Environment, Legislature

In the House, a major amendment to controversial Duke Energy rate-making bill hands the hot potato back to the Senate

Rep. Larry Strickland: “Not a lot of people want this bill outside of Duke Energy.”

A key provision in Senate Bill 559 was upended in the House Tuesday afternoon, which made the measure more palatable to opponents but added uncertainty to it future.

Colloquially known as the Duke Energy rate-making bill, it contained a controversial section that allowed the utilities commission to approve multi-year rate plans. Utilities could then avoid requesting rate hikes more often. While bill proponents in the legislature said it would add certainty to rate-making, there’s no guarantee that rates would decrease. If they increased, customers could be locked into higher bills for several years.

The amendment now require the Utilities Commission to study multi-year rate making and other methods. “Not a lot of people want this bill outside of Duke Energy,” said Rep. Larry Strickland, a Republican representing Harnett and Johnston counties. “We need a lot more discussion. This impacts small businesses, industry and families.”

The study would be due no later than March 1, 2020.

The amendment passed 63-51, which teed up the near-unanimous approval of the bill. After a 112-2 vote, the measure now returns to the Senate.

Section 1 of the bill allows Duke Energy to ask the Utilities Commission for permission to sell bonds to recover costs associated with storm damage. It has met no opposition. But with Section 2, and now the amendment, the fate of the bill in the Senate is uncertain. During committee hearings and on the Senate floor earlier in the session, several Democratic senators, including Mike Woodard of Durham County, suggested peeling off the controversial section into a study bill. Sen. Ralph Hise, a bill co-sponsor, quickly quashed the proposal.

The bill has been tweaked several times to attempt to assuage concerns from industry and consumer advocates that Duke could use alternative rate-making to “milk profits from customers,” said Rep. David Lewis, a Harnett County Republican, who supports the measure.

The original bill contained “earnings bands.”  The banding portion of a multi-rate plan would allow the Utilities Commission to establish a return on investment — a profit — for the utility that acts as a midpoint; from there, the commission also would set a low- and high-end range — a band — for profitability. This provision would require Duke Energy to refund to customers any profits above 1.25 percent on its rate of return.

Bill sponsors changed the bill so that profits from the middle and top of earnings bands were directed to projects like affordable housing.

Thirty-five states have enacted alternative rate-making mechanisms, but they differ in their approach and success. “Let’s not make mistake Virginia made,” Strickland said, “which resulted in hundreds of millions of dollars in overcharges.”

Lewis opposed the amendment. “Why study something that merely gives the Utilities Commission the option. It’s redundant to study whether they would like to have the option. The amendment is damaging to the bill.”

A study is beyond the scope of the Utilities Commission, said Rep. Dean Arp, a Union County Republican. “This is a confusion of checks and balances. Their role is not to enact a study but to carry out policy.”

Bill proponents often touted that the measure had bipartisan support because it Democrat Dan Blue of Wake County is a co-sponsor. However, there also has been bipartisan pushback.

Rep. John Szoka, a Republican from Cumberland County, said he could not support the multi-year rate-making portion of the bill. “It’s better than when it was introduced but it still has flaws.”

Szoka said he agreed the changing energy industry needs new methods for rate-making. Because of energy efficiency, the demand for electricity has decreased. “Rewarding a utility for building more [plants] is no longer viable,” Szoka said. I understand where impetus for Section 2 is coming from. But it doesn’t solve the problem. It’s utility-centered, not ratepayer-centered. The best alternative is a study.”

Environmental groups were pleased with Strickland’s amendment. Josh McClenney, North Carolina field coordinator for Appalachian Voices, issued a statement:

“This is how public policy should be made, with a thorough and open vetting by the public and by experts to understand the full impact on North Carolina families and businesses, not through Duke Energy writing its own bills and making deals with legislators behind closed doors. Regardless of what happens when the bill gets to the Senate, multi-year rate hikes should not be passed outside of broader utility regulatory reform.”

Molly Diggins, director of the NC Chapter of the Sierra Club urged the Senate to agree with the changes. “There are many utility rate-making tools that could benefit the environment and customers that were not included in this bill because it was crafted by and for the utility, not the public.”


