On October 12, 2017, attorneys for the Sierra Club and Appalachian Mountain Advocates (Appalmad) filed an appeal to the Virginia Supreme Court to ensure that a deal for fracked gas shipping capacity is reviewed for conflicts of interest. The Atlantic Coast Pipeline (ACP) presents a major conflict of interest because the companies that own the pipeline, including Dominion Energy, also own the utilities that have purchased shipping capacity on the pipeline. These arrangements between corporate affiliates encourage their parent companies to build unnecessary infrastructure – like the ACP – that would likely not be built if those companies had to rely on independent purchasers. As a result of this inter-affiliate agreement, Dominion stands to reap major profits on the ACP, which will be paid for by its customers through increased electricity bills. The Sierra Club and Oil Change International recently released The Art of the Self-Deal, a report detailing how these arrangements work. Virginia’s Affiliates Act requires the State Corporation Commission to review agreements like these.
Sierra Club’s Beyond Dirty Fuels Campaign Director Kelly Martin said, “The fracked gas Atlantic Coast Pipeline is not only dirty and dangerous, it’s also expensive and unnecessary: Dominion is making a deal with itself for pipeline capacity to justify building a project we just don’t need. Fortunately, Virginia passed the Affiliates Act for exactly this type of situation. The State Corporation Commission must, under that law, review Dominion’s inter-affiliate agreement before it can take effect and determine whether or not it is in the public interest. This review process is not optional, so we’re taking this case to the Virginia Supreme Court.”
In her September 26, 2017, post in Power to the People, Ivy Main writes about the proposed Atlantic Coast Pipeline as part of a widespread, systemic market failure. “Anyone who examines the corporate deals that underlie the Atlantic Coast Pipeline comes away with a strong sense of looking at a broken regulatory system. The Federal Energy Regulatory Commission (FERC) is supposed to approve only those pipelines that can demonstrate they are actually needed. Pipeline companies demonstrate need by showing that customers have contracted for most or all of the pipeline’s capacity. In the case of the ACP, Dominion Energy and its partners manufactured the need by making their own affiliates the customers of the pipeline.”
The article goes on to discuss the new report, Art of the Self-Deal, from Oil Change International that shows “the U.S. is currently building unneeded fracked-gas pipelines as a result of FERC’s regulatory failures, including its failure to police self-dealing. The result will be excess pipeline capacity, paid for by regulated utility customers.”
The article also discusses the Virginia State Corporation Commission (SCC) acceptance of self-dealing. “The Sierra Club petitioned the SCC to require Dominion to comply with the Affiliates Act by disclosing the affiliate relationship and seeking approval of the arrangement that affects captive customers. Without SCC approval, Dominion would seem to be on thin ice telling FERC it has the contracts in place that demonstrate the ‘need’ for the ACP. One would have thought the SCC would jump at the chance to weigh in. The FERC filings show it will cost ratepayers three to four times more to use the ACP than to stick with the competing pipeline that Dominion already has long-tem contracts with. But on September 19, the SCC denied the Sierra Club’s petition. One of the reasons cited was that Dominion will have to get SCC approval before it actually charges ratepayers for any gas carried by the pipeline. Meaning, the SCC says it will consider the merits of the problem only after Dominion has secured FERC approval, and after the ACP has already ripped a 600-mile gash across the countryside, dispossessing landowners, tearing up forests, and endangering streams and water supplies.”
On June 28, 2017, we posted the story revealing that EEE Consulting, Inc., the environmental consulting company the Department of Environmental Quality (DEQ) hired to review Dominion’s soil and erosion plans when they are finally submitted, was also working directly for Dominion on other projects – and that Dominion was given the “opportunity” to review and comment on the consulting company’s proposal before it was issued.
DeSmog broke the original story in June, and now reports that recently obtained documents and emails from the DEQ indicate that, prior to DeSmog’s reporting, DEQ was not aware of the relationship between the contractor, EEE Consulting, and Dominion, despite a contract with strict stipulations intended to avoid conflicts of interest. Although DEQ asked EEE about existing and pending work with both the ACP and MVP, they did not ask about work for Dominion or other pipeline partners.
Read the new story from DeSmog here and the Richmond Time-Dispatch coverage here.
Natural Gas Building Boom Fuels Climate Worries, Enrages Landowners is a lengthy and well-researched NPR Morning Edition piece, the result of a six-month investigation into the Federal Energy Regulatory Commission and its handling of the gas pipeline building boom. The report discusses the multiple pipelines proposed in the last several years (including the MVP and ACP), the dysfunctionality of FERC, the push by energy companies, and the push-back by pipeline opponents. The story was researched, written, and produced by the Center for Public Integrity, joining with StateImpact Pennsylvania and NPR.
Versions of the story also appear on the Center for Public Integrity and the StateImpact Web pages.
StateImpact Pennsylvania is a collaboration between WITF and WHYY, and covers the fiscal and environmental impact of Pennsylvania’s booming energy economy, with a focus on Marcellus Shale drilling – and Marcellus Shale drilling is what brings us the Atlantic Coast and Mountain Valley Pipelines. The Center for Public Integrity was founded in 1989 by Charles Lewis and is one of the country’s oldest and largest nonpartisan, nonprofit investigative news organizations.
Having a hard time keeping up with all the news related to the pipeline? Remember to check out our In the News page for stories not featured in our main page posts. Click on the In the News tab for the current two months, or use the dropdown menu under In the News to look at back stories. A few good stories from the last week or two:
A WVTF feature story which aired on July 5, 2017, discusses the questionable tactics Dominion has used to influence local officials – specifically in Buckingham County, but it is likely the same tactics are routinely used elsewhere.
Pastor Paul Wilson recalled the January 2017 Buckingham Supervisors meeting where, “I guess over a hundred people spoke against the pipeline [and compressor station]. The board of supervisors and the people on the planning commission – they never listened to us. It was obvious from the very beginning that Dominion manipulates the whole process!” The Board voted unanimously to approve the compressor station.
After hearing complaints about people going unheard at Buckingham public hearings, Charlie Spatz, with the Climate Investigation Center, a non-profit in Northern Virginia, sent a Freedom of Information Act request to the county, asking for all correspondence with Dominion. What he found was a cordial relationship between local Buckingham officials, the town’s largest employer, Kyanite Mining, and Dominion.
Documents revealed promises Dominion made to the county and to Kyanite, and also revealed that a Supervisor signed a letter on county stationary to the Virginia Outdoors Foundation (VOF) in favor of the pipeline – a letter whose text was written by Dominion and which Dominion picked up in time for the VOF public hearing. Dominion’s Aaron Ruby explained that by saying, “Every company and corporation involved in the political process works with their elected officials to achieve shared goals.” Andy Wicks, of the Olsson Center for Applied Ethics at UVA’s Darden School of Business, suggests a distinct ethical difference between working with elected officials and asking officials to sign letters written by corporations seeking favors.
Read or listen to the full WVTF report here.