Energy

UPDATED: Vermont Gas faces possible work stoppage, sanctions over permit

(Editor’s note: This story was expanded and updated July 8 at 7:45 p.m.)

The Public Service Board on Friday ordered Vermont Gas Systems to explain within seven days why the company should not be held in contempt and forced to halt construction on its 41-mile natural gas pipeline for alleged violations of its permit.

The order came in response to a petition from Jim Dumont, an attorney for nearly a dozen users of Hinesburg’s Geprags Park, through which Vermont Gas plans to run the pipeline.

Jim Dumont
Jim Dumont is a lawyer for opponents of Vermont Gas Systems’ pipeline project. File photo by John Herrick/VTDigger

Dumont told the board that a wetlands biologist his clients hired found wetlands in the park last month that weren’t described in Vermont Gas’s 2013 certificate of public good that allowed the project. The pipe must pass through the area on which the wetlands sit, company representatives said.

Because of the discrepancy, the permit isn’t valid, Dumont argued.

Vermont Gas and its opponents disagreed Friday over whether the permit issue, even if resolved in the company’s favor, could sink the project through delays.

The mismeasurement of wetlands seems to have been an accidental oversight on the part of the company, said Natural Resources Commissioner Deb Markowitz.

Vermont Gas can’t amend an existing permit to include the larger area, Markowitz said, and likely will need to file for a new wetlands permit.

But the Public Service Board’s 2013 order allowing the pipeline’s construction contains a stipulation that all necessary permits must be secured first.

Vermont Gas spokeswoman Beth Parent said the company already has all its required permits and that the situation in Hinesburg doesn’t change that. The company intends to comply with the board’s order and supply a response by July 15, she said Friday.

Work on the pipeline has not stopped, but neither is it proceeding on the land in question, Parent said.

“We have 4,000 families and businesses depending on us,” Parent said, referring to the number of customers the pipeline is expected to serve. They’re counting on Vermont Gas to complete the pipeline this year, she said.

Dumont vowed to appeal if the board doesn’t halt construction. It’s not clear how soon the board will make a decision.

The importance of timing to the project’s future was a matter of dispute Friday.

Dumont said every setback throws Vermont Gas closer to what he described as an October deadline for completing the project in order to avert a dramatic rate increase for the company’s customers.

Parent, however, said rates won’t necessarily spike if the pipeline isn’t completed by October.

The question has to do in part with a hearing at the end of October, when Parent said the company plans to request a one-year, 3.3 percent rate decrease for its customers.

That decrease would be made possible, in spite of a costly expansion effort, through the use of money from what’s called the System Expansion and Reliability Fund, or SERF. Since 2011, Vermont Gas has collected about $5 million annually from ratepayers and put it into the fund, which holds about $21 million currently.

By withdrawing two-thirds of that sum, Vermont Gas would temporarily limit the hit to ratepayers of the $134 million in pipeline costs they are expected to cover. Without the withdrawal, ratepayers would see a 13.8 percent rate increase next year, primarily due to the long-term cost of the pipeline, according to the Department of Public Service.

Vermont Gas would need permission from the Public Service Board to use money from the SERF for that purpose.

Dumont said Vermont Gas in its original permit application told the board it wouldn’t use money from the SERF until the pipeline is built. Therefore, if the project remains unfinished by the October rate hearing, he said, Vermont Gas can’t request the rate decrease.

That was in order not to incur costs upon customers for a structure they can’t use, since the SERF consists of ratepayers’ money, said Philene Taormina, advocacy director for Vermont’s AARP chapter and a litigant against Vermont Gas on behalf of AARP members who fear rate hikes due to the pipeline.

But Dumont’s deadline scenario, Parent said, “is just not true.” The pipeline project is under no threat from any October deadline, she said.

The company has filed for a rate decrease, Parent said, “and we look forward to presenting our case and the facts in October.”

The project has experienced numerous delays and cost increases since the Public Service Board approved it in 2013. Sandra Levine, senior attorney with the Conservation Law Foundation, said further delays would threaten the project’s viability.

Levine has been involved in several pieces of pipeline-related litigation and said the most recent setback only continues a pattern that’s been evident since the project’s inception.

