Clash of Competing Values

chickahominy_route

Map 1: Subdivisions and recreation areas. Proposed Chickahominy-Skiffes Creek transmission line route. (Click for image.)

Virginians need pipelines and transmission lines to keep the economy humming. But we also value our historical, cultural and historical heritage. The trade-offs are getting harder and harder.

by James A. Bacon

In the 1970s engineers at Dominion Virginia Power envisioned the need to increase the supply of electric power to the Virginia Peninsula one day. The logical course of action at the time seemed to be hooking into a 500 kV substation north of the James River in Charles City County, skirting Williamsburg, and plugging into a York County switching station where the power could be stepped down to lower voltages. To secure the route, the company proactively procured easements the entire length. It seemed an example of far-sighted planning.

When the Environmental Protection Agency enacted new toxic-emission standards earlier this decade that would compel Dominion to shut down its Yorktown coal-fired power plants, the company dusted off plans to import electricity from outside the Peninsula. However, taking a close look at the route, Courtney Fisher, an electric transmission siting and permitting specialist, found that many things had changed since the 1970s. Developers had built subdivisions right up to the easement. Environmental laws had became stricter, creating protections for wetlands and waterways. Government agencies had created classes of protected land, such as parks, conservation districts and agricultural/forestal districts. Private landowners had set up conservation easements. Society as a whole placed greater value upon scenic vistas and cultural resources like churches, battlefields, cemeteries and Indian settlements.

Even though Dominion owned the right of way, it didn’t take many public hearings to realize that building a high-voltage transmission line along that route would be a public relations disaster. The 38-mile line would cross 28 subdivisions and 300 parcels, leaving 1,129 residences within 500 feet of the line.

“The easement was purchased but the land was never cleared,” Fisher said. “Through the years, people bought houses. Their plats should have showed the easements. Some showed our transmission line easements and some did not. In either case, a line on a piece of paper is very different from the reality.”

Making matters worse, the transmission line would cut through 21 miles of forest land, requiring the clearing of 420 acres of trees, and it would affect 253 acres of wetland and forested wetlands. A crossing over the Chickahominy River would disrupt views to one of the most pristine stretches of river in eastern Virginia. To top it all off, the Chickahominy Indian tribe expressed concerns about the proximity of the line to its lands.

The route would have been so disruptive that Dominion decided to push an alternative, the 7.4-mile Surry-Skiffes Creek route across a historic stretch of the James River, arousing the wrath of conservationists and preservationists in the Williamsburg area and around the state.  As controversial as that proposed route has proven to be, Dominion believes the Chickahominy route would have been worse.

When it comes to picking a route, sometimes there are only painful choices, says Fisher. “We know we can’t please everyone, but we strive to minimize overall impacts.”

As the United States adapts to a post-coal era of more solar, wind and natural gas, major energy corporations are actively seeking to acquire right of way for two major gas pipelines and build several electric transmission lines in Virginia, with more projects waiting in the wings. The problem is that more places on the map are designated off-limits than ever before.

Route of the Williams Companies' Transco pipeline, built around 1950.

Route of the Williams Companies’ Transco pipeline, built circa 1950.

Building gas and electric lines was a lot easier a half century ago when projects disturbed little more than farm and woodlands. Witness the Transco pipeline built through Virginia around 1950 in a straight line. For purposes of acquiring right of way, it was a straightforward proposition to calculate the loss of economic value to a farm or a timber stand to compensate a landowner for an easement across his land.

Since then, suburban sprawl has smeared low-density subdivisions across vast swaths of the landscape, while changing societal values have placed a priority on preserving Virginia’s cultural, historical and environmental resources. Try assigning an economic value to a family cemetery, an expanse of marsh grass or the bucolic view from a vineyard.

Gas and electric companies follow a standard procedure when plotting routes for pipelines and transmission lines. The preliminary step is to plot the most economical path from Point A to Point B, using detailed maps identifying terrain features as well as environmental, historical and cultural assets in the path. Within the budget constraints of the project, they are willing to zig and zag to avoid sensitive locations. If it is impractical to steer around a subdivision, wetlands or scenic vista, utility companies endeavor to minimize the impact — whether drilling through mountains, in the case of pipelines, employing low-glare materials to build a transmission line, or utilizing any number of other strategies. Then begins the open houses and meetings with affected landowners, federal and state agencies and other interested parties to refine the proposed routes further.

A particularly thorny set of issues revolves around how much money utilities should spend in order to avoid or mitigate these conflicts. If a pipeline or transmission line diminishes viewsheds and destroys economic value, how much of that cost should be shifted to rate payers and how much should be absorbed by the property owner? And what happens if a historic, cultural or environmental asset is priceless? Bacon’s Rebellion will explore those issues in an upcoming article.

However those issues are decided, Virginia will be seeing more of these conflicts. To show how challenging it can be to plot a route, Bacon’s Rebellion sat down with Fisher to discuss the challenges posed by the Chickahominy-Skiffes Creek route and with Robert M. Bisha, director-environmental business for Dominion Resources, to walk through the major choke points in the proposed Atlantic Coast Pipeline.

The Chickahominy-Skiffs Creek Route

There are so many obstacles to the Chickahominy-Skiffes Creek transmission line route that combining them all in one map would render the map unintelligible, so Dominion created four maps for Bacon’s Rebellion. Map 1 at the top of the article shows subdivisions and recreation areas in light yellow and orange.

Streams and wetlands along the rejected Chickahominy-Skiffes route. Map source: Dominion Virginia Power

Map 2: Environmentally sensitive areas. Source: Dominion Virginia Power. (Click for larger image.)

Map 2 shows environmentally sensitive areas: forests, streams and wetlands. The yellow spot rates “high” in the Virginia Department of Conservation and Recreation’s National Heritage Resources Screen. The orange spots rank “very high,” and the red spot “outstanding.”

Public land ownership and conservation easements. Map credit: Dominion

Map 3: Protected lands. Source: Dominion Virginia Power. (Click for larger image.)

Table for conservation easements map

Table for conservation easements map

Map 3 displays public lands, conservation easements on private land, and agricultural/forestal lands.

Map 4 below shows historical and architectural assets, including battlefields.

In commenting on the challenges, Fisher moves from west to east. The first issue arises, she notes, practically next door to the Chickahominy Substation: the transmission line passes near the Chickahominy Tribal Center in Charles City County (as displayed in Map 1). The website of the state-recognized Indian tribe touts “sustainable lifestyle, responsible energy usage, and environmental stewardship” as values consistent with the ancient vision of “life in harmony with creation.” Not surprisingly, in public hearings, tribal chief Stephen Adkins expressed reservations about the line. The same area also was the site of the Civil War battle of Saint Mary’s Church, an 1864 cavalry engagement, seen in Map 4.

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Map 4: Historical assets. Source: Dominion Virginia Power. (Click for larger image.)

 

Nearby, the proposed route passes very close to a  cemetery and church (a red dot in Map 1). Then it crosses two trails (purple lines in Map 1) designated as part of the Captain John Smith Trail system, as well as the Old Main Road Rural Historic District (Map 4), location of at least 82 archaeological resources, and determined to be potentially eligible for listing in the National Registry of Historic Places. Among the more notable structures there is Moss Side, a circa-1850, wood-framed, two-story dwelling with out buildings (Map 4).

Next, a few miles to the east, the electric-line intersects a large tract of wetlands on the Chickahominy River, some of which consists of state-owned conservation land, as well as an agricultural-forestal district (Map 2). That complex also contains birding trails. “This particular area is pristine,” Fisher says. “It’s virtually untouched.”

