ATLANTIC COAST PIPELINE, LLC ATLANTIC COAST PIPELINE

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1 ATLANTIC COAST PIPELINE, LLC ATLANTIC COAST PIPELINE Virginia Outdoors Foundation Chandler Easement September 2017

2 Chandler Easement TABLE OF CONTENTS 1.0 PROJECT DESCRIPTION ESSENTIALITY REDUCED ENVIRONMENTAL IMPACTS PURPOSE AND NEED ALTERNATIVES AND AVOIDANCE MINIMIZATION RESTORATION COMPLIANCE WITH LOCAL COMPREHENSIVE PLAN REPLACEMENT LAND FAIR MARKET VALUE REPLACEMENT LAND CONSERVATION VALUE REPLACEMENT LAND LOCATION/USEFULNESS CONCLUSION REFERENCES...16 LIST OF FIGURES Figure 1 Chandler Easement... 3 Figure 2 Chandler Easement- Constraint Map... 9 Figure 3 Chandler Easement- Hayfields Farm LIST OF APPENDICES Appendix 1 Appendix 2 January 19, 2016 U.S. Forest Service Letter Real Estate Appraisal Report September 2017 i

3 Virginia Outdoors Foundation Chandler Easement 1.0 PROJECT DESCRIPTION Atlantic Coast Pipeline, LLC (Atlantic) is proposing a mile natural gas pipeline referred to as the Atlantic Coast Pipeline (ACP or Project) as part of the plan to provide safe, dependable natural gas service for current and future customers in Virginia and North Carolina. A proposed route has been selected, after Atlantic evaluated potential route options, worked with agencies to avoid environmentally sensitive areas and species, as well as addressed concerns raised by the public and State/Commonwealth and Federal agencies. The proposed route will cross an open space easement held by the Virginia Outdoors Foundation (VOF) on land formerly owned by Curtis G. and Rebecca F. Chandler in Bath County, Virginia (Chandler Easement). On July 15, 2010, Curtis G. Chandler conveyed a deed of Open-Space easement to the Virginia Outdoors Foundation. Subsequently, on June 10, 2015, Curtis G. Chandler conveyed all of his interest in the acres to Gerald L. Campbell. The Chandler Easement is comprised almost entirely of forested land with the exception of a small open field along State Route 629. This easement borders the George Washington National Forest (GWNF) along with other VOF easements, including the Chandler Easement to the northwest and the Lyons easement to the southwest. The VOF holds a total of 3,835 open space easements in Virginia comprising more than 750,000 acres (VOF, 2015). Large concentrations of VOF easement acreage, including the Chandler Easement are located within the Appalachian and Piedmont region, along the proposed ACP route. The primary conservation values of the Chandler Easement, as defined by VOF, include the preservation of scenic views and protection of rural character in the area. The VOF describes the Chandler easement area as consisting almost entirely of forested land that borders the GWNF and another VOF easement. The property has 2,300 feet of frontage along Stuarts Run, 1,800 feet of White Sulphur Springs Branch, and 600 feet of an unnamed tributary of Stuarts Run. There is one dwelling on the property that is managed for recreation. The Sister Knob National Forest Special Biological Area, which contains 1,700 acres and contains shale barren habitat for several endangered plants, lies 400 yards from the Chandler Easement. The Chandler Easement consists of approximately acres. The proposed Project would permanently cross approximately 0.80 acres (or 1 percent) of the Chandler Easement for a maintained pipeline rightof- way. Of the proposed permanent workspace crossing the Chandler Easement, approximately all will be forested land. An additional 1.72 acres would be temporarily crossed during construction (including temporary and additional temporary workspace). Areas temporarily impacted during construction would be restored following construction. Figure 1 depicts the total affected portions (2.52 acres) and permanent impacts (0.80 of the 2.52 acres) to the Chandler Easement. At VOF s request, in May 2016 Atlantic submitted the first draft application for approval of the proposed crossing as a conversion or diversion under Virginia Code Given the nature of the impacts proposed herein, no diversion will occur, and Atlantic questions if and to what extent any conversion will occur. Nonetheless, in the spirit of cooperation, Atlantic is proceeding as VOF requested, and believes that it meets the conditions set forth in Virginia Code Pursuant to the statute, VOF has authority to approve the application so long as (i) the conversion or diversion is determined by VOF to be (a) essential to the orderly development and growth of the locality and (b) in accordance September

