[V]ermont Gas may be forced to prove once again whether a planned pipeline in Addison County is in the public’s interest.
The Public Service Board issued an order on Thursday that denies Vermont Gas’ petition to dismiss a case brought by the Conservation Law Foundation in 2014. The CLF case turns on whether a twofold increase in the cost of the project constitutes a “substantial change.”
Vermont Gas Systems representatives say they’re undeterred by the order, and plan to continue building the pipeline under an existing certificate of public good. The project was originally approved by the Public Service Board in 2013. The board ruled again, in January, that the pipeline appeared to serve the public good.
The board decision on Thursday means Vermont Gas will have to file for a new or amended certificate of public good. Public Service Board rules require projects to submit new filings for projects that have undergone “substantial change.”
“We’re pleased that the board will take a fresh look at the impact of these significant cost increases in a way that Vermont Gas Systems will need to show the merits of this project,” said Sandra Levine, senior attorney at Conservation Law Foundation.
Levine said that the order denying Vermont Gas’s request to quash CLF’s suit doesn’t necessarily indicate the Public Service Board believes the CLF suit has merit.
“I never try to guess what the board’s thinking,” Levine said. But given the uncertainty of the outcome, Vermont Gas proceeds with the pipeline “at their own risk,” Levine said.
The company’s spokeswoman, Beth Parent, said that Vermont Gas will continue construction as scheduled.
“We’re confident this order will not impact our schedule,” she said. “We are moving forward and planning on completing this on time and on budget later this year. Thousands of families and businesses are depending on us to do so.”
The Public Service Board in its order Thursday requested that both the gas company and its opponents in the case submit any additional documents or materials that might guide the board’s decision, and that they provide any suggestions they might have on how the board should proceed. The board’s order states that a hearing is likely unnecessary.
A hearing would be the Public Service Board’s first opportunity to employ a rule it established in 2006 following significant cost increases to the Northwest Reliability Project, a VELCO power-transmission line, according to the board’s order.
That rule requires a project’s proponents to seek a new or amended certificate of public good in the event of a “substantial change.” The case currently underway will determine whether the project’s cost increase — from $86 million to $154 million — meets the definition of a substantial change.
Levine said that if the board finds a doubled price constitutes a substantial change, Vermont Gas will face significant hurdles as it tries to prove that ratepayers will benefit from the increased cost of the project, the company’s treatment of landlowers and environmental harms associated with natural gas and its production.
Vermont Gas reached a deal last year with the Department of Public Service, which is charged with protecting ratepayers. The memorandum of understanding between the company and the state caps ratepayer liability for the pipeline to $134 million.
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 has said the agreement means Vermont Gas Systems bears the risk of the remaining $20 million, plus any additional cost increases.
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, as well as for the town of Hinesburg, which owns a public park underneath which Vermont Gas intends to run the pipe.