MVP Southgate natural gas pipeline targets Jordan Lake watershed, public meetings this week

The Jordan Lake watershed is in the bulls-eye of a proposed natural gas pipeline that would cross the drinking water supplies for hundreds of thousands of people. The Federal Energy Regulatory Commission has issued a Draft Environmental Impact Statement for the MVP Southgate project and is holding two public meetings this week to receive comments.

If built, the MVP Southgate would be a 74-mile extension of the controversial Mountain Valley Pipeline, which starts at a fracked gas operation in West Virginia. Owned by MVP, LLC, a subsidiary of EQM Midstream Partners, a company based near Pittsburgh, the main MVP line is under construction in Virginia, where its has racked up 300 water quality violations.

The Southgate project would enter North Carolina in Rockingham County, near Eden, cross the Dan River, burrow under the Stony Creek Reservoir and travel southeast, hugging the Haw River to Alamance County. The Haw River lies within the Jordan Lake Watershed and feeds the lake, a major drinking water supply for Cary, Apex and other cities and towns.

The purpose of a DEIS is to assess the potential and likely environmental effects of the pipeline on waterways, endangered species, habitats, forests and communities along its route. After FERC receives public comment on the draft, it will issue a Final Environmental Impact Statement.

Like FERC’s environmental impact statement for the Atlantic Coast Pipeline in eastern North Carolina, the DEIS glosses over or ignores serious and cumulative impacts of MVP Southgate. Along its route, it would cross 224 waterbodies, including three major ones, as well as 27 acres of wetlands. According to the 700-page document, the project would cause long-term, permanent impacts to 615 acres of forest, 12 acres of protected riparian forested lands in the Jordan Lake watershed, and 1,439 acres of wildlife habitat.

The company is also proposing to run the pipeline parallel to and within 15 feet of a waterbody in 28 locations, including within the Jordan Lake watershed, where rules require a 50-foot buffer.

Emily Sutton, the Haw Riverkeeper, noted that the company proposes using horizontal drilling beneath the Stony Creek Reservoir, the drinking water supply for the City of Burlington. Because of concerns about the toxicity of pipe coatings, federal regulators have asked owners of the Atlantic Coast Pipeline for more data about those materials.

The pipeline also would cross the Dan River, already injured by the 2014 coal ash disaster, as well as tributaries to the flood-prone Haw River, which is polluted with emerging contaminants such as 1,4-dioxane. The Haw also has problems with excessive sedimentation, which degrades water quality.

Construction of the MVP will use about 6 million gallons of water, but the DEIS does not pinpoint the source, which prevents federal regulators from assessing the environmental effects of those withdrawals.

Sutton said she is also concerned that during construction contractors will dam some of the waterbodies to install the pipeline. “If they release all that water at once it will drown aquatic life and the velocity of the stream will cut the banks away.

The DEIS says that contractors will restore and maintain the health of environment “when practical.”

MVP Southgate, LLC, says the pipeline is necessary to transmit gas to central and western North Carolina. However, in a November 2018 letter to FERC, NC Department of Environmental Quality Assistant Secretary Sheila Holman questioned the validity of the project. “We remain unconvinced the project is necessary,” she wrote.

Rep. Jerry Carter, a Republican from Rockingham County, and other  elected officials, including the Alamance County Commissioners, have also said they oppose the project. The main proponent, Copland Fabrics, in Burlington, said it needed the gas, but the company has since declared bankruptcy. Businesses that wanted to tap directly into the line would have to pay hundreds of thousands of dollars to do so.

The DEIS omits several important factors, including the the environmental justice burden the pipeline would impose on the Black community of Green Level.

Nor does the document address the role of pipelines in climate change. Scientific studies have shown that methane, a powerful greenhouse gas, leaks both from the fracked gas wellhead, as well as along the route, at rates greater than previously thought. DEQ’s Clean Energy Plan, released for public comment Aug. 16, notes that pipeline construction also releases carbon dioxide, another greenhouse gas, through emissions from trucks, machinery, which is not accounted for. 

To proceed, the project must receive a water quality permit, known as a 404, from the US Army Corps of Engineers, as well as a state permit, known as a 401. But the Trump administration released proposed rules last week that would restrict states’ authority to reject or amend 401 permits. State regulators could consider environmental impacts only from direct discharges associated with pipelines, but not sedimentation and erosion.

