Dominion Energy and Duke Energy announced today the cancellation of the Atlantic Coast Pipeline due to ongoing delays and increasing cost uncertainty that threaten the economic viability of the project.
“We regret that we will be unable to complete the Atlantic Coast Pipeline,” said Thomas F. Farrell, II, Dominion Energy chairman, president, and chief executive officer, and Lynn J. Good, Duke Energy chair, president, and chief executive officer, in a joint statement on today’s decision. “For almost six years we have worked diligently and invested billions of dollars to complete the project and deliver the much-needed infrastructure to our customers and communities. Throughout we have engaged extensively with and incorporated feedback from local communities, labor and industrial leaders, government and permitting agencies, environmental interests and social justice organizations.
“We express sincere appreciation for the tireless efforts and important contributions made by all who were involved in this essential project. This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged.”
The Atlantic Coast Pipeline was initially announced in 2014, but faced substantial regulatory and legal hurdles almost from the outset.
The companies won a recent case in the U.S. Supreme Court, but another recent case making its way through the federal system, in a circuit court in Montana, overturning long-standing federal permit authority for waterbody and wetland crossings, promised to throw another wrench into the proceedings.
This new information and litigation risk, among other continuing execution risks, make the project too uncertain to justify investing more shareholder capital, the companies said today.
Recent public guidance of project cost has increased to $8 billion from the original estimate of $4.5 to $5 billion. In addition, the most recent public estimate of commercial in-service in early 2022 represents a nearly three-and- a-half-year delay with uncertainty remaining.
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Chris Graham
