Environment, Governor Roy Cooper, Legislature

FERC approves construction to begin in NC on Atlantic Coast Pipeline; status of $57.8 million fund still uncertain

The segments in red indicate where construction on the pipeline is to begin this year; construction is scheduled for 2019 along the segment in blue. (Map: Atlantic Coast Pipeline)

The Federal Energy Regulatory Commission is allowing construction of the Atlantic Coast Pipeline to begin in North Carolina, according to a notice issued late yesterday.

But it’s unclear what this final approval means for the $57.8 million escrow fund agreed to by Gov. Roy Cooper and Dominion Energy and Duke Energy.

Construction had already begun on the compressor station near Pleasant Hill in Northampton County, as well as an office building and a metering and regulation station . The FERC notice now allows ACP, LLC, which is co-owned by Dominion Energy and Duke Energy, to start major excavation along most of the route.

Construction has been occurring in West Virginia for several months; however FERC has yet to give final approval for it to begin in Virginia.

FERC’s approval would have also triggered the launch of a $57.8 million escrow account, under a controversial Memorandum of Understanding between Gov. Cooper and Dominion Energy, signed on Jan. 25. Under that voluntary agreement, Dominion and Duke were to deposit half that amount –$29 million — into the account upon receiving FERC’s final notice to proceed.

That money was to be used for environmental mitigation — even though those measures had been requirement in state environmental permits — renewable energy, and to enhance economic development in communities along the route. One of ACP, LLC’s  main talking points was that the pipeline itself would spark economic development. But many critics of the project noted that it would cost millions of dollars for industry to connect to the pipeline. This money would have presumably helped with those connection fees, although it’s unclear how and who would determine the recipients of the funds.

But the legislature passed a law earlier this year to negate the agreement. Instead, the money would go to school districts in counties along the route. However, since the MOU was voluntary and between the utilities and the governor, the new law jeopardized the fund. Duke Energy spokeswoman Tammie McGee said that details on the utilities’ disbursements are not yet fleshed out.

 

Environment, Governor Roy Cooper, Legislature

State budget: DEQ still snubbed, plus Jordan Lake rules delayed again and an odd line item for Charlotte

The state budget: Stingy (again) toward DEQ (Creative Commons)

The state budget, having secretly curdled inside Republican bill writers for several weeks, was finally served to the public last night just before 9 p.m. At 748 pages long — including the conference report-– and weighing more than a pound, the financial blueprint for the next fiscal year spoils most hopes of  environmental protection for North Carolinians.

Republicans tweaked the GenX portion of the bill, which had already been divulged in the Water Safety Act. But the the minor tinkering did nothing to address perennial underfunding of the Department of Environmental Quality. Conservative lawmakers still snubbed the agency, appropriating $2.3 million for long overdue water and permitting projects. Lest that sound like a significant figure, over the past seven years, lawmakers have cut DEQ’s budget so deeply that $2.3 million is the equivalent of finding $20 in a winter coat pocket. Nice to have, but it won’t go far.

This section of the bill does remove the unfunded mandate lawmakers had saddled DEQ with: to develop a monitoring, remediation and corrective action plan for fluorinated compounds in public and private water supplies. That project — on its face, prudent and essential — disappeared because lawmakers refused to fund it.

Instead, the NC Collaboratory, a think tank headquartered at UNC Chapel Hill, received nearly three times that amount, raking in $5 million to essentially do what DEQ is statutorily charged with doing to rein in emerging contaminants — but without the regulatory authority. The Collaboratory, run by rainmakers Brad Ives, a former assistant secretary for DENR (now DEQ), and Jeffrey Warren, the former research director for Sen. Phil Berger, did take a “hit” in that its original appropriation in the Water Safety Act was $8 million. (The Collaboratory got another $1 million to analyze water quality issues in the Haw River and to continue its analysis in Jordan Lake.)

The GenX part of the Water Safety Act, as Policy Watch reported last week, contains several legal and constitutional pitfalls regarding the governor’s power that the budget only partially addresses. The Environmental Management Commission is designated as the rulemaking authority, wise, because that’s the EMC’s role. Several procedural changes attempt to circumvent the potential for a prolonged contested case appeal, should Chemours disagree with the governor’s shut down of its facility.

