Atlantic Coast Pipeline (ACP) in WV, VA & NC

Commentary by Ivy Main, Virginia Mercury, March 20, 2019

In December of last year, regulators at the State Corporation Commission took the unprecedented step of rejecting Dominion Energy Virginia’s Integrated Resource Plan. Among other reasons, the SCC said the utility had inflated projections of how much electricity its customers would use in the future.

On March 8, Dominion came back with a revised plan. And sure enough, when it plugged in the more realistic demand projections used by independent grid operator PJM and accounted for some energy efficiency savings, the number of planned new gas plants dropped in half. Instead of eight to 13 new gas combustion turbines, the revised plan listed only four to seven of these small “peaker” units.

Yet there is a good chance Dominion is still inflating its demand numbers. Although the re-filed plan is short and vague, it appears Dominion isn’t figuring in the full amount of the energy efficiency programs it must develop under legislation passed last year.

SB 966 required Dominion to propose $870 million in energy efficiency and demand-response programs designed to reduce energy use and the need for new generation. But Dominion has proposed just $118 million in its separate demand-side management filing.

Moreover, the company has concocted a theory whereby it can satisfy that $870 million requirement by spending just 40 or 50 percent of it and pocketing the rest. Dominion argues that since the Virginia code allows a utility to recover lost revenue resulting from energy efficiency savings, it can simply reduce the required spending by the amount of lost revenue it anticipates.

It’s a great theory, suffering only from being wrong. But it does suggest that Dominion’s demand figures in the IRP are based on plans to spend just a fraction of the energy efficiency money required by SB 966.

If the SCC decides Dominion can’t withhold hundreds of millions of dollars in efficiency spending, that additional spending will have to be factored into demand projections. Thus the IRP’s demand projection can only go down — and with it, the number of gas plants that might be “needed.”

And yet even the resulting number is likely too high. Several of Dominion’s large corporate customers have been trying to leave its fond embrace to seek better renewable energy offerings elsewhere. (The SCC recently rejected Walmart’s effort to defect.) If they or others were allowed to leave, how much would that further reduce the need for new generation?

For that matter, those customers and many others, including many of the tech companies responsible for what demand growth there is, say they want renewable energy, not fossil fuels. Dominion claims the renewable generation will have to be backed by gas peaker plants, but energy storage would serve the same purpose and further reduce the need for gas. The SCC will rule on that question when — and if — Dominion ever requests permission to build one of those peakers. It is possible the utility will never build another gas plant.

That’s bad news for Dominion Energy’s other line of business, gas transmission and storage. With demand for new gas generation here evidently falling off a cliff, Dominion’s ability to rely on its customer base as an anchor client for the Atlantic Coast Pipeline becomes increasingly doubtful.

Dominion may actually have conceded as much in its re-filed IRP. In response to the commission’s order that Dominion include pipeline costs in its modeling of the costs of gas generation, Dominion merely stated, without discussion, that it is using the tariff of the pipeline owned by the ACP’s competitor Transco, which supplies gas to Dominion’s existing plants.

This statement continues a pattern of Dominion attempting to avoid any mention of the Atlantic Coast Pipeline in commission proceedings, lest it invite hard questions. But Dominion can’t have it both ways. If it will use Transco, it doesn’t need the ACP. If it plans to use the much more expensive ACP and just isn’t saying so, it has lowballed the cost of gas generation and is misleading the SCC.

(NOTE: Dominion claims the Atlantic Coast Pipeline will provide supply diversity that will benefit customers, but critics argue that there’s no way the new pipeline gas will be cheaper than existing sources after factoring in construction costs and profit.)

This is unfair to customers, and it may backfire on Dominion. The ACP received its federal permit on the strength of contracts with affiliate utilities, but Dominion hasn’t yet asked the SCC to approve the deal. Leaving the ACP out of the discussion in the IRP year after year makes it harder to win approval. When and if the company finally asks the SCC for permission to (over)charge ratepayers for its contract with the ACP, it will not have built any kind of a case for a public need or benefit.

