State Rep. John Szoka, R-Cumberland, said if the utility companies building the Atlantic Coast Pipeline voluntarily contributed $57.8 million to the state as Gov. Roy Cooper claims, they better not try to recoup the money through rate increases tied to construction costs.
“There would be huge pushback because if they’re voluntarily giving a gift then don’t come and hit the ratepayers to get paid back the gift. And the voluntary portion seems questionable at this point in time,” Szoka, co-chairman of the Joint Legislative Commission on Energy Policy, said after a commission meeting Tuesday, Feb. 6.
Cooper’s lawyer signed a Mitigation Memorandum of Understanding for what the governor has called a $57.8 million discretionary fund to be administered by a board under his direction. Szoka said the memo would be the first item on the commission’s March agenda. He advised commission members to prepare questions about the unusual deal and submit them to commission chairmen.
The discretionary fund has raised suspicions that it violates statutory and constitutional requirements that state money belongs in the state treasury, and must be distributed through legislative appropriations.
Szoka added his voice to the chorus of skeptics questioning the governor’s legal authority to establish a discretionary fund. Lt. Gov. Dan Forest called it a slush fund. Former House Republican Leader Paul “Skip” Stam called it an exaction, with the government forcing pipeline developers to pay for a permit they were entitled to receive.
Cooper announced the memorandum of understanding less than a half hour after the state Department of Environmental Quality said a crucial water permit was issued to move pipeline construction closer to final regulatory approval. The governor claims the multimillion-dollar discretionary fund is separate from DEQ’s review and permitting process.
The governor said a portion of the funds would be used for mitigation of construction disturbances to land and wildlife. The rest would be spent on unrelated economic development and renewable energy projects.
The North Carolina memorandum is light on detail, fundamentally different from the specific arrangement Virginia reached with pipeline principals on how to spend mitigation funds.
“It came as a surprise to me that this memorandum of understanding came about. Personally I’ve never heard of anything like that, and we need to find out answers on it, to find out why we’re doing it, and why at the last minute,” Szoka said of Cooper’s plan.
Szoka said he has been following the pipeline approval process for several years. He never heard any mention of a discretionary fund before it was announced.
He knew no reason the governor, rather than DEQ’s professional staff, should be calculating mitigation costs and negotiating mitigation requirements with pipeline developers. He said DEQ’s permitting process was very thorough.
“In fact, their final response has been delayed beyond when we thought we were going to see their final responses, so I don’t think it’s a matter of policy or DEQ’s attentiveness to the problem, and thoroughness in going through the permitting process,” Szoka said.
The 600-mile pipeline would start in West Virginia, cross Virginia, and stretch almost to the South Carolina border. The longest portion in North Carolina would extend through Cumberland County, traversing Szoka’s legislative district.
Szoka acknowledged some of his constituents raised concerns about the pipeline route. He doesn’t like the configuration in the Town of Wade.
“The fact of the matter is that America runs on energy, and we have to have access to good, cheap energy,” Szoka said. American energy production is safer and more environmentally friendly than anywhere else, he said.
“I’ve seen too many soldiers come back from overseas, where we’ve been defending America against people that attack us. I am tired of seeing sons and daughters of America being put in their graves, and being blown up, and missing limbs, and all the rest that goes with that,” said Szoka, who represents Fort Bragg.
“We go into foreign lands when oil is certainly a consideration. We need to be energy independent in this country,” Szoka said. “The ACP can help us get there. I’m 100 percent for it.”
During the meeting Szoka expressed disappointment over the Cooper administration’s lack of responsiveness to questions from Mark Trogdon, director of the legislature’s nonpartisan Fiscal Research Division. Trogdon wanted to know who owns the $57.8 million, whether the money belongs to the state, where the funds would be deposited, who would administer the fund, and the if the governor legally could enter the memorandum of understanding.
Szoka said the Office of State Budget and Management’s response “was less than enlightening, and did not sufficiently answer these questions. This committee is asking the governor and his administration to provide clear, understandable answers to these questions, and any other questions this committee may have when we meet next in March.”