The Vermont Public Service Board on Friday decided to allow Phase 1 of Vermont Gas’ pipeline expansion to proceed without further review.
The regulatory body said in its decision that a 40 percent increase in the estimated cost of the natural gas project through Addison County was not enough to require a re-examination of the company’s certificate of public good.
“Having carefully considered the record developed at the hearing we convened on September 26, 2014, as well as the briefs subsequently filed by the parties, we have concluded that the new cost information is not of such a material and controlling nature so as to change our previous determination that approval of the Project pursuant to the criteria of 30 V.S.A. § 248 will promote the general good of Vermont,” the decision reads.
The PSB approved the company’s 41-mile pipeline from Colchester south to Middlebury in December. In July, the company increased its cost estimate by $35 million, citing nationwide competition for natural gas construction.
Vermont Gas has also said that the cost of the project, now estimated at $121.6 million, could increase further.
“We are pleased with the decision and look forward to continuing to expand the economic and environmental benefits of natural gas service to more Vermonters,” Vermont Gas president and CEO Don Gilbert said Friday.
Pipeline opponents seized on the July cost increase to call on the PSB to reconsider the project. The Conservation Law Foundation, later joined by other opponents, asked regulators to halt construction until the new cost estimates were evaluated.
The Department of Public Service, which represents ratepayers in utility matters, supported the continuation of the project, saying no parties in the case provided evidence that the new costs would reduce the economic benefits of the project.
Opponents of the natural gas pipeline expansion have said the cost increase does affect how benefits of the project are calculated and criticized analyses of the cost benefits that were performed by Vermont Gas and the Department of Public Service.
Paul Burns, executive director VPIRG, applauded the board’s willingness to consider reopening the case but criticized the outcome.
“The Board deserves credit for stepping up to the plate to take another look at Phase 1 of the fracked gas project in light of huge cost overruns,” Burns said in a statement. “But they struck out with today’s decision to green-light this costly new investment in fossil fuel infrastructure. Vermont ratepayers and our climate will take the hit under this decision.”
The cost of the pipeline will not affect rates for the next rate year, which begins Nov. 1.
Vermont Gas estimates that rates will increase about 3.6 percent in 2015 — assuming the company uses about $15 million it has in a reserve fund designed to smooth the rate impact associated with the project. The rate adjustment will be reviewed by regulators.
