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Pipelines Add Unneeded Charges for VA Ratepayers, Critics Warn

Despite public protests, several huge gas pipelines are moving through the regulatory process. Critics say that's bad news for consumers. (Chesapeake Climate Action Network/Flickr)
Despite public protests, several huge gas pipelines are moving through the regulatory process. Critics say that's bad news for consumers. (Chesapeake Climate Action Network/Flickr)
September 19, 2016

RICHMOND, Va. - Huge gas pipelines now seeking approval aren't needed but will make utility rates spike, according to their critics.

Federal regulators have issued a preliminary Environmental Impact Statement for the Mountain Valley Pipeline, a $3.2 billion project that would run 300 miles across West Virginia and Virginia. Joe Lovett, executive director of Appalachian Mountain Advocates, said it's one of six similar lines proposed to carry Marcellus and Utica gas to eastern markets. Even though they're not needed, he said, the pipeline builders and utilities are allowed to pass along their costs plus a hefty guaranteed profit.

"So, it's a double hit to ratepayers," Lovett said. "It's a total scam, and those rates will be passed along to ratepayers. So, both of these pipelines are going to raise your utility bills."

Lovett said a study by Synapse Energy Economics found enough existing pipeline capacity to supply Virginia and the Carolinas through 2030. However, he said, regulators allow pipeline developers to claim costs plus a guaranteed 14 percent profit - and that's separate from the 10 percent or 11 percent assured profit for utilities such as Dominion that buy the gas.

"Pipeline companies, drilling companies - and in Dominion's case, a gas-burning company - raise their profits," Lovett said, "and in the process, take private property for their own gain. It's really remarkable."

The Federal Energy Regulatory Commission has said it found "limited adverse environmental impacts, with the exceptions of impacts on forest," from the MVP. Lovett disputed this, and said it's a mistake for FERC to consider each pipeline project separately. He's convinced it's likely to cause overbuilding - at the expense of consumers, landowners and the environment.

"So, as long as FERC continues to analyze pipelines in isolation," he said, "it can't make a fair determination about whether they're necessary and what the alternatives are to those."

A spokeswoman for the pipeline said two years already have been spent planning and developing the pipeline, and hundreds of adjustments have been made to protect the public interest. The companies have argued that the projects are being built to meet expected demand in eastern Virginia and the Carolinas.

The preliminary EIS for the Mountain Valley Pipeline is online at ferc.gov. The Synapse study is at abralliance.org.

Dan Heyman, Public News Service - VA