Energy Regulator Weighs Manchin Pipeline Extension, Rate Boost

Energy regulators on Tuesday will consider rate increases and an extension of an important project deadline for the long-delayed Mountain Valley Pipeline championed by West Virginia Democrat Joe Manchin.

Developers of the natural gas pipeline that runs through West Virginia and Virginia want to hike transportation rates to cover ballooning costs of the project. Equitrans Midstream Corp. is also asking regulators to give them more time to complete a 75-mile extension of the pipeline into North Carolina, amid the kind of permitting hurdles and local opposition that have delayed the original project by several years.

Supporters view the natural gas project as critical to delivering affordable, reliable energy domestically and abroad.

The Federal Energy Regulatory Commission will weigh the increase in rates and the three-year extension for the MVP Southgate Project, located in northern North Carolina, at its Dec. 19 meeting, according to the agenda. FERC issued a certificate for the Southgate project in June 2020, which expired on June 18.

The 303-mile natural gas project, first proposed in 2014, has encountered heavy opposition from environmentalists and landowners whose property is affected by construction. Manchin, chairman of the Energy and Natural Resources Committee, and his West Virginia colleague, Republican Shelley Moore Capito, successfully pushed legislation through Congress this summer to ensure the eventual completion of the pipeline after years of litigation and delays.

Equitrans Midstream Corp., based near Pittsburgh, asked FERC for the Southgate extension in June, about two weeks after Congress authorized the 303-mile main line in an extraordinary provision of the debt limit law (Public Law 118-5), which developers cited in their request to FERC. FERC twice extended the certificate for Mountain Valley’s main line, originally approving the line in 2017 but allowing developers until August 2026 to complete the pipeline.

The pipeline’s costs have swelled to $6.6 billion from $3.7 billion, according to developers. The rate increase would “address the overall increase in MVP’s total project cost, due to repeated delays associated with litigation and project permitting,” said Natalie Cox, a spokeswoman for Equitrans, in a statement.

“In addition to there being ample precedent for this rate change, approval of these rates will give additional clarity to current and future shippers,” Cox said, noting the changes won’t affect negotiated rates the developers previously struck with the pipeline’s shippers.

MVP opponents continue to criticize developers for creating an expensive project that damages the environment and infringes on property owners’ rights.

Related: Manchin’s Pipeline Could Be the Last of Its Kind, if It Survives

“The project’s increased costs, cited by the developers as the reason for the increase, are self-created,” Sam Rasoul, a Democratic member of the Virginia House, told FERC in an Oct. 2 letter. “Those problems stem from selecting a steep mountainous terrain and inadequate construction practices, not from external sources or project opponents.”

The Southgate extension “are not in the public interest and the developers have not demonstrated its viability,” said Jessica Sims, Virginia field coordinator for Appalachian Voices, a group that advocates for the environmental health and safety of Appalachian communities. “Its threats remain — from disproportionately impacting environmental justice communities along the pipeline route to endangering the waterways it would cross.”

FERC is likely to approve the rate change, given the lack of opposition from shippers paying the rates, ClearView Energy Partners, an independent research organization in Washington, said in a Dec. 13 note to clients.

The commission could approve the time extension for MVP Southgate, but permitting hurdles remain.