Continuing east, the route encounters parks, recreation areas and more trails (Map 3), including the Colonial Parkway (Map 4). Then, on the outskirts of Williamsburg, the transmission line blasts through several miles of residential development (Map 1). The Civil War battle of Williamsburg, or Fort Magruder, took place there, while the terminus of the line approaches the location of the famed Revolutionary War battle at Yorktown (Map 4).

The Atlantic Coast Pipeline Route

As managing partner of the Atlantic Coast Pipeline (ACP), Dominion Transmission Inc., the business unit of Dominion Resources that builds natural gas pipelines, has petitioned the Federal Energy Regulatory Commission (FERC) to build a 564-mile, interstate natural gas pipeline from West Virginia to North Carolina. Most of the route is uncontroversial — Dominion is getting very little push back from landowners. But the proposal has generated intense resistance in Augusta and Nelson Counties in Virginia, where the route has to thread the needle between U.S. Forest Service land, the Appalachian trail, wilderness area and conservation easements, all while trying to follow ridge lines across mountainous terrain.

Proposed Atlantic Coast Pipeline route through August and Nelson Counties. Map credit: Dominion Resources.

Proposed Atlantic Coast Pipeline route through August and Nelson Counties. Map credit: Dominion Resources. (Click for larger image.)

Bob Bisha, leader of the pipeline routing team, has the goal of devising a route that causes the least distress possible. One of the biggest challenges is to pick a path through a near-impenetrable wall of restricted areas. As can be seen in the map above, the pipeline route (the blue line) had few options. “We can’t go through the Shenandoah National Park, the Appalachian Trail or the Blue Ridge Parkway,” he says. “Those are non-starters.”

The route skirts to the east of valuable U.S. Forest Service land (the big green blob with green cross-hatching), much of which is roadless, classified as potential wilderness area, and/or designated a special biological area. The route then twists to the southwest, squeezing between Forest Service land and land belonging to the Appalachian Trail. (The trail is yellow and the land associated with it is pink.)

The Appalachian Trail Conservancy will not grant permission for the pipeline to cross the trail or its lands. But close to the Nelson County line, there is a tiny gap with no buffer land. Dominion made the decision to drill through the mountain there, using horizontal directional drilling technology, and literally pass underneath the Appalachian Trail and the Blue Ridge Parkway.

Emerging east of the Appalachian Trail, the pipeline then would swing south of the Wintergreen Resort (the mountainous area just north of the 160-mile marker). Many Wintergreen residents objected to the visual impact of the pipeline Right of Way cut through wooded mountains, and Dominion has consulted with the Wintergreen Property Owners Association to mitigate the impact as much as practicable. “We don’t anticipate any issues involving access [to the resort], either during construction or afterwards,” Bisha says.

Once past Wintergreen, the route poses few obstacles for ten miles or so before hitting a conservation easement on privately owned land. Terrain considerations made the intrusion unavoidable in order to stay out of nearby wetlands, streams and developed areas, Bisha says.

acp_wingina

Map source: Dominion Transmission Inc.

The original plan was to head south, swinging west of the James River Wildlife Management Area (the dark green block) but that would have taken the pipeline through the Norwood-Wingina Rural Historic District (in purple), which has been nominated for inclusion in the National Register of Historic Places. Originally occupied by the Monacan Indian nation, the 3,450-acre district was settled by English colonists in the 1700s. Located on the James River and Kanawha Canal and later served by a railroad, the district gave rise to tobacco cultivation, plantations, a warehouse and two villages.

The adjusted route cuts through the James River wildlife area and, beyond it, the Swift Island Mitigation Site, a constructed wetlands. To avoid disrupting both habitats, the ACP will run the pipe underground. Additionally, the route was modified to minimize impact to the new Warminster Historic district, which was adopted just prior to the project application. (See photos of historic rural structures here.)

The pipeline emerges south of Satchidananda Ashram Yogaville, a spiritual retreat in Buckingham County where yoga and meditation are practiced. “The pipeline will be buried out of site,” said Bisha. “They won’t even know it’s there.” However, construction noise will be an issue for people expecting to practice meditation in quiet. “We want to be good neighbors,” he adds. “We propose to … to minimize the noise impacts.”

The ACP will intersect with the Transco pipeline south of Yogaville in order to serve Dominion Virginia Power’s Bear Garden and Bremo natural gas-fired power stations. The pipeline company is obligated through customer contracts to deliver natural gas to a particular point of the Transco pipeline. Swinging the pipeline to the east of the James River Wildlife Area and Yogaville is not a practical alternative, Bisha says.

Dominion is trying to minimize the impact of the pipeline path, but it’s important to recognize that it also is determined to stick to a budget. The overall project cost is expected to run between $4.5 billion and $5 billion. The company has not provided a breakdown of those costs, but Right of Way acquisition and pipeline construction will be major factors.

In my discussions with Dominion about the drawing of transmission lines and gas pipelines, I did not address the question of whether the company could cause less disruption if it were willing to bust its budget by spending more on re-routing or mitigation. That issue has been especially pointed on the Virginia Peninsula. Foes of the Surry-Skiffes Creek line across the James River, which Dominion favors in place of the Chickahominy-Skiffes Creek route, argue that the worst negatives could be offset by burying the transmission line under the river. Dominion does not dispute that such an alternative is technologically feasible but argues against it on the grounds that they would not have the same capacity, would impact different viewsheds and would cost tens, or hundreds, of millions of dollars more — costs that would be passed on to electric rate payers.

That then raises a philosophical question regarding trade-offs between electric rates, grid reliability, viewshed preservation, and conservation of environmental, historical and cultural resources. There are no easy answers. The only thing that is certain is that these issues will become more prominent in the years ahead as the need for big energy infrastructure collides with the increasing desire to conserve priceless resources.

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44 responses to “Clash of Competing Values

  1. I remain skeptical for several reasons. I suspect that DVP made decisions about siting power plants before they sought approval for new rights-of-ways – tilting the playing field to favor their preferred plan.

    there are already EXISTING rights-of-ways available that are not “budget busting” , for instance along the I-64 corridor …

    why did DVP build new gas plants SOUTH of the James when that area already had ample power from Surry BEFORE bringing forth the James River crossing idea?

    It’s not like Surry was sitting there not being used – it IS already being used so what is going to replace Surry for the areas now powered by Surry?

    And HOW EXACTLY does using Surry to power the Peninsula address the peak load issues they talk about when Surry itself is a base load plant and not capable of delivering peak power quickly? Where is the peak power for Hampton going to come from?

    how does DVP propose to provide peak load power to the Peninsula?

    finally – you do not base your budget on plans to keep it cheap by loading impacts disproportionately on groups that DVP has chosen to bear them for their convenience.

    That’s not really DVPs sole decision. Those who are adversely impacted in DVP’s quest to not “bust the budget” can legitimately ask why all ratepayers are not equally sharing the true costs rather than asking a smaller group to bear those impacts so the bigger group has lesser?

    is “busting the budget” really an excuse for offloading costs all ratepayers should share – onto a smaller group?

    • Jim,

      Your explanation, while detailed and well written, as always, suffers from the very same problem that any application, SCC filing, build justification and uttering of the word “reliable,” by Dominion spokespeople does. The source of the information is Dominion.

      Sufficient evidence now exists to demonstrate that the company’s statements cannot be trusted. When dots are connected, which the company tries very hard to ensure is impossible, the high degree of disingenuity is, at first, disgusting, but, then, frightening.

