Pipeline means big money
Published 7:19 pm Saturday, January 24, 2015
Other than offering a steady and reliable energy source, the Atlantic Coast Pipeline (ACP) will also provide a financial shot in the arm for local government entities along its 550-mile path.
According to estimates provided by Dominion, property taxes paid to counties and municipalities by the proposed pipeline would ultimately exceed $25 million a year across three states.
In North Carolina, those combined annual payments stretched across eight counties are estimated to start at $406,500 in 2016 and reach a shade over $7 million by 2025.
As the project is capitalized, Northampton County’s estimated share of the tax payments generated by the ACP start at $39,500 in 2016. In succeeding years (through 2025), the county is forecasted to receive $166,000; $665,000; $796,000; $980,000; $1,040,000; $1,070,000; $1,097,500; $1,197,500; and $1,231,500.
Dominion officials are quick to point out that those estimated tax payments to Northampton County only include the main portion of the pipeline that will cross into the county from Virginia in the Pleasant Hill area and run south to the Roanoke River near Weldon.
To date, no estimates of tax payments to Northampton County have been developed on Dominion’s latest proposal to shift a lateral extension off the main pipeline to Chesapeake, VA. Originally, that lateral (spur line) was to be constructed entirely in Virginia. At a recent public meeting in Jackson, ACP officials formally unveiled a new route for a portion of that lateral, proposing that the first 12 miles of it may be constructed in Northampton County.
“The local benefits of the Atlantic Coast Pipeline for the host communities, including new property taxes paid by the pipeline, will be very real and very significant,” said Diane Leopold, president of Dominion Energy. “At a time when many local governments are challenged to fund schools and provide other essential services, this new revenue can make a big difference.”
Annual property tax payments will increase during the construction period, based on tax formulas in each state and locality. For example, Dominion has estimated that counties and municipalities along the proposed route would receive $23 million in property tax payments in 2020 and increase to more than $25 million starting in 2021, when the full value of the project is ultimately reflected in tax payments.
Northampton County Economic Development Director Gary Brown said the benefits are not just limited to improving the tax base.
“Without a doubt, this proposed pipeline will help grow our tax base, but we also need to weigh in the impacts this project will have on the availability of natural gas on a consistent basis,” Brown said. “That availability will aid us in meeting a critical infrastructure need, which helps in attracting larger scale industrial projects. There’s also the reliability factor of having a constant source of energy at the commercial, institutional and residential levels here in Northampton County and throughout the region.”
Property tax payments may begin as early as 2016 once construction of the pipeline is approved by federal regulators and installation begins as the ACP joint venture spends dollars on construction-related costs. If approved by federal regulators, construction will begin in 2016 and the pipeline is projected to be in service by late 2018.
The property tax estimates are based on the latest available tax rates and assessment ratios by each county and are subject to change. They exclude any property taxes on land, and are calculated using current estimates of income, expense and capital costs. Changes in the construction schedules for the pipeline also may affect the amount and distribution of the property tax payments in any given year.
“These property tax benefits are in addition to the cleaner air, the thousands of jobs it takes to build a project of this magnitude and the other significant economic growth created by the pipeline,” Leopold said.
Chmura Economics & Analytics of Richmond, Va., projects that the ACP would inject an annual average of $456.3 million into the economy of the three-state region of West Virginia, Virginia and North Carolina, supporting about 2,900 annual jobs in the region from 2014 to 2019. When the pipeline is in full operation, the project is estimated to have an annual impact in the three-state region of $69.2 million that can support 271 regional jobs from 2019 onward.
ACP is a major interstate natural gas pipeline construction and operation initiative proposed by Dominion Resources (Dominion) and three other major U.S. energy companies – Duke Energy, Piedmont Natural Gas, and AGL Resources. The project involves constructing about 550 miles of natural gas pipeline, as well as three compressor stations and other associated facilities across three states—West Virginia, Virginia, and North Carolina. The compressor station for North Carolina is projected to be built in Northampton County.
Total capital expenditures for this project are estimated to be $4.6 billion.