4 with the official comprehensive plan for the locality in effect at the time of conversion or diversion and (ii) there is substituted other real property which is (a) of at least equal fair market value, (b) of greater value as permanent open-space land than the land converted or diverted and (c) of as nearly as feasible equivalent usefulness and location for use as permanent open-space land as is the land converted or diverted. Since the first application was submitted, the application has been revised based on route changes, input from stakeholders and agencies, and VOF requests. The second draft VOF application was submitted in January ACP presented its application at the February 9, 2017 VOF Board of Trustees meeting. After listening to the information presented at the meeting, the VOF Board of Trustees voted to defer a decision on Atlantic s application. VOF also provided FERC with the VOF staff report in a letter dated March 10, 2017, which included conclusions regarding the application. The letter also provided staff recommended conditions: Issuance of a Certificate of Public Convenience and Necessity (Certificate) by FERC and all other necessary state and federal permits for the proposed ACP route crossing this easement. VOF approval and sign off of final ROW easement permitting only a permanent 50-foot easement for one 42-inch diameter underground natural gas pipeline and the associated permanent access road easement. No above-ground structures are permitted within this permanent ROW except for above ground pipeline markers as required by law. ACP transfer of fee-simple interest to VOF of the proposed 1,034-acre Hayfields Farm Property and Rockfish River Parcel as Substitute Land for the converted areas of the open-space easement property. The acceptance of funds from ACP to: (i) serve as a Stewardship Fund to support VOF with the operation and management of the substitute properties, and (ii) partially offset VOF s unreimbursed costs associated with the ACP. Written requests from both VOF and ACP to FERC to include the above stated requirements as conditions of the FERC approval. FERC noted these conditions in the Final Environmental Impact Statement (EIS) for ACP. This final September 2017 submission of the application (along with nine others) includes updated language since the Final EIS from FERC was filed. Four of the VOF applications, not including the Chandler Easement, include minor changes to workspace. September

5 O ,500 Feet No change Last Update: Jan Chandler, Curtis G., additional grantor Rebecca L. Chandler ACP Corridor VOF Easement U.S. Forest Service Land Access Road Workspace Permanent Temporary ATWS Topsoil Segregation Atlantic Coast Pipeline Figure 1 - Chandler Easement Bath County, Virginia FILE: M:\Clients\D-F\DOM\SRPP\_ArcGIS\State_Permits\VA\VOF_Easements\Figures\Updated_ \_acp_VOF_Workspace_Overview.mxd, REVISED: 09/15/2017, SCALE: 1:12,000 DRAWN BY: TAH

6 2.0 ESSENTIALITY Essential to the orderly development and growth of the locality The applicant must demonstrate that the conversion/diversion is essential to the orderly development and growth of the locality. The applicant must submit a letter or statement and/or materials from the local government, regional, state, or federal entity to this effect. The applicant must also provide examples of all alternatives considered, including project alterations or other options that were considered to avoid the need to convert or divert open space land and why those alternatives were not realistic. Clear evidence should be provided that there are no other feasible alternatives and that the conversion/diversion is not just the most cost- effective solution. This evidence might include letters from professionals consulted, certified engineering studies and/or plans, local planning documents, and environmental analyses. Response The conversion/diversion of the Chandler Easement for a 42-inch diameter underground natural gas pipeline within a 50 foot-wide permanently maintained right-of-way is essential to the orderly development and growth of Virginia s localities, including those crossed and served by ACP, as described in more detail below. In addition, while numerous alternatives to avoiding the Chandler Easement were analyzed, none were determined to be feasible, and as a result, conversion/diversion of a small portion of that easement is necessary. 2.1 Reduced Environmental Impacts The need for cleaner, cost-effective, reliable, and more efficient energy sources with fewer environmental impacts has been well documented. Compared to generating electricity from coal, generating electricity from natural gas is approximately 30 percent more efficient and produces significantly less emissions of carbon dioxide, sulfur dioxide, and nitrogen oxides. Atlantic anticipates that construction of the ACP will be completed between the fall of 2017 and the fall of 2019, with all facilities planned to be in-service by the end of 2019 (subject to receipt of the required permits and regulatory approvals). The timing required for review and approval of the ACP is critical to meeting customers needs and supporting a diverse energy portfolio. The increased demand for natural gas as an electric energy generation and comfort heating fuel choice is driving the need for new natural gas pipeline infrastructure to expand the availability of this cleaner fuel, and to maintain cost-effective, steady energy supplies as the amount of variable renewable energy increases on the electric grid. The ACP is a central component for meeting these needs in Virginia. In order to provide natural gas to citizens and businesses, pipelines are needed to bring the gas from its source to the demand centers. Natural gas pipelines are essential to achieving this goal, and to the orderly development and growth of a comprehensive energy system. Atlantic is seeking a Certificate of Public Convenience and Necessity (Certificate) from the FERC under Section 7(c) of the Natural Gas Act (NGA) to construct, own, operate, and maintain the proposed facilities for the ACP system. FERC issues Certificates for construction and operation of pipelines engaged in interstate natural gas transportation where public need has been demonstrated and a comprehensive review of the environmental impacts has been completed pursuant to the National Environmental Policy Act (NEPA). This, in part, ensures that all alternatives have been evaluated and the alternative with the least environmental impact that can meet the need has been selected. As required by NEPA, FERC will prepare an EIS for the proposed ACP. On December 30, 2016, FERC issued its draft EIS for public review and comment. The comment period ran through April 6, The Final EIS was issued by FERC on July 21 st, 2017.Atlantic anticipates that September

