Application filed with FERC on $5bn, 564-mile Atlantic Coast Pipeline

Atlantic Coast Pipeline LLC said Sept. 18 that it has formally applied to the Federal Energy Regulatory Commission for permission to build a 564-mile interstate natural gas transmission pipeline designed to meet the need for cleaner electricity generation, satisfy the growing demand for natural gas to heat homes and businesses, and promote consumer savings and economic growth.

FERC is being asked to certify the public benefit and necessity of the project. The FERC and a number of participating agencies will examine fully a broad number of issues, including public safety, air quality, water resources, geology, soils, wildlife and vegetation, threatened and endangered species, land and visual resources, cultural and historic resources, noise, cumulative impacts and reasonable alternatives.

Four major energy companies – Dominion Resources (NYSE: D), Duke Energy (NYSE: DUK), Piedmont Natural Gas (NYSE: PNY) and AGL Resources (NYSE: GAS) – formed Atlantic Coast Pipeline LLC to build and own the proposed Atlantic Coast Pipeline (ACP). The pipeline would transport natural gas supplies from Harrison County, W.Va., southeast through Virginia with an extension to Chesapeake, Va., and south through central North Carolina to Robeson County.

Pending regulatory approval, construction is expected to begin in the second half of 2016 and the pipeline is expected to be in service in the fourth quarter of 2018.

The 30,000-page application, environmental resource reports and exhibits represent an extensive study by Dominion and outside experts as well as public input to find the best route to bring the much-needed energy to Virginia and North Carolina. Atlantic said it has considered more than 3,000 miles of potential routes and made hundreds of route adjustments based on discussions with landowners, public officials and others. Atlantic has participated in more than 60 public meetings involving thousands of interested individuals, agencies and organizations.

“The Atlantic Coast Pipeline is essential to meeting the clean energy needs of Virginia and North Carolina, and has significant benefits for West Virginia as well,” said Diane Leopold, president of Dominion Energy, the Dominion business unit responsible for building and operating the project. “The ACP will enhance overall energy reliability in the region, bringing natural gas that will heat homes and power businesses, support thousands of jobs, and promote lower energy prices and economic development. It will be used to fuel a new generation of efficient power stations being built to achieve future federal and state environmental regulations.”

The ACP has strong support from Govs. Earl Ray Tomblin of West Virginia, Terry McAuliffe of Virginia and Pat McCrory of North Carolina, and other federal, state and local officials. A three-state coalition of more than 150 business and labor organizations, EnergySure, recently announced its support for the project and the economic development that it is projected to create.

Ownership stakes in Atlantic are: Dominion, 45%; Duke Energy, 40%; Piedmont, 10%; and AGL Resources, 5%. Utility subsidiaries and affiliates of all four companies plus PSNC Energy have signed on as customers of the pipeline. Ninety-six percent of the pipeline’s capacity is subscribed by these companies.

Duke, Dominion need this gas for new power plants

For example, Dominion and Duke Energy are building multiple natural gas-fired power stations and closing coal-fired ones to meet growing demand for electricity with less impact to the environment. Natural gas has less than half the output of carbon when compared with coal. The abundant natural gas that would flow through the ACP would provide each utility with more sources from which to secure reliable, cost-competitive fuel and keep customers’ rates reasonable, Atlantic added.

Virginia Natural Gas, the subsidiary of AGL Resources in Hampton Roads, has stated that it needs more natural gas to meet customer demand especially during peak times in Chesapeake and Virginia Beach, two of Virginia’s most heavily populated cities. For Piedmont Natural Gas, the ACP will provide access to abundant, low-cost natural gas supplies from a geographically diverse production region and will help the company meet growing demand for natural gas in its Carolina markets.

Dominion has completed surveying about 85% of a proposed route that meets the operational and reliability needs while minimizing the impact on the environment as well as historical and cultural resources. Atlantic will file supplemental information with the FERC when surveying is completed and propose a final route.

Dominion Transmission Inc. applied simultaneously to the FERC for permission to build its Supply Header Project, a $500 million project of approximately 38 miles of natural gas pipeline and modified existing compression facilities in West Virginia and Pennsylvania. The project will provide natural gas supplies to various customers, including the ACP, allowing the transport of natural gas from supply areas in Ohio, Pennsylvania and West Virginia to underserved market areas in Virginia and North Carolina.

  • Dominion is one of the nation’s largest producers and transporters of energy, with a portfolio of approximately 24,600 megawatts of generation, 12,200 miles of natural gas transmission, gathering and storage pipeline, and 6,455 miles of electric transmission lines.
  • Duke Energy is the largest electric power holding company in the U.S. Its regulated utility operations serve about 7.3 million electric customers located in six states in the Southeast and Midwest. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company.
  • Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to more than one million residential, commercial, industrial and power generation utility customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities who are wholesale customers.
  • AGL Resources is an Atlanta-based energy services holding company with operations in natural gas distribution, retail operations, wholesale services and midstream operations. AGL Resources serves approximately 4.5 million utility customers through its regulated distribution subsidiaries in seven states.

Project touted as good way to comply with the Clean Power Plan

Said the Sept. 18 application:”The benefits of natural gas are well known to this Commission. When burned, natural gas produces significantly lower emissions than coal, including just half the carbon, which furthers the goals of the Clean Power Plan recently announced by the U.S. Environmental Protection Agency on August 3, 2015. ACP will provide a dependable supply of natural gas for electric utilities in the region, enabling them to use natural gas as a cleaner option to generate electricity. This new, reliable source of supply will help local gas utilities serve their customer obligations, and allow businesses to build or expand their operations.

Atlantic conducted a non-binding open season from April 16, 2014, to May 9, 2014, for the proposed firm transportation services offered for this project. As a result of the open season and negotiations that followed it, Atlantic executed precedent agreements for firm transportation service totaling 1.44 MMDt/day. Atlantic’s precedent agreements are with the following customers, with each customer’s Maximum Daily Transportation Quantity (MDTQ) provided in parentheses:

  • Duke Energy Progress (DEP) (452,750 Dt/day),
  • Duke Energy Carolinas (DEC) (272,250 Dt/day),
  • Piedmont Natural Gas (160,000 Dt/day),
  • Virginia Power Services Energy (VPSE) (300,000 Dt/day),
  • Public Service Co. of North Carolina (PSNC) (100,000 Dt/day), and
  • Virginia Natural Gas (VNG) (155,000 Dt/day). 

 

Atlantic conducted a second binding open season from Oct. 21, 2014, to Nov. 10, 2014, for the proposed firm transportation services offered for this project. No additional customers or executed binding precedent agreements for firm transportation service resulted from this second open season.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.