      You’ve read this, I know, but I suggest a read of the following for just a sampling of DVP tactics. This is only one case. The SCC document database is a gigantic repository of Dominion Data Dumps, designed to confuse.
      https://www.dropbox.com/s/xnt0m53ky2j9d0z/STJA%20Response%20to%20Alternative%20Analysis%20111215.pdf?dl=0

      When you’ve finished that, take a gander at the most recently cited case of The World According to Dominion not exactly comforting with reality.
      http://www.scc.virginia.gov/docketsearch/DOCS/36c701!.PDF

      Even Dominion’s own Regional Transmission Operator, PJM, can’t trust them.

      I would appreciate and be sympathetic to a company, whose back against the wall, had no other options and was “forced” to make the types of decisions that Dominion does. DVP is not that company. They are a monopolistic bully, accustomed to having their way in Virginia, wedded to the Virginia Way and 20th century technology in the 21st Century. It’s high time they were exposed. Thankfully, a current confluence of their distortions may do that for us. We can hope.

      • Miuaiga, I’m not sure which particular part of the article you’re taking exception to. Let me state clearly that the article does not try to justify Dominion’s decision to go with the Surry-Skiffes route as opposed to the Chickahominy route or to pursue some other alternative. The purpose is simply to show how much more difficult it is these days to build a transmission line. What made the Chickahominy route such a powerful example is that Dominion had acquired the rights of way 40 years ago!

  2. Bacon: “Most of the route is uncontroversial — Dominion is getting very little push back from landowners.”
    As a landowner, I can tell you that there is a LOT more unhappiness among landowners than anyone acknowledges. Unfortunately, those who allow surveying without a fight are assumed to support or not oppose the pipeline. Many citizens think they have no choice and that there is no way to fight. That is why my mother allowed the company to survey the family farm we have operated for over 100 years. When they asked, she said yes without even consulting us because of her previous experiences when someone wants to take land for roads and other infrastructure. If you talked to all the owners of our property, you’d not find support for this pipeline.

    My father died unexpectedly 20 years ago and my husband and I have sacrificed a lot to help keep the business going since then. Now, my husband manages the farm and we had – notice the word had – plans to move there in retirement. Even though the farm is my heritage and I have a lot invested in it both economically and psychologically, I am no longer sure I will ever feel safe enough to live there. We’d planned to retire soon to the 1804 farmhouse that still has standing outbuildings from that era. However, the pipeline is planned to go within 600 yards of that property and the primary farm buildings.

    Dominion is willing to move it a few hundred yards – to somewhat near the edge of the “original” segment of the farm. However, they will not even consider putting it on the far edge of our property – or to avoid us since it is a historic site. That would require that they remove more trees – which I am willing to part with in exchange for the line being farther from the house – but they prefer to cut through the middle of the property and nothing stops them from doing so.

    Virginia has no safety enforcement authority over transmission pipelines. I have learned that the federal inspector believes that an inspection every 7-10 YEARS is sufficient in rural areas. Congress has told it to emphasize populated areas and it still does not have sufficient operating funds to do the job. In other words, we will be totally dependent upon the company – which does not serve us for electricity, which will not serve us and which has no intention of ever providing us with anything of value, but which believes it has the right to site a pipeline designed primarily for earning profit, through the middle of a functioning business.

    A smaller pipeline, one that would meet the needs Dominion claims in Virginia but not provide excess for export, would be a lot safer and would cause much less concern. We have no way to pressure the company to just build what they need so we’d be safer and our property value would be more likely to hold up. They are allowed to seek profit.

    We also have to be concerned about what could happen if the Compression Station blows up since we will be less than two miles from it. This would not be necessary with a smaller line. We are confident that this huge, high pressure pipeline is going to be used to ship gas out of the country (or to replace other gas that’s shipped) – to places that pay a lot more than Americans do – ultimately increasing the cost of natural gas. While energy self-sufficiency has been the mantra in the US for decades, that has been dropped in favor of a few people making a lot of money in short order by selling the energy.

    Dominion crows in their FERC filing about how few people are affected. The problem is that for those of us affected, we’re affected in a big way and we get nothing but a small one-time easement payment. It’s so little that even if we invested it, we’d not earn enough money to pay taxes on that land. Yes, even though they take over the land and we are limited in use of it, we pay the annual tax on the value of the land. They pay tax on the value of the infrastructure. No entity requires that the pipeline owners post a bond to assure our costs will be paid if there is loss to our property caused by the pipeline. The entity operating the pipeline is an LLC, which could simply go bankrupt to avoid paying. The company could sell their interest – even to a company in another country. We’d have no say. Most people seem to just consider us inconsequential – sacrificial.

    The rules we are operating under were developed with the anticipation that when such things were done, there would be public benefit. Usually, those forced to give access to land would benefit. The infrastructure would help everyone be better off by providing a utility. In this case, most of the benefit for this huge quantity of gas will be beyond Virginia’s borders and to investors. This pipeline is not simply required for provision of electricity to Virginians, it is an anticipated source of income. Landowners deserve at least an annual share of the income, but the rules aren’t written that way.

    The process has been “managed” in such a way that many locals are not even aware of what is going on. The media supports the line, so it’s impossible to get negative information published locally. The board of supervisors approved it before we knew of it’s possible route and refuse to even ask questions on our behalf, even about things like safety. The only public meeting on the pipeline was an open house held in October 2014 -scheduled in conflict with the local historical society’s annual meeting. The public hearings were held at night out of the county in March – when weather was still a concern. Repeated requests for a local meeting have been denied. Many of us are totally frustrated and feel totally ignored by the powers that be at every level of government and in the company.

    Bacon also says: “Bob Bisha, leader of the pipeline routing team, has the goal of devising a route that causes the least distress possible.” I can only tell you that I’ve gotten nowhere in my efforts to reduce our risk and the damage to our property by moving the line to the far side of the property. I don’t want it at all. I’ve been seeking to fight the pipeline in every way possible but everyone tells me I have no chance of protecting my heritage from this travesty or of getting annual income to compensate for the loss of use of the land and the risk of living near the infrastructure. We can’t even get FERC to consider all of the proposed pipelines in Virginia together – to determine if we even need all of them. It is very likely that too much capacity is about to be built, but the process was designed to avoid that consideration.

    Once this pipeline is in place, we will also be at risk of additional such infrastructure being co-located with it. Clearly, there is public sentiment for creating common routes for such things. While we cannot get them to consider an existing right of way for this pipeline, we will not be able to stop them in the future when we become the ones stuck with this and others don’t want future infrastructure in the place most convenient to the company. I expect this is the last big land grab by utilities and that is part of why they are seeking to get as much as possible as fast as possible. Any delay means something might change and they like the rules as they are.

    Landowners are addressed individually and the land folks appear friendly and helpful – to the uninformed. Rural people are naturally close lipped about money issues so are easy to convince not to tell others what kind of deal they make. The company is using all of this to their advantage. Others don’t realize that landowners feel pressured, don’t know how to protect their rights, and are being taken advantage of by the company and our system. No land deals should be even attempted until approval is granted, but they are happening.

    Sorry, Mr. Bacon, but you are dead wrong about opposition. There is a lot more out there than is recognized. The media downplay it and the company categorizes landowners in ways that make it appear that there is support where there is none. Come join us at a local meeting of those fighting the pipelines, or at a meeting of multiple localities fighting multiple pipelines. You would find something very different than you currently believe true.

