Dive Brief:
- Dominion Energy disclosed on Friday that its Atlantic Coast Pipeline project has been delayed and costs are rising, a result of environmental lawsuits that have forced a stop in construction.
- Dominion hopes to restart construction in the third quarter, targeting a partial in-service date of late 2020. When the project was first announced, the company expected construction to finish later this year.
- The pipeline was originally supposed to cost between $6 billion and $6.5 billion, but Dominion now says it will likely be $1 billion more. The company says it remains committed to the project and sees multiple paths forward — whether through legislation or the courts.
Dive Insight:
The delay is a sign that opponents' environmental and legal challenges to gas pipelines are having an impact on project timelines and company bottom lines.
All construction on the 600-mile pipeline has been halted, in part over a dispute regarding permits to cross the Appalachian Trail and national forests. Dominion has requested an en banc hearing at the U.S. Court of Appeals for the Fourth Circuit to challenge a December decision by a three-judge panel of the court that invalidated necessary authorization.
"There are multiple paths here," Dominion Chairman, President and CEO Thomas Farrell, told analysts during the company's quarterly earnings call on Friday.
"I know, people are focused understandably and justifiably on the en banc. But that's not the only path here. ... There is the potential if we don't get the en banc or we lose the en banc .... we have the judicial path to Supreme Court."
Farrell said the company is working "quite vigorously" on a legislative path to address the invalidated permits, and has other options as well.
"There are, as I mentioned, administrative path[s] that we have identified, but haven't been able to fully pursue because of the government shutdown," Farrell told analysts. "But the primary focus right now for us is our en banc proceeding."
Dominion is developing the project along with Duke Energy, Piedmont Natural Gas and Southern Co. The Atlantic Coast Pipeline is not the only East Coast pipeline facing setbacks. The 300-mile Mountain Valley Pipeline is also stalled, behind schedule and over budget.
