The Cost Of An ACP Tap
Published 7:33 am Wednesday, May 27, 2015
BUCKINGHAM — The cost of a single tap on the proposed Atlantic Coast Pipeline (ACP) could be over $8 million.
“…The cost of a tap is $500,000 and the necessary metering and regulation…station would be in the range of $5 million to $8 million, depending on how much natural gas is required,” noted Dominion spokesman Jim Norvelle in an e-mail to The Herald.
He says Dominion has told any county that is interested in a tap that it’s not important to determine the location for the tap before the pipeline is built. “It can always be added later. It’s more important to put it in the right place after a customer is found who requires the natural gas and would pay for the tap and [metering and regulation] station as a cost of building its facility.”
Norvelle said that Dominion’s usual experience regarding tapping is “that the business looking to build a manufacturing plant, for example, in the county will determine the location of the tap and pay for its installation.”
The current proposed ACP route shows the pipeline entering Buckingham just west of Wingina under the James River, traveling southeast across Buckingham, entering Cumberland southeast of Curdsville, running southeast through southern Cumberland, continuing through the northeastern portion of Prince Edward.
All three county governments in The Herald’s coverage area—Buckingham, Cumberland, and Prince Edward—are interested in a tap.
Locally, a majority of the ACP would travel through Buckingham: 25.5 miles of the line will impact 76 parcels of land, according to Dominion.
“I have had two meetings regarding the possible tap into the ACP…” detailed Buckingham County Administrator Rebecca S. Carter. She said during one of the meetings with Dominion officials and other county administrators, she learned it could cost roughly $4.5 million per mile to extend a line off of the main ACP. She said the figures weren’t “etched in stone” and were estimations. “And, a lot will vary on the lay and condition of the land,” she said, offering wetlands as an example.
Carter said one meeting was with Dominion representatives and “a business in the county that stands the potential of using a lot of gas. The company would most likely be the only company that we thought would warrant enough dekatherms [a unit of energy equal to 10 therms or one million British thermal units usage]. However, their usage is not enough to warrant a connection. We discussed [the possibility] to try to aggregate with others to see if it can be worked out. That possibility is still being discussed, but until we know how far away the ACP line will actually be from this company or from any business, it will be hard to make a feasible decision.”
Carter detailed that County officials have been advised that the local distribution company, or LDC, “is who we would work with for this process. There are many determinants…How far will the capacity and line be from where we need to tap is a major issue.”
During the meeting, the levels of need to determine potential usage were discussed. Carter said she was provided with different levels: level one being a small size customer, using between one and five dekatherms, a level two would be a medium-sized customer, using between five and 15 dekatherms, and a level three would include larger customers, using more than 15 dekatherms.
“I was told that roughly 10 miles on either side of the [proposed pipeline] is in play for line extensions…10 miles would be 45 million [dollars]. The determinants for line extension cost…($4.5 million can go up or down) are…high consequence…wetland…high volume customer (bigger pipe) and standing water,” she explained.
Norvelle told The Herald that the requested delivery volume of the natural gas would dictate the diameter of the pipe, which drives the cost. “Lateral pipe diameters can range from two inches to 20 inches, so the cost could range from an estimated $150,000 per mile to an estimated $4.5 million per mile.”
Carter said that generally, if the total cost of the tap and line extension is over $30 million, the County would need to get approved by FERC (the Federal Energy Regulatory Commission). “In this case, if we had an economic developer/customer, it could take up to 36 months to get the FERC approval.”
As a breakdown, Carter said it could take between six and eight months to prepare for FERC certification and filing an application, one year for FERC’s review and filing, one year for construction, and six months to test and install a measuring and regulation station, as needed.
“Certainly, at these costs it would not take long to exceed that $30 million threshold. Again, until we know the true route of the ACP…it is very difficult for anyone to study the possible cost of connecting.” She said once a route is approved, the County could look further into the feasibility of a tap “to have ready in the event a possible large user would want to tap in. We [were] told that we did not have…to acquire a tap while the line is being installed, [and] that we could get a tap at a later date. But, with 91 percent of the commodity already sold, waiting certainly could be risky.”
In addition to the pipeline, Buckingham is also slated to see a 31,515-horse-powered gas-fired compressor station to be constructed near the intersection of the proposed pipeline and the existing Transcontinental pipeline, which lies just north of Route 56, northwest of Union Hill Road, southeast of Shelton Store Road, and southwest of Ripley Creek.
The County is “definitely interested” in a tap, said Cumberland County Administrator and Attorney Vivian Giles. “In speaking with…ACP representatives, what you need to bear in mind, we’re learning, [are] really two components: placement and timing. So those will be critical.”
Prince Edward County Administrator Wade W. Bartlett, confirming the County’s interest in a tap, noted that the taps “are very expensive.”
He said Prince Edward is working with Cumberland and the Town of Farmville “in multiplying our efforts…Together we could have a bigger impact to try to see what the process is for obtaining a tap.”
Bartlett noted that the Virginia Tobacco Commission is working with Dominion on potential taps. He added that the localities have also been in discussion with the Virginia Growth Alliance. “It’s very early yet in the process, because it will actually not be operational until 2018.”
The county administrator said they’ve had meetings with Dominion, too. He said the possibility of a tap was still “in the preliminary stages…”
Bartlett noted that a Dominion representative stated that the affected counties “‘…can say now that natural gas is available, even if you don’t have a tap.’ He said, ‘You’d be fine with saying that to companies…that are large enough that require a tap. They understand this.’…Before, we couldn’t even say we had availability of natural gas.”