    • VaConsumer, I respect your passionate conviction on the issue, and I am keenly aware that opposition to the pipeline is intense in Augusta and Nelson counties. I can well understand the opposition because the communities in those counties are stunningly beautiful places that people understandably want to preserve intact.

      But south of Yogaville, there hasn’t been any vocal opposition that I’m aware of. I can’t imagine there are many landowners who are excited by the prospect of having a gas pipeline running through their property, but outside of August and Nelson, they’re not getting exercised by it. That’s what I meant by the statement that “Most of the route is uncontroversial.”

      • I am one of those landowners south of Yogaville. I am not the only one opposing this in that region.

      • One of the questions that does not receive enough attention with some utility proposals is – is it truly needed? Or a variation – is there a better way to achieve the same end?

        With all of the hoopla about various route alternatives for the Atlantic pipeline the initial premise has gone unexamined. Dominion has substantially overestimated the monetary benefits from the pipeline so that regardless of the level of impacts identified from construction, they believe there will still be a positive benefit/cost ratio.

        The need for additional natural gas supply in Virginia is to fuel a possible new plant in 2022. Finding ways not to use energy (energy efficiency) is far cheaper than building a new gas-fired power plant and saves all ratepayers money when the peak load is reduced. Many believe that solar power, which does not require any fuel, will also be less expensive than gas combined cycle plants within 5-7 years. But assuming more gas supply to Virginia is needed, the question remains – is the ACP the best means to supply it?

        Two new gas-fired combined cycle plants are being built in Southside Virginia. The Brunswick facility is scheduled for operation in 2016, the Greensville plant is proposed for 2019. A spur from the Transco pipeline is nearing completion and will serve these two plants for an investment of $490 million. Dominion has said that it prefers to use the ACP to provide the gas supply to these plants, but the ACP will require about 300 miles of new pipeline construction and a cost of more than $3 billion to reach these two plants.

        The ACP developers say that they have long-term commitments from customers wanting to receive natural gas deliveries from the Atlantic pipeline and these commitments are adequate to prove that the ACP is necessary. Nearly all of the purported customers are also subsidiaries (affiliates) of the same holding companies that own the developers of the pipeline. Dominion’s willingness to renege on a 20-year Long Term Supply Agreement with Transco after just a few years of operation of the new pipeline highlights that these commitments are not binding. They are often used by developers to gain approval to construct a new pipeline and are not indications of the economic need for a project, although they are often considered as such by FERC.

        If 96% of the new Transco spur will go unused if supplanted by the ACP, will Dominion ratepayers have to pay for both pipelines? Since the gas transport fee is part of the fuel cost and is automatically passed through to ratepayers, can Dominion and Duke force their utility subsidiaries to pay for the ACP even if it is more expensive than other alternatives?

        The ACP developers say the Atlantic pipeline is the only realistic alternative, but that is seldom the case. If Dominion’s utility subsidiary (Dominion Virginia Power) was free to choose or if they were directed by the SCC to select the lowest cost choice for reliable natural gas supply, what might that be?

        Currently, natural gas drillers in the Marcellus are continuing to drill, even if prices are below their production costs, in order to generate the cash necessary to service their debts. U.S. natural gas prices declined more than 40% in 2015 compared to a year earlier largely due to excess production in the Marcellus. As yet, there are not enough takeaway pipelines serving the Marcellus production area to move all of the gas into the existing gas transmission system. This “stranded” gas must sell at a discount to the national price in order to find a market. By 2017, this situation will be remedied by the addition of new takeaway pipelines. Dominion has forecast hundreds of millions of dollars of financial benefits for the Atlantic pipeline as a result of this price differential, but it will likely disappear well before the ACP is projected to be in operation. If some price advantage remains for Marcellus gas, the lower price would be available whether the gas is transported by existing pipelines or the ACP.

        Once these new takeaway pipelines are in operation, the entire Marcellus production can gain access to existing gas transmission pipelines. When this occurs much of the supply to the mid-Atlantic and northeast will come directly from the Marcellus. Traditionally, much of this supply traveled from south to north from the Texas and Gulf Coast supply zones using pipelines in the Transco corridor to serve markets along the Atlantic seaboard. With much of the northeast demand supplied directly from the Marcellus, several of the existing pipelines in the Transco corridor would be available to reverse flow and bring natural gas from the Marcellus to Virginia and the Carolinas. This is the plan identified in the Natural Gas Infrastructure report published by the Department of Energy in February, 2015.

        Another project, the WB XPress, would provide 1.3 billion cubic feet per day (nearly the amount of the ACP) of additional capacity in the Columbia Gas system requiring just three miles of new pipeline and 26 miles of replacement pipeline in West Virginia and a new compressor station in Virginia and modifications to several existing ones. The project is expected to be in service the second half of 2018 at a cost $875 million dollars. Adding capacity to the Columbia Gas system would provide greater supply to the Chesapeake, Virginia region as well. The main Columbia Gas line feeds the AGL (Virginia Natural Gas) line which supplies the Chesapeake/Norfolk area. The Atlantic Coast Pipeline project proposes a 77 mile 20” pipeline on new right-of-way to connect the Chesapeake area to the Atlantic Pipeline just after it enters North Carolina. Using the additional capacity in the Columbia Gas system avoids the costs and impacts from this new construction.

        Adding over twice the capacity of the ACP in the Transco and Columbia Gas pipelines provides Virginia with a multitude of options for siting the two new gas-fired plants when (and if) they are needed in 2022 and 2030. Compare the coverage of the Transco and Columbia pipelines in Virginia to a single corridor for the Atlantic pipeline. This would provide a great deal of flexibility for growth and development in Virginia without the disruption from new pipeline construction.

        Pipelines serving North Carolina could connect over the same corridor planned for the Atlantic pipeline or by connecting to the Transco mainline running through North Carolina. Costs and impacts of using existing pipelines to serve North Carolina would be the same or better than with the Atlantic pipeline.

        One can see that Dominion and its partners would prefer to own the supply pipeline to their captive utilities. There are business advantages to paying themselves more rather than paying someone else less to transport the natural gas. However, the benefits accrue only to them. Ratepayers would pay higher transport fees for the ACP compared to existing pipelines; Virginia would have a poorer infrastructure for future economic development and power plant siting; West Virginia and Virginia public and private landowners would suffer greatly from the impacts of unnecessary new pipeline construction.

        The spirit of eminent domain is to require a landowner to sacrifice their individual interest in order to serve the greater public good. In this case, the greater public good is better served both economically and environmentally by using existing pipelines.

        The superiority of using existing pipelines applies to the Atlantic Coast Pipeline, and to the Mountain Valley Pipeline, the Appalachian Connector and any other major new pipeline construction project intended to bring natural gas from the Marcellus into the Virginia and North Carolina markets. The Department of Energy states that adequate capacity exists in the existing pipeline system to serve this region throughout the multi-decade planning horizon of their studies.

        The land, the landowners, and ratepayers of Virginia should be respected by selecting the clearly superior option of using existing pipelines to supply the future natural gas needs of Virginia. Dominion and other Virginia utilities are needed for the important role of developing a more reliable and resilient grid for the 21st century that easily accommodates decentralized solar and wind projects which they or other parties develop. Dominion should seek out projects that benefit the ratepayers and residents of Virginia, as well as their shareholders. Setting the interests of shareholders against the interests of customers is not good for any business in the long run. There are numerous other important energy projects where Dominion can work for the good of all Virginians.