7 FERC will issue a Certificate for ACP in the third quarter of The issuance of the Certificate will demonstrate the need for the ACP and confirm that the route selected is the best alternative for meeting that need. Project development is contingent upon receipt of the FERC Certificate, which will be provided to VOF upon receipt. 2.2 Purpose and Need The ACP is a proposed interstate natural gas transmission system that will serve the growing energy needs in Virginia and North Carolina. Based on current customer commitments, approximately 75 percent of the natural gas transported by the ACP will be used as a fuel to generate electricity for industrial, commercial, and residential uses. The remainder of the natural gas will be used directly for residential, industrial, as well as commercial and other uses such as vehicle fuel. By providing access to low-cost natural gas supplies, the ACP will increase the reliability and security of natural gas supplies in Virginia and North Carolina, and thereby meet expected demand for natural gas-powered electric generation in those states. In recent years, demand for natural gas in Virginia has grown significantly. Demand for natural gas for all uses grew by 31 percent in Virginia between 2009 and Demand for gas-fired electric power generation grew by 67 percent in Virginia from 2009 to 2014 (U.S. Energy Information Administration, 2015). Demand for natural gas in Virginia is expected to increase in coming decades due to a combination of population growth and displacement of coal-fired electric power generation. The U.S. Census Bureau predicts 2.7 million new residents in Virginia between 2000 and 2030 (U.S. Census Bureau, 2014). At the same time, use of natural gas for power generation is expected to increase significantly. By 2035, natural gas is expected to surpass coal as the most common fuel for electric power generation due to coalfired plant retirements and low natural gas prices. The EIA (2015) expects renewable generation to grow 2 percent per year from , meeting a part of the demand for power, but more than 60 percent of new generating capacity needed from 2025 to 2040 will be fueled by natural gas. A study prepared by ICF International (2015) for Atlantic projects that electric power generation in Virginia and North Carolina will increasingly rely on natural gas over the next two decades. Between 2019 and 2038, the study predicts that approximately 9,900 megawatts of electric generating capacity will be retired, while 20,200 megawatts of new generating capacity from natural gas will be built in Virginia and North Carolina. As a result, demand for natural gas for power generation in Virginia and North Carolina is expected to grow 6.3 percent annually between 2014 and 2035, increasing from 1 to 3.7 billion cubic feet per day (bcf/d).1 1 In April 2014, Duke Energy and Piedmont issued a request for proposal for incremental pipeline transportation service due to their existing and future natural gas generation requirements, core load growth, and system reliability and supply diversity goals. Specifically, the request for proposal issued by Duke Energy and Piedmont stated that the new infrastructure requested as part of the proposal would support their anticipated needs for natural gas supply and transportation services. Duke Energy s growing reliance on natural gas to meet the State of North Carolina s and Duke Energy s electric generation needs coupled with Piedmont s core load growth and operational requirements supports an investment in new natural gas infrastructure as proposed by Atlantic. In June 2014, Virginia Power Services Energy Corp., Inc. issued a request for proposal for firm 1 One bcf/d is approximately equivalent to 1 MMDth/d. September