“It’s been cobbled together with bubble gum from the beginning, and each of the problems builds on the previous problems,” Levine said.

The Geprags Park segment would be part of a 41-mile pipeline extension to Addison County that is now expected to cost $165.6 million. Ratepayers, according to an agreement the company reached last year with the Department of Public Service, would need to cover $134 million of that.

The project has struggled to secure access to the planned route and attracted protests from environmental activists who oppose expansion of fossil fuel infrastructure.

Vermont Gas remains “laser focused” on finishing the pipeline this year, Parent said, and access to the Geprags Park parcel will be a critical component to meeting that timeline.

The company is involved in eminent domain proceedings to win the right to put the pipeline beneath the park. Dumont and his clients also are trying to prevent that, on the grounds that eminent domain can’t be used to obtain easements on land “dedicated to use as a public town park.”

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  • Lea Terhune

    Protection of environment and enforcement of regulations? Who is ANR working for? “The mismeasurement of wetlands seems to have been an accidental oversight on the part of the company, said Natural Resources Commissioner Deb Markowitz.” Accidental oversight, baloney. Are there no penalties for submitting false information in a permit application?

    • Dan Allard

      The ANR does not care about false information being filed, whether intentional or not. An engineer from the agency can state, in a permit, that a project will endanger public health and declare the project a failed system but then the next guy will take that statement out of the permit to allow the violations. When a project is complete, an ” as built” document can be filed with the agency with obvious false information, yet still nothing is done. I have dealt with the ANR for 26 years trying to get them to make a site visit, conduct ground water elevation tests and review the permit for Burke Mountain’s leach field, but everything stays the same even though there were countless violations. You must remember that the head of the ANR is a politician and not an environmental engineer.
      Dan Allard

  • Thank you for the most quotable quote of the day, Sandy Levine: “It’s been cobbled together with bubble gum from the beginning, and each of the problems builds on the previous problems.” It is time for the state of Vermont to stand up to the peremptory hubris of this fuel seller. It was shown long ago by the assiduous work of private citizens and legal expertise of Conservation Law Foundation and AARP representatives that this project has never been “in the public good.” Far from it. The fact that VGS is now proposing a “rate decrease” by using funds current ratepayers have already supplied (through the SERF surcharge) is just the kind of bait and switch on which the company’s p.r. spinners feed and thrive. “Look how we’re lowering your bill.” (With your own money you have likely unknowingly been paying into the SERF all along.) Vermonters have been played and manipulated throughout this process (or lack thereof). It unconscionable to read how cavalier everyone seems to be about the “accidental oversight” of incorrectly mapping the location our incredibly valuable and protection-worthy resources. How many other times along this route have there been “oversights” and “miscalculations”? State of Vermont agencies should also be held accountable for relying on the corporation’s “expert consultants” instead of taking charge of oversight and regulation of this for-profit entity which is more concerned about its bottom line than any “new customers” Beth Parent disingenuously touts this mainly transmission pipe will ostensibly service.

  • Vermont gad should be referee to py it’s Canadian parent company name. To do elsewise is giving them camouflage and sullied our state name….eh?

    • I agree. Gaz Metro should not be allowed to use the Vermont name to get folks to feel that warm and fuzzy feeling they get when they associate businesses with the Green Mountain State. Nothing they sell is made in Vermont and nothing they are doing is for Vermont or Vermonters.

      • Maple syrup must be produced in Vermont to Earn the name Vermont.

