-Total property tax payments to Virginia localities would eventually exceed $10 million annually
-Payments of more than $6 million annually in North Carolina, $8 million in West Virginia
-Estimates vary by locality based on pipeline miles, tax rates, assessment ratios
RICHMOND, Va., Dec. 1, 2014 /PRNewswire/ -- Property taxes paid to counties and municipalities by the proposed Atlantic Coast Pipeline would ultimately exceed $25 million a year, according to estimates provided to the local governments.
The estimates were developed by Dominion (NYSE: D), which will build and operate the natural gas pipeline pending regulatory approval for a four-member joint venture that includes Duke Energy (NYSE: DUK), Piedmont Natural Gas (NYSE: PNY) and AGL Resources (NYSE: GAS). The pipeline is to extend approximately 550 miles in West Virginia, Virginia and North Carolina to bring much-needed natural gas for power generation, homes and businesses.
"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."
Property tax payments may begin as early as 2016 once construction of the pipeline is approved by federal regulators and installation begins as the Atlantic Coast Pipeline 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.
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.
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 Atlantic Coast Pipeline 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. The report is available at https://www.dom.com/library/domcom/pdfs/gas-transmission/atlantic-coast-pipeline/acp-chmura-report-091014.pdf
A spreadsheet showing estimated tax property payments by county for the period 2016-2025 is available at https://www.dom.com/library/domcom/pdfs/gas-transmission/atlantic-coast-pipeline/acp-property-tax-chart-120114.pdf.
Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 23,600 megawatts of generation, 10,900 miles of natural gas transmission, gathering and storage pipeline and 6,400 miles of electric transmission lines. Dominion operates one of the nation's largest natural gas storage systems with 947 billion cubic feet of storage capacity and serves utility and retail energy customers in 10 states. For more information about Dominion, visit the company's website at www.dom.com.
About Duke Energy
Duke Energy is the largest electric power holding company in the United States with approximately $115 billion in total assets. Its regulated utility operations serve approximately 7.2 million electric customers located in six states in the Southeast and Midwest. Its commercial power and international energy business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at: www.duke-energy.com.
About Piedmont Natural Gas
Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to more than one million residential, commercial, industrial and power generation utility customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities who are wholesale customers. Our subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, and regulated interstate natural gas transportation and storage, and regulated intrastate natural gas transportation businesses. More information about Piedmont Natural Gas is available on the Internet at http://www.piedmontng.com/.
About AGL Resources
AGL Resources is an Atlanta-based energy services holding company with operations in natural gas distribution, retail operations, wholesale services and midstream operations. AGL Resources serves approximately 4.5 million utility customers through its regulated distribution subsidiaries in seven states. The company also serves approximately 630,000 retail energy customers and approximately 1.2 million customer service contracts through its SouthStar Energy Services joint venture and Pivotal Home Solutions, which market natural gas and related home services. Other non-utility businesses include asset management for natural gas wholesale customers through Sequent Energy Management and ownership and operation of natural gas storage facilities. AGL Resources is a member of the S&P 500 Index. For more information, visit www.aglresources.com.
This Dominion news release includes certain "forward-looking information." We have identified and will in the future identify in our SEC Reports on Forms 10-K and 10-Q a number of factors that could cause actual results to differ from those in the forward-looking statements. We refer you to those discussions for further information.
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