8 transportation service to serve Virginia. In particular, the request for proposal identified a need for additional firm, interstate pipeline capacity to deliver natural gas supplies to various points in the Commonwealth of Virginia. Following the request for proposal processes, Duke Energy, Piedmont, and Virginia Power Services Energy Corp., Inc. each contracted for transportation service on the ACP as did other companies in the region. The ACP will provide up to 1.5 MMDth/d of firm natural gas transportation service into West Virginia, Virginia, and North Carolina. Of the 1.5 MMDth/day of the firm transportation capacity created by the ACP, Atlantic currently has customer commitments for over 90 percent of ACP s capacity. The precedent agreements between Atlantic and these six customers demonstrate the demand for new natural gas supplies, the desire for access to a new supply region, and the need for the ACP. The remaining unsubscribed capacity on the ACP (4 percent) will be awarded and contracted in accordance with FERC policies applicable to open-access interstate pipelines and the provisions of applicable natural gas tariffs. As explained above, the ACP has firm, financially stable customers for the overwhelming majority of its natural gas and will serve the growing energy needs of its customers in Virginia and North Carolina, and is a central component for meeting EPA carbon emissions limits. Specifically the crossing of the Chandler Easement supports the orderly development and growth of Virginia s localities by aiding with economic development and provision of natural gas for Virginia citizens. 3.0 ALTERNATIVES AND AVOIDANCE The FERC licensing process includes a NEPA evaluation of multiple alternatives to the proposed route. A proposed route for the ACP, which would cross the Chandler Easement, has been preliminarily selected by the FERC pursuant to the Final EIS issued July 21 st, Even before filing its FERC application, Atlantic reviewed various alternatives to avoid, minimize and mitigate impacts. In September of 2015, Atlantic proposed a route to the north that would avoid the Chandler Easement completely, but would cross areas on Cheat Mountain and Shenandoah Mountain on U.S. Forest Service (USFS) property in West Virginia and Virginia, respectively. The USFS filed comments with the FERC on January 19, 2016 (attached as Appendix 1), indicating that construction of this route was not compatible with the Land and Resource Management Plans for the Monongahela National Forest and GWNF due to the presence of sensitive species. Based on the USFS comments, Atlantic was forced to consider an alternative route south of the southward extent of Shenandoah Mountain and South Sister Knob. Routes further south of the proposed route and Deerfield Valley also were studied; however, they would have encountered USFS management prescription units that are not compatible with utility corridors, varying topography not suitable for pipeline construction, and additional VOF easements. Furthermore, routes to the south of the proposed route and the Deerfield Valley added length to the Project and did not minimize impacts to the environment or VOF easements. To address USFS comments and considering other constraints, Atlantic proposed the current route, which resolves concerns over potential impacts to sensitive species on USFS lands, but due to multiple competing constraints, requires the crossing of VOF easements, including the Chandler Easement. The Chandler Easement is bounded by Remote Back Country areas within the GWNF to the north and east, another VOF easement to the west, and the Lyons Easement to the south. In addition to the routing constraints immediately adjacent to the property, approximately one mile to the south of the easement are a series of adjoining VOF conservation easements and a Virginia Department of Conservation and Recreation easement protecting sensitive bat species and their habitats. Atlantic considered route alternatives to the north and south of the Chandler Easement, but neither option is viable or constructible due to numerous constraints, including significant karst topography, sink holes, impacts to GWNF property, steep terrain, and potential impacts to other VOF easements. September

