Senior advisor to lawmakers: Gov. Cooper’s office didn’t meddle in DEQ permitting of Atlantic Coast Pipeline

The segments in red indicate where construction on the pipeline was to begin in 2019; construction scheduled for 2019 along the segment in blue. The project is on hold while the US Supreme Court weighs the utilities’ appeal of a lower court’s rejection of key federal permits in Virginia. (Map: Atlantic Coast Pipeline)

Skepticism about the economic promises of the Atlantic Coast Pipeline prompted Gov. Roy Cooper’s office to establish a $57.8 million mitigation fund, a top official told lawmakers this morning. 

Ken Eudy, senior advisor to the governor, told the Joint Subcommittee on the Atlantic Coast Pipeline that Cooper did not use a key water quality permit as pressure utilities to create the fund.

“From the outset, Gov. Cooper told Duke Energy the permitting would be handled by experts at DEQ based on the science, technology and the law” Eudy said. “There was no interference.”

Duke Energy and Dominion Energy are majority owners of the Atlantic Coast Pipeline. The 600-mile project would start at a fracked gas operation in West Virginia, travel through Virginia and enter North Carolina near Garysburg in Northampton County. From there, it would route 160 miles through eight counties: Northampton, Halifax, Wilson, Nash, Johnston, Cumberland, Sampson and Robeson. 

These counties, Eudy said, “bear all of the risk and reap none of the reward.”

Eudy reiterated what had been disclosed in public documents, but his comments did underscore major turning points in the ACP controversy: 

  • Eastern North Carolinians, even business interests, became increasingly skeptical about the supposed economic promise of the ACP.
  • Meanwhile, opposition to the project was intensifying.
  • Duke Energy appeared impatient and concerned about the state’s lengthy permitting process.

After months of review and requests for more information from the utilities, the NC Department of Environmental Quality approved the essential water quality permit — a 401 — on Jan. 26, 2018. Within two hours of that approval, the governor’s office announced the mitigation fund and a memorandum of understanding, which was voluntary, with Dominion Energy. Immediately, environmental advocates and Republican lawmakers — rarely on the same side of an issue — speculated that a quid pro quo was at work.

The governor’s office and DEQ have consistently denied the permit was contingent upon the fund. In statements and transcripts released earlier this week, 10 DEQ employees told investigators they did not know of the fund until after the media reported on it.

This was a project most farmers and residents didn’t meet with open arms

Duke Energy CEO Lynn Good called the governor’s office repeatedly, according to public documents. Eudy said Good “was concerned and frustrated about the slow pace” of the permitting process.

Eudy told lawmakers that the governor’s office “had been updated on the status of a series of permits” — erosion and sedimentation, air quality and water quality. “We were kept in the loop of the timing [of the permits] but not the substance,” he said.

Cooper’s office began discussing the possibility of a fund in 2017, after DEQ and the Department of Commerce held several listening sessions in eastern North Carolina. Most of the people who attended those sessions opposed the pipeline — for safety, environmental and social justice reasons — although a few economic developers spoke in favor of it.

“If the ACP received the permits we wanted the pipeline to have economic development. Much of the property had been taken by eminent domain,” Eudy said. “This was a project most farmers and residents didn’t meet with open arms.”

To garner support for the project, ACP, LLC had purchased TV ads touting the jobs the pipeline would allegedly create. But as it became clear that the ACP would include only three connection points along the 160-mile route through North Carolina, “people in those ads began questioning those promises,” Eudy said.

Top Commerce and DEQ officials discussed how the pipeline, if permitted, could benefit Eastern North Carolina, “in light of the concerns people had raised,” Eudy said. 

Eudy said that Commerce officials said “one of the best way to create jobs was to encourage solar development.”

Under the terms of the fund, the utilities would pay in installments, and the money would be held by a trustee for disbursal. The money was to be used for environmental mitigation, economic development in eastern North Carolina and renewable energy projects in that region.

One of the best way to create jobs was to encourage solar development

Meanwhile, Eudy was also trying to mediate an impasse between Duke Energy and solar energy developers t over House Bill 589. The 2017 legislation was supposed to help accelerate solar energy projects statewide. However, Duke Energy had placed stipulations on grid interconnections, causing a  backlog that was costly for developers.

“We hoped to announce resolution to House Bill 589 and the mitigation fund to present a full picture of the state’s energy future,” Eudy said.

“Did we do things perfectly? No, we did not,” Eudy said of the MOU. “We didn’t nail down in writing how the fund would be administered.”

In 2018, state lawmakers passed a bill diverting the money to public school districts in the eight affected counties. The utilities have paid none of those funds because pipeline construction has been halted while the legality of several federal permits was considered by the US Court of Appeals — and now will be heard by the US Supreme Court.

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