Category Archives: Dominion

Broken Regulatory System

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.”

Art of the Self-Deal


Oil Change International, in collaboration with Public Citizen and the Sierra Club, have released a September 2017 report, Art of the Self-Deal: How Regulatory Failure Lets Gas Pipeline Companies Fabricate Need and Fleece Ratepayers.

The report examines how a new wave of gas pipeline construction threatens to shunt serious risks and costs on to utility ratepayers. Utilities and gas companies are increasingly engaged in self-dealing practices to support a dangerous gas pipeline buildout in the Appalachian Basin. Lax oversight from regulators – particularly the Federal Energy Regulatory Commission (FERC) – is enabling companies to manufacture ‘need’ for projects while shifting financial risks from shareholders to ratepayers. Absent effective oversight, ratepayers could end up shouldering long-term costs for pipeline capacity they don’t need, while losing out on opportunities to take advantage of increasingly cheaper, cleaner choices.

Case studies of four pipelines illustrate this dynamic: the Atlantic Coast, Mountain Valley, PennEast, and NEXUS projects.

As regulators snooze, ratepayers are getting ripped off so pipeline companies can rake in profits – and the climate is getting wrecked.

Blast Zone


Blast Zone – Natural Gas and the Atlantic Coast Pipeline: Causes, Consequences and Civic Action is a new report from the Rachel Carson Council. In addition to naming and exploring the economic and political systems underlying fracking and the ACP, Blast Zone highlights organizations, businesses, and campuses working in interconnected ways toward reducing greenhouse gas emissions at the source, restoring equity, and putting decision-making in the hands of communities.

The report discusses:

  • Natural gas: current and future trends (including the “bridge fuel” myth)
  • Fracking in the Marcellus and Utica Shale Basins
  • The Atlantic Coast Pipeline (including the power behind it, industry motives, what’s paving the way, and the ACP and the environment)

And the report includes an entire set of “Toolboxes” for fighting the ACP:

  • Policy Toolbox: Our Power Plan
  • Housing Toolbox: Efficient, Affordable, Durable Investments
  • Voter’s Toolbox: Supporting Fossil-Free Leaders
  • Campus Toolbox: Research and Advocacy for the Public Interest
  • Advocacy Toolbox: Eliminating Fracking Dangers
  • Financial Toolbox: Divest and Reinvest
  • Property Rights Toolbox: Challenging Eminent Domain
  • Lobbying Toolbox: Re-envisioning FERC
  • Policy Toolbox: Water Quality Permits
  • Civil Rights Toolbox: Driving Racial and Social Justice
  • Direct Action and Advocacy Toolbox

Easily understandable graphs and charts, along with photographs (many you’ll recognize) help to make the points in this clear and thoughtful report.

Distraction: “Hey, look over there!”


Our colleagues near the Richmond area tell us Dominion has been hitting the TV commercial circuits pretty hard in the evenings lately. (To the point of distraction ad nauseum.) Seems you can’t even sit and peacefully watch Jeopardy without being inundated with lies about cheaper power bills and how much we need their safe gas pipeline. Thankfully, there are the ads like this one, from the hard-working folks at Natural Resources Defense Council (NRDC). This video was created by a nonpartisan partnership of clean energy, conservation, consumer and social justice organizations from around Virginia to highlight Dominion’s favorite pastime: distracting you from some of the things you might not like about them, something they do every single day to their customers and to lawmakers alike.

And while the enthusiastic Byron from Distraction Energy might not be an actual lineman, what he’s saying about Dominion is 100% true.

New DPMC Map Shows Proposed ACP Construction Schedule


Check out Dominion Pipeline Monitoring Coalition’s (DPMC) new map showing the ACP’s proposed sequence of construction.  The sequencing is based on ACP receiving project approval in September 2017 (ahead of schedule), something Dominion and others requested in a September 7, 2017 letter to FERC. On the map, click on the legend icon (second icon from right on top right) to see the dates indicated by the various colors on the map, with site prep proposed to begin November 2017 and actual construction proposed to start in February 2018.

Customers Will Pay the Costs of the Unneeded ACP


Two recent publications explain in detail (using Dominion’s own data) why the economic benefits Dominion says the ACP will bring to Virginia won’t happen.  (But Dominion, Duke, Southern, and their shareholders will profit.)

Thomas Hadwin, worked for electric and gas utilities in Michigan and New York for many years, leading a department which was responsible for the site selection and approval of multi-billion dollar projects working with state and federal agencies, as well as assuring that all company facilities complied with existing environmental regulations. In Power to the People on September 5, 2017, writes, To Understand Pipeline Economics, Follow the Money.

