FERC Approves MVP’s Southgate Gas Pipeline Extension in North Carolina, Alongside Rate Hike
(P&GJ) — The Mountain Valley Pipeline (MVP) achieved significant milestones on Tuesday, securing two federal approvals from the Federal Energy Regulatory Commission (FERC), The Roanoke Times reported.
The first approval allows for increased rates on the transportation of natural gas through the 303-mile pipeline, while the second grants additional time for the construction of a North Carolina extension known as the Southgate Project.
Over its nearly decade-long existence, the MVP has encountered formidable opposition, contributing to construction delays and a surge in project costs. Initially estimated at $3.7 billion, the project's current cost projection has surged to $7.2 billion. Citing these challenges, Mountain Valley sought permission to raise transportation rates from $26.92 to $53.42 per dekatherm per month reservation.
The buried pipeline, designed to transport up to 2 million dekatherms (equivalent to 2 billion cubic feet) of gas daily from northern West Virginia to North Carolina, faced criticism from concerned individuals and organizations. Appalachian Voices, in a letter digitally signed by over 3,200 people nationwide, expressed worries that higher transportation rates would adversely impact consumers.
According to Roanoke Times, FERC, in its order, acknowledged Mountain Valley's revised cost of service and recourse rates, stating, "Mountain Valley has provided sufficient support for its revised cost of service and revised recourse rates." The rate change, according to Mountain Valley spokeswoman Natalie Cox, will not affect previously negotiated agreements with current shippers.
The second FERC approval pertained to the Southgate Project, a 75-mile extension into North Carolina. Initially proposed in 2018, the project faced delays due to legal challenges against MVP's government permits. After a law fast-tracked the main pipeline's completion in June, Mountain Valley sought a three-year extension for Southgate, which was granted on Tuesday.
Opponents, however, argued that the project's increased costs were self-created, stemming from terrain choices and construction practices. Del. Sam Rasoul emphasized in a letter to FERC that these issues were not external but resulted from internal decisions, Roanoke Times reported.
While Mountain Valley expressed satisfaction with FERC's decision, Southgate still needs to obtain at least two state permits, with no current estimate for the commencement of work. The rate increase and construction extension cases reflect the ongoing debate over the project's challenges and its impact on the surrounding communities.
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