Dominion Energy on Friday again pushed back the service date and increased its cost estimates for the embattled Atlantic Coast Pipeline (ACP) as the legal morass confronting the project continues to grow thicker.
The company now expects partial service to begin in late 2020 and full service to start sometime in early 2021, it said in its year-end earnings announcement. Costs for the 600-mile Appalachia- to-Southeast pipeline also continue to balloon, with Dominion now projecting them to come in at $7.0-7.5 billion, not including financing.
Dominion last delayed the project’s timeline in November, when it said the system would come online in phases beginning later this year and concluding in mid-2020. At that time, it also increased its initial cost estimate for the project from a low-end of $6 billion to a range of $6.5-7.0 billion. ACP was originally scheduled to enter full service this year.
The pipeline has faced fierce resistance from environmental groups, which has taken a toll on its schedule. The U.S. Court of Appeals for the Fourth Circuit has repeatedly stayed or vacated authorizations for the project, leading to various work stoppages since last year, when construction got underway. Most recently, all work was stopped by the court in December, when it stayed the U.S. Fish and Wildlife Service’s revised biological opinion and modified incidental take statement. Other cases are pending.
Given all the litigation, Dominion said Friday that it expects construction across the entire route to start again in 3Q2019.
“We remain highly confident in the successful and timely resolution of all outstanding permit issues, as well as the ultimate completion of the entire project,” said CEO Thomas Farrell. “We are actively pursuing multiple paths to resolve all outstanding permit issues including judicial, legislative and administrative avenues.”
ACP would originate in West Virginia, pass through Virginia and into North Carolina to move 1.5 Bcf/d of Appalachian gas to the Southeast. The project is also backed by Duke Energy Corp., Piedmont Natural Gas and Southern Company Gas.
As it wrestled with ACP delays, Dominion capped 2018 with a number of accomplishments, including commercial in-service of both the Cove Point liquified natural gas export facility and the 1,588 MW gas-fired Greensville Power Station in Virginia. The sale of non-core assets, such as its stake in Blue Racer Midstream LLC, and the $8 billion reduction of debt also helped to shore up the balance sheet.
The company also recently closed its all-stock acquisition of South Carolina-based electricity and natural gas utility Scana Corp. in a deal value at about $14.6 billion. Dominion, which serves more than seven million electricity and natural gas customers in 18 states, has created a new operating segment called the Southeast Energy Group that’s comprised of all former Scana operations.
Dominion reported fourth quarter net income of $641 million (97 cents/share), compared with earnings of $1.3 billion ($2.04) in the year-ago period.
For 2018, the company reported net income of $2.4 billion ($3.74), versus 2017 earnings of $3.0 billion ($4.72). Revenue increased to $13.4 billion from $12.6 billion over the same time.
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