While the State Corporation Commission weighs the approval of a new natural gas facility in Chesapeake, its staff has released a report echoing some concerns raised by opponents of the project.
Virginia Natural Gas plans to build a $90 million compressor station on an existing company site along South Military Highway and Bainbridge Boulevard.
It would be the first compressor station in Hampton Roads, designed to maintain the pressure and flow of natural gas during peak demand.
The SCC staff report released last week is meant to help guide commissioners’ decision. It outlines several factors for the commission to consider, including community pushback over what residents see as environmental injustice.
Here are the report’s biggest takeaways.
Environmental justice
Hampton Roads environmental groups and residents near the proposed site have raised concerns for months about noise pollution, safety and potential health impacts. The site is near several lower-income communities of color.
This summer, many packed a City Council meeting, and it voted against rezoning the land, acknowledging these concerns. A month later, however, council members changed course and approved the project, along racial and political party lines.
The company’s last major hurdle is getting SCC approval for a certificate of public convenience and necessity.
Dozens of people spoke against the project at an SCC hearing in Chesapeake last month. The commission also received 151 public comments before the hearing, 134 of which were in opposition, according to the new staff report.
Since then, the staff conducted its own environmental justice analysis, looking at whether the project could disproportionately impact communities with lower income and majority-minority populations.
The analysis found that within a 5-mile radius of the site, about 74 census block groups — small geographic units used by the U.S. Census Bureau — are defined as low-income. About 111 are identified as communities of color.
The state also notes there are two coal ash sites and 15 federal Superfund sites located within the area.
The company’s and SCC’s assessments “demonstrate that the project may potentially negatively impact several EJ communities,” SCC staff wrote. “The Commission may determine that approval of the proposed project is not reasonable at this time, given the number of EJ communities and the identified existing pollution sites.”
Virginia Natural Gas states that the project will not cause pollution because it will be fully enclosed and use electric motors instead of traditional burning methods.
“Many of the comments regarding emissions are related to the combustion of natural gas to operate a compressor,” Ken Yagelski, the company’s gas supply director, previously told WHRO. “That's not what we're doing here.”
He said the station would only operate about 20 days each year, when temperatures drop and demand soars.
But residents argue the neighborhoods, including Crestwood and Eva Gardens, are already exposed to industrial and gas infrastructure, such as the Southside Connector Project pipeline.
Even a small amount of added pollution or noise would be too much, speakers told the SCC last month.
The area “has carried more than its fair share of environmental burdens for generations,” said Rodney Nickens, Jr., a Chesapeake resident also running for a seat in Virginia’s House of Delegates. “Siting this facility here continues a pattern of environmental injustice targeting working class, Black and brown communities.”
Economic tradeoffs
Virginia Natural Gas states the compressor station is necessary to prevent service disruptions to customers amid rising energy demand.
Every new connected home or business “adds more demand on the system, which draws down the pressure in the pipe,” Yagelski said.
SCC staff found that the project would likely mitigate risks of service loss and avoid costs associated with restoring such service. However, they noted that the cost of restoring service after a single event would be less expensive than the total project cost of $90 million.
Staff also wrote that VNG admits it has never experienced an outage so “the likelihood of any such contingency actually occurring must also be taken into consideration when assessing the project’s benefits.”
The only guaranteed need for the project is to provide uninterrupted service to Smurfit Westrock, a paper mill in West Point, the report states.
Smurfit plans to pay for about 10% of the project under an agreement that ensures a portion of the company’s natural gas demand cannot be interrupted.
The project would increase the average household’s monthly bill by about $2, the SCC stated.
Moving forward
If the SCC approves the current proposal, the staff recommends requiring several safety measures, including providing technical details before construction begins.
Staff also said commissioners could require the company to analyze alternative locations with fewer community impacts, and provide more context about the likelihood of emergency events when the station would be needed.
Virginia Natural Gas maintains that the proposed site is the most feasible and cost-effective.
Yagelski said the company uses a “hub and spoke” model to distribute gas. The Military Highway property is a hub at the intersection of two interstate pipelines.
Building it elsewhere would require building new pipelines, he said.
In a statement to WHRO Tuesday, Virginia Natural Gas said it “continues to support the Chesapeake Compressor Station as a critical investment in strengthening energy resiliency for the region.”
The statement said the company has prioritized engagement with stakeholders and looks forward to working with the SCC throughout the regulatory process.
The company’s formal response to the staff report is due to the SCC by Sept. 16.