The bill does try to confront the serious legal chain of custody issues that outsourcing data collection and analysis to the university system presents, but it’s hardly foolproof. Somewhere, Chemours lawyers are lighting cigars.

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Environment, Governor Roy Cooper, Legislature

Analysis: Water Safety Act constitutionally suspect, could slow down enforcement, clean up

Rep. Ted Davis Jr., a New Hanover County Republican (Photo: NCGA)

It’s curious how two legislators, who, in their day jobs are attorneys, have co-sponsored bills that leak state and federal law like a sieve.

The Water Safety Act — Senate Bill 724 and  its identical companion legislation House Bill 972 — pretend to strengthen regulations and enforcement against Chemours, but in reality, make the state vulnerable to legal action by the company and do little to clean up GenX contamination.

The legislation could be folded into a larger budget bill, making it all but impossible to defeat.

Primary sponsors of the House version are Republicans Ted Davis Jr. (the lawyer of the bunch), Holly Grange, Frank Iler and Bill Brisson. They all are members of the House Select Committee on River Quality.

The Senate counterpart is co-sponsored by Republicans Mike Lee, an attorney, plus Bill Rabon and Wesley Meredith.

The Department of Environmental Quality and Gov. Cooper both issued statements and analysis critical of the bill today. But environmental lawyers, policy analysts and environmental groups, have also chimed in. They have noted the bills’ serious legal defects that could hamper cleanups, run afoul of current state and federal laws, and deprive Chemours and other polluters their constitutional right to due process.

Sen. Mike Lee, a Republican from New Hanover County (Photo: NCGA)

The bills makes DEQ’s actions dependent on the governor, who is authorized to issue an administrative order to “require a facility to cease all operations that result in the production of a pollutant.” (In the bill, “pollutant” is not defined.)

“On its face, a governor’s order sounds like a quicker and more direct way to stop the release of these pollutants,” wrote former Assistant DEQ Secretary Robin Smith, now a lawyer and consultant in private practice, on her environmental blog. “In reality, any order could be appealed in an administrative hearing and the administrative law judge has the power to prevent the order from going into effect until there has been a final decision on the appeal.”

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Those appeals can take months; meanwhile, contamination could continue unabated.

On the other hand, DEQ can go directly (and quickly) to court for an injunction, which the agency has already done in Bladen County to stop Chemours from discharging GenX offsite.

While the legislation appears to target Chemours and its “discharge” of GenX and fluorinated compounds, DEQ pointed out that “discharges,” as defined in state law, exclude air emissions. GenX-related compounds are being emitted into the air from the Chemours plant and contaminating surface water, soil, groundwater and drinking water — topics also extensively discussed in the House River Quality Committee.

In addition, the bill sponsors seemed to go out of their way not to fund DEQ, other than $2.3 million worth of breadcrumbs. “While providing extravagant funding to those other entities, the bill fails to make a long-term investment in DEQ’s regulatory programs that have been subject to budget cuts since 2011,” DEQ said in its analysis.

By comparison, the bill serves as an ATM for other entities: the Cape Fear Public Utility Authority ($450,000), local governments ($2 million), the state health department ($530,000), and the NC Collaboratory at UNC ($8 million), whose research director is Jeffrey Warren, former science advisor to Sen. Phil Berger.

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Environment, Governor Roy Cooper

Gov. Cooper proposes $14 million for DEQ, $536,000 for DHHS to tackle emerging contaminants

Gov. Roy Cooper

The NC Department of Environmental Quality would add 45 jobs, primarily in water resources, and upgrade its outdated lab to address the statewide problem of emerging contaminants, according a portion of Gov. Roy Cooper’s draft budget released today.

Under the proposal, DEQ would receive $7 million for water quality analysis and sampling of emerging contaminants, as well as for chipping away the 40 percent backlog of wastewater discharge permits. The Division of Air Quality would also receive part of that money to conduct rainwater sampling and analyze potential air pollutants across the state. Thirty-nine new full-time employees would study emerging contaminants in all water sources, including surface water, groundwater, wastewater, plus soil and sediment.

