Category Archives: Economy

Dominion Keeps Trying to Pull the Wool Over Our Eyes

Writing in the Virginia Mercury on May 5, 2019, Ivy Main outlines the ways Dominion is currently trying to pull the wool over our eyes. She muses on “the series of full-page ads Dominion Energy has taken out in newspapers over the past few weeks bragging about the company’s investments in solar energy. The ads are misleading — I’ll get to that in a minute—but the more interesting question is what the company is up to that it hopes we’re too busy looking at solar panels to notice.”

A few of the things Main says Dominion wants to distract us from:

  • Dominion Energy paid no federal income tax for 2018, in spite of earning over $3 billion in U.S. income.
  • Most of that untaxed income comes from customers here in Virginia, but not all of it is earned (she explains why).
  • After getting authority to spend all that customer money, one of Dominion’s first moves was to interpret “spending” as “keeping.”
  • Dominion’s Atlantic Coast Pipeline could shape up to be a huge profit center for the company, but also a huge financial burden for utility customers.
  • In March, Dominion boasted customer-funded spending numbers at least $3 billion higher than it gave its regulators at the State Corporation Commission just two weeks before.
  • And so on.

She notes, “Yet at least some Dominion leaders seem to be aware that other people think the company should be ashamed of its greed, and that some of these people are voters who may eject its friendly legislators from office this fall. Their answer is to run an ad about solar panels to distract us and change the conversation. But the ad just starts its own conversation — and not in the intended way.” She enumerates the errors and faulty implications in the ads e.g. boasting about 2 million added solar panels (which, at an average of 300-watt panels “comes out to 600 MW, which is a pitifully small amount compared to Dominion’s fossil fuel investments”), and the fact that all of that solar is for data centers and other large customers rather than ordinary customers.

Read the full article here.

Protesters Target Bank of America

In Charlotte NC on April 24, 2019, protestors outside the Bank of America annual meeting demanded that the bank halt any further funding for the Atlantic Coast Pipeline and other fossil fuel projects. “The Atlantic Coast Pipeline is economically and environmentally reckless,” said Donna Chavis, senior fossil fuels campaigner at Friends of the Earth. “The pipeline is just one example of how Bank of America is fueling the climate crisis. Investors should be aware that Bank of America’s pumping of finance into fossil fuel infrastructure is accelerating climate catastrophe and community destruction. This is bad for the Earth, and bad for investors’ bottom-line.”

Over 100 groups, including Friends of Nelson, had sent a letter to Bank of America CEO Brian Moynihan, calling on the bank to refrain from any further financing of the ACP.

NC General Assembly Members Ask FERC to Halt ACP

After a lobby day last week, 22 members of the North Carolina General Assembly signed an April 12, 2019 letter to FERC urging “the Commission to issue a stop work order, and suspend the Certificate of Public Convenience and Necessity in order to re-assess the need for the Atlantic Coast Pipeline.”

Sierra Club, NC Pipeline Watch, NC Conservation Network, other partners, and congregants from the NC Council of Churches met at the North Carolina General Assembly to advocate for the future world they want to live in. Community lobbyists also passed out the NC Council of Church’s governing board’s statement opposing fracked gas pipelines; the Council represents more than 1.5 million congregants across the state.

ACP: Risk Upon Risk

On March 25, 2019, Oil Change International released a new report, Atlantic Coast Pipeline – Risk Upon Risk, about the public health, ecological, and economic risks of the now $7.5 billion dollar ACP. As the transition to clean energy gathers pace, the risks and costs of this huge fracked gas pipeline project are growing rapidly in the face of major legal, regulatory, financial, and community challenges.

The ACP is now two years behind schedule and substantially over-budget. The latest update from Duke Energy estimates the project cost at between $7 to $7.8 billion – 37% to 53% higher than the original estimate of$5.1 billion – with the latest date for full operation now pushed back to 2021.