  3. using eminent domain to transport gas to sell to the highest bidder is wrong on so many levels.

    and all the more egregious when we know that other pipelines have been 95% purchased rights-of-ways – via willing-seller/willing-buyer.

    ” The [6.8 billion] project [Rockies Express Pipeline, 1,679 miles ] was accomplished within budget and with nearly 100% voluntary acquisition. For REX West, voluntary acquisition was 99.7% successful. While REX East proved to be a more difficult area to acquire and the acquisition costs were somewhat higher, CLS still accomplished voluntary acquisition at the rate of 99.2%. The use of condemnation was extraordinarily low for a project of this size traversing such a large and difficult area.”

    https://www.irwaonline.org/eweb/upload/mar_Web_RockiesExpress.pdf

  4. Perhaps Dominion should have initiated proceedings 40 years ago to condemn the entire unbuilt-on Peninsula as a park. No more houses; no Kings Dominion, no Pottery Factory or new dorms at W&M, plenty of room for preserving more battlefields. No need at all for a power line or a gas pipeline. No new industry; no new employment. Lots of “undisturbed vistas.”

    Now really, that’s no more pie-in-the-sky than saying you’re going to shut down the Peninsula’s economy for lack of adequate electricity, by blocking every route they come up with at Dominion or anywhere else.

    Yes, it can all be built in somebody else’s backyard, at great additional expense to all Dominion customers, and at great cost to those in whose backyard it is then built. But they are further from the area that’s benefited, and they haven’t lived with a recorded right-of-way easement across their back yard all these years. How fair is that?

    • The problem is that Dominion is the one making the determination of what is best for everyone. The problem we have is that the company alone gets to make the decision and to tell us it’s best. Others are not given the pieces of information and allowed to question the assumptions made or to encourage a different set of assumptions/ evaluations. The chosen alternative is the one Dominion rates as the best. What you are hearing is that the public is not accepting Dominion’s analysis.

  5. there does seem to be a little bit of ” we can’t put powerlines in folks back yards” but we can a pipeline… , eh?

    but the idea that there are zero options to put powerlines along I-64 or the existing rail line powered by a gas plant just east of Richmond fed by existing gas pipelines… strains credibility.

    the question still remains – if Surry is a baseload plant – how will peak demand be met? Do we just run the nukes flat out and disconnect the turbines when they are not needed for generation? serious question.

    • There’s easily enough peaking power available on the Grid to complement Dominion’s generation even if DVP were generating in an all-baseload mode. What there isn’t is enough transmission to get enough of that power from PJM onto the Peninsula under peak load conditions.

      • how are they getting peak power to the Peninsula right now? Surely they’re not running on base load alone so where are they getting their peak power right now – (that is insufficient)?

        It’s hard to believe that powerlines corridors don’t already exist along I-64 and cannot be added to …. or do not come across the downstream James bridge.

        why is the ONLY viable location the proposed one?

        normally – the Army Corp REQUIRES designation of the least environmentally damaging practical alternative even if not chosen.

        http://media.swf.usace.army.mil/pubdata/environ/regulatory/permitting/ip/altanal1.pdf

        what is that alternative?

        why are all the “alternatives” to crossing the James – “can’t do ” ones like implying that the ONLY WAY to transmit is through tribal lands or wetlands rather than utilizing existing corridors that already exist and much more viable than purposely picking alternatives that have fatal flaws?

        this is a common VDOT tactic – every “alternative” to their preferred has “flaws” and they won’t consider ones that do not have flaws – even though they clearly exist and they commonly are at loggerheads with the Army Corp – like they were with US 460.

  6. Great article and very interesting comments.

  7. LarryG, to put it simply, the Peninsula needs a new electricity superhighway not a bunch of local streets. There are 500 kilovolt electricity superhighways in an arc from north to southeast of Richmond, but between Richmond and Hampton Roads they run south of the James with a spur to the Surrey plant. They are big and ugly, no question, but they obviate the need for dozens of smaller lines (230kV and 115kV) that would be required to do the same job. Here’s a rough guide:
    o A 500 kV transmission line can carry between 1,000 and 1,500 megawatts (MW)
    o A 230 kV transmission line can carry between 300 and 500 MW
    o All of these lines will normally be operated well below their maximum capability and in parallel with (electrically alongside) another line of equal size or a set of lower voltage lines. That way, if the line with the highest capacity goes out the remaining lines can instantly “take up the slack” — that is, carry their existing loads plus the load that was on the line that went out. That is how the system operator avoids a catastrophic blackout situation.

    Dominion needs a 500 kV line or equivalent (multiple 230s, for example) into the Peninsula area, or a new, efficient power plant on the Peninsula (or both). There is a 230 kV line from the northwest, and another over the River from Portsmouth to Newport News, but a lot more bulk power transfer capability is needed if those coal plants at Yorktown are not operating to carry some of the local load. Jim’s posting lays out the options/obstacles. If they built more generation on the Peninsula, it could be any sort (base-load, cycling, peaking) except what they’ve got: an inefficient, obsolete coal plant that takes half a day to fire up, and is so cost ineffective (compared to what’s available from PJM) the only reason EVER to fire it up is when it is scheduled to “must run” to provide local stability and relieve the transmission network during peak hours.

    • Well , I’m NOT advocating a bunch of smaller lines – but I AM asking how they get peak power right now if it does not come from Yorktown and the reason I am asking is that if there ARE – EXISTING lines that carry the peak demand to the Peninsula why can’t those existing corridors be upgraded ?

      Why can’t the existing corridor along I-64 be used?

      there is a rail line from Richmond to Hampton – that could be used as a corridor.

      there is an existing VNG pipeline corridor also.

      The DVP preferred plan is no doubt – to put new lines over the James and feed those lines from Surry – and supplement with peak power from new gas plants near Surry.

      There seems to be plants near Chesapeake also which I presume feeds a line near or on the James River Bridge.

      • A recent study by independent experts reveals that Yorktown 1 & 2 have been closed many times during summer peaks since at least 2013, and we have had no blackouts/brownouts. Anyone surprised?

        Surry-Skiffes Creek is not about getting power to the Peninsula. It is about getting DVP generated power from its new gas fired plants, using its own gas inventories, onto the regional grid, while getting the 60 million customers of the PJM footprint to pick up nearly all of the cost.

        P.S. Are you aware that the VA SCC is not subject to FOIA requests?

  8. Also, Larry, you ask, “why are all the “alternatives” to crossing the James – “can’t do”?” Dominion is trading off a number of factors here including system needs, environmental impact, public opinion, likely regulatory delay, and of course cost. Believe me, if there was a better solution top management should be open to it, and on that scale Dominion by reputation is fairly nimble. But like all bureaucracies, there is institutional inertia once you get mobilized behind a plan. Also, as you well know from transportation and other infrastructure planning, there’s a tradeoff between what you truly believe is the right long-term solution versus a series of stop-gaps, and stubbornness on that point gets involved. Heck, here it’s pretty obvious, DVP has known for years it wuld eventually need more transmission into the Peninsula, even bought the land for it years ago to minimize the eventual cost, and now look at the mess it’s in as it scopes out various alternatives trying to find the one that’s least offensive in today’s world!

  9. one of the things that a true NEPA process requires is a concise description of the current base case.

    and what is called the no-action alternative.

    so my question is -what is the current situation with Hampton?

    what are the current sources of power – all of them?

    there seems to be a presumption that the only source of power currently for Hampton is Yorktown.

    is that true?

    are there no other existing sources of power coming down I-64 or up from below the James and across the river?

    the sole source of power is Yorktown?

