By Martin Martz, Richmond Times-Dispatch
RICHMOND — A new economic study says the proposed Atlantic Coast Pipeline will generate $377 million in annual energy savings — $243 million in Virginia alone — by expanding the availability of natural gas and driving down the price for utilities and commercial and residential consumers.
The study by ICF International, based in Fairfax and Houston, says those savings will stimulate business growth and consumer spending that will create jobs, raise labor income and expand the economies of Virginia and North Carolina.
“In general, energy cost savings allow consumers to spend more money in other sectors of the economy, which stimulates new job creation, labor income, tax revenues and gross state product,” the study states.
Dominion Transmission Inc., which commissioned the study on behalf of a pipeline partnership that includes Duke Energy in North Carolina, said Wednesday that the findings underscore the economic benefits of the $5 billion, 550-mile pipeline.
“This will be the largest private economic growth driver in Virginia and North Carolina for the next decade,” Diane Leopold, president of Dominion Energy, which owns the transmission company, said in a conference call Wednesday.
Dominion Energy, Dominion Transmission and Dominion Virginia Power, the state’s largest utility, are owned by Richmond-based Dominion Resources Inc.
The pipeline has stirred strong opposition in parts of western Virginia, particularly Nelson and Augusta counties, where opponents contend they would bear the environmental costs of a project that primarily would benefit southeastern Virginia and North Carolina.
“Our concerns are not relieved by an economic study,” Tracy Pyles, a member of the Augusta Board of Supervisors, said Wednesday.
Pyles said the county is more interested in a geological study to determine the potential harm to water supplies for Augusta and Staunton from blasting through limestone karst to lay the pipeline.
“This is a public relations document and not a guarantee,” he said in an email. “Our water is far more valuable than their profits and will be far more vulnerable if the pipeline becomes a reality in our pristine valley.
The reaction was similar from Constance Brennan, a member of the Nelson County Board of Supervisors who said the study “ignores the negative impacts the [pipeline] will have on the area.”
“Specifically, the degradation of the mountains and of our scenic resources will certainly have a negative impact on our agri-tourism and agricultural industries,” Brennan said. “There is no mention of the cost of diminished property values and what that will mean for our county’s tax revenue. Those devaluations will go on forever.”
Dominion Transmission and its allies — including Virginia poultry farmers and advocates for elderly residents on fixed incomes — contend the pipeline would bring economic and environmental benefits to the entire state by lowering the cost of electricity, even in areas not directly served by Dominion Virginia Power.
“Energy costs are very significant in the poultry industry,” said Hobey Bauhan, president of the Virginia Poultry Federation.
Dominion Transmission officials acknowledged the concerns of landowners in the pipeline’s proposed path, but said the project would allow Dominion Virginia Power and Duke to replace coal-fired power plants with natural gas stations to meet impending EPA clean-air requirements, and drive down the cost of fuel by expanding and diversifying the supply.
“This is a very important public utility project,” Leopold said. “The need is clear for it. We are committed to building the pipeline with the least environmental and social impact possible.”
The ICF study is the latest in a series of analyses that Dominion Transmission has commissioned and released to tout the economic benefits of the Atlantic Coast Pipeline, including pipeline construction and property tax payments to local governments.
A study by Richmond-based Chmura Economics & Analytics estimated in September that the project would invest $2.5 billion in Virginia, generating $236.5 million a year in economic benefits during the pipeline’s construction and supporting 1,462 jobs each year.
After the pipeline begins full operation in 2019, Chmura Economics said it would have an annual economic impact of $37.8 million in Virginia and employ 39 full-time permanent positions — 118 after including the indirect and induced benefits to employment in the state economy.
The new study focuses primarily on energy savings over 20 years and how they would ripple through the economies of Virginia, North Carolina and West Virginia, where the proposed pipeline would originate.
ICF estimates the project would stimulate the creation of 2,200 permanent, full-time jobs in the three states, including 1,300 in Virginia. The report also estimates an annual increase of $83 million in labor income and $136 million increase in gross state product in Virginia from the project.
The economic benefits cited in the study do not include jobs and investment in related development, such as the ongoing construction of a gas-fired power plant in Brunswick County and the potential construction of another one in Greensville County.
Dominion Transmission said it has contracts for 91 percent of the 1.5 billion cubic feet of gas per day the pipeline would carry, primarily to supply power plants operated by Dominion Virginia Power and Duke.
Dominion Transmission said it is talking to local economic development officials about potentially supplying projects, but has not reached any agreements to do so.
“It’s certainly possible to be able to tap into the pipeline,” Leopold said.