This is not just a risk that Dominion Energy chose to take, it is a risk of the company’s own creation. It defied the Sierra Club’s efforts to have the commission review the ACP contract early on, knowing it would face vigorous opposition from critics. But since then, its chances for approval have only gotten worse. Back then, the pipeline cost estimate came in at $3 billion less than it is today, Dominion Virginia Power was halfway through a massive buildout of combined-cycle gas plants, and the IRP included several more big, new, gas-hungry combined-cycle plants.

Now the ACP’s cost has climbed above $7 billion and may go as high as $7.75 billion, excluding financing costs, CEO Tom Farrell told investors last month in an earnings call. Meanwhile, the IRP includes an ever-shrinking number of gas plants, to be served by a different pipeline.

One investment management company told clients in January the spiraling price tag may make the ACP uncompetitive with existing pipelines. And Farrell faced a host of cost-related questions in his call with investors.

But Farrell downplayed the risk when it came to a question from Deutsche Bank about the need for SCC approval. Managing Director Jonathan Arnold asked, “On ACP, when you guys are talking about customers, does that include the anchor utility customers, your affiliate customers? Does whatever you’re going to negotiate with them need to be approved by the state regulatory bodies?”

Farrell’s answer sounds nonchalant. “In Virginia, it’s like any other part of our fuel clause. It will be part of the fuel clause case in 2021 or 2022 along with all the other ins and outs of our fuel clause.”

Oh, Mr. Farrell, it is not going to be that easy.

Report on Pipelines and Community Activities in West Virginia

From Elise Keaton, Greenbrier River Watershed Association, April 22, 2015

Community Meetings for You

Tuesday, April 28 (6-8 pm) – Preserve Monroe has their bi-monthly meeting every other Tuesday at the Union Senior Center in Union (Monroe County).

Thursday, April 30 (7-8:30 pm) -Preserve Greenbrier County will hold a community meeting in the Board Room at Carnegie Hall in Lewisburg (Greenbrier County).

Wednesday, May 20 (5:30 pm) – Summers County Residents Against the Pipeline (SCRAP) will hold their regular meeting at the corner Episcopal Church in Hinton (Summers County).

Sunday, June 14 (9am-10pm) – Preserve Monroe Fundraising Concert at Salt Sulphur Springs, WV (Monroe County).

Please call Elise at 304-207-1150 for more information about these community meetings.

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Join us this Saturday for the Great Greenbrier River Race!

The Greenbrier River Watershed Association is a sponsor of the Great Greenbrier River Race in Marlinton this Saturday, April 25th from 11am to 4pm. This is an annual event held the last Saturday in April each year. With great prizes, live music and good food,the event attracts a loyal following of racers and fans.The race is organized by the Greenbrier River Trail Association and monies raised are spent on trail improvements.

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Pipeline Meetings Upcoming

FERC sent a notice of intent to prepare an Environmental Impact Statement (EIS) for the proposed Mountain Valley Pipeline project. As a part of this process, FERC will hold scoping meetings the first and second weeks of May. The schedule for the meetings is as follows:

Monday, May 4, 2015 – 7:00 pm, James Monroe High School – Lindside, WV

Tuesday, May 5, 2015 – 7:00 pm, Eastern Montgomery High School – Elliston, VA

Thursday, May 7, 2015 – 7:00 pm, Chatham High School – Chatham, VA 24531

Monday, May 11, 2015 – 7:00 pm, Robert C. Byrd Center – Pine Grove, WV

Tuesday, May 12, 2015 – 7:00 pm, West Virginia University Jackson’s Mill – Weston, WV

Wednesday, May 13, 2015 – 7:00 pm, Nicholas County High School – Summersville, WV

The last day that FERC will receive comments for the MVP is June 16, 2015.

The last day that FERC will receive comments for the ACP is April 28, 2015.

Please call Elise at 304-207-1150 for more information.

See also:  www.MAREproject.org

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Marcellus Academy June 27-28

Learn as much as you’ve ever wanted to know about Marcellus drilling and fracking at the Marcellus Academy. This year, participants may help work on developing a “Marcellus Campaign Plan.” The Academy will be held at the West Virginia Wesleyan College Campus. To register please contact: Jim Sconyers, jimscon@gmail.com 304-698-9628.

