The Shumlin administration intends to hire an independent appraiser to assess the value of landowners’ property taken through eminent domain for the construction of a natural gas pipeline through Addison County.
Gov. Peter Shumlin sent a letter to three lawmakers on Monday stating his concern and disappointment with Vermont Gas’ rollout of its natural gas pipeline. The company has started construction of a 41-mile pipeline extension from Chittenden and Franklin counties to Middlebury.
Among Shumlin’s top concerns are the company’s belated announcement of project cost overruns and unsuccessful negotiations with some landowners along the pipeline route.
“I am concerned at the transparency and equity issues that have been raised by Vermont Gas’ negotiations with landowners. I want to ensure consistent third-party valuations for property subject to condemnation in the event eminent domain proceedings occur,” the letter states.
He said the company must do everything it can to avoid using eminent domain – a process in which state regulators determine what price will be paid to landowners for their property. Vermont Gas is offering to pay for a third party mediator to assist in negotiations.
Chris Recchia, commissioner of the Department of Public Service, said this will be the first time an administration has hired a third-party appraiser in an eminent domain proceeding to determine the value of property seized from landowners.
He said the cost of the appraiser would be billed back to Vermont Gas. The company can then decide whether to charge customers to cover the cost. The company already plans to file for a rate adjustment Aug. 28.
The company says it has reached easement agreements with 70 percent of the property owners along the pipeline. Another 20 percent appear likely to sign while 10 percent appear unlikely to sign, the company says.
Sens. Claire Ayer and Christopher Bray and Rep. Willem Jewett, Democrats from Addison County, sent a letter to the governor this month highlighting their concerns with the pipeline project.
Shumlin said in his response that he still supports the pipeline because it will deliver cleaner burning and less expensive fuel to customers and businesses that now use heating oil. He said natural gas is an important bridge fuel to transition off of “dirty fuel oil.”
Nonetheless, he said he is committed to alternative heating technologies such as cold climate heat pumps, which run on electricity. He said his administration has pressed Vermont Gas to deliver biogas and provide incentives for solar hot water heating systems in its service area.
Vermont Gas this month announced it would launch a bio-methane pilot program for its current customers.
Vermont Gas is also seeking regulatory approval for the second phase of its pipeline extension from Middlebury to the International Paper mill in Ticonderoga, New York. The paper mill plans to pay for nearly the entire cost of the estimated $74 million project.
The Addison County lawmakers said in their letter to the governor that the project saves money for International Paper but places a burden on the residents of Cornwall and Shoreham, which will host the pipeline.
Shumlin said the second phase of the pipeline expansion will provide tax benefits for towns and rate benefits for natural gas customers.
“That being said, Vermont Gas can do a much better job at conveying who will pay, how much it will cost and how it will benefit the public good,” Shumlin’s letter states.
State regulators are scheduled to hear testimony on phase two of the project in October.