9 September Virginia Outdoors Foundation Alternatives to the north are not viable because they would intrude into Shenandoah Mountain and the known range and habitat of the Cow Knob salamander, which is listed as a very high conservation need (Tier II) species in the Virginia Wildlife Action Plan, and is protected by the USFS through the GWNF Land and Resource Management Plan. The area to the north also includes two designated roadless areas Sister Knob and Jerkemtight. Alternative routes to the north would be inconsistent with GWNF management prescription units (MPU) 13 (Mosaics of Wildlife Habitat), 12D (Remote Back Country) and 4D (Special Biological Area). In addition, a northern route alternative would pose a higher risk to water quality in receiving waters. White Sulfur Springs Branch, which is located on the northeastern boundary of the easement, is part of the Cowpasture River watershed. In the pertinent vicinity, the Cowpasture River is designated as a Class vi Stream pursuant to 9 VAC Waterbody crossings of higher gradient stream beds alongside slope construction result in complicated restoration and crossing measures. The USFS commented during a meeting on March 4, 2016 that these stream beds often have faster flowing water and are more prone to erosion following disturbance. In addition to these water quality hazards, routes to the north could adversely affect numerous significant karst features, artesian wells, and underground springs that provide water for local landowners. As a matter of general practice, Atlantic attempts to route away from these features in all areas encountered to minimize potential impacts on water quality. Atlantic also considered a route that traverses farther to the south of the proposed route, but encountered USFS management prescription units that are not compatible with utility corridors, steep terrain, rock outcrops that are not compatible with pipeline construction, and additional VOF easements. A route to the south would add significant length to the total Project. The GWNF covers substantial portions of Bath County. Additionally, there are a large number of connected VOF easements that could potentially be affected by routing to the south. The additional length needed in order to avoid both the GWNF and VOF easements would require more environmental impact, including significantly more water crossings, as well as affect more landowners than the shorter route proposed through the Chandler Easement. Areas to the south of the proposed route also have more variable topography, which would require more side slope construction. Within a side slope area, cut-and-fill operations used to create a flat area require the excavation and movement of large volumes of soil and rock to create a safe and level work surface. This requires a construction right-of-way footprint upwards of 200 to 300 feet wide, which would increase the environmental impacts and potentially result in visual impacts from State Route 627. Excavation for side slope construction requires excavating soil from the high side of the right-of-way to the low side. The wider construction footprint requires more tree clearing, soil stabilization, and restoration, which further increases soil destabilization risk. Additionally, and especially over longer distances, the potential for slips or slope failure is greater in areas of side-slope construction relative to construction along the natural fall of a slope. Restoration success is hindered by the quantity of unconsolidated fill replaced to restore initial contours. In turn, this increases risk of slips and erosion, and therefore sedimentation into receiving waters. For these reasons, a southern alternative was considered infeasible. Atlantic evaluated more localized adjustments and refinements to avoid and minimize impacts to VOF easements and sensitive environmental areas along the route, including the Chandler Easement. However, due to GWNF property, large areas of VOF easements, and topographic constraints, Atlantic was not able to identify any option that would meet the Project need while avoiding the Chandler Easement. The requested conversion/diversion of the Chandler Easement will enable Atlantic to proceed with a constructible route that has the least overall environmental impact among the potential alternatives, adjustments and refinements. Figure 2 shows routing constraints, including the location of VOF easements in the vicinity of the Chandler Easement. Given the aforementioned considerations, Atlantic submits that the proposed route, which crosses through the Chandler Easement, is the only viable and safely constructible route for the ACP facilities in this area. The route passes through more favorable

10 topography, minimizing environmental and scenic impacts and disturbance associated with side slope construction. Unlike other options considered, the proposed route avoids impacts to significant karst areas, the GWNF, and other VOF easements. It also avoids the need to add significant mileage to the Project, which would lead to more land disturbance and impacts to environmental resources. The proposed route traverses a landscape less prone to environmental concerns associated with side slope construction, and avoids the crossing of significant karst features, artesian wells, and underground springs that provide a local source of water for the landowners in the area Considering all of the constraints associated with routing the ACP around the Chandler Easement, Atlantic has concluded that the proposed route will have the least overall impact to environmental and viewshed resources when compared to the alternative routes. Although crossing of the VOF easement is not desirable, the location is more favorable from a constructability and environmental perspective. Atlantic remains committed to routing and constructing the Project in a manner that is least impactful to the conservation values of this easement. September

11 O ,000 2,000 Feet No Update. Last updated: January 2017 Rice, James L., III GWNF 101 Chandler, Curtis G., additional grantor Rebecca L. Chandler Lyons, Laura C. Last Update: 9/15/2017 GWNF VOF Easement Critical Interior Forest Habitat Areas Critical Habitat Area George Washington National Forest (GWNF) ACP Corridor VOF Easement VOF Conservation Easements Atlantic Coast Pipeline Figure 2 - Chandler Easement Constraint Map Bath County, Virginia FILE: M:\Clients\D-F\DOM\SRPP\_ArcGIS\State_Permits\VA\VOF_Easements\Figures\Updated_ \_acp_VOF_Constraints.mxd, REVISED: 09/16/2017, SCALE: 1:12,000 DRAWN BY: RSM

