The News & Advance, Lynchburg, Virginia

Is the Atlantic Coast Pipeline inevitable?

“Inevitable.” “Inescapable.” “fated.” “What’s the use, nothing can stop those pipelines?” Are these the responses the Atlantic Coast Pipeline is trying to elicit in folks opposing their pipeline? Is this why they have initiated an eminent domain “quick take” process for lands along the pipeline route, during the holidays and many months before construction can possibly begin? Is this really why they cut down wide swaths of trees along the route and left them where they fell? Just a reminder of the inevitability of the pipeline for everyone to see every day? An attempt to declare premature victory?

It has begun to feel more like a fight to death than a reasonable discussion of what is best for both the customer and our utility with its corporate owner. The price tag has gone up $2 billion since it was first proposed, but that doesn’t seem to matter to the builders. Neither does the fact that both Duke and Dominion have canceled building several new gas plants that were scheduled for the next 10 years. Nor does the troubling information from Texas geologists that production from of the Marcellus Shale will peak in the next five years, that the drillers have never shown a profit or that the price differential for overseas gas sales is closing.

Opposition to the pipelines has documented that our current gas supply is more than adequate. So is the 14 percent return on investment granted by FERC the real reason the ACP is still on the drawing boards? Maybe those actions asserting inevitability are doing the opposite — keeping the opposition energized.

JANE TWITMYER, Roseland, Virginia

In 1999, FERC set the rate of return that companies that invest in federally approved gas infrastructure get on the money they put into natural gas projects at 15%. When they approve these huge projects, that rate of earnings on their investment holds for 30 years.

The market has changed a lot since 1999. Most interest rates have been changed to reflect that fact, especially rates that will last for more than a short time. However, FERC has chosen to leave the rate high.

There is no way Dominion could lock in such a high interest rate for such a long time with any other investment. Nothing else comes even close. Thus, federal policy about what developers of natural gas infrastructure can earn incentivized Dominion and others to put their money there. It’s part of why they don’t want to invest in renewable energy infrastructure that would not take 30 years to pay off and that won’t be awarded such a high rate of return.

They are counting on the fact that even though ACP is an LLC – limited liability company – the fact that Dominion, which is a “load serving utility” in Virginia, is majority owner and operator of the ACP will allow Dominion to claim that rate payers “need” this pipeline and thus its cost, set by FERC, must be included in the electric rates the SCC approves for Dominion’s customers.

This ignores the fact that all of the generation Dominion owns is currently served via the existing Transco line with 20 year firm contracts that cost less than the ACP will because that line is largely paid for. No one knows of any need for a large quantity of natural gas in Virginia that might use this gas. Dominion has to claim the line is for its customers, or its stockholders would have the risk of the gas running out sooner than Dominion hopes, of gas prices dropping, etc.

Instead, rate payers take the risk plus the risk that rates will get much higher because the market that sets them ceases to be just the United States, as it is now, but international. Prices in other countries are much higher than they are here, so many are anxious to export gas to get those prices. If they can sell to people who are willing to pay much more, why will they sell gas to us at low prices?

When our low prices join that market, they won’t be low any more. Ratepayers will be on the hook for the new pipeline – needed or not – plus the higher gas cost. Dominion claims gas will cost less, but it’s currently at some of the lowest rates ever. The only way it can go is up.

In other words, the rate of return and the existence of infrastructure that can be used to get natural gas to LNG export facilities could mean lots of income for Dominion shareholders. The deal they are trying to seal will give those getting the fat reward less risk – which by market standards should transfer to lower return – but will conversely will pay them more. What is happening here is against economic principles. It’s dead wrong.

Irene Leech

From the Daily Progress, News Virginian, November 2, 2018

VERONA – The Augusta County Board of Zoning Appeals Thursday denied a special use permit for a storage yard for the Atlantic Coast Pipeline in western Augusta County.

The board, citing community concerns about the storage yard location, voted 4-1 to deny the permit.

Thursday’s vote came after the BZA twice tabled a decision on the 59-acre site near the intersection of West Augusta Road and Deerfield Valley Road in western Augusta County. The site is a couple of miles from the West Augusta community.

Board of Zoning appeals member Daisy Brown offered the most articulate opposition to the permit. Brown said it is the duty of the zoning board to protect the county with zoning decisions and to protect the neighbors.

She said the rural landscape proposed for the storage yard lacked compatibility for the project. She described the site as small and agricultural and said the storage yard would be “too big” for West Augusta.

She said the chemicals, oil and gas in the storage yard site could affect nearby wildlife, including brook trout. Brown said the board has a duty to keep “West Augusta citizens safe and protect future resources for children.”

Other members of the zoning board said they had listened to the concerns of residents who would live near the storage yard. Board Chairman Steve Shreckhise said “there are a lot of reasons not to have” the storage yard.

Board member George Coyner II said he was concerned about soil compaction and the proximity to streams.

Opponents of the pipeline project and residents of western Augusta County have expressed concerns about the storage yard. A large crowd of opponents showed up for Thursday’s meeting at the Augusta County Government Center.

Plans called for the storage yard to serve about 250 workers. In addition to serving as the location for three food trucks, the storage yard would have housed pipes and other materials, and would have offered some minor pipe fabrication.

Ron Baker, the construction manager for the pipeline, said the special-use permit would only be for two years. Any extension of the permit would require coming before the zoning board again. He said the storage yard would serve about 32 miles of the pipeline from the Highland and Bath county lines into Augusta County.

As for concerns of pollution and runoff into adjacent streams from the storage yard, Baker said the pipeline builders would employ “best management practices” to avoid runoff from the storage site.

A Dominion Energy official said permitting requirements stipulate that the land for the storage yard must be returned to its original agricultural condition.

Baker offered a power point presentation to the zoning board that described the entire pipeline construction process, a process that includes numerous crews and 14 steps.

The ACP pipeline route covers about 55 miles of Augusta County. While construction on the 600-mile underground natural gas pipeline has begun in both West Virginia and North Carolina, a final notice to proceed from the Federal Energy Regulatory Commission is needed for construction to start in Virginia, according to Baker.

https://www.dailyprogress.com/newsvirginian/news/politics/pipeline-storage-yard-denied-by-augusta-zoning-board/article_675ddf92-de1e-11e8-81b8-d74124d194c6.html