The Atlantic Coast Pipeline (ACP) is supposedly designed to bring fracked natural gas to theoretical markets in Virginia and North Carolina. This environmentally devastating project (from cutting swaths through pristine forests to worsening climate pollution) is, at its core, designed to boost its owners profitability (Dominion Energy (48%), Duke Energy (47%), and Southern Company (5%)) on the backs of ratepayers. While the pipeline is theoretically a private concern, regulated subsidiaries of its owners have contracted for 96% of the pipeline’s projected capacity. Those contracts assure payments (assure outsized profits) even if the services aren’t ever required. Ever hear the term ‘privatize profits, socialize risks’? The ACP is a poster child for the term and the changing situation (increased risks) are making this clearer with every passing day.
Just released by the Institute for Energy Economics and Financial Analysis and Oil Change International, the report The Vanishing Need for the Atlantic Coast Pipeline makes a compelling case that should underpin regulatory decision-making that the ACP is simply not in ratepayer interests and is counter the interests of Virginia and its citizens — if it ever was.
Things have changed since the ACP was originally proposed and then approved.
- The project’s costs have skyrocketed by at least 30 percent — and could mount even higher.
- Electricity demand projections used by Dominion and Duke (D&D) electric utility subsidiaries (68% of total capacity) to justify the contracts are not standing up to reality: demand is flat and no serious analyst considers those D&D assertions about future (phantom) growth defensible.
- In fact, neither do these utilities. Dominion Virginia Power now projects 2033 natural gas use at 2019 levels.
- “For the first time ever, the Virginia State Corporation Commission rejected Dominion’s Integrated Resource Plan in 2018. Among other issues, the Commission noted its “considerable doubt regarding the accuracy and reasonableness of the Company’s load forecast.” The Commission cited the inaccuracy of Dominion’s forecasts in the recent past, as well as the fact that PJM – the regional transmission organization – forecasts load growth for Dominion’s region of only 0.9% per year, compared to Dominion’s forecast growth of 1.4% per year.”
- “Dominion has consistently predicted growing electricity demand, while actual electricity demand has remained essentially flat since 2007.”
- Renewable energy (and storage) prices have plummeted (and continue to plummet), making it clearer that new natural gas electricity plants will have a hard time competing against clean energy options.
- With the emergent potential that Virginia will start to develop and exploit the Commonwealth’s virtually unlimited offshore wind resources at prices below what new natural gas projects can provide.
“Recent analyses of the Levelized Cost of Electricity (LCOE) for a range of generation technologies shows utility-scale wind and solar already competitive with gas in many markets,” said Lorne Stockman, Senior Research Analyst at Oil Change International and co-author of the report. “As renewable technologies and storage continue to decline in price, it increases the risk that natural gas plants planned for construction in the late 2020s will never materialize.”
Any objective read of The Vanishing Need for the Atlantic Coast Pipeline makes clear that, even putting aside its environmentally catastrophic implications, the case that this project is in Virginia utility ratepayer and Virginia citizens’ interest has withered away … if it ever even existed.