Other recommendations:

  • $1 million to fund scientific equipment and laboratory analysis. Although a high-resolution mass spectrometer isn’t mentioned by name in the draft, that type of equipment — costing roughly $500,000 — depending on the model, is necessary to conduct the complex monitoring of emerging contaminants. Six new full-time employees would be hired and trained to use the equipment and process samples.
  • $4.4 million for a “permit transformation” project that would provide public online access and tracking for all permits.
  • $1.5 million to upgrade the Reedy Creek Laboratory, where scientists analyze air and water samples. Built in 1991, the facility has not been substantially renovated since.
  • $536,000 for Department of Health and Human Services to hire a medical risk assessor, a Ph.D level-environmental toxicologist, a public health educator and a public health epidemiologist. This DHHS appropriate is the same amount of funding and personnel that Cooper requested last August, but that the legislature did not approve.

The short session begins May 16, when the legislature is expected to consider the recommendation.

Environment, Governor Roy Cooper, Legislature

Gov. Cooper’s office: Lawmakers have “imperiled” pipeline agreement by reallocating funds

At a public hearing in Garysburg, Tom Betts, a supporter of the Atlantic Coast
Pipeline, echoed the utilities’ promises that the project will bring economic
development and jobs to eastern North Carolina. However, privately,
local economic developers were concerned those claims were overblown.
(Photo: Lisa Sorg)

In a letter to lawmakers today, Kristi Jones, chief of staff for Gov. Roy Cooper, implied that a $57.8 million mitigation fund for the Atlantic Coast Pipeline could be in jeopardy now that lawmakers have reallocated the money from its original purpose.

“It’s unclear if North Carolina will receive these funds, denying businesses and farms in eastern North Carolina access to natural gas and much-needed economic development,” read the letter, addressed to Republicans Sen. Bill Rabon and Rep. David Lewis.

Divided between Duke Energy and Dominion Energy, the money was to be used to offset environmental impacts from the pipeline’s construction, as well as economic development and renewable energy projects in the eight counties along the route: Northampton, Halifax, Nash, Wilson, Johnston, Cumberland, Sampson and Robeson.

But earlier this week, lawmakers passed House Bill 90, hodgepodge legislation that tied a critical class-size provision to the diversion of the mitigation funds to school districts in the affected counties. Gov. Cooper allowed the bill to become law without his signature.

Dominion Energy co-signed a memorandum of agreement with Cooper’s office; the utility could not immediately be reached for comment.

The fund, though, has been controversial among lawmakers and environmental advocates who view it as financial exchange for state approval of a key water quality permit. The fund would have been voluntary and non-binding. And even with financial help, it’s unlikely that industry in eastern North Carolina could afford the millions of dollars to hook onto the pipeline.

Nor are there assurances that the cost of the natural gas would be affordable, an important point since these counties are among the poorest in the state.

In the letter, Jones also explained the origin of the fund. The details confirm what pipeline opponents have been cautioning for the past 18 months: That despite the utilities’ and economic developers’ public claims, there was private concern that the economic prospects of the project was overblown.

It is also unclear, based on Jones’s letter, whether ratepayers or shareholders would cover the cost of the mitigation fund. If ratepayers were to bear the financial burden — in addition to the $5.5 billion cost of the project — that would further undermine the claim that the pipeline would help eastern North Carolina.

Jones wrote that discussions began in 2017  — although she does not say what month — when “eastern North Carolina economic developers and others expressed concerns about whether the pipeline would bring the economic growth it promised.”

Cooper and his administration were also concerned about the pipeline’s ability to revive eastern North Carolina’s economy as well as the environmental impacts to air, water and forests along the route, Jones wrote. She added that the fund was established independent of permit approvals by the NC Department of Environmental Quality.

The fund would have been administered by a third-party selected by the governor, although Jones wrote that Cooper would not decide what projects would be funded. Distribution of the money to environmental and economic projects would have been based on reviews of applications by “qualified government entities and nonprofits.”

Examples of those entities, Jones wrote, were the Rural Infrastructure Authority and the Clean Water Management Trust Fund, both of which currently award grants to similar types of projects. Jones told lawmakers that Cooper would have signed an executive order that would have made the fund subject to Public Records and Open Meetings Laws, as well as the State Ethics Act.

 

Kristi Jones/Roy Cooper letter by Lisa Sorg on Scribd