News: CJ Exclusives

Cooper’s office: Pipeline investigation ‘a sham’

Ken Eudy, adviser to Gov. Roy Cooper, at a Nov. 8 legislative hearing about the Atlantic Coast Pipeline. (CJ photo by Don Carrington)
Ken Eudy, adviser to Gov. Roy Cooper, at a Nov. 8 legislative hearing about the Atlantic Coast Pipeline. (CJ photo by Don Carrington)

A legislative investigation into the permit process for the Atlantic Coast Pipeline is a sham, say representatives of Gov. Roy Cooper.

The claim was part of a news release sent from Cooper’s office 30 minutes after a Friday, Nov. 8, legislative committee meeting in Raleigh.

Legislators, who are looking into how Cooper’s administration handled an environmental permit for the ACP and a related $57.8-million discretionary fund, asked Cooper and three of his top staffers to testify Friday. Cooper and his legal counsel declined to appear. Advisers Ken Eudy and Julia White, however, took questions from subcommittee chairmen Sen. Harry Brown, R-Onslow, and Rep. Dean Arp, R-Union.

Arp, who presided, said the meeting was held to allow representatives for Cooper the opportunity to answer questions so investigators can finalize their report and present it to the full Government Operations Committee. He said all involved have cooperated to some degree with the committee — with the exception of Strata Solar and Cooper.

Documents suggest Strata Solar’s president, Markus Wilhelm, asked Cooper to intervene on behalf of the solar companies in a dispute with Duke Energy.

Eudy, in an opening statement, said as the pipeline project went forward some questioned whether the project would create jobs. He said he led an effort to ensure ACP lived up to jobs promises, and he also monitored negotiations between Duke and the solar developers.

He criticized lawmakers for their investigation.

“You spent 20 months on ACP but refuse to negotiate with the governor on teacher pay,” he said, referring to the impasse between Cooper and the General Assembly over this year’s budget. “We did what we did for one reason: to help the people of North Carolina.”

Brown asked Eudy to refer to a transcript of an interview Eudy did with WRAL. The interview was in late February 2018, one month after the pipeline permit was announced. Brown asked Eudy if his statements in that interview were true. Eudy hesitated briefly, but said yes.

Only a few questions went to White. Brown asked her why state Department of Environmental Quality Deputy Secretary Doug Heyl sent her multiple emails on the status of the water quality permit. “We were interested because of all the public attention on the ACP,” she said.

Brown asked Eudy why renewable energy was included as a possible use of the discretionary fund. Eudy said that idea came from the N.C. Department of Commerce and that solar energy creates jobs.

After the hearing, Arp told Carolina Journal the governor’s side is certainly different from what’s in the record, and that it will be interesting to see how investigators interpret Eudy’s and White’s responses to Friday’s questions.

According to the governor’s news release, the decision to issue the water quality permit was up to the experts at DEQ. The governor’s office did not direct DEQ. Cooper’s team said, according to ACP officials, similar mitigation funds were agreed to in Virginia and West Virginia, as that was part of the federal regulatory process.

Cooper’s office wanted to announce the mitigation agreement and the solar settlement at the same time DEQ announced the water quality permit “so that North Carolinians could have a full picture of North Carolina’s energy future.”

Cooper’s team also says the solar settlement was supported by Republican legislators and negotiated with the public staff of the utilities commission.

“For months, the governor’s office has been ready to answer questions, and today it’s clear that the only thing left to chase are half-baked conspiracy theories,” said Cooper spokesman Ford Porter.

The project

The ACP project is a 600-mile natural gas pipeline project that will be built in West Virginia, Virginia, and North Carolina. Dominion Energy and Duke Energy are the major partners. The Federal Energy Regulatory Commission granted final approval for the project in October 2017, but the ACP still needed to get environmental permits in each state.

In January 2018, immediately after Cooper’s Department of Environmental Quality announced it granted a water quality permit for the ACP, the governor’s office announced the ACP would create a $57.8 million discretionary fund for Cooper to spend on damage mitigation, economic development, and renewable energy projects in counties affected by the pipeline.

CJ’s reporting raised concerns about the legality of the fund. Legislators said the arrangement was unconstitutional and looked like a “pay to play” scheme. In February 2018, the General Assembly voted to redirect Cooper’s discretionary fund to the school systems in eight counties in the path of the pipeline.

Legislative leaders still wanted to know the details of the DEQ permitting process and the background behind the discretionary fund, as well as Cooper’s possible intervention in negotiations between Duke and the solar industry on the interpretation of legislation aimed at reducing the cost of solar power to ratepayers.

The Joint Legislative Commission on Governmental Operations, chaired by Senate leader Phil Berger, R-Rockingham, and House Speaker Tim Moore, R-Cleveland, created a subcommittee on the ACP. The subcommittee hired a team of private investigators, including former FBI and Treasury agents.