Public records show behind-the-scenes rallying by developers for Atlantic Coast Pipeline

Triangle Business Journal
by Lauren Ohnesorge

The North Carolina Department of Environmental Quality wants more information from Duke Energy and Dominion Energy before approving the 600-mile natural gas pipeline they’re pushing to build across the state.

Amid high stakes, the Atlantic Coast Pipeline continues to be in a holding pattern, as regulators in North Carolina weigh the 600-mile project's implications for the state.

The Federal Energy Regulatory Commission put a tentative stamp of approval on the project Oct. 13. But in order for ACP to move forward, however, state agencies – including the N.C. Department of Environmental Quality, would have to issue their own certificates. And NCDEQ has issued multiple information requests instead, pushing the timeline back indefinitely.

More than 100 pages of emails disclosed by the N.C. Commerce Department at the behest of a public records request show officials have been circulating facts, figures and even news articles about the pipeline on nearly a daily basis to speed up the timeline.

As Duke Energy and Dominion Energy were submitting paperwork to state regulators, the Commerce team was arming itself with information.

On Oct. 17, William Miller, deputy secretary of Commerce, sent Bruce McKay, senior energy policy director of Dominion, a lengthy list of questions on ACP.

“If ACP is not approved, the lost opportunity costs for North Carolina would dwarf the sunk costs that the shareholders of Dominion Energy, Duke Energy and Southern Company Gas would absorb,” ACP's Oct. 18 response stated, noting that, over the first two decades of ACP’s operation, it’s expected to stimulate $1.2 billion in capital investment in North Carolina. That investment, along with an estimated $7.7 million in local property tax revenue each year, would be lost if the project doesn’t move forward, ACP pointed out.

Commerce's primary concern, the emails show, involved the ability of North Carolina companies to directly tap into the pipeline for their own natural gas needs.

In its Oct. 18 email, ACP claimed it will allow large customers or groups of customers to directly tap into the line – but at a cost. A tap with a metering and regulating station could cost $3 million to $5 million or more, according to the documents.

“However, based on the volume of gas being taken by the customers, ACP would likely enter into an arrangement under which it would cover a portion of those costs,” the Oct. 18 response stated.

“After ACP is operational in late 2019, should a large industrial customer seek gas directly from ACP in a location where a new tap and transmission line would be the best solution, ACP and the PNG, or another relevant local gas utility, would work with that customer to help them access gas directly from the line per the open access rules of the Federal Energy Regulatory Commission,” McKay reiterated in an email Nov. 2.

“The simple fact is that ACP will bring opportunities which don’t exist today,” he continued. “Policymakers may be interested in exploring options such as tariff modifications to support expanded distribution, increased funding for the ‘Ag Gas’ program administered by the Department of Commerce, targeted economic development funding to support system expansion, tax-exempt funding … all of these options can now be seriously considered because the gas supply will be there to support them, assuming the ACP is constructed.”

On Nov. 1, Durwood Stephenson, founder of Stephenson General Contractors, wrote that a local business park has lost two “large prospects” due to the gas issue “and I am aware of 2 other prospects to the north and east that would not consider Eastern North Carolina as a potential site because of the absence of gas.”

On Nov. 7, Stephenson wrote Michael Regan, secretary of NCDEQ, thanking him for meeting with Stephenson and Norris Tolson, CEO of the Carolinas Gateway Partnership.

“As we conveyed to you, we fully support the construction of the pipeline and believe it is a necessary infrastructure tool in order to promote economic opportunity for our region,” he wrote, noting that, while they “understand and support” the need to vet the environmental stakes, “it is apparent an underground gas pipeline conduit can be constructed safely with minimal impact to our great environment in Eastern North Carolina as evidenced by more than 100,000 miles of underground pipelines now in existence.”

Behind the scenes, officials continued to work out details.

Ken Eudy, senior advisor to Gov. Roy Cooper, emailed Susan Fleetwood, executive director of economic development at Commerce, on Nov. 28, noting that the state has three funds for expansion of natural gas distribution – the Industrial Development Fund Utility Account, the Site Infrastructure Development Fund and the Ag-Gas Fund.

“What kind of funds are in those accounts?” he wrote. “Is it General Fund appropriations, or another source?”

In the last email included in the batch of public records, Rosemary Wyche, field director for ACP, sent an article by Triangle Business Journal on how all that stands between the ACP and water quality permits is North Carolina.