U.S. asks Supreme Court for more time on Atlantic Coast natgas pipe appeal

(Reuters) - The U.S. Solicitor General asked the Supreme Court on Wednesday to extend the time the government has to file a petition in an appeal of a circuit court decision preventing Dominion Energy Inc from building the Atlantic Coast natural gas pipeline across the Appalachian Trail in Virginia.

Solicitor General Noel Francisco is seeking a one-month extension until June 25. Without the extension, the time expires on May 28.

Some analysts think Dominion could cancel the pipeline if the Supreme Court does not hear the case because the project’s costs have ballooned due to legal and regulatory delays.

In December, the Fourth Circuit Court of Appeals in the Cowpasture v U.S. Forest Service case vacated a permit that allowed the pipe to cross the Appalachian Trail on National Forest land.

The court determined the Forest Service lacks authority to grant pipeline rights-of-way across the trail on federal land.

Dominion said it welcomed news that the Solicitor General would join the case, noting for decades that 56 other pipelines have operated across the Appalachian Trail.

Earlier this month, Dominion’s Chief Executive Thomas Farrell said it would increase the chances the court will hear the case if the Solicitor General joins the appeal.

Farrell said Dominion hopes to overcome other legal challenges that will allow the company to resume construction of the $7.0 billion to $7.5 billion pipeline in the third quarter and complete it by early 2021.

Dominion suspended construction in early December after the Fourth Circuit stayed a U.S. Fish and Wildlife Service permit that authorized building the pipe in areas inhabited by threatened or endangered species.

Analysts at Height Capital Markets in Washington, DC, said they expect the Supreme Court to grant the extension but do not expect the court to take up the case. The court will likely make a decision in the fourth quarter.

“If the court declines to hear the case, we anticipate Dominion and Duke will decide to terminate the project as rerouting the pipeline would likely be cost prohibitive,” the Height Capital Markets analysts said, noting it will be “extremely difficult” for the utilities to pass on additional costs to ratepayers.

Atlantic Coast is a partnership between Dominion, Duke Energy Corp and Southern Co.

When Dominion started work on the 600-mile (966-km) pipe from West Virginia to North Carolina in the spring of 2018, the company estimated it would cost $6.0 billion to $6.5 billion and be completed in late 2019.

Reporting By Scott DiSavino; Editing by Bernadette Baum