Regulator denies pipeline payoff

By: Staff and wire report
Danny Britt

RALEIGH — A North Carolina environmental regulator said Tuesday a separate monetary agreement reached by Gov. Roy Cooper’s office with developers of a multistate natural gas pipeline had nothing to do with her department’s decisions on key project permits.

Assistant Secretary for the Environment Sheila Holman answered questions from the General Assembly’s energy policy committee about where things stand on signing off on the Atlantic Coast Pipeline in eastern North Carolina.

GOP legislators have criticized Cooper’s deal in which Dominion Resources, Duke Energy and other utilities would put $57.8 million into an escrow account for environmental mitigation, renewable energy and economic development projects along the pipeline route. Cooper has said the money was a voluntary contribution.

On Feb. 13, the legislature passed a law taking effect next week to send that money to area school districts instead. House Bill 90, which fixes an upcoming public school class-size dilemma and expands fully pre-kindergarten for at-risk children dictates the pipeline money be divided among the eight counties and be spent on education needs. The counties are Robeson, Northampton, Halifax, Nash, Wilson, Johnston, Sampson and Cumberland.

The exact amounts for the counties are: Robeson, $7,752,278: Cumberland, $15,547,610; Halifax $4,030,076; Johnston, $7,666,167; Nash, $3,590,678; Northampton, $2,797,992; and Sampson, $4,110,288, according to information from state Sen. Danny Britt Jr., a Republican from Lumberton.

The bill was sent to the governor. Cooper had 30 days to sign the bill into law, veto it or take no action and let the bill become law in 30 days.

Cooper said Feb. 14 he would neither sign the bill into law nor veto it. The Democratic governor said lawmakers heard parents’ voices and phased in lower student-teacher ratios in early grades. But the lawmakers’ actions on other matters in the bill were purely political, Cooper said. Their actions make it uncertain if the utilities developing the Atlantic Coast Pipeline will pay the $58.7 million to the state, the governor said.

“We have not worked out how the money is to be spent,” Britt said after the bill cleared the Senate. “This is not a blank check. It will have a specific purpose for education attached to it.”

According to Britt, 50 percent of the funds from the bill will be deposited and made available as soon as the Federal Energy Regulatory Commission gives a final notice to proceed with the project. The deposit of the remaining $28.9 million is required to take place no later than the pipeline’s first day in service.

“The right thing to do with this $57.8 million ‘voluntary contribution’ is to use the money to support the educational needs of students in the economically distressed, rural communities that are directly impacted by the Atlantic Coast Pipeline,” Britt said.

Cooper has strongly rejected Republican arguments that the $57.8 million was a condition for permit approvals. Holman’s comments to Republican questions Tuesday aligned with Cooper’s statements.

Holman said she’s never read the “memorandum of understanding” signed by Cooper’s attorney and a pipeline executive and heard about it sometime in January, well after the permitting process began.

“It didn’t play a role in our work,” she said, adding regulators had no involvement in how the agreement directed how the funds would have been used.

The state Department of Environmental Quality, a Cabinet-level agency where Holman works, has issued a water quality permit for the pipeline and an air quality permit for the pipeline’s planned compressor station in Northampton County. Some erosion and stormwater control permit applications are pending.

The federal government and regulators in Virginia and West Virginia also have been issuing permits for the pipeline, which will send fracked natural gas from West Virginia to points east and south. The pipeline would end in Robeson County.

DEQ announced the water quality permit Jan. 26. Within an hour, Cooper’s office announced the memorandum, leading to criticisms by both Republicans and environmental groups opposing the pipeline. Cooper said the payments were voluntary and separate from the regulatory process.

Holman said North Carolina’s permitting process already required pipeline builders to address temporary and permanent environmental harm caused by the pipeline’s construction.

The mitigation included the developers paying more than $6 million to a DEQ program to compensate for unavoidable environmental damage to streams, wetlands and vegetative buffers along river basins. Governments and private-sector companies participate in the program.

Responding to questions by Union County GOP Rep. Dean Arp, Holman said current and future permitting decisions aren’t contingent on whether money in the memorandum is used for environmental mitigation.

“We would not be revoking permits because of the (memorandum of understanding) or failure to pay the MOU,” she said. “I believe that we have adequately addressed the environmental issues under our purview.”

That got the attention of Arp and other GOP members, who questioned why Cooper’s office agreed to additional money for mitigation if more wasn’t necessary.

“I’m even more perplexed,” said Rep. Jimmy Dixon, a Duplin County Republican. “I, for one, hope going forward that there’ll be additional conversations and inquiries into the ‘whys’ and ‘how.’”

Cooper told reporters last month details of how to distribute the memorandum’s funds would have been developed with an eye to transparency and avoiding conflicts. Instead, he said, GOP legislators intercepted money “that was supposed to improve the economy and bring jobs, and lessen the environmental impact for the very communities that were affected” by the pipeline.

Danny Britt Britt

Staff and wire report