACP). If granted, such a hearing could delay a decision on the pipeline, which already is a year behind the schedule originally anticipated for possible construction.
In a motion filed with the Federal Energy Regulatory (FERC) on Wednesday, the coalition claims that justification for the $5.5 billion interstate natural gas pipeline — which would stretch from West Virginia into Virginia and North Carolina — has eroded in the three years since it was proposed.
The filing by the Southern Environmental Law Center (SELC) on behalf of eight environmental groups states that, “The primary stated purpose of this pipeline is to fuel gas-fired power plants in Virginia and North Carolina. But the energy landscape that prompted Dominion Energy and Duke Energy to propose this project in 2014 has shifted dramatically, and the purported justification for the project is eroding, if it ever existed before.”
The coalition claims that demand for gas-fired generation is not growing in the region or across the country due to increased energy efficiency and the availability of solar and wind alternatives.
The coalition includes the Natural Resources Defense Council, a national group, and several local organizations: the Shenandoah Valley Network, Highlanders for Responsible Development, Virginia Wilderness Committee, Shenandoah Valley Battlefields Foundation, Cowpasture River Preservation Association, Friends of Buckingham and Winyah Rivers Foundation.
According to the motion, factors that challenge the public need for the pipeline include new evidence showing a level or declining demand for electric generation through 2030, the sufficiency of existing pipeline structure to meet that demand and the falling costs of renewable energy that “will render gas-fired generation uneconomic in coming years.”
The 36-page motion goes on to say that the agreements Dominion Energy and Duke Energy have with their own affiliates that would use the pipeline are not a reliable measure of market demand. “In other words these companies are gambling with ratepayer money in order to build their $5 to $6 billion project on which pipeline developers will receive a lucrative 14 -15 percent rate of return.”
Greg Buppert, the senior attorney with the SELC in Charlottesville who filed the motion, said in a statement, “If you look behind the claims that this pipeline is needed, what you’ll find is that Dominion and Duke subsidiaries are contracting with each other to manufacture a need for natural gas in Virginia and North Carolina.”
Richmond-based Dominion Energy, the pipeline’s lead partner, disputes such claims. “There is no question about the urgent public need for this infrastructure. It’s been clearly demonstrated in the public record and will be thoroughly evaluated by the FERC in the final Environmental Impact Statement released next month,” Aaron Ruby, a spokesman for Dominion Energy, said in a statement.
“Public utilities in Virginia and North Carolina urgently need new infrastructure to generate cleaner electricity, heat homes and power new industries. The region's population is growing, the economy is diversifying, and electric utilities are transitioning from coal to cleaner-burning natural gas. This requires new infrastructure because the region's existing pipelines are fully tapped.”
Ruby pointed out that Virginia Natural Gas in Hampton Roads had to shut off service to more than 100 major industrial customers in recent winters “to keep their customers’ homes warm. There isn’t enough pipeline infrastructure east of Richmond to support any major new economic development. Eastern North Carolina faces similar challenges, where entire communities don't have access to natural gas because the state's only transmission pipeline is located hundreds of miles to the west. Electric utilities are heavily reliant on a single transmission pipeline to serve the entire region, and that's caused serious reliability issues and higher costs for consumers. All of these challenges can be solved with new infrastructure. That's why we're proposing the Atlantic Coast Pipeline.”
If FERC approves a motion for an evidentiary hearing, it could slow down a decision on the pipeline that was expected by October. A hearing before one of FERC’s administration law judges would entail discovery, testimony from witnesses and cross examination. The judge would make an initial decision, which would be forwarded to FERC, which has the final say on awarding or not awarding a permit of necessity.
According to Tamara Young-Allen, a spokeswoman and longtime employee for the agency, FERC’s job is to weigh in on three areas: public need, environmental affects and rates for initiating service if the pipeline is approved. Currently, there’s a shadow of uncertainty as to when any action on the ACP would come, because FERC doesn’t have a required quorum of three commissioners. Two nominees are still awaiting confirmation by the full Senate, and FERC has no control over when that vote might take place, Young-Allen said.
“There’s a lot of uncertainty,” and “a bottleneck” of pipeline projects awaiting action, she said.
What is certain, in terms of a timeframe, is that FERC plans to issue its final environmental impact statement (EIS) on the Atlantic Coast Pipeline on July 21. That must be done before a decision on a evidentiary hearing could be made, Young-Allen said.
The ACP has drawn strong support from the business and manufacturing community and many public officials, including Gov. Terry McAufliffe. The pipeline also faces stiff opposition from environmental groups and some property owners on whose land the pipeline would be built.
FERC also expects to release an EIS on the smaller, 303-mile, $3.5 billion Mountain Valley Pipeline on Friday, June 23. That natural gas pipeline would run from northwestern West Virginia to southern Virginia and also has drawn both supporters and opponents.