From the Allegheny-Blue Ridge Alliance ABRA Update 239, August 1, 2019:
Two witnesses appearing before a July 30 Virginia State Corporation Commission (SCC) hearing on the proposed fuel factor for Dominion Energy to use in calculating future customer rates testified that the company has sufficient pipeline capacity to meet future energy demands.
Greg Lander, an energy consultant representing Appalachian Voices (an ABRA member), testified that Dominion “has sufficient pipeline capacity to serve its existing generation fleet. Further, because of the frequency, magnitude, and duration of the non-power plant deliveries under its existing pipeline contracts, I conclude that the Company has ample pipeline capacity to serve additional power generation load should that be necessary.” Mr. Lander’s analysis was echoed by Bernadette Johnson, a consultant retained by the SCC staff.
Mr. Lander’s filed testimony is available here. Ms. Johnson’s filed testimony is available here and here.
The SCC is expected to decide about Dominon’s fuel factor proposal in 2-3 weeks.
Friends of Nelson joined 15 other public interest organizations in signing a joint comment to the Federal Energy Regulatory Committee (FERC) in response to their Notice of Inquiry on on whether and how to revise its rate of return on equity (ROE) policy for projects, including new gas pipelines. Discussion points in the joint comment include:
- 14 percent ROE is excessive in relation to other capital-intensive regulated projects
- Profit-driven pipeline affiliate deals place captive ratepayers at risk
- Traditional utilities are lured by lucrative pipeline profits
- A 14 percent ROE overstates utility pipeline investor risk
- Pipeline investments are at risk of becoming stranded assets
- Pipeline overbuild is occurring
To read the full comment, click here.
The comment period for FERC’s Notice of Inquiry ended on June 26, 2019.
On March 21, 2019, FERC issued a notice of inquiry requesting “information and stakeholder views to help the Commission explore whether, and if so how, it should modify its policies concerning the determination of the return on equity (ROE) to be used in designing jurisdictional rates charged by public utilities. The Commission also seeks comment on whether any changes to its policies concerning public utility ROEs should be applied to interstate natural gas and oil pipelines.”
The high rate of return on equity (a guaranteed 14% for the Atlantic Coast Pipeline) allows for the construction of unnecessary pipeline projects, leaving the US with newly built fossil fuel infrastructure in a time of rapidly falling renewable energy prices and growing concern about climate change. Because utilities can pass along costs to consumers in their monthly bills, FERC has effectively allowed them to use their customer’s money to build pipelines that may never be fully used.
We urge everyone to comment to FERC, suggesting it change the way it determines rate of return. Comments from the public on FERC’s new inquiry are due on June 26, 2019. Because FERC makes it so difficult for people to submit comments electronically, we urge you to print, sign, and mail this letter – or write your own letter and mail it! Your letter must be postmarked by June 26.
A DeSmog article on May 13, 2019, Energy Regulators May Reconsider Rules Critics Say Fueled America’s Oil and Gas Pipeline Glut, discusses a “little-noticed Federal Energy Regulatory Commission (FERC) announcement could have an outsized impact on the oil and gas pipeline industries — if the commission decides to snap shut loopholes that analysts say create financial incentives to build too many new pipelines in the U.S.” FERC’s announcement was followed by a March 21 notice of inquiry requesting “information and stakeholder views to help the Commission explore whether, and if so how, it should modify its policies concerning the determination of the return on equity (ROE) to be used in designing jurisdictional rates charged by public utilities. The Commission also seeks comment on whether any changes to its policies concerning public utility ROEs should be applied to interstate natural gas and oil pipelines.”
The high rate of return on equity (a guaranteed 14% for the Atlantic Coast Pipeline) allows for the construction of unnecessary pipeline projects, “which critics say will leave the United States criss-crossed by newly built fossil fuel infrastructure despite falling renewable energy prices and growing concern about the climate crisis. Critics add that because utilities can pass along costs to consumers in their monthly bills, FERC has effectively allowed them to use other people’s money to build pipes that may never be fully used.”
Now is your chance to comment to FERC on whether it should change the way it determines rate of return. Comments from the public on FERC’s new inquiry are due on June 26, 2019.
Two recent editorials, one in Charlottesville’s Daily Progress and one in Fredricksburg’s Free-Lance Star, urge the State Corporations Commission (SCC) to demand full and accurate information from Dominion before considering Dominion’s request for new projects and new profits – and potentially new rate increases from customers to pay for them. Dominion wants the SCC to raise its guaranteed return on equity [ROE] so it can attract investors. But SCC judges and staff noted that nearly all the projects could also generate higher bills for ratepayers. Plus Dominion has submitted varying plans at various times.
The Free-Lance Star put it this way: “If Dominion’s guaranteed return on equity is increased, that would mean more money for investors, but less money for refunds or grid investments that directly benefit the company’s 2.6 million captive customers—who incidentally just got stuck paying up to $5.7 billion to clean up decades’ worth of toxic coal ash. It’s up to the SCC, which will hold a public hearing on Sept. 10 in Richmond on the utility’s application, to decide whether that’s fair.”
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.