Recommendation to Approve Dominion Virginia Power s Request for an Easement along Route 606 at Washington Dulles International Airport.

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1 REPORT TO THE STRATEGIC DEVELOPMENT COMMITTEE Recommendation to Approve Dominion Virginia Power s Request for an Easement along Route 606 at Washington Dulles International Airport June 2017

2 Requested Action Staff requests that the Strategic Development Committee approve and recommend to the Board of Directors that it authorize the President and Chief Executive Officer, subject to the approval of the United States Secretary of Transportation (Secretary), to execute an easement across certain Metropolitan Washington Airports Authority (Airports Authority) land located at Washington Dulles International Airport (Dulles International) in favor of Virginia Electric and Power Company, doing business as Dominion Virginia Power (Dominion), for the installation of a portion of the new Poland Road 230-kV transmission line.

3 Background Commercial and high-tech sector development in the area around Dulles International has led to an increase in the demand for electricity. As a result, Dominion is building new transmission infrastructure to carry additional power to Loudoun County. This new infrastructure includes two new 230-kV overhead transmission lines and two new substations. One of these lines, the Poland Road 230-kV line (Project), which is four miles long, is located in the area of Dulles International. The Project will connect Dominion s existing electrical transmission network, located northwest of Dulles International, to a new substation to be built on Poland Road, south of the Airport. Approximately one mile of the Project falls within Dulles International.

4 Background (cont d) Dominion conducted a study to consider several route alternatives for the Project. The routes were selected to maximize the distance of the Project from residences and other buildings, avoid Airport infrastructure, minimize the length of the line, and limit effects to wetlands. Based on the study, Dominion identified a preferred route and alternative routes to the State Corporation Commission (SCC). Loudoun County objected to the Dominion preferred route, and proposed several alternative routes to the SCC for evaluation. All of these routes were nearly identical as to their use and location on Airport property. The SCC issued a Final Order on August 23, 2016, approving one of Loudoun County s proposed alternative routes and authorizing Dominion to undertake the Project.

5 Discussion Dominion first approached the Airports Authority about the need for an easement in the summer of Staff worked with Dominion and Loudoun County throughout the SCC process, providing information and comments. Staff also presented the Project to the Federal Aviation Administration, which approved an environmental assessment of the construction and location of the Project on Dulles International property, issued a Finding of No Significant Impact, and approved an update to the Airport Layout Plan showing the Project, conditioned on obtaining the Secretary s approval. The proposed easement is 100 feet wide and totals approximately acres.

6 EXHIBIT A LEGEND Easement (13.08 Acres)

7 Discussion (cont d) Based on an appraisal commissioned by Dominion, Dominion offered the Airports Authority $1,743,500 as compensation for the easement. The Airports Authority s appraiser performed a review appraisal and valued the easement at $2,730,000. After negotiations, Dominion agreed to pay the Airports Authority $2,500,000. The easement is located on land leased from the federal government. Because Dominion is a private, for-profit entity, the Secretary must approve the grant of this easement.

8 Recommendation Staff requests that the Strategic Development Committee approve and recommend to the Board of Directors that it authorize the President and Chief Executive Officer, subject to the approval of the United States Secretary of Transportation, to execute an easement across certain Metropolitan Washington Airports Authority land located at Washington Dulles International Airport in favor of Virginia Electric and Power Company, doing business as Dominion Virginia Power, for the installation of a portion of the new Poland Road 230-kV transmission line.

9

10 Proposed Resolution Authorizing the Conveyance of an Easement to Virginia Electric and Power Company along Route 606 at Washington Dulles International Airport WHEREAS, Virginia Electric and Power Company, doing business as Dominion Virginia Power (Dominion), is building new transmission infrastructure to carry additional power to Loudoun County; WHEREAS, The infrastructure to be constructed includes a new overhead transmission line, the Poland Road 230-kV line (Project), which is four miles long, and located in the area of Dulles International and will connect Dominion s existing electrical transmission network, located northwest of Dulles International, to a new substation to be built on Poland Road, south of the Airport; WHEREAS, Approximately one mile of the Project falls within Dulles International; WHEREAS, In order to construct the Project, Dominion is requesting an easement totaling approximately acres across Airports Authority property at Dulles International; WHEREAS, The easement is located on land leased from the federal government and the Secretary must approve the grant of this easement since Dominion is a private, for-profit entity; WHEREAS, Staff also presented the Project to the Federal Aviation Administration which approved an environmental assessment of the construction and location of the Project on Dulles International property, issued a Finding of No Significant Impact, and approved an update to the Airport Layout Plan showing the Project, conditioned on obtaining the Secretary of Transportation s (Secretary) approval; WHEREAS, Dominion has agreed to pay the Airports Authority $2.5 million for the Easement; and WHEREAS, the Strategic Development Committee has reviewed the Easement, as presented by staff at its June 2017 meeting, and recommended

