Atlantic Coast Pipeline Delayed, Cost Rises To $7.5B
Cost estimates for the 600-mile Atlantic Coast Pipeline have risen by a half-billion dollars, to 7.5 billion dollars, and its projected completion date has been pushed back by a year to 2021, amid legal delays on key environmental permits. But lead developer Dominion Energy of Virginia says it still expects to finish the pipeline.
The company is appealing decisions by the Fourth Circuit Court of Appeals in Richmond in December that put on hold key permits from the U.S. Fish & Wildlife Service and U.S. Forest Service.
"We are actively pursuing multiple paths to resolve all outstanding permit issues, including judicial, legislative and administrative avenues," Dominion CEO Thomas Farrell told Wall Street analysts Friday.
Duke Energy and its subsidiary Piedmont Natural Gas are partners in the pipeline, which would carry fracked gas from West Virginia to Virginia and North Carolina.
Citizens and environmental groups have filed multiple lawsuits trying to stop the project. Dominion halted construction after the appeals court decisions.
Farrell told Wall Street analysts last week that if delays are resolved, full construction could resume this fall, and parts of the pipeline could open in late 2020, a year later than expected. Full service would begin in 2021.
He said the pipeline now is expected to cost $7 billion to $7.5 billion, up $500 million from previous estimates. That's also about $3 billion more than originally forecast.
Dominion has warned that the pipeline will not contribute to its earnings as soon as expected.
The delays also are expected to affect Duke Energy's projections. Duke will report quarterly earnings on Feb. 14.
Separately, Dominion said its profit in the quarter that ended Dec. 31 was $641 million, or 97 cents a share. That was down from $1.3 billion ($2.04 per share) for the same period in 2017. The difference was primarily attributable to lower renewable energy investment tax credits, higher storm restoration expense and higher interest expense partially offset by the Cove Point liquefaction project and the benefit of tax reform.
During the fourth quarter, Dominion also received final regulatory approvals for its acquisition of South Carolina-based SCANA, the parent of SCE&G and gas company PSNC. The merger was completed on Jan. 1.