Recent news reports that Dominion will get court orders to survey private land for Atlantic Coast Pipeline should not intimidate landowners, says WV SORO

From the Barrack Report, Special to the Appalachian Chronicle, November 14, 2014

CHARLESTON, W.Va. – Recent news reports that Dominion Resources has sent letters to landowners threatening to use court orders to gain access to private land to conduct surveys for the proposed Atlantic Coast Pipeline has confused and frightened landowners. However, an organization based here – the West Virginia Surface Owners’ Rights Organization (SORO) – has responded that it has resources available for landowners who have been approached by Dominion and other companies.

The Atlantic Coast Pipeline is planned to span about 550 miles, from Harrison County, West Virginia to Southeastern North Carolina. It would also include a spur running from near the Virginia-North Carolina border to Hampton Roads, Va.

According to the Raleigh News & Observer, “Dominion Energy said Tuesday it sent letters to 226 land owners in North Carolina and two other states who have refused to allow the company to survey their land for the proposed Atlantic Coast Pipeline route. The Richmond, Va.-based company said the letters are a final attempt to get the land owners to cooperate before Dominion seeks court orders to gain entry onto the properties to conduct survey work.”

In response, SORO is advising landowners that if they do not want surveyors on their land they could deny the surveyors permission until the company was granted eminent domain powers by having its project approved by the Federal Energy Regulatory Commission. According to SORO, under West Virginia trespass laws, landowners can exclude anyone from their property by posting, fencing, or telling them to get off unless the person or entity has a deed, lease, right-of-way or some other interest that would include the right to conduct surveys. This right must be backed by a legal document. If a surveyor cannot produce a document, landowners can tell them to leave.

“After we updated our pipeline information, we were told that landowners were getting letters citing a section of West Virginia’s eminent domain law and claiming it allows surveyors to come onto people’s land before an eminent domain proceeding is initiated or finished,” said Julie Archer, project manager for SORO. She continued, “However, even if this statute applies, in West Virginia eminent domain laws may only be exercised for a ‘public purpose.’”

West Virginia cases determining whether gas or oil pipelines are for a public purpose usually considered the pipelines operated by regulated utilities that supply gas directly to consumers and businesses as “a true public purpose.” The cases have not involved companies engaged in the exploration, production and transportation side of oil and gas, which is used for sales between private businesses.

Archer offered, “We think this is an important distinction for several reasons, but being made aware of the letters did not change our advice much. We anticipated that landowners might be sued if they denied access to the surveyors, and after learning of Dominion’s plans to sue landowners our advice remains essentially unchanged.” She explained, “If you are sued, you should get a lawyer if you can.

If you can’t get a lawyer for some reason, don’t let yourself be intimidated. File an answer in the lawsuit, show up at any hearings, and just say you do not think they should be able to take your land because it is not a public enough purpose.”

Archer said that landowners who are sued can contact WV SORO at 304-346-5891 for a referral. Archer can also be reached at julie@wvsoro.org. Learn more by visiting the group’s website.

The Appalachian Chronicle is a publication of the Appalachian Preservation Project, LLC   

See also: www.FrackCheckWV.net

Henry Hub Spot Gas Prices

Marcellus gas pipeline capacity seen rising 0.5 Bcf/d by month’s end; additional expansions expected this winter

From: US Energy Information Administration, September 19, 2013

Initial service could begin by the end of September for two projects that would increase natural gas takeaway capacity from the Marcellus Shale formation by a combined 0.5 billion cubic feet per day (Bcf/d).

These two projects are a 7.9 mile, 0.23 Bcf/d looping pipeline added to Kinder Morgan’s Tennessee Gas Pipeline (TGP) (known as the MPP Project’s “313 Loop”) and a 2.5 mile, 0.22 Bcf/d pipeline connecting NiSource’s Columbia Gas Transmission (TCO) pipeline to a 1,329-megawatt gas-fired Dominion power plant (known as the Warren County Extension project). Notably, these would be the first of several projects increasing natural gas takeaway capacity from Marcellus planned for completion this winter.

