Despite ongoing legal woes and increasing costs for its Atlantic Coast Pipeline (ACP), a top executive with Dominion Energy said the company remains "committed" to the project, while continuing to embrace changes in the energy sector.
During an earnings call last week, Dominion said it expects the 600-mile pipeline, which was originally planned to enter service last November, will begin partial service in late 2020, followed by full service sometime in early 2021. The company also said the project, originally estimated to cost $4.5-5 billion, is now up to $7-7.5 billion, excluding financing.
"We are committed to it," said CEO Diane Leopold of Dominion's Gas Infrastructure Group, during a luncheon Monday at American Gas Association (AGA) headquarters in Washington, DC. "Our customers desperately need the infrastructure. It is still profitable and the customers still need it...We certainly are pursuing judicial, legislative and administrative routes."
Leopold said the U.S. Court of Appeals for the Fourth Circuit, which has stayed or vacated authorizations for ACP several times, including last December, has "done what they've done, but the [regulatory] agencies are continuing to work with us, and if there's information that they need to correct, they will correct it and we will move on.
"We are very confident that this is the most transparent and thoroughly analyzed project and we will prevail," she said, adding that most of Dominion's customers continue to back ACP. "The far majority of people that care, and even know about it, know they desperately need the infrastructure.
"You're turning away customers that cannot go into that area because there is no infrastructure in eastern North Carolina and eastern Virginia. Last winter, [that region] had the highest gas price recorded in the U.S. That isn't just trying to signal high prices, it's trying to signal constraints. Industrials are getting shut down on cold days because there isn't enough natural gas, and the people that understand it know that they need that."
Embracing Change, And RNG
Aside from the continuing brouhaha surrounding ACP, Leopold told AGA that Dominion, one of the nation's largest combination gas-and-electric utilities, continues to hold its embrace of change as a core value for the company.
"There are a few disruptive factors that are going on," Leopold said. "Certainly the proliferation of renewables and battery technology; the increase in electrification and the many different terms for what that means; and, because natural gas is so abundant, a discussion of moving away from natural gas to a zero carbon future.
"Over the last couple of years, there has been an enormous amount of discussion within the industry. It's been a very healthy discussion, and we've done the same thing within our company: What does a natural gas company in the future look like, given those disruptive factors?"
Leopold said having Washington, DC, and several government facilities within its service area has prompted Dominion to consider the importance of regulation in the energy sector.
"We have always believed that we need to be secure and we need to keep evolving, whether there's a regulation there or not. A lot of times the regulation is very important additional documentation around that what you are doing or that what you need to do -- and then some.
"With or without regulation, we need to have a secure grid. For a long time, critical infrastructure was thought of -- and is still thought of -- as the 'electric grid.' We believe that because of their dependence on the natural gas grid, that we need to be focused just as much on that, regardless of the regulation."
When asked if Dominion's platform in the renewable natural gas (RNG) sector was in its infancy or a more mature stage, Leopold said "somewhere in between." Last November, Dominion announced a $250 million partnership with Smithfield Foods to convert methane from hog waste into natural gas.
Although methane has been captured from landfills and other sources for decades, partnerships like the one with Smithfield are new but there numbers are starting to increase, Leopold said.
"A lot of companies are starting to look at different types of opportunities. The agricultural sector is certainly one -- wastewater treatment, food waste, cow farms, pig farms and landfills [are others]. It's helping our customers lower their carbon footprint by having this RNG come into the system, and the agricultural communities lower their carbon footprint."