  10. Here’s another question.

    Why were two new gas plants built in Southside Va not that far from Surry?

    what new demand were they to serve that Surry was not already providing?

  11. You are approaching this topic correctly, from the point of view of system operations and the tradeoffs that change constantly as the load increases and drops off each day; but no-one, at least not me, can answer so many complex questions at once.

    The basic fact is that the Peninsula is what’s called in the trade a “constrained area”: it has more load within that area during peak hours than it has transmission to deliver sufficient power from outside the area. Simple physics dictates this answer: you must build more transmission, or relieve the strain on the existing transmission with local generation during those hours, or, reduce the load so that it doesn’t exceed the power supply. Note: area transmission is not inadequate in the middle of the night; this inadequacy is an “peak load” phenomenon.

    DVP has been avoiding dealing with this constraint for years by “must-running” those Yorktown coal units. Those are not peaking units; on the contrary they take hours to heat up and cool down (like most steam-generating boilers built that long ago); it is very inefficient to run them only to satisfy an on-peak need; but that’s what DVP has been doing, because all the alternatives would cost more. One obvious solution would be to scrap the old coal boilers and build new ones fired by natural gas and capable of “cycling” on and off quickly. Another would be that Surrey to Skiffes Creek power line. Another would be a bunch of lower voltage transmission lines. Another would be rotating planned blackouts on the Peninsula.

    Now the EPA has forced the issue by requiring the Yorktown units be shut down. You don’t like DVP’s response? Go look at the record of testimony before the Virginia SCC when the SCC reviewed DVP’s latest “integrated resource plan.” I can’t tell you exactly why this, why not that. But I do know enough about the utility planning process to know that planned blackouts, the “no action alternative” as you put it, is not on the table, and the bunch-of-small-transmission-lines alternative would be a last resort, and very unpopular, stop-gap. That leaves: new generation, or a new big transmission line. For whatever reason DVP prefers the latter. I suspect it’s because of air quality issues and fuel delivery and storage cost issues and the cost of developing a new generation site in that area. I also suspect there was no hidden Dominion conspiracy, it was a decision made in good faith at the time (although not necessarily the same decision you or I might make), and it has been defended somewhat inflexibly since it was made (more arrogantly than you or I might prefer, because that’s how hard-charging folks get unpopular things done).

    As for where to put new transmission if it’s built at all, again, please don’t just spew questions each one of which we could write a book about, but go look at the answers in the record already developed before the SCC when the currently planned lines were submitted for route approval, and then let’s talk about just one of those questions. OF COURSE they would put such a line where the public opposition to it was least (e.g., down an existing railroad ROW) if there weren’t some other countervailing consideration. Often there is: it’s frequently the case that a railroad built 150 years ago has attracted industrial/agricultural customers and little towns have sprung up nearby over the years that make it harder, not easier, to build transmission anywhere close to the tracks. There are lots of historic properties on the Peninsula as well, and parks, and protected wetlands. If you want to see how DVP went through the options initially, parcel by parcel, read the testimony they filed before the SCC. It’s hundreds of pages in each case, and can’t be summarized here in a paragraph, and I don’t know most of what it says anyway. Jim took a nice crack at showing the complexity of the utility planning process in this posting.

    As for your last question about the two new gas plants [being] built in Southside VA, that’s a whole ‘nother subject entirely.

  12. well, let’s focus on just the gas plants.

    why were they built in Southside Va? What demand are they serving?

    oh – and ” read the testimony”.

    Nope – it’s DVP’s job to present to the public – their argument and the alternatives they did consider as well as respond to the ones they did not.

    we’re talking about a public process where they are asking for an accommodation – from the public – to essentially damage a public good ostensibly to provide something needed and no other way to avoid that damage.

    It’s NOT the job of the public to go read DVP’s “testimony” – it’s DVP’s job to prove they did pick the least damaging.

  13. Now you (and the snow) have me riled! What do you mean, “It’s NOT the job of the public to go read DVP’s “testimony” – it’s DVP’s job to prove they did pick the least damaging [route].” How the @%#&**! is ANY complicated infrastructure issue explored before the public today? If it’s a regulated public utility, it finds the agency that is appointed by the legislature to act on behalf of the public and it tells them all the gory details and lets the agency sort it out and decide the matter (which is what the SCC did in this case!), and the agency puts its entire formal record of the proceeding (testimony, exhibits, motions and orders), every bloody word of it, in a public file (today, an on-line file searchable from your own home) so the press and the public can look over its shoulder if inclined to do so (which is what the SCC did in this case!). [And that’s a lot more transparent than VDOT.] And DVP placed an ad in the paper describing the application and advertising the hearings. Next to nailing a 39-bullet-point-summary to the church-house door or carving it into the bark of a tree, what more could DVP have done here? As for “proving they did pick the least damaging” solution, you know that’s impossible, nobody can prove a negative, although that logical truth never stopped some regulators from demanding the applicant try. What the SCC is obliged to do under State law is show that they considered all the reasonable alternatives and held public hearings to allow allow the applicant’s choice to be attacked and other alternatives put on the table and allow the applicant to defend its choice (which is what the SCC did in this case). Nobody is going to reduce all of this to one simple soundbite for you, Larry, because it can’t be done. If you aren’t willing to dig in and read up on all the pages of this stuff, all the big and little tradeoffs made along the way and why the agency chose the path it did, but simply sit back smugly and say “anytime any utility’s construction would inconvenience somebody along the way the utility has to show there’s ‘no other way to avoid that damage'” — well, damn, tell the public to just go freeze in the dark and ‘nyah nyah nyah NIMBY’ to you too!

    Not only can it not be done, but think about what it would cost to try — in terms of dollars to accommodate every request from the public to find and find again the “perfectly innocuous” route, in terms of the cost of halting, delaying and restarting the job every time to do this, and in terms of harm to the public through years of delay or denial of needed improvements. You know, there are places that try to run the government like this and they are holy hell for small businesses.

    No, I’m back to this: you go read the record in the case and then we can talk about how the SCC decided it. It’s all here: https://www.scc.virginia.gov/

    • a little behind.. bear with me.

      DVP has a responsibility to justify it’s plans to the public – beyond the SCC.

      re: ” As for “proving they did pick the least damaging” solution, you know that’s impossible, nobody can prove a negative, although that logical truth never stopped some regulators from demanding the applicant try. ”

      no – you’re proving a positive. you use real data …

      no – you can’t put a price on a scenic view but you CAN put a price on other real alternatives and not ignore them and instead pick ones that are obviously flawed from the get go.

      when you pick as an alternative – a route right smack through the middle of tribal lands or an environmental area – that’s not an honest alternative.

  14. Larry, you also ask, ” let’s focus on just the gas plants. Why were they built in Southside Va? What demand are they serving?”

    The new gas combined cycle plant in Brunswick County is nicely sited at a location where four important things come together. Immediately adjacent to the site, there’s a 500 kV transmission line (a ‘superhighway’ line) to take away the power generated, a good road for the people working there (4-lane US 58), a railroad for deliveries during construction and repairs (spur line from Emporia to Lawrenceville), and a spur proposed off Dominion’s new natural gas pipeline. I suspect Dominion also was thinking about lower land cost, cheaper labor, and perhaps a more favorable political climate for a new power plant than Spotsylvania. The important thing your question suggests and which is not important is whether this plant will be near other DVP loads. Once Dominion gets this power onto its grid at the 500 kV level, it might as well be anywhere and everywhere at once. The only place they might wish to deliver it, but can’t always, is into that constrained delivery area on the Peninsula.