A second Trump administration proposal, announced last week, would weaken federal law by requiring regulators to consider the “economic effects” of mitigating the environmental effects on endangered and threatened species. If the proposal passes legal muster, it could reduce protections for these species, such as the Yellow Lampmussel, along the MVP Southgate route. 


agriculture, Environment

EPA protection of bees, pollinators against pesticides is weak, getting weaker

Bee hive at Burt’s Bees at American Tobacco Campus, Durham (File photo: Lisa Sorg)

While the EPA’s pollinator protection program sounds promising, it does little to actually ensure the welfare of the nation’s honeybees, according to an EPA Inspector General report published this week.

The report criticized the EPA for inadequately assessing the success or failure of 45 state-managed pollinator protection plans. The program, which is voluntary, is supposed to ensure bees are safe from the harmful effects of pesticide exposure.

However, the program includes only managed colonies — those that farmers hire to pollinate their crops. Wild colonies and other pollinators that are also susceptible to pesticide poisoning are not accounted for.

And, the report went on, the program is focused solely on acute poisoning, not the chronic exposure that can weaken and kill the bees, especially during overwintering, when food sources are scarce.

The EPA has been working on a survey of participating states, including North Carolina, about their individual programs. However, there is no plan on how, or if, the data will be used to improve state protections.

The survey is scheduled to launch this fall, and it is a separate data collection program from the one run by the US Department of Agriculture. Last month the USDA  announced it would no longer collect honeybee colony data, which is critical to understand the health and threats to these pollinators.

The Honey Bee Colonies report allows agencies, beekeepers, and other interested parties to compare quarterly losses, additions, and movements and to analyze the data state-by-state. The agency said a lack of funding prompted the program’s closure.

Since 1940, the US has lost more than half of its managed colonies, from 5.7 million to 2.7 million in 2015. Acute and chronic exposures to pesticides are among the causes.

Coincidentally, also last month, the EPA reintroduced the pesticide, allowing sulfoxaflor not only to be sold commercially but also be applied for new uses. The decision was prompted by a 2015 Ninth Circuit Court of Appeals ruling that required the EPA to remove sulfoxaflor from the market and ordered the agency to further study its effects on bees.

The EPA said data shows that when used according to the label, “sulfoxaflor poses no significant risk to human health and lower risk to non-target wildlife, including pollinators, than registered alternatives.”

Sulfoxaflor disappears from the environment faster than widely-used alternatives like neonicotinoids, the agency said.

However, pesticides are not always applied according to the label. Even some licensed pesticide applicators take shortcuts, allowing the chemicals to drift onto nearby crops or ignoring the warning labels altogether.

For example, according to NC Department of Agriculture data from June, Ricardo M. Aldape, a pesticide applicator for Wendell Garret Johnson’s peach farm in Candor,  in Montgomery County,   applied a pesticide to blooming parts of peach trees, resulting in a bee kill in nearby hives. The label stated the pesticide should not be applied to blooming, pollen shedding or nectar producing parts of plant if bees may forage during this period.

Aldape agreed to pay $500 for using a pesticide in a manner inconsistent with its labeling.



Several members of Lumbee tribe, climate coalition ask DEQ to revoke Atlantic Coast Pipeline permit; EPA proposes to clamp down on states’ authority

Atlantic Coast Pipeline construction began in Northampton County but has since stopped because of court rulings in Virginia. (File photo: Lisa Sorg)

While the Trump administration proposed rules to strip states of some authority to reject natural gas pipelines, opponents of the Atlantic Coast Pipeline petitioned state regulators to revoke the water quality permit for the controversial project.

“We asked the department to consider the new information in the petition today,” said Donna Chavis, a member of the Lumbee Tribe in Robeson County and Friends of the Earth, during a press conference at the legislature. “The cumulative impacts are worse than previously thought. We urge DEQ to reconsider its decision. We believe they want to do what is right.”

The ACP would run more than 160 miles in eastern North Carolina from Northampton County to Robeson County, which has the largest community of American Indians east of the Mississippi River.

