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Public Perplexed by Pipeline Bill


Regulating utilities in Virginia is a complicated job, and making sense of the rules requires expertise that few voters have, so it’s no surprise that citizens hoping to stop Dominion’s Atlantic Pipeline were alarmed by a bill that would change the way gas companies recoup their investment in pipelines.

Groups hoping to prevent construction of a 550-mile natural gas pipeline from West Virginia to North Carolina were alarmed when a state delegate from Powhatan proposed a new law.  House Bill 1475 says, among other things, that it is “in the public interest to authorize and encourage the expansion of natural gas infrastructure in the Commonwealth and to promote the use of natural gas.”

Their fears were heightened by the fact that if you disregard contributions from the Republican party,  sponsor Lee Ware has received more campaign dollars from Dominion Power, its CEO and a sister company than from any other donor -- $27,000. But it turns this bill has nothing to do with Dominion’s pipeline, which is regulated by the federal government.  Instead, House Bill 1475 was introduced on behalf of smaller companies that distribute gas in Virginia.  Here’s Ken Schrad, spokesman for the State Corporation Commission, which regulates those firms.

“Say I’m a new developer, and I want to build 50 homes, and I want those homes to have the ability to heat with natural gas.  That developer might go to the local distribution company and say, ‘Hey, I know I’m a little bit outside the area you currently serve.  Can you extend service to where I’m building these homes?”

To help pay for the cost of digging trenches and laying pipe, the gas companies can ask for a payment from the developer, but  House Bill 1475 and a companion bill in the Senate would allow gas companies to charge the new customers more over time to pay back the cost of extending their service.  Either way, Ken Schrad says, it’s the consumer picking up the tab.

“I mean ultimately the homeowner was going to pay either the developer because it was built into the cost of the home or the person getting the gas service can be charged that extension cost.”

When real estate was booming, developers were willing to pitch in, but they’re more reluctant now, and lawmakers hoping to spur economic development want industry to have access to new supplies of relatively cheap natural gas.

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