DEQ required Dominion to pay $1.5 million for potential, actual damage from Atlantic Coast Pipeline

Dominion Energy paid more than $1.5 million to the NC Department of Environmental Quality to offset potential and actual damage from the construction and operation of the now-defunct Atlantic Coast Pipeline.

The payment, made in February 2018 to the Division of Mitigation Services, was part of a state program for impacts to water quality and stream and river buffers.

Both state and federal regulators require developers to pay a third-party or conduct mitigation themselves if their projects unavoidably damage waterways or buffers.

Under the state’s in-lieu fee mitigation program, a state agency like DMS, or a nonprofit organization, sells credits to developers, in this case, Dominion. The payment is required in advance of construction, and DMS or the nonprofit is responsible for the mitigation project’s success. In some instances, the developer chooses to hire a contractor and pay for its own mitigation.

Just under half of the funds Dominion paid to DMS — $719,240 — were allocated for buffer projects in Upper Tar River and Fishing Creek sub-basins. This area includes the cities of Rocky Mount, Nashville and Enfield, where the pipeline would have routed.

Another $849,000 was allocated to buffer projects in the Upper Neuse River and Contentnea sub-basins, which include Smithfield, Selma and Wilson, also along the proposed route.

A formula determines the number of acres or linear feet that must be mitigated for every acre or linear foot that is impacted. The ratio depends on the type of wetlands or streams the acres or linear feet, and the type of mitigation. Usually the ratio is 2-to-1 or 5-to-1, but can be as high as 10-to-1, in particularly sensitive areas.

DMS then calculates the number of credits a developer must purchase. The value of credits in North Carolina is established by the Environmental Management Commission, and are based on the actual costs of the projects. Currently the rate is $1.16 per credit.

The US Army Corps of Engineers requires impacts to be mitigated within the same watershed. But depending on the availability of public and private land on which to build new wetlands or restore streams, mitigation can occur farther away from the immediate impact. For example, the Upper Neuse River sub basin encompasses 1.4 million acres, and mitigation could legally occur anywhere within it.

However, the state says it targets even smaller sub-watersheds and local watersheds to maximize the benefits as close to the impact as possible. And instead of restoring areas piecemeal, DMS is trying to combine sites into larger, connected tracts to amplify the environmental benefits.

Dominion has not requested a refund. After nine months, refunds apply to canceled projects only if mitigation no longer required, according to DMS policy. The utility could not be reached for comment.

Policy Watch recently reported on the immense damage incurred on private property as a result of the pipeline construction. Waterways and wetlands on that land could be eligible for mitigation.

This money for environmental offsets is unrelated to the governor’s memorandum of understanding with the utility, worth $52 million. That amount was not paid because Dominion and Duke Energy, co-owners of the ACP, canceled the project earlier this year.