Construction had begun in Northampton and Cumberland counties, but stopped after several court rulings in Virginia vacated federal permits. The cost of the project, originally estimated at $5.5 billion, is now at least $7.5 billion.

After months of requesting additional information from Dominion and Duke Energy, co-owners of the ACP, he NC Department of Environmental Quality granted the water quality permit in January 2018. Known as a 401 permit, it is among the requirements for a pipeline project to proceed.

Legally, the state can revoke or amend a 401 permit if information in the original application was incorrect or the conditions under which the certification was made have changed. “Both triggers for revocation have been met,” the petition reads.

“The information doesn’t have to be incorrect at the time it was presented. It doesn’t matter if it was withheld,” said Ryke Longest, director of Duke University’s Environmental Law and Policy Clinic. “The scope of project has changed or is not as described in the proposal.”

DEQ Sarah Young spokeswoman told Policy Watch the the department received the petition “and is reviewing it.”

The petitioners, including the NC Climate Coalition, say ACP and FERC made math errors and failed to disclose ACP’s possible extension into South Carolina, also known as “segmentation.”  ACP also failed to evaluate the cumulative impacts of nine natural gas projects on the Lumbee community, according to the petition. And since DEQ issued the 401 permit, there have been  court rulings directing regulators to also consider the effects of energy projects on climate change.

Ryan Emanuel, a hydrologist and Lumbee, said the ACP and FERC both erred in their environmental justice analysis because they compared the demographics of the affected census tracts with the rest of the county average, rather than the state.

Robeson County is 41.7 percent American Indian, according to 2017 census figures. Twenty-nine percent of its residents live below the federal poverty threshold. These percentages are starkly different from North Carolina as a whole: Just 1.6 percent of the state’s residents are American Indian, and 14.7 percent live below the federal poverty threshold.

Duke Energy has emphasized that the ACP will end in Robeson County and not extend into South Carolina. If there were an extension, DEQ would be required to also assess those impacts. However, the petition points out that these denials “are highly contradictory to other written and oral statements …”

During South Carolina Public Service Commission hearings, Dominion officials testified that “we would hope that the demand will arise, and that the pipeline would be extended into South Carolina. We have no plans to do so today, but I would hope that happens.”

In September 2017, Dan Weekley, Dominion Energy’s vice president and general manager of Southern pipeline operations told the Associated Press that “even though it dead ends in Lumberton, of course, it’s 12 miles to the border. Everybody knows it’s not going to end in Lumberton. We could bring in almost a billion cubic feet a day into South Carolina just by adding horsepower upstream.”

Mac Legerton, who lives in Robeson County, said that residents were puzzled that an M&R was being built if the ACP and its gas were to end there. The petition details nine natural gas projects within an eight-mile radius of Prospect, a small town in Robeson County, that are “interrelated and the cumulative impacts of which are greater than the sum of its parts.

Robeson County is not a landing pad but a launch pad Click To Tweet

Tammie McGee, a Duke Energy spokeswoman, said the petitioners “confused a M&R station with a compressor station. A compressor station pushes natural gas down a pipeline. The ACP only has one compressor station planned in North Carolina, and it will be in Northampton County, to push natural gas from the Virginia border into NC.

“The function of the M&R station in Robeson would be to pull natural gas off the ACP transmission line and distribute it through Piedmont’s system of distribution lines to serve existing customers and future growth in eastern NC. All of the natural gas from the ACP in NC will be consumed in the state, to benefit North Carolinians. There is currently no plan to extend the pipeline into South Carolina, which would require a completely new FERC process.”

These nine projects (see box) place a disproportionate burden on Robeson County and the American Indian and low-income people who live there, Legerton said.  “Robeson County is not a landing pad but a launch pad,” he said.

McGee said the assertions are “not factual.”

The petitioners, she said, have “lumped together existing Duke and Piedmont infrastructure and planned ACP infrastructure and manufactured some conspiracy theory that the indigenous population in that area is specifically targeted. Nothing could be further from the truth. Some of the infrastructure they cite has been in place for years or decades, reliably serving natural gas customers, and is no different than the infrastructure in any communities with natural gas service.”

