Home Sierra Club letter details potential Atlantic Coast Pipeline antitrust violations

Sierra Club letter details potential Atlantic Coast Pipeline antitrust violations


economic-forecast-headerThe Virginia Chapter of the Sierra Club submitted a letter to the Federal Trade Commission (FTC) detailing the harm to consumers and competition stemming from the role of Dominion Resources, LLC and Duke Energy as partners in the Atlantic Coast Pipeline (ACP).

The ACP is a proposed, 550-mile natural gas transmission line that would run from West Virginia through Virginia to North Carolina. Along with Dominion and Duke, the other partners in the ACP are AGL Resources, a subsidiary of Southern Company, and Piedmont Natural Gas, which is merging with Duke.

The partners own electric power utilities including Dominion Virginia Power and Duke Carolinas that, as monopolies, are able to charge their ratepayers for the costs of building and fueling power plants, including plants that burn natural gas.

“The problem with this set-up is that it allows the utilities to use their captive ratepayers to ensure a continuous demand for natural gas, to be supplied by the ACP,” said Ivy Main, an attorney and energy writer who serves as the Virginia Chapter’s Renewable Energy Chair, and led Sierra Club’s inquiry into the antitrust issues. “The result is good for Dominion and Duke but bad for their ratepayers, because it shifts onto customers the risks that are otherwise inherent in building and operating a gas pipeline. It also means Dominion Virginia Power and Duke Carolinas have an incentive to build more natural gas generating plants in order to create more demand for gas from the ACP. This locks customers into paying for these gas plants for decades to come, regardless of what happens to gas prices, and regardless of whether ratepayers would be better off with alternatives like wind and solar.”

These issues were first raised with the Federal Trade Commission on May 12 by Michael Hirrel, an attorney formerly with the Antitrust Division of the Department of Justice. Mr. Hirrel expressed concern that the activities of the utility investors in the ACP may violate Section 2 of the Sherman Act and Section 5 of the Federal Trade Commission Act, and asked the FTC to investigate.

“Sierra Club has been urging Dominion to move away from fossil fuels to clean energy, and we are actively opposing the ACP due to the threat it poses to the environment, local communities and ratepayers,” said Kate Addleson, Virginia Chapter Director. “These issues are directly linked. Having invested in the ACP, Dominion and Duke now have a huge incentive to build more gas plants. In fact, we are seeing this already. Not only is Dominion building a huge, new 1,600-megawatt gas plant in Greensville, but it also wants to add another 9,000 megawatts of gas between now and 2040. Meanwhile, in the way of renewable energy, it has committed to only 400 megawatts of solar.”

“We live in a time of climate change, and a time when other utilities are transitioning away from dirty fuels,” said Kirk Bowers, Pipelines Program Manager for the Virginia Chapter. “Natural gas is cheap now because the price doesn’t reflect its true cost to consumers and society, but it won’t always be cheap. Dominion and Duke want to lock customers into fracked gas to make money. But in doing that, they are shifting the risk onto customers,and they are shutting out developers of wind and solar, harming competition as well.”

The Sierra Club is urging the FTC to open an investigation of the ACP and other pipelines to further look intothis potential conflict of interest.

The full text of the letter, with all attached documents can be found here: wp.vasierraclub.org/LetterInFull.pdf



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