The state’s regulatory body, in a much-anticipated ruling, said the Vermont Gas System’s pipeline, even though it has gone up dramatically in price, will still benefit ratepayers.
The order says the Public Service Board will not reopen proceedings for the pipeline, which effectively means the project can go ahead.
Opponents of the pipeline say a variety of circumstances changed since the board issued the original certificate of public good in 2013, most notably the cost estimates have increased from $86.6 million to $154 million. The opponents believe the project represents a net harm to residents.
The order from the board incorporated an agreement that Vermont Gas reached last year with the Department of Public Service, the arm of the Shumlin administration charged with protecting ratepayers.
Under that deal, ratepayers in Franklin, Addison and Chittenden counties will cover $134 million of the pipeline’s costs. The board emphasized in its order that this document played a significant role in its decision.
Chris Recchia, the department commissioner, has said that even if ratepayers shouldered the full cost of $154 million, he believes the project would still represent a net benefit for Vermonters.
Vermont Gas Systems CEO Don Rendall said the agreement means Vermont Gas Systems bears the risk of the remaining $20 million, plus any additional cost increases.
“The MOU was an important agreement we reached with the Department of Public Service, and we agreed to a significant cost cap which protects customers and can give all our stakeholders confidence that we will do the right thing by our customers as we work to complete the project,” Rendall said.
Vermont Gas overcame significant challenges to arrive at this point, and Rendall says he looks forward to delivering natural gas to residents and businesses in Addison County.
Pipeline opponents say the MOU is an agreement that the Department of Public Service and Vermont Gas Systems can agree to break at any time.
The board treated the memorandum too credulously, said Sandra Levine, Senior Attorney at the Conservation Law Foundation. Levine’s organization was an intervenor against the pipeline.
“To suggest that costs will be contained — that may be a hoped-for result — that is far from certain,” Levine said. “I think the language of the MOU is very limited. There are a number of exceptions to it, and it’s simply an agreement between two parties … that could be changed tomorrow.”
The Public Service Board should have required a more thorough evaluation of the project’s costs and benefits, in light of a variety of circumstances that have changed since the board issued its original public good certificate, Levine said.
“This is a significantly changed project from the one initially approved more than two years ago,” she said. “It costs more, there are new and cleaner energy supplies available, and large industrial customers now have compressed natural gas available to them.”
The board also erred in approving a project that will extend Vermont’s reliance on fossil fuels, when the state has committed to reducing that dependence, Levine said.
Her organization continues in a separate action to litigate against the project, Levine said, and she’ll evaluate what other legal avenues CLF may use.
Another party to the case, Jane Palmer, who lives along the pipeline route, said she’ll continue to oppose the project.
“We’re still in the fight, and we still have our attorney, and we’re going to keep swinging,” Palmer said. “If he thinks there’s a legal course to keep going, we will, and we’ll fundraise if we have to pay his fees. We’ve done it before.”
Palmer said this is now the third time it has appeared that the pipeline would move forward, and said past experience proves the pipeline’s future isn’t certain.
“When you know something’s wrong, you just don’t stop fighting it because there’s a legal thing saying it’s ok, because it’s not,” she said. “We’ve gotten bad news before. We’re down but not out.”
Vermont Gas has built 11 miles of the 41-mile project already, traversing the distance from Colchester to Williston. When complete it will extend to Middlebury.
The company has permission from 98 percent of landowners to build a pipeline through Addison County. Eminent domain proceedings remain for three landowners who did not reach voluntary agreements allowing the pipeline to cross their property.
Vermont Gas plans to complete the project this year, Rendall said.
“We’ll continue with some construction activity through the winter, and we’re really looking forward to getting ready for an active construction season after winter ends,” he said.