11 that the Easement should be granted; subject to the approval of the Secretary; now, therefore, be it RESOLVED, That the President and Chief Executive Officer is authorized and directed, subject to the approval of the Secretary, to execute an easement across certain Airports Authority land located at Dulles International in favor of Dominion, for the installation of a portion of the new Poland Road 230-kV transmission line, as identified in detail in the documents presented to the Board of Directors at its June 2017 meeting. For Consideration by the Strategic Development Committee and Board of Directors on June 21,

12 REPORT TO THE STRATEGIC DEVELOPMENT COMMITTEE RECOMMENDATION TO APPROVE DOMINION VIRGINIA POWER S REQUEST FOR AN EASEMENT ALONG ROUTE 606 AT WASHINGTON DULLES INTERNATIONAL AIRPORT ACTION REQUESTED JUNE 2017 That the Strategic Development Committee approve and recommend to the Board of Directors that it authorize the President and Chief Executive Officer, subject to the approval of the United States Secretary of Transportation (Secretary), to execute an easement across certain Metropolitan Washington Airports Authority (Airports Authority) land located at Washington Dulles International Airport (Dulles International) in favor of Virginia Electric and Power Company, doing business as Dominion Virginia Power (Dominion), for the installation of a portion of the new Poland Road 230-kV transmission line. BACKGROUND Commercial and high-tech sector development in the area around Dulles International has led to an increase in the electrical load and demand for electricity. In order to provide continued reliable service, Dominion is building new transmission infrastructure to carry additional power to Loudoun County. This new infrastructure includes two new 230-kV overhead transmission lines and two new substations, all to be located in Loudoun County. One of these transmission lines, known as the Poland Road 230-kV transmission line, is located in the area of Dulles International, and includes construction of an approximately four mile-long overhead transmission line connecting a proposed new substation on Poland Road south of Dulles International, to Dominion s existing electrical transmission network (Project). The Project will begin at a point along Dominion s existing Loudoun-Brambleton 230-kV line, east of the Dulles Trade Center West Industrial Park, which is located off Arcola Road, just west of Dulles International. The line will then run south along the western boundary of Route 606, entering Dulles International property, turn southeast, and cross Route 606 just north of Route 50. The line will then continue across Airport land and exit

13 Dulles International, where it will run along the northern boundary of Route 50, crossing Route 50 and ending on the southern side of Route 50 at the proposed Poland Road substation. Approximately one mile of the Project falls within Dulles International. Dominion completed a routing study in May The study considered several route alternatives, which were selected to maximize the distance of the Project from residences and other buildings, avoid Airport infrastructure, minimize the length of the line, and limit effects to wetlands. Based on the routing study, Dominion identified a preferred route and alternative routes and submitted those routes to the State Corporation Commission (SCC). Loudoun County objected to the Dominion preferred route, and proposed several alternative routes to the SCC for evaluation. All of these routes were nearly identical as to their use of and location on Dulles International property, varying only where they entered the airport from the north. After evaluation and consideration, the SCC issued a Final Order on August 23, 2016, approving one of Loudoun s proposed alternative routes and authorizing Dominion to undertake the Project. DISCUSSION Dominion first approached the Airports Authority about the need for an easement in connection with the then-proposed Brambleton-Poland Road-Yardley Ridge 230-kV transmission line in the summer of Staff worked with Dominion, as well as with Loudoun County, during the SCC process and provided information and comments on the various alternative routes for the Project. Staff also presented the proposed Project as it affects Dulles International property, to the Federal Aviation Administration which approved an environmental assessment of the construction and location of the Project on Airport property, issued a Finding of No Significant Impact in May 2017, and approved an update to the Airport Layout Plan showing the Project, conditioned on obtaining the Secretary s approval. The proposed easement is one hundred feet wide, totals approximately acres, and is shown in red on the attached Exhibit A. Based on a January 24, 2017 appraisal from John McCracken & Associates, Inc. commissioned by Dominion, Dominion offered the Airports Authority $1,743,500, as compensation for the easement. The Airports Authority s appraiser, William C. Harvey & Associates, Inc., performed a review appraisal, and concluded that the

14 market value of the easement is $2,730,000. After negotiations, Dominion agreed to pay the Airports Authority $2,500,000 as compensation for the easement. The easement is located on land leased from the federal government. Because Dominion is a private, for-profit entity, in accordance with the federal lease, the Secretary must approve the grant of this easement. After approval by the Board of Directors, this easement will be submitted to the Secretary for approval. CONCLUSION Staff requests that the Strategic Development Committee approve and recommend to the Board that it authorize the President and Chief Executive Officer, following the approval of the easement by the United States Secretary of Transportation, to execute an easement of approximately acres, across Airports Authority property located at Washington Dulles International Airport, as shown on Exhibit A, in favor of Virginia Electric and Power Company, doing business as Dominion Virginia Power, for the installation of a portion of the new Poland Road 230-kV transmission line. Attachment Prepared by: Office of General Counsel June 2017

15 EXHIBIT A LEGEND Easement (13.08 Acres)

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