12 3.1 Minimization The landowner has granted Atlantic access to this property and thus, Atlantic has conducted field surveys to identify environmental features that should be considered in the final routing process. Typical environmental features include viewsheds, wetlands, waterbodies, karst features, habitat for sensitive or rare species, artesian wells, springs, seeps, and potable wells. Atlantic additionally has conducted surveys for cultural resources, such as archaeological sites or historic buildings. Upon identification of such environmental or cultural resource features, the route and/or construction techniques will be modified as necessary to either avoid or minimize disturbance. Atlantic submitted a complete set of erosion and sediment control plans (E&S Plans) in July 2017 to the Virginia Department of Environmental Quality. The E&S Plans incorporate FERC s Upland Erosion Control, Revegetation, and Maintenance Plan as well as elements from Dominion s VDEQ-approved Annual Standard and Specifications for pipeline construction. Where the two documents differ, Atlantic will implement the more stringent standard to ensure compliance with Commonwealth water quality standards and minimize impacts to adjacent lands and waters that could otherwise result from construction activities. 3.2 Restoration A Restoration and Rehabilitation Plan has been prepared for the ACP to address post-construction restoration and rehabilitation activities and filed with the FERC in April 2016 and was updated in January The plan will be implemented in conjunction with the 2013 versions of FERC s Upland Erosion Control, Revegetation, and Maintenance Plan and Wetland and Waterbody Construction and Mitigation Procedures. Both the temporary and permanent right-of-way will be restored to Open Space Criteria, which is compatible with VOF mission. Atlantic has consulted with the U.S. Department of Agriculture s Natural Resources Conservation Service (NRCS) and is in the process of consulting with other Federal, State/Commonwealth, and local agencies, including Federal and State/Commonwealth land managing agencies, to identify appropriate seed mixes for use during restoration. Atlantic has obtained recommendations from the local NRCS offices regarding species, seeding rates, mulching during planting, and maintenance mowing. Atlantic has also met and consulted with various national, State/Commonwealth, and local groups and experts on pollinators and pollination species endemic to the region that the pipeline crosses to learn which native forb seed mixes will be complimentary to the various grass seed mixes. Atlantic will incorporate regionally-specific and endemic forb (flowering plant) seed mixes in its traditionally all-grass seed mixes. The incorporation and development of native flowering plants on the permanent right-of-way of the pipeline will be discussed with both VOF and the landowner. The results of these discussions could create, where conditions and land management practices along the route are suitable (i.e., areas with slope less than or equal to about 15 percent), substantial acreages of pollinator habitat where it is either currently non-existent or was previously degraded. As explained above, a crossing of the Chandler Easement cannot be avoided and alternate easement crossing locations would likely result in a need for additional right-of-way and land disturbance to accommodate side-slope construction. In addition, Atlantic s minimization and restoration plans will ensure that any impacts on the easement, or its conservation values, will be mitigated to the extent feasible. September

13 4.0 COMPLIANCE WITH LOCAL COMPREHENSIVE PLAN In accordance with the official comprehensive plan for the locality in effect at the time of conversion or diversion The applicant must demonstrate that the proposed project is in accordance with the current comprehensive plan of the local government copies of the applicable section of the current plan are required as well as statements from the local planning staff, Planning Commission or Board of Supervisors. Specific references to goals, objectives, or strategies as well as the future land use map are strongly recommended. Response The ACP is not specifically included in the local comprehensive plan because, pursuant to the NGA, localities do not have jurisdiction over the siting of interstate natural gas pipelines. The FERC Certificate will control the location of ACP, and once FERC has approved it, it is expected that the ACP will be reflected in local comprehensive plans. Local governments do have the opportunity to participate in the FERC process, including commenting on routing, making environmental recommendations and preparing and submitting studies on impacts that may be relevant to FERC s public interest findings. The Bath County Comprehensive Plan outlines planning goals in the areas of land use/environmental balance, economic opportunity, social well-being and educational quality (Bath County, 2014). ACP supports those goals by aiding with economic development and mitigating impacts to environmental resources. The ACP route through Bath County has been designed to minimize impacts on natural and scenic resources. This route crosses 8 VOF easements within Bath County (one of which is located partly in both Bath County and Augusta County) and one easement within Highland County; however, as supported by the aforementioned alternatives analysis, the proposed baseline route will minimize disturbances to environmental resources, karst topography and sensitive species habitat. Further, the proposed route avoids crossing through the GWNF where possible. These avoidance measures are consistent with the Bath County Comprehensive Plan s goals to preserve natural resources. Furthermore, the baseline route for the ACP achieves goals for balance between economic development and environmental protection. 5.0 REPLACEMENT LAND FAIR MARKET VALUE There is substituted other real property which is of at least fair market value : The applicant must propose substitute conservation land and demonstrate that the property is of at least of equal fair market value. Equivalent fair market value must be established by a Virginia Certified General Real Estate Appraiser, with experience in conservation easement appraisals, agreeable to both the VOF and the applicant, or the appraisal may be contracted by the VOF, but in either case, the appraisal must be paid for by the applicant. Appraisers who also have experience appraising land located in the same locality as the proposed conversion/diversion are recommended. The appraisal must include valuation of both the eased property proposed for diversion and the proposed substitute land. The easement property must be appraised using the before and after technique (i.e. what would the current land value be if it was unencumbered vs. what is the land currently worth with the existing easement). The replacement land must be valued using the same method (i.e. what is the replacement land currently worth vs. what will it be worth as protected under the Open Space Land Act. The appraiser needs to determine value of easement to be diverted and value of property protected serving as replacement. September