Since DEQ issued the permit more than 18 months ago, the climate crisis has grown more urgent, both globally and in North Carolina. Two catastrophic hurricanes — Florence and Michael — hit the state last fall, whose characteristics, scientists say, indicate a warming planet.

Natural gas pipelines leak methane. A greenhouse gas, methane is roughly 28 times more efficient at trapping heat in the Earth’s atmosphere compared to carbon dioxide, and current levels of methane in the atmosphere are higher than at any point in the past 2,000 years, according to NOAA.

The petition details nine natural gas projects, some unrelated to the ACP, within an eight-mile radius of Pembroke/Prospect in Robeson County. A Duke Energy spokeswoman said some of these projects have been in place for years.



A 2018 study from Colorado State University showed that rate of methane entering the atmosphere from pipelines is far greater, 2.3 percent — than EPA estimates of 1.4 percent. (While that difference might seem small, it is actually 60 percent.) These rates translate to an estimated 14 million tons of methane leaking from pipelines each year.

Meanwhile, the Trump administration announced it would propose rules to prevent states from reject pipeline projects except in limited circumstances. Inside Climate News reported the story on Aug. 9.

Under the proposal, states would have no more than a year to decide on water quality permits, with no pauses or restarts to request more information. The federal government could also overrule a state decision in some circumstances.

States could not reject a permit based on erosion and sedimentation concerns, according to Inside Climate News, and could only consider “the potential for discharges” from a specific source.

Erosion and sedimentation can present serious problems for wetlands, rivers, lakes and streams. When too much dirt enters waterways, it can kill aquatic life and increase the cost of  treatment for downstream utilities. Bacteria and pathogens can also attach to the sediment particles, further contaminating the waterways.

Although the rules will most likely be legally challenged, if they become final, it could hamstring North Carolina regulators in their evaluation of a separate pipeline proposal, the Mountain Valley Southgate Pipeline, which would enter the state in Rockingham County, near Eden, and route southeast more than 40 miles before ending in Haw River.

Longest told Policy Watch that the proposed rules violate the Clean Water Act and “the principles of federalism” — which distributes certain powers and autonomy to the states. “We should be investing in securing the pipelines we have to eliminate leaks, not creating more opportunities for leaks and other adverse impacts to our natural resources,” Longest said.

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Attorney General Josh Stein sues EPA over Trump administration rollbacks of clean air rule

Attorney General Josh Stein

North Carolina is among 29 states that announced today they are suing the EPA over its repeal of the Clean Power Plan, which limited emissions from coal-burning power plants.

“The Clean Power Plan is essential to addressing the climate change crisis and beneficial for our economy and health,” said Attorney General Josh Stein in a prepared statement. “The Trump administration’s replacement rule does nothing to address this crisis or protect us, and it violates the Clean Air Act in the process. The Dirty Power rule is exactly the wrong policy at exactly the wrong time. I’m committed to using my authority to uphold the law and protect our environment.”

The Obama administration developed the Clean Power Plan, with a goal of reducing carbon dioxide emissions 32 percent by 2030, relative to 2005 levels. Coal-fired power plants are a major source of carbon dioxide, a greenhouse gas that contributes to climate change. These plants also emit other pollutants that can worsen or cause respiratory illnesses, particularly in children.

More than two dozen states, including North Carolina under then-Gov. Pat McCrory, opposed Obama’s plan, and in 2015 sued to stop it, arguing the EPA had overstepped its authority. However, Roy Cooper, who was attorney general at the time, declined to pursue the lawsuit.

In 2016, the Supreme Court issued a stay, and the Clean Power Plan was never implemented. Stein withdrew North Carolina from the litigation in 2017, after Cooper was elected governor.

A year ago, President Trump’s EPA unveiled a its Affordable Clean Energy rule, which favored the coal industry, to replace the Clean Power Plan. By the EPA’s own estimates, the rule would contribute to a projected overall pollution decrease of 35 percent – far short of the 74 percent target set out in the Clean Power Plan, Stein said.

In June, the EPA formally eliminated the plan.

Stein and the coalition of 29 states suing the Trump administration argue that Affordable Clean Energy rule disregards requirements of the Clean Air Act. The CAA requires that limits on air pollutants, such as greenhouse gases, must be based on the emissions reductions achievable through the “best system of emission reduction.”