Lorne Stockman of Oil Change International says the ACP is facing a triple threat of challenges that combine to present serious obstacles for the project to reach completion:

  • Extensive legal and regulatory challenges that are delaying construction and raising costs, which may lead to cancellation.  ““The ACP is facing an onslaught of legal challenges and losses. Seven federal permits have been stayed, suspended or vacated; in fact, all construction on the pipeline is currently stopped. When — or if — construction will start up again is unknown. Environmental groups, Indigenous Peoples and others have brought at least nine court challenges to ACP permits and certifications, most of which are ongoing.” 
  • Fundamental challenges to its financial viability in the face of lack of growth in domestic demand for methane gas and increased affordability of renewable energy options.  “In Dominion’s 2018 long-term Integrated Resource Plan (IRP), four out of five modeled scenarios showed no increase in methane gas consumption for power generation from 2019 through 2033. However, in December 2018, this IRP was rejected by Virginia state regulators, in part for overstating projections of future electricity demand.” “Over the next decade, it is likely that the demand for methane gas in Virginia and North Carolina will decrease further as renewable energy and storage technologies continue to rapidly decline in price and undercut the cost of running methane gas-fired power plants.”
  • The Pipeline Compliance Surveillance Initiative (CSI), an unprecedented citizen initiative, is positioned to ensure strict compliance with environmental laws and regulations, even in remote locations, if construction proceeds. [Three cheers for the CSI!]

These challenges and the accompanying risk are likely to further delay construction and raise the project’s price tag even higher. If completed, state utility regulators in North Carolina and Virginia are unlikely to justify passing the full cost of methane gas transportation contracts onto ratepayers.

Download the full Oil Change International briefing here.

Questions About Financial Viability – and Jobs

In the last week there have been an number of articles raising questions about the financial viability of both the Mountain Valley and The Atlantic Coast Pipelines. According to an analyst writing in Forbes on March 7, 2019, “Investors can no longer be entirely sanguine about the possibility that one or both of these projects could be abandoned.” A March 4, 2019, article in the Richmond Times-Dispatch reports that Moody’s Investor Service had rated the ACP “credit negative” because of mounting costs and uncertainty over the project in the wake of the Fourth Circuit Court of Appeals’ decision not to review a December decision to vacate the U.S. Forest Service permit for the project to cross beneath the Appalachian National Scenic Trail. Moody’s stated: “The appeals court’s decision and the subsequent appeal mean that a longer legal process will ensue, adding costs and uncertainty to when and how the project will be completed.”

Jobs?  Many economic studies over the last 5 years have shown that the pipeline will provide few – if any – local construction jobs, and a mere handful of permanent jobs.  Some West Virginia high school students recently found that out for themselves with a research project investigating jobs from the Atlantic Coast Pipeline.  Check out the DeSmog report on their project:  Student Reporters in West Virginia Find Atlantic Coast Pipeline Offers Only Two Dozen Permanent Jobs.  Note especially in the video they made where the ACP project manager admits on camera that the pipeline will create only about 20 full time jobs once it is completed.

Economic Blows to ACP

According to the February 18, 2019, Rocky Mount Telegram, Moody’s Investors Service has changed its rating of the proposed Atlantic Coast Pipeline “to credit negative due to the project’s latest increases in costs and delays in construction. ‘As cost estimates continue to rise and as the completion date is pushed further out, Dominion’s path for financial improvement is starting to look more uncertain,’ said Moody’s Vice President Ryan Wobbrock. When investors begin to sour on big construction projects, the collapse comes into view, said Jim Warren, executive director of N.C. Warn, a Durham-based environmental watchdog group. ‘This project is $3 billion over budget yet construction had barely begun when it’s been halted for many months,’ Warren said. ‘My guess: 30 percent chance it’ll ever be completed.'”

A few days earlier, S&P Global reported on February 14, 2019, that “On its earnings call, Duke executives expressed concern over litigation and permit delays of one of its biggest projects, the planned 600-mile Atlantic Coast Pipeline. Analysts were told that the company hopes it can resume construction of the line in the fall when it will pursue a phased schedule, with the first phase of the line in service by late 2020 and the second in 2021. The estimated cost of the pipeline has risen to $7.8 billion from $7 billion, Duke Energy chairman and CEO Lynn Good told the analysts.”

The $7.8 billion mentioned by S&P is a new high for the ACP projected cost. Recently mentioned estimated costs had been $7 billion, up from the original $4.5-$5 billion estimated by Dominion in 2014.