Court Ruling May Delay Expansion of Gas Plant
Sunday, July 20, 2008
Dominion Energy's expansion plans for its Cove Point liquefied natural gas plant could be delayed because of a federal appeals court ruling.
The highly contested $740 million project to build a 47-mile pipeline through Southern Maryland and parts of Pennsylvania and to upgrade the Cove Point plant in Calvert County is scheduled to be completed by the end of the year.
But the U.S. Court of Appeals ruled Friday that the Federal Energy Regulatory Commission did not give Washington Gas Light Co. enough time to address safety concerns about potential gas leaks, raising the prospect that the project could be delayed.
The ruling also supported the commission's conclusion in June 2006 that the gas company's infrastructure was to blame in several explosions in Prince George's County in 2005. The utility, which delivers natural gas to customers in the District, Maryland and Virginia, had said that the natural gas coming from Cove Point caused the problem.
In an e-mail Friday, Eric Grant, a Washington Gas spokesman, said the company appreciates "the court's recognition that the Cove Point expansion should not proceed until the safety issues are fully addressed."
The decision grants a review by the regulatory commission so that it "can more fully address whether the expansion can go forward without causing unsafe leakage" and puts a hold on when Dominion can begin service through the new pipeline.
Officials with Dominion, based in Virginia, said Friday that the ruling would not delay the project.
"Dominion is confident that [the regulatory commission] will act expeditiously and the Cove Point expansion will proceed on schedule," said Karl Neddenien, a Dominion spokesman.
The commission is reviewing the court's decision and evaluating what actions need to be taken, said Barbara Connors, a spokeswoman for the agency. The commission's next public meeting is set for September, Connors said.
Washington Gas said in its petition to the appeals court that Cove Point's expansion "would cause severe leakage throughout its distribution system." The utility said the liquefied natural gas, after it was converted to natural gas at Cove Point, damaged its distribution system.
The gas company said it "experienced a sixteen-fold increase in leaks, from 62 repairs per year to 1,041 repairs per year," after 2003 when it began receiving gas from Cove Point. The company said that it took three years to repair the damaged infrastructure, which was in Prince George's County, and that it could take "up to a decade or more" to fix the remainder.
As a result, the company said, it would not be ready by the time the pipeline was scheduled to be in use.
The court said the regulatory commission did not adequately prove that Washington Gas could fix its facilities in time and "failed to carry out its obligation" of moving forward in the public interest.
The ruling also rejected the utility's claim that Dominion should pay to fix its infrastructure and that the commission's proceedings to hear the case were inadequate.
The project, once completed, is expected to nearly double the amount of natural gas processed at the Cove Point plant. Dominion cleared the right of way and dug trenches for the new pipeline in the spring, Neddenien said. Much of the work laying pipeline under roadways has been completed, he said.