The Federal Energy Regulatory Commission is expected to release the final environmental impact statement Friday for the 600-mile, roughly $5.5 billion Atlantic Coast Pipeline, the Dominion Energy-led project that will run from West Virginia through the heart of Virginia and into North Carolina.
Along with EQT’s shorter Mountain Valley Pipeline, proposed to run through the southwestern part of the state, the project has generated a wave of opposition from the rugged rural regions of Virginia it will traverse, though it also has backers in Southside and Hampton Roads that see it as a potential driver of manufacturing growth.
The issuance of the final environmental impact statement is a major step on the path to approval, a process that began nearly two years ago when the Atlantic Coast Pipeline filed applications with FERC.
“I’d say we’re about two-thirds through the process,” said Tamara Young-Allen, a FERC spokeswoman. “Now we’re awaiting a commission decision. Then the parties in the case have 30 days to appeal the commission’s decision.”
Opponents, who contend the project cannot be safely built through mountainous terrain while safeguarding water quality and avoiding landslides and other impacts, have little reason to believe the statement will differ substantially from the favorable draft environmental impact statement the pipeline project received in December. FERC found then that “the majority of project effects, with the exception of impacts on forest vegetation, would be reduced to less-than-significant levels” by the developers’ proposed mitigation measures.
“If past practice is any indication, FERC will determine that there are some adverse effects of the project but they can be mitigated,” said Greg Buppert, an attorney with the Southern Environmental Law Center in Charlottesville.
Dominion spokesman Aaron Ruby also said the company expects findings similar to the draft statement and still hopes to begin construction this fall. Though FERC has just one sitting commissioner at the moment and no quorum to vote on projects, President Donald Trump has made four appointments to fill the five-member commission, including two that have cleared the Senate’s Energy and Natural Resources Committee.
“We’re optimistic that a quorum will be restored relatively soon,” Ruby said.
FERC has three main charges: evaluating the need for the pipeline, weighing the environmental impacts, and determining whether the proposed rates for customers are “just and reasonable.”
However, critics of the process said spending the vast amount of staff time on the environmental review and the reams of comments from federal and state agencies, environmental groups and the general public that come with it before making a determination on the public need for the project is a major flaw in the FERC process.
“They really don’t do any analysis to determine that,” said Tom Hadwin, a retired New York utility executive who lives in Waynesboro. “They don’t look at whether a pipeline is needed and the impact on ratepayers.”
Instead, the commission largely relies on contracts the pipelines have signed to purchase capacity, which in the case of the Atlantic Coast Pipeline are primarily utilities that are subsidiaries of the entities developing the project, he noted.
“It’s not an indication of true market demand. It’s not an adequate market test,” said Hadwin, a member of the Friends of the Central Shenandoah preservation group.
Young-Allen said that unlike the environmental impact statement, the commission’s staff does not make a recommendation on the necessity of natural gas pipelines.
“That’s firmly a decision of the commission,” she said.
Hadwin, a former executive at New York State Electric and Gas Corp., said the pipeline projects have more to do with generating revenue for shareholders than unmet demand for natural gas capacity. Electrical load growth is stabilizing and utilities’ revenue streams are flattening, he said.
“They have to look elsewhere for revenue growth. So they’re doing two things: They’re continuing to propose building new power plants, and they’re also heading to other investment like natural gas pipelines, where the rates of returns are so high and they can really pass the costs and risk on to their ratepayers,” Hadwin said. “They are making these investments because electricity use is flat even though our economy is growing and our population is growing, and it’s disrupting the whole regulatory scheme that has worked for 100 years.”
He expects FERC to sidestep the analysis of potential alternatives to the Atlantic Coast Pipeline, as he says it did in the environmental impact statement for the Mountain Valley Pipeline, which came out last month and was blasted by environmental groups such as the Sierra Club, which said the statement was “rife with omissions and inadequate, incorrect data” and relied on consultants employed by the developers to prove need.
“I expect that will be the same case with the ACP,” Hadwin said. “And it’s unfortunate. We’re really going down a road that is going to harm the economy, the citizens and the land and water of the state unnecessarily.”
Hadwin favors investments that modernize the electrical grid to better incorporate renewable sources such as solar and wind and incentivizing utilities to cooperate.
“We can find a better way to get our utilities the revenues they need without harming the rest of us,” he said.
Ruby, the Dominion spokesman, is weary of arguments that the driving push behind the pipeline is profit.
“That is not accurate to say that FERC just looks at capacity agreements,” Ruby said. “We have to provide a detailed explanation of the market forces that are driving the public need.”
The company also has to demonstrate that it has explored other means of meeting that demand, he added, including expanding existing pipelines.
Having supply diversity, Ruby noted, is key to protecting customers from price spikes. Shale gas from the Marcellus and Utica formations, he said, tends to peak in the winter, when demand for heating gas is the highest. Gulf gas, he said, which is available from the existing Transco pipeline, peaks in the summer, when electrical demand from air conditioning surges.
The ACP project has its origins in a 2014 joint request for proposals by Duke Energy and Piedmont Natural Gas to build a second wholesale natural gas pipeline in the state to provide extra capacity and power new natural gas plants replacing the coal-fired generation, he added.
“There is simply no question about the public need and demonstrated market demand for this project,” Ruby said, pointing to business groups that have backed the project for its potential to bring new manufacturing to the area.
“It is reasonable to expect that companies and investors who put up billions of dollars in private investment, that they get a reasonable return on that investment,” Ruby added.
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