State regulators are deciding whether to reconsider Vermont Gas’ permit to build a natural gas pipeline through Addison County.
The Vermont Public Service Board approved the 41-mile pipeline in December, but may take a second look at the project since the company announced a 40-percent cost increase in July, bringing the project’s total cost to about $121 million.
Several groups and landowners opposing the pipeline have asked regulators to decide whether the project is still a good deal for Vermont Gas customers. Some want the company to halt construction.
But before regulators can reconsider the project they must first receive permission from the Vermont Supreme Court, where the December approval is being appealed. The board could then take action ranging from approving the project again to revoking the company’s permit outright.
The Conservation Law Foundation, an environmental law firm opposing the pipeline, in July requested that regulators halt construction and reconsider the company’s state permit. Landowners opposing the pipeline and the Vermont Fuel Dealers Association joined CLF in the request.
Sandra Levine, a senior attorney with CLF, said regulators are clearly concerned about the cost increase and are taking steps to reevaluate the project. She said regulators could deny the project even though construction is underway.
“Vermont Gas is moving forward at its own risk at this point,” Levine said.
Vermont Gas spokesman Steve Wark said the company understands the board may want to take another look at the project. Nonetheless, he said Vermont Gas would again demonstrate the economic and environmental merits of the project.
“We are not concerned. We know this still a very strong project,” Wark said. He said the project will provide $150 million in energy savings for future customers switching to natural gas and will be good for the environment.
Pipeline opponents, however, say the mining of natural gas releases methane into the atmosphere, which is a greenhouse gas more potent than carbon dioxide, even though it burns cleaner than traditional heating oil.
The company has said the cost increase was due to competition for natural gas construction and changes to the pipeline route to accommodate landowner concerns. Wark said the cost increases will not significantly impact rates.
“I don’t know what the rate impact will be for sure,” he said. “I know that it will be very small.”
Vermont Gas on Aug. 28 asked state regulators to approve a 0.7 percent rate reduction to be effective Nov. 1.
CLF and other pipeline opponents want the company to halt construction until regulators review the cost increases. Wark said stopping construction would only increase the cost of the project.
The Department of Public Service asked Vermont Gas to pay a $35,000 fine, which it has agreed to, for failing to notify regulators until July of a cost increase the company knew about since March. The department knew about the cost increase in March as well, and maintains the project’s benefits still outweigh the costs.
Vermont Gas wanted to wait for all its permits — and any associated costs — before announcing the cost increase. The company received its final wetlands permit in June.
Regulators last month lifted a restriction on construction in a transmission utility corridor, where a section of the project will be built. Regulators required the company to write and adopt a soil management plan that would address concerns about toxic chemical contamination along the VELCO corridor.
Vermont Gas is required to follow the soil management plan when drilling in the VELCO right-of-way and study areas where the utility pole preservative pentachlorophenol could cause groundwater contamination.
Wark said the board’s decision to lift the restriction is an indication that it has confidence in the company’s soil management plan.
Vermont Gas is also seeking approval for the second phase of its pipeline extension plan from Middlebury to a paper mill in Ticonderoga, New York. The company is also planning to then bring gas to Rutland.
