When you make a big investment in your home — say a new roof or a heating and cooling system — it’s usually because you have carefully considered your options and decided that there’s a real need and that the benefits outweigh the costs. And as smart consumers, when we do invest in our home’s infrastructure, we ‘right size’ it for our house, our budget, and our needs. Common sense tells us that the same should be true of investments in infrastructure intended to serve the public interest—including natural gas pipelines.
As president of the Virginia Citizens Consumer Council, I have dealt with issues affecting consumers for decades, and I have concluded that the decision-making process for natural gas pipelines built through our state is anything but common sense. Instead, irrational and illogical, it turns the law of supply and demand (as well as the balancing of costs and benefits) on its head. At the wheel is Dominion Energy, a for-profit corporate giant that operates as a monopoly in Virginia’s energy market. Dominion tells us that what we need is what they’re selling, namely the $6.5 billion Atlantic Coast Pipeline (ACP) that would slice through 600 miles of private property, national forest and other public lands, and would cross hundreds of streams and rivers.
What Dominion doesn’t want the public to know is that this project is not needed in the first place, and that the decision-making process used to approve it is unfair and fundamentally flawed. Why? Because the only proof of need required by the Federal Energy Regulatory Commission (FERC) is a developer’s contracts with other companies who will use the pipeline for gas they might transport. Guess who Dominion’s contracts are with? You guessed it, Dominion.
What Dominion also doesn’t want its customers to know is that the ACP will increase its customers’ power bills by as much as $3 billion over the next 20 years, according to independent analysis. That includes not only covering Dominion’s costs to build it, but also footing the bill for the handsome 15 percent guaranteed return that FERC allows Dominion shareholders to collect.
When a deal sounds too good to be true, you know only half the story is being told. The other half is this: Dominion passes along the cost of the project to ratepayers while its investors reap all the rewards, even if the ACP never transports a single drop of natural gas to a power plant in Virginia. The pipeline could sit empty and ratepayers would still pay for it and pay Dominion shareholders 15 percent on top of that. Two current FERC commissioners are on record stating that the project is not in the public interest, in large part because they recognize that the proof that we even need it is weak. This is unprecedented and confirms the flimsy rationale supporting this ratepayer rip-off.
Additionally, just last month, Virginia State Corporation Commission Staff seriously called into question Dominion’s future energy demand projections — the same projections being used to justify the pipeline. For the first time ever, the staff testified that it has no confidence in Dominion’s story. Other experts also have pointed out that Dominion’s projections do not fit with current state and broader market facts. The company’s inflated predictions are further evidence of the shaky grounds behind the ACP — if Virginia doesn’t need new power plants, we don’t need this pipeline to run them.
Perhaps the most shocking thing is that Dominion revealed in SCC proceedings that it has not conducted studies to show that the ACP is needed, has not considered lower-cost alternatives, and has not calculated the costs to its utility customers.
Would you expect someone else to pay for home renovations that you don’t really need? We all know the real world doesn’t work that way. And it shouldn’t work that way for a $6.5 billion project like the Atlantic Coast Pipeline.