    • As I noted in my comment above, Dominion contracted with Transco for a 20-year Long Term Service Agreement to supply the gas to the Brunswick (and Greensville) plants. The ACP, if built, will not be available for initial operation of the Brunswick plant. The Atlantic Coast Pipeline is actually a redundant and far more expensive source of gas supply than the existing pipeline.

      The Atlantic pipeline from West Virginia to the new power plants is also unnecessary to supply gas to North Carolina.

      I do agree that once the electricity from the new plant enters the grid, that it is available to meet load in all but transmission constrained areas throughout PJM territory.

      • re: ” I do agree that once the electricity from the new plant enters the grid, that it is available to meet load in all but transmission constrained areas throughout PJM territory”

        if that’s true – why can’t you power Hampton from plants to it’s west where there is ample natural gas rather than south?

        • I am not as familiar with Dominion’s transmission system as is Acbar, but I believe that is one of the transmission constrained areas. New generation will be required to handle the peaks or energy efficiency will be needed to lower the demand so that the transmission system is not overloaded during peak usage.

    • Acbar – what new demand are they serving? where?

  15. Goodness, there is so much in this thread about which one might comment. Because of other pressing issues, I’ll restrain myself other than to encourage folks to go to the SCC website to read the PJM opposition to DVP’s Brunswick plant construction. Then find the more recent PJM complaint to the Commissioners regarding DVP’s Greensville plant bogus RFP process.

    Then venture back to the Brunswick County plant documents at the SCC. Read the Hearing Examiner’s rejection of the application and the HE’s recommendation to the Commissioners to deny DVP the permit to build. But, politics wins the day, so read the “Oh, let’s not bother with the facts.” response of the Commissioners.

    Then take a gander at the legal brief filed with FERC (SCC doesn’t regulate gas transmission pipelines) in the ACP case by the opposition who discuss at length just how unneeded the pipeline is, all the while DVP says, “Pay no attention to the man behind the curtain.”

    Then look again at Surry-Skiffes Creek. It’s only needed because DVP is closing Yorktown, not because they must, but because they spent the money to keep it going on the Greensville plant ( see Greensville app), so DVP could tap into its own gas from the Marcellus Shale deposit and run it down their brand new ACP pipeline rated than competitively bid for resources.

    This goes on and on, and back again. And, the dots connect. Dominion wants to build it all and own it all no matter the cost to the Virginia consumer. I could keep going, but it’s late. It’s all there. READ!

    • Thanks, Miuaiga, this is just why I urge people to read the SCC’s record on these matters; there is so much information there. Not that we should agree with every decision they make. I for one don’t understand why one or both of those new NGCC plants Dominion is building couldn’t have been located where the old coal plants are currently near Yorktown. Seems very convenient that they are proposed farther south at a location that the ACP just happens to pass near. And building them in Yorktown might have changed the need for that transmission line across the James. But the need to retire those old coal units is pretty clear esp given the EPA’s proposed rule.

      • I continue to say that it’s not the burden of the public to plow through the regulatory and technical offal in the SCC dogpile.

        the public is owed a concise and easy-to-understand justification as to WHY the ONLY option was to build new plants south of the James and put new power lines over the James – as opposed to new plants near Richmond and powerlines down I-64 – and NOT through sensitive environmental and tribal lands.

        what is the cost to expand the powerline capacity down I-64?

      • AcBar,

        I agree with Larry. It should not be the work of the average consumer to plow through the literally tens of thousands of pages of arcane, SCC filings, where much of the critical information is conveniently redacted or excluded from even the SCC staff. (See Brunswick plant filings where even the SCC staff complained about DVP’s unwillingness to divulge critical information.) The types and quantity of the information found there is the consequence of a Lawyers’ Full Employment Act, if ever there was one.

        In fact, I would argue, strongly, that the Great and Powerful DVP, tactically, attempts to intimidate or lose even the most informed among us in their paper Ponzi routine. Then, when one actually catches them at their charade, they have the temerity to state, outright, that this is all too complicated for anyone but them to understand, so we just have to trust them. That is not a joke. That happened. Trust me.

        The honest truth is that consumers cannot rely on the VA SCC Commissioners, a wholly owned subsidiary of DVP, for any greater degree of enlightenment. DVP says it at the HQ on the Rivah and it comes out of the SCC Commissioners mouths up on Main Street. It’s that direct. It really is.

        Have you read the ACP opposition brief to FERC? You should.
        https://www.dropbox.com/s/13z1eds6d8cclfz/ACP%20Opposition%20Ltr%20to%20FERC%20102715.pdf?dl=0

        • Miuaiga, You are exactly right.

          We have the situation where the SCC is not allowed to do its job due to years of work by Dominion with the General Assembly. The current judges were forced to promise the General Assembly that they would not speak in legislative battles unless spoken to and they would keep other SCC employees from speaking, as well. The standard answer to what has become a routine question of the SCC is “The SCC has no position” on the legislation. Restructuring of the SCC, demotion of staff as whole sections were disbanded, and other actions assured that the judges and everyone else understand who’s calling the shots. If the judges want to keep their jobs, they have no choice. If they challenge Dominion, others who will do as told will get the jobs.

          As for the public or its representatives having access to all the information, the current process of regulating our electric rates requires so many individual cases before the SCC that it’s impossible to be involved without lots of money and dedicated staff for just that effort. To get everything expensive attorneys must be involved, volunteers cannot do the work. The process has been effectively designed to exclude most of us.

          Our system is severely broken. There is nowhere near equal competitive power between utilities and those they serve. Dominion owns Virginia.

      • Yes, it’s a real shame the real estate used for coal plants isn’t being used for gas plants. Much of the area invaded by Dominion for the ACP is served by cooperatives – not Dominion. Virginia has allowed our utilities to locate generation far away from the load – especially out of state – for far too long. Then utilities ignore that ownership and claim they must be approved for new infrastructure since we are an import state. It’s clear that Virginia has allowed our utilities to call too many shots for too long and lost control to utilities.

  16. Dominion accepted a $23 million contribution from the Virginia Tobacco Commission to build the Transco spur to serve the new Southside combined cycle plants. I wonder how this will be affected if they abandon this new pipeline after just a few years of operation if they can replace it with the ACP? Will ratepayers be expected to pay back free money too, as well as pay many times more for gas delivery from the ACP?

    I don’t know if any Tobacco Commission money is involved in the financing of the ACP. Apparently, the Transco grant came because Mr. Farrell was a college friend of the Tobacco Commission chairman. Virginia politics are certainly a strange arrangement.

  17. In the Resource Report 10 addendum to the application for the Atlantic Coast Pipeline, the Transco pipeline is identified as the primary receipt point for the North Carolina deliveries, as shown below:

    Three customers (Duke Energy Progress, Inc., Duke Energy Carolinas, LLC, and Piedmont Natural Gas Company) identified the existing Transcontinental Gas Pipe Line Company, LLC (Transco) system as a primary receipt point with an interconnection in Buckingham County, Virginia.

    Four customers (Duke Energy Progress, Inc., Duke Energy Carolinas, LLC, Piedmont, and Virginia Power Services, Inc.) identified the existing Transco system as a primary delivery point with an interconnection in Buckingham County, Virginia.