14 Response Atlantic is proposing to convey, in fee simple the Hayfields Farm property to VOF. Hayfields Farm is approximately 1,059 acres and satisfies multiple VOF conservation values. Please note that the Hayfields Farm property is being proposed as replacement land for nine separate 1704 applications, including this one, for a total of acres of permanent diversion/conversion. Atlantic proposes to allocate the proportionate share of the 1,059 acre Hayfields Farm property based on the share of this application s diversion/conversion over the entire VOF easement acreage crossed by Atlantic in Bath County, Highland County and Augusta County (i.e., the Revercomb, Koontz, Wilderness, Berry, Bright, Teague, Rice, Chandler and Normandy Easements). The impacted portions of the ten VOF easements have an appraised fair market value of $797,596. The replacement lands proposed in these applications have an appraised fair market value of $4,245,975. The ratio of permanently impacted acres (52.91) to replacement acres (1,144, factoring in acreage offered for the Saunders Easement) is approximately 21:1. An appraisal is included as Appendix 2 to this application. 6.0 REPLACEMENT LAND CONSERVATION VALUE Of greater value as permanent open-space land than the land converted or diverted : The applicant should provide maps and photos of the property to be substituted for the open space land and a description of the conservation values to be protected. In the materials submitted, the applicant must make a case for the substituted land being of greater value as open space than the land to be diverted from open space. Response Atlantic plans on providing compensatory mitigation for the 0.80 acres that will be permanently crossed by the pipeline on the Chandler Easement. At a meeting between Atlantic and VOF officials on April 11, 2016, VOF stated that their preference is to have compensatory mitigation for all VOF easements affected by the proposed route satisfied with one large parcel, as opposed to smaller disbursed parcels across the region. In keeping with this VOF preference, Atlantic focused on acquiring the Hayfields Farm parcel. The VOF staff report dated January 2017 declared Hayfields Farm of greater value as permanent openspace than the proposed land converted and is of as nearly as feasible equivalent usefulness and location for use as permanent open-space as the land converted, as compared to the 9 affected VOF easements. The Hayfields Farm parcel is 1,034 acres located in Highland County, Virginia and is in close proximity to the group of VOF-held conservation easements that would be affected by the proposed ACP in Bath and Highland Counties. A property of this scale could further support VOF s mission to conserve property in this area of Virginia. The Hayfields Farm site is adjacent to the VDGIF s Highland Wildlife Management Area, and includes upland white oak and white pine forest within the higher elevations on the eastern and western portions of the property. The mountainous topography on the western portion of the property primarily consists of shale; the eastern side of the property has a high probability of karst features, which would be protected by preserving this parcel. The Bullpasture River is the primary water feature on Hayfields Farm flowing one mile in a southern direction. This stretch of the river has a cobble and shale base, and Brook Trout, Brown Trout and Rainbow Trout have all been observed within the river on the parcel. The Bullpasture River, in the context of the hilly terrain that surrounds it, provides the primary scenic element of this parcel. The September