Using information that the pipeline owners (Dominion Energy, Duke Energy, and Southern Company, the parent company of Virginia Natural Gas, have filed with the Federal Energy Regulatory Commission (FERC), he explains that:

  • Data filed with FERC show the ACP will cost customers more than existing pipelines. “Using gas prices from May of this year, which show a price advantage at the Dominion South zone (the source of supply used by the ACP), the total price of gas delivered by the ACP to Dominion’s Brunswick plant would be 28% more expensive than gas delivered by the connection to the Transco pipeline built in 2015. The fee to use the ACP is over three times more expensive than using the Transco connection. Using existing pipelines in other parts of the state would save even more money compared to the ACP.”
  • Dominion study shows savings from the ACP, but doesn’t tell the whole story.  Dominion’s calculations of ACP cost savings are based on a short-term phenomenon that was over in 2016, but was assumed to last until 2038; the calculations included a “magic multiplier” – and omitted the costs of transportation.
  • The ACP is more expensive than using existing pipelines. “As new takeaway pipelines are added in 2017-2018 to the production zone used by the ACP, it is expected that the gas price in this zone will equalize with other regions, so that the difference in the price of delivered gas will be due mainly to pipeline transportation costs. This will put the ACP at a considerable disadvantage to other alternatives. Using the ACP to deliver gas over the long-term is far more expensive than using existing pipelines.”
  • Can existing pipelines deliver the gas? Dominion’s actions say yes. “Dominion argues it can’t get enough gas from other pipelines, but its actions indicate otherwise. The ACP’s FERC application identifies that the Columbia Gas Pipeline can deliver Dominion’s full allotment of gas from West Virginia to Virginia for use in power plants…. Gas service to southeast Virginia and to North Carolina could be accomplished with connections to existing pipelines, mostly over existing rights-of-way, at a fraction of the cost and impacts associated with the ACP. Southeast Virginia could obtain as much, or more, natural gas using a connection to existing pipelines, entirely over existing rights-of-way. The region could have its own source of supply for 80 years for a fraction of the price it would pay for the 20-year contract with the ACP.”
  • With demand for natural gas slowing, rushing to build the ACP risks making a costly mistake. “Dominion and Duke have been scaling back the number of gas-fired units that require service from the ACP and pushing back the expected dates for initial operation. Just this year, the two companies cut in half the number of large gas-fired power plants needed in the next 15 years. The first unit is not needed until 2025, in Virginia.”
  • Learning from others’ mistakes: Florida’s example. “The ACP is not the only pipeline project to overestimate demand. Further south, Sabal Trail, the most recent pipeline to go into operation, is running at 25% capacity, all of it taken from existing pipelines. This new pipeline, in rapidly growing Florida, was promoted as being absolutely necessary to meet growth in natural gas demand by its utility holding company owners, NextEra and Duke Energy. Yet, total natural gas usage in Florida is down 4% over last year, undercut by cheaper renewables.”
  • If Virginia’s families and businesses lose, who wins? “FERC offers a 50% higher return for gas pipelines than for interstate transmission lines. The holding company executives are making what they see as a prudent decision to chase this extra money, while revenues from their utility subsidiaries are flat, and shift the risk and higher costs to the utility ratepayers. A choice that is good for the shareholders but bad for the ratepayers is not one that we should encourage. A company cannot be successful in the long run setting the interests of its owners against the interests of its customers. If Dominion builds the pipeline and successfully convinces the SCC to pass on the full costs of the 20-year agreements to the ratepayers, customers will pay billions more for no benefit.”

On September 8, 2017, Institute for Energy Economics and Financial Analysis posted IEEFA Update: Atlantic Coast Pipeline Risk Is Being Borne Not by Dominion and Duke, but by Their Customers. “[I]n the three years since the Atlantic Coast Pipeline was first proposed, Duke and Dominion have revised their projections of future electricity demand substantially. By 2025, Duke’s forecast is lower by 10,800 gigawatt-hours (GWh) and Dominion’s by 7,700. These are not small numbers. For context, the 1,585-megawatt combined-cycle gas plant under construction by Dominion in Greeneville, Va.—a not-insignificant project—will generate 11,000 GWh per year. The total downward revisions in demand by Duke and Dominion—18,500 GWh —works out to about 400 million cubic feet per day of natural gas, a sizeable chunk of the pipeline’s daily 1,500-million-cubic foot capacity…. FERC considers a pipeline “needed” if the pipeline developer has found other companies willing to sign contracts to ship gas on the pipeline. Duke and Dominion have met this criterion—but only by contracting with their own utility subsidiaries to purchase the pipeline capacity, an investment risk ultimately borne for by the customers of those utilities.”

Whether it be politics, pipelines, or mystery stories, one gets answers by following the money. With the ACP, the utility companies and their stockholders get the money – and the customers pay more to line the pockets of the companies and shareholders.