Regulators say Chickahominy Pipeline will be subject to Virginia oversight

The Virginia State Corporation Commission ruled Wednesday that Chickahominy Pipeline, LLC, a company planning to construct an 83-mile natural gas pipeline across central Virginia, is a public utility and is therefore subject to state oversight. 

The commissioners agreed with a November report by Hearing Examiner Mathias Roussy that Chickahominy Pipeline is a public utility “under the plain language” of state law. 

Virginia’s Utility Facilities Act includes in its definition of a public utility “any company that owns or operates facilities within the commonwealth of Virginia … for the production, storage, transmission, or distribution, otherwise than in enclosed portable containers, of natural or manufactured gas or geothermal resources for sale for heat, light, or power.”

Chickahominy Pipeline had argued that although it would be transporting natural gas for light, heat, or power, it wouldn’t be selling that gas. 

Instead, the company said the pipeline would simply be acting as a conduit between a third-party supplier and the gas user, the planned Chickahominy Power Station in Charles City County. 

“There is no mercantile relationship between Chickahominy (Pipeline) and CPLLC with regard to the natural gas,” attorney Eric Page told Roussy in November, using an abbreviation for the company developing the power station. “Chickahominy is not selling natural gas to CPLLC. Rather, the third-party supplier is selling gas to CPLLC.” 

Both Chickahominy Power and Chickahominy Pipeline are affiliated with Balico, LLC, and the pipeline has specifically been proposed to transport natural gas to the facility. If built, it would cross the five counties of Louisa, Hanover, Henrico, New Kent and City. The company has said gas would be obtained from the existing Transco pipeline in Charlottesville. 

The determination that Chickahominy Pipeline is a public utility will also mean that the company must obtain a certificate of public convenience and necessity from the SCC before beginning construction of any pipeline. 

Virginia Natural Gas, whose service territory encompasses the pipeline route, has argued that state law prohibits the SCC from issuing a certificate to a public utility to operate in the territory of another public utility. 

“VNG remains willing to provide a proposal for service to Chickahominy Power that is feasible, properly recovers the actual costs to serve this customer, and appropriately protects the utility and its other customers,” Virginia Natural Gas wrote in comments to the commission. 

Following the ruling, Chickahominy Pipeline spokesperson Beth Minear said in an email that the company is “weighing its options on how to proceed” and that all options “are on the table.”

“As we’ve previously affirmed, the requirement of full SCC regulation of the pipeline would not cause Chickahominy Pipeline to abandon the proposed project,” she wrote. “Chickahominy Pipeline still plans to pursue this project. The power generation station that the Chickahominy Pipeline intends to serve is already permitted and shovel-ready.”