15 deciduous forest on the ridges to the east and west of the river adds to the scenic character, and may be particularly attractive in the foreground during spring (new blossoms) and fall (multi-colored foliage). Areas along the river are used for agricultural operations, including cattle grazing and hay making. Wetland areas in the floodplain, as well as the stream banks of the Bullpasture, are fenced off, keeping cattle away from these areas, allowing natural vegetation to grow with in the wetland areas. The valley surrounding the Bullpasture River consists of open fields which are in good condition and can be used for wildlife habitat. Additionally, there are at least five cold water springs on the property that have been developed into ponds and/or cisterns to provide water sources to wildlife and cattle. Given the diversity in terrain, protection of water quality of receiving waters, protection of potential karst features, habitat potential and contribution to both state and local goals emphasizing visibility and scenic attributes of conserved land, the Hayfields Farm parcel provides greater value as open space when compared to the Chandler Easement. The Hayfields Farm parcel, in relation to the ACP and the Chandler Easement crossing is depicted on Figure REPLACEMENT LAND LOCATION/USEFULNESS Of as nearly as feasible equivalent usefulness and location for use as permanent open-space land converted or diverted : The applicant should provide information on the proximity of the proposed substitute land to the existing protected open space land through maps, plats, and descriptions. If the proposed substitute land is not adjacent to the existing protected open-space land, then the applicant should provide a clear explanation for why this was not possible and how proposed property will provide clear replacement conservation values. The applicant must also make a case for the proposed substitute land being of equivalent usefulness to the land proposed to be diverted from open space. Response The Hayfields Farm parcel is located approximately 10.4 miles north of the Chandler Easement. The benefits of the Hayfields Farm parcel s size and outstanding conservation values provide an excellent opportunity to offer the highest value for compensatory mitigation of the 0.80 acre permanently crossed on the Chandler Easement. Atlantic investigated the availability of adjacent easements to be used for mitigation of the Chandler Easement. A new approved VOF easement exists to the east of the Chandler Easement. The property to the west is part of the GWNF, and it is therefore not available for acquisition. Pursuant to VOF s preference with regard to providing one large parcel to account for proposed crossing of VOF-held lands, the Hayfields Farm property is of greater value as permanent open-space than the proposed land converted and is of as nearly as feasible equivalent usefulness and location for use as permanent openspace as the land converted, as compared to the 9 affected VOF easements. TITLE REPORT Applicant must provide a title report indicating a clear title on the proposed substitute land is required. Response A title report for the replacement land was provided in advance of the February VOF Board meeting. September

16 No update. Last updated: Jan 2017 Hayfields Farm p Highland Wildlife Management Area Miles Proposed Route Hayfields Farm Mitigation Option U.S. Forest Service Land Crossed VOF Easement Other VOF Easement Highland Wildlife Management Area Atlantic Coast Pipeline Figure 3 Chandler Easement Hayfields Farm FILE: M:\Clients\D-F\DOM\SRPP\_ArcGIS\State_Permits\VA\VOF_Easements\Figures\Updated_ \_acp_VOF_Hayfields_Farm_Vicinity_Fig3.mxd, REVISED: 09/16/2017, SCALE: 1:100,000 DRAWN BY: TAH

17 8.0 CONCLUSION The Atlantic Coast Pipeline project meets the conditions for VOF approval of its application pursuant to Virginia Code By providing access to low-cost natural gas supplies, the ACP will increase the reliability and security of natural gas supplies in Virginia and North Carolina, and thereby meet expected demand for natural gas-powered electric generation as well as produce significant tax benefits for Bath County and the other localities crossed by the pipeline in those states. Atlantic has demonstrated that a crossing of the Chandler Easement cannot be avoided and alternate easement crossing locations would likely result in greater environmental impacts. The issuance of the FERC Certificate will demonstrate the need for the ACP and confirm that the proposed route is the best alternative for meeting that need. Atlantic believes that the Hayfields Farm parcel offers significant conservation value and adequately supports the proposed crossing of a small portion of the Chandler Easement. September

18 9.0 REFERENCES Bath County Government Bath County Comprehensive Plan. Available online at: Accessed April 2016 ICF International The Economic Impacts of the Atlantic Coast Pipeline. Available online at: Accessed April U.S. Census Bureau Interim State Population Projections. Available online at: Accessed April U.S. Energy Information Administration Natural Gas Pipelines in the Southeast Region. Available online at: eline/southeast.html. Accessed April U.S. Environmental Protection Agency The Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, available online at: gov/cleanpowerplan/clean-power-plan-existing-power-plants#cpp-final (pre- publication version). Accessed April Virginia Outdoors Foundation Easements & Acres by Locality. Available online at: Accessed April September

19 ATLANTIC COAST PIPELINE Virginia Outdoors Foundation Chandler Easement APPENDIX 1 January 19, 2016 U.S. Forest Service Letter

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24 ATLANTIC COAST PIPELINE Virginia Outdoors Foundation Chandler Easement APPENDIX 2 Not to be Released Under FOIA Subject to Appraisal Exclusion Real Estate Appraisal Report Prepared By Myers & Woods Appraisal Group, Inc.