Outsized Influence of Dominion Energy

Dominion rules: How the Richmond-based utility company became one of the most influential political forces in Virginia, a special report published on October 13, 2017, by the Richmond Times-Dispatch.

Last month, in a decision that could allow the Richmond-based monopoly to reap an estimated $1 billion windfall, the Virginia Supreme Court confirmed that the General Assembly can constitutionally freeze electric rates. The series explores the utility’s transformation and political power – and what that means for the company’s 2.5 million customers.

  • Part 1: After epic corporate feud, energy giant Dominion emerges to dominate regulators, legislators, including attempted coup, Dominion takes control
  • Part 2: Virginia’s regulatory landscape turns upside down, as SCC loses sway at General Assembly, including ‘They attacked the messenger,’ ‘They’re not the problem – it’s the General Assembly’
  • Part 3: Is Dominion’s grip on political power at a crossroads? including ‘A policy area with massive implications,’ A changing landscape for a power player
  • The People: A man of influence, Dominion Energy chairman and CEO’s reach is long in state, regional affairs
  • Dominion executives political donations
  • Dominion: Who’s who?

The link to the series includes links to the different parts of the report as well as to a podcast of reporters Michael Martz and Robert Zullo discussing their series of stories about Dominion Energy, tracing the company’s rise from its creation by Virginia Power in the early ’80s to its growth into one of the most powerful forces in Virginia politics.

Oil Change International Responds to FERC Approvals

Lorne Stockman, Senior Analyst with Oil Change International, released the following statement:

“In spite of FERC’s irresponsible action, these fracked gas pipelines still face massive opposition in West Virginia, Virginia, and North Carolina. FERC cannot sneak these mega-projects past the hundreds of communities in their path in the dead of night.

“Oil Change International and the many groups fighting these pipelines have documented the extensive damage these projects will do. Both projects are bad deals for ratepayers, and huge threats to our mountains, rivers, farms, and local economies. They threaten our climate and disproportionately impact our low-income and minority communities. FERC has ignored all the evidence and certified these destructive projects as ‘convenient and necessary’ – when in fact they are neither.

“There is no public convenience or necessity associated with either of these pipelines, and the only people they serve is shareholders. No assessment of actual need has been conducted for either of them, as noted by Commissioner Cheryl LaFleur in her rarely-seen dissent opposing today’s approvals. Atlantic Coast and Mountain Valley will cause irreparable harm to our climate, and to the communities and environment along their routes.

“Despite the certificates granted today, these fights are far from over. The responsibility to protect the climate, ratepayer interests, and the precious water in these states now rests squarely on the shoulders of Governors Terry McAuliffe, Roy Cooper, and Jim Justice. We will join our partners and communities in Virginia, North Carolina, and West Virginia to increase pressure for the rejection of 401 water permits in these states and stop these reckless pipelines.”

ABRA Statement to Media on FERC Approval of ACP

The following statement from ABRA on FERC approval of the ACP was released to the media on Friday evening, October 13, 2017:

​”The Allegheny-Blue Ridge Alliance, a coalition of 52 organizations in Virginia and West Virginia, is appalled at the action tonight by the Federal Energy Regulatory Commission in approving the construction of the Atlantic Coast Pipeline. The Commission’s judgment has been made in advance of necessary and required decisions by the U.S. Forest Service, the U.S. Army Corp of Engineers and the state environmental authorities in the affected states of Virginia, West Virginia and North Carolina on critical environmental issues. We concur with the thoughtful dissent of Commissioner LeFleur’s, who has served on the Commission for 7 years, raising serious questions about the basis of need for both the ACP and the Mountain Valley Pipeline and expressing concerns about environmental impacts that both projects present. The majority decision does not reflect an understanding of the issues at hand and is clearly not in the public interest. It calls into serious question the agency’s regulatory credibility.”

FERC Grants Certificate for ACP and MVP

After 7:00 p.m. on Friday October 13, 2017, The Federal Energy Regulatory Commission granted certificates of public convenience and necessity to both the Atlantic Coast and Mountain Valley Pipelines.  Recently appointed FERC Commissioners Neil Chatterjee and Robert F. Powelson voted in favor of certification, Commissioner Cheryl A. LaFleur dissented.

In its 157-page approval statement for the ACP, the Commission said:

“As explained herein, we find that the benefits that the ACP Project, Supply Header Project, and Capacity Lease will provide to the market outweigh any adverse effects on existing shippers, other pipelines and their captive customers, and on landowners and surrounding communities. Further, as set forth in the environmental discussion below, we agree with Commission staff’s conclusion in the Environmental Impact Statement (EIS) that, if constructed and operated in accordance with applicable laws and regulations and with the implementation of the applications’ proposed mitigation and staff’s recommendations, now adopted as conditions in the attached Appendix A of this order, the projects will result in some adverse and significant environmental impacts, but that these impacts will be reduced to acceptable levels. Therefore, we grant the requested authorizations, subject to conditions.”

In her 5-page dissent, Ms. LaFleur said, “I recognize that the Commission’s actions today are the culmination of years of work in the pre-filing, application, and review processes, and I take seriously my decision to dissent. I acknowledge that if the applicants were to adopt an alternative solution, it would require considerable additional work and time. However, the decision before the Commission is simply whether to approve or reject these projects, which will be in place for decades. Given the environmental impacts and possible superior alternatives, approving these two pipeline projects on this record is not a decision I can support.  For these reasons, I respectfully dissent.”

Read the approval statement for the ACP here.  Ms. LaFleur’s dissent begins on page 151

Read the approval statement for the MVP here.  Ms. LaFleur’s dissent begins on page 136.

Conservation Groups Argue Dominion Conflict of Interest

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.”

ACP Talking Points Don’t Stand Up to Scrutiny

In the first in a series of Oil Change International blogs building on their September 2017 report, Art of the Self-Deal, and responding to statements (the same statements. over and over) offered by Dominion Energy’s spokespersons, Oil Change International discusses why the report on the economic impact of the ACP by Dominion’s consultant, ICF, never did make any sense.

The ICF report claims that consumers in Virginia and North Carolina combined could save $377 million over twenty years due to the discounted Appalachian gas the project might deliver, $243 million in Virginia alone. “These numbers have been repeatedly stated by Dominion and other pipeline supporters in promotional materials, opinion pieces and in comments in response to dissent from pipeline opponents.

“The numbers are calculated based on the idea that the pipeline will deliver gas from the Appalachian Basin that sells at a discount to gas delivered from the Gulf Coast by existing pipelines. But this assumption is fundamentally flawed. So much so that it is hard to imagine ICF was not aware of at least some of the flaws. But let’s give them the benefit of the doubt for now.

“There are three reasons this assumption is flawed:

  • The assumption that price discounts in Appalachia will continue into the 2030s — even as new pipeline capacity, including ACP, is added — defies the laws of supply and demand.
  • The price of gas is not the only cost associated with gas delivered by a pipeline. The transportation cost of using the pipeline must be added and was not clearly included in the ICF analysis.
  • Owners of the existing pipeline system were also planning to connect their system to Appalachian Basin gas. Indeed, the Transco pipeline is already flowing gas from Pennsylvania. Therefore, the comparison with the price of gas on the Gulf Coast is invalid.”

Read the full blog post here.