    Dominion would probably respond that this is just a temporary assignment of delivery points until the final location of the power plants to be developed in North Carolina are identified. However, it can also be read as an on the record admission that the future gas needs in North Carolina can be met by transporting gas over the existing Transco system without the need for any pipeline construction in West Virginia or Virginia.

    This is a business deal that allows huge energy companies to arbitrage gas supply throughout the region without benefit to their regulated subsidiaries. If everyone agreed to allow the ACP to be constructed on their property, so be it. But to grant eminent domain for a project that is much more expensive and causes far greater impacts than existing alternatives is not appropriate.

    It concerns me that Virginia ratepayers’ interests are not being represented in the federal proceeding.

    • TomH, you are into the gas pipeline info far deeper than me. I am no advocate for the ACP. But we should take note, any electric power plant operator places a high value on multiple ways to get fuel delivered, because it allows negotiation and bluff-calling. The fact that Brunswick has a rail spur and one pipeline and another planned pipeline coming in before the current gas contract expires is good DVP planning from the competitive fuel delivery point of view.

      As for the VA Tobacco Comm money, that whole situation smells. On the other hand, the existence of that Transco spur may attract economic development, somebody to locate jobs in that area where they are badly needed, even if Dominion ceases to use it, which is more like what the VTC is supposed to be doing. I’d be curious though if Dominion reserved an exclusive right to bump others off later if they want it back.

      • The Transco spur for the two Southside power plants is brand new. It was scheduled for completion in the fall of 2015 so that gas would be available for pre-commercial testing of the Brunswick plant. The contract is just beginning and is not set to expire for another 20 years. This spur can obtain gas from both the Marcellus and Texas/Gulf Coast production regions. It seems that $3+ billion is a lot to spend for a third backup source of supply, when the Virginia ratepayers will already have to pay for the $490 million Transco spur. The Marcellus gas producers are currently in a difficult financial position. I’m sure attractive long term agreements could be made with a number of different suppliers, so there is no great negotiating advantage in having a third source of supply.

        Dominion admits that the Atlantic pipeline is designed to be a wholesale pipeline for utility use, not for local industrial and commercial development along its route. There is a $.5 million tap-in fee to gain access to the ACP which essentially rules out moderate-size development occurring from accessing the gas supply of the ACP. This type of development would be well supported by adding additional gas supply to the existing pipeline network in Virginia.

        My guess is that the ACP was selected to begin in the western Marcellus (in West Virginia) because Dominion has recently developed thousands of miles of gathering pipelines there which terminate in Dominion owned natural gas liquids processing plants and natural gas storage facilities. By having a supply pipeline header take gas from the storage areas and distribute it into the southeast, Dominion could gain more revenue from its existing investments as well as from the pipeline. The current route is basically a straight shot from the supply region to the Southside plants. But does that that mean that the next two gas plants in 2022 and 2030 will have to be located near the ACP corridor?

        Pipelines are cash machines. They usually last 80-100 years and only take 30+ years or so to pay off. FERC is allowing a 14% rate of return on the equity portion of the pipeline, which is considerably higher than the 10-11% returns authorized by the SCC.

        The business logic is not the issue, if you can serve captive customers and pay yourself a higher price than they would get elsewhere, all funded by the ratepayers – the shareholders should be happy.

        What bothers me is that this is all being touted as a great boon to Virginia. As you know, I have worked for two electric and gas utilities in the north and northeast, so I am well acquainted with the need to build major facilities to meet customer requirements. And as the head of the department that selected the sites and dealt with the regulators and public, I know how difficult it is to find solutions that meet many very different requirements.

        However, I have not seen any convincing evidence that this pipeline is the only way (or best way) to supply gas to Virginia and the Carolinas. The developers’ presentation goes like this, “Our customers (all but one are sister companies of the pipeline developers) say they want to purchase gas from our pipeline so it must be necessary and FERC should approve it without going through a full regulatory review. Our (the developers’) calculations show that the benefits far outweigh the impacts so there is no question that the pipeline should be built and we should be granted eminent domain to do it quickly.”

        I don’t want to beat this issue into the ground, but I think Jim’s article speaks to the difficulty of selecting solutions that meet widely varied criteria and that those conditions only seem to get more difficult as time goes on.

        A big part of how easily solutions can be agreed upon has to do with how the utility and the regulators deal with the public’s interests. Neither of the utilities for whom I worked would have submitted material to a regulator that was done in such a slipshod and incomplete manner as I have seen from Dominion in their submittals to FERC. They seem to have a great disregard for the process and for the public’s concern. Their response to questions regarding their plans are met with – “There can be no question that the pipeline is needed” rather than with actual answers to the public’s many questions.

        If there is to be progress in working out these knotty issues, the range of options must be expanded and there must be genuine willingness to engage with the other interested parties. The days are coming to a close where all energy related decisions come from utility executive offices and backroom deals.

        • TomH you are right. Dominion doesn’t feel it has to verify its statements with fact, we’re just supposed to believe what they say and do what they say. Part of the reason they are pushing so hard right now is to assure that they have this new infrastructure and new corridor, recognizing that the window to get it is closing. There are no protections for landowners who feel threatened and powerless “negotiating” with the company. Many do not even feel they can exercise their rights to protect themselves and their property. There are vocal community members telling them to accept their fate, belittling any effort made to speak up. Community norms that require “respect” of leadership and prohibit challenging them or publicly asking for protection also make it difficult. Dominion knows and encourages this, and marches toward its goal.

  18. ” The Supreme Court sided with federal regulators Monday, upholding a rule meant to incentivize efforts to reduce electricity demand.

    The court ruled that the Federal Energy Regulatory Commission (FERC) did not exceed the authority Congress gave it when it wrote its “demand response” rule, mandating that electric utilities pay customers to reduce use during peak demand periods.”

    interesting….

    I presume now that some will claim that the SCOTUS has been co-opted by “leftists”.

    😉

    • This is good news, in that it means that there will be a wholesale market for demand reduction and energy efficiency run by the ISO’s, such as PJM. This will encourage development of these solutions and lower customer bills.

      Energy companies and utilities that did not want to lose revenues because of these energy and cost saving solutions brought the suit.

  19. I understand that the discussion on this thread has moved on, but if Acbar is still tuned in, I would appreciate his feedback. From what I gather from Jim’s articles, the Skiffe’s Creek transmission line is needed because the Yorktown coal plant will soon no longer be allowed to occasionally fire up to meet peak loads resulting in potential transmission overloads to serve the region. How much power is contributed by these units? Could they be replaced by a combination of utility solar at the Yorktown plant site, which could be installed faster and more cheaply than new transmission? And if more capacity is needed, could a small combustion turbine be located at Yorktown – or perhaps several customer sited gas-fired combined heat and power units be utilized which would both add electricity and reduce the peak by supplying some of the heating or cooling requirements. And perhaps 3-5 large commercial or government buildings or office complexes could have deep energy retrofits which could be accomplished in a short time and actually save rather than cost money and also reduce the peak. I don’t know if what I am suggesting is of sufficient scale to address the issue, but it would remove the wrangling and could get all parties focused on a rapid and positive solution.

    • Great ideas TomH. Landowners find it very frustrating that FERC’s requirement to compare alternatives is being met by Dominion simply saying, “We looked at many and this is the only logical one” with no proof provided. Years of fighting renewable energy and energy efficiency while refusing to include costs of “negative externalities” because “they can’t be adequately quantified” have stacked the deck unfairly and allowed Dominion to control the situation without challenge.

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