On September 13, TGP applied to the Federal Energy Regulatory Commission (FERC) to begin service this coming Monday, September 23 on the 313 Loop, as well as the MPP Project’s planned upgrades to an adjacent compressor station in northern Pennsylvania’s Potter County. Service under its firm transportation agreements, however, would not begin until the originally agreed-upon date of November 1. By that date, TGP also plans to complete upgrades to three compressor stations in northern Pennsylvania west of Potter County to allow for bidirectional flow of natural gas.

Columbia’s TCO requested FERC permission on September 6 to begin service on September 30 on the Warren County Extension pipeline in Northern Virginia. This project also includes upgrades to compressor stations along TCO’s line carrying Marcellus gas east from West Virginia as well as the replacement of TCO’s interconnect with Williams’s Transcontinental Gas Pipeline (Transco), near Rockville, Maryland, which carries gas through the mid-Atlantic and into New York City.

Additional Marcellus gas takeaway capacity expected to come into service this winter includes:

• Dominion Transmission (DTI) plans to:
  • establish a 0.09 Bcf/d interconnect with TGP in northern Pennsylvania’s Tioga County (known as the Sabinesville to Morrisville project), and
  • build new segments adjacent to an existing pipeline to carry an additional 0.26 Bcf/d of gas to interconnects with Transco in Leidy, Pennsylvania, as well as to Spectra’s Texas Eastern Transmission Pipeline (TETCO), which carries gas into New York and New Jersey, in addition to other facility modifications (Tioga County Expansion project),
• TETCO plans to begin service on its 0.78 Bcf/d expansion to a portion of its pipeline running from Linden, New Jersey, to Manhattan, New York (NY-NJ Expansion project),
• Transco plans to complete work on 0.24 Bcf/d of expansions to its existing pipeline network, to move more gas from interconnects on its Leidy Line in Pennsylvania to delivery points in New Jersey and New York City (Northeast Supply Link Project), and
• TGP plans to build five looping lines and upgrade four compressor stations in order to add 0.62 Bcf/d of pipeline capacity from northern Pennsylvania to New Jersey (Northeast Upgrade Project).

New V & M Rolling Mill, Youngstown, OH

In Youngstown in Ohio on the edge of the Mahoning River, where once stood many blast furnaces for steel making there are more than 400 workers constructing a new steel plant to make pipe.  This was unthinkable a few years ago, to see a new $650 million steel plant here. When complete, it will stand 10 stories tall, it will involve one million square feet of floor space and make seamless steel pipes. These will be used in the natural gas industry now having a boom in Pennsylvania and West Virginia.

France’s Vallourec & Mannesmann Holdings Inc., one of the world’s largest makers of steel pipe for the energy market, has decided to build the plant here next to an existing facility. The V&M project is the linchpin for economic recovery in Youngstown.  It is a transformational investment and one that could serve the neighboring Marcellus and Utica shale fields for years to come.  It required an up-front investment — waiving some local taxes and spending $25 million in federal stimulus funds — to seal the deal, but in Youngstown, they think it’s money well spent.

As a result of the exploration boom, a natural gas transmission line — the Rockies Express — was constructed, which  stretches from the very eastern edge of Ohio and cuts through Muskingum, Perry and Fairfield counties before continuing on all the way to Colorado. The Rockies Express crosses the 40 acres that Clark Burton and his family own on Ohio 42 in northeastern Warren County. The pipeline is about 1,000 feet from the Burtons’ house.

But the pipe — running through an area that’s seen increasing development since the Burtons bought their land in the 1980s — is a few hundred feet from the homes of neighbors, although it doesn’t go under their property. If the pipeline were to burst, it would cause devastation for those neighbors,  Clark Burton said.

This summer’s mishap in Montana followed a catastrophic natural gas transmission line explosion in 2010 in San Bruno, Calif. The incident killed eight, injured 60 and destroyed 37 homes, renewing concerns about pipeline safety.