  • Ooops! we underestimated the cost by…uh…a LOT! Ooops! We thought we might wait to tell the PSB we knew this project was way over budget…until, well….until they might not notice. Ooops! We hired the wrong company to install our pipeline in Georgia and the welders were more like from a scene from Breaking Bad than they were a pipeline construction team. Ooops! We lost a very big customer (International Paper) because we just couldn’t keep our costs in line. Ooops!We missed a (very large significant) wetland.
    I don’t know about you, but this seems like a pattern to me. I am skeptical that any of this was a mistake. I think VGS lowballed the estimate intentionally so the PSB would approve this project (even though at the time it was still very costly) and also to use IP as a toe in the door or grease on the stick, so to speak…so the business folks in Rutland would start salivating for their own pipeline full of fracked gas. (There was, if you remember, a lot of talk about getting gas to Rutland 15 years sooner if they could hook IP on their line.)
    One after another these “promises” or “projected benefits” have dissipated into thin air. But in the mean time, the company is smashing and blasting their way through Addison and southern Chittenden County furiously throwing down pipe in an attempt to get as much in the ground before anyone with any clout wakes up and sees this scam for what it is.
    I personally have no confidence that there was ANY oversight on the wetlands mapping. I experienced the biased tunnel vision of the VHB employees who were supposedly protecting our natural resources (they were hired by VGS after all) and I also know that anyone who works for the governor had better well do what he says (like get this project approved) or their job is in jeopardy. So, yeah, they missed a wetland…or rather, they were caught on this one. But how many other sensitive areas have been devastated because of this company’s greed?
    If only someone in our state regulatory system would be big enough to admit this was a (BIG) mistake and pull the plug before any more damage is done and any more ratepayer money goes down the tube.

  • Barbie Alsop

    This pipeline was ill-conceived from the beginning. What troubles me most, however, is the cavalier treatment by state regulators, including Deb Markowitz’s surmise that it was accidental oversight rather than misfeasance on the part of VGS. Knowing that this one permit was based on faulty evidence should trigger an examination of other evidence produced for other wetlands this pipe is crossing. There are several more, and given the fact that no further investigation appears to be starting, I wonder at the cozy relationship between the regulator and the regulated in this case. Knowing that one “map” of a wetland is faulty, and rather egregiously so, surely a decent state agency would at least look at the other permits to make sure that similar errors have not been made elsewhere. And did the state just rubber stamp the map provided by VGS in the first place? Or did they also miss the extent of the wetland when they authorized the permit?

  • Let’s be real. The pipeline is not for the public good, and the Public Service Board is not representing the public. GazMetro and the PSB really don’t care about people, the environment, or paying attention to scientific evidence or following contractual agreements – if they did, this pipeline would never have begun. The pipeline benefits corporate giants Enbridge/Gaz Metro at the expense of our people and communities in Addison County, indigenous peoples in Canada, and the environment. Instead of investing in clean energy and in the health and well being of our communities, the PSB and Gaz Metro are ramming a bad fracked gas project down our throats, a project that ratepayers will be largely paying for, in a state where fracking is illegal but corporate giants making $$ off of it is not. Follow the money.

  • Bobbie Carnwath

    ” ‘The mismeasurement of wetlands seems to have been an accidental oversight on the part of the company’, said Natural Resources Commissioner Deb Markowitz.” Again, with knee-jerk reaction, our state agencies jump to the defense of VGS. And where does the Commissioner get her inside information about the motives of VGS as they repeatedly misinform us about the cost and consequences of this project? Is no one in this administration interested in jumping to the defense of Vermont”s natural resources?

  • My biggest disappointment from this article is the Deb Markowitz quote. When I first moved to Vermont over 12 years ago, I had some personal contact with her so after with Sec. of State business and found her approachable and reasonable. This example fits the pattern of Shumlin saying we ARE going to do this pipeline, folks and all the officials and the PSB doing what it takes to make it happen. I agree with Jane Palmer’s comment that this pipe line is NOT for Vermont or Vermonters but another corporate greed project.

    I just contacted the Democratic candidates for Governor asking each to take a public position on this project. Interesting that they haven’t.

  • My swamp lot in Monkton,Vermont has been ignored as having no right to be a gaz free area. A swamp is a swamp. A piece of a swampland connects with the whole swamp. It’s a swamp. Yet Monkton,Vermont Selectboard told me I’d have to ask Vermont gaz about that myself. Every man and woman for his/her self. My lot 2000 feet from the pipe. Or is it? I can’t fight. Looks like the fix is in. Pay up gaz customers and landowners. The path of destruction has not made it to the press.
    Having done a little plumbing in my day, the pipeline pathway looks too “bend-y” if you get my drift. Not one straight piece of pipe. Stop now, PSB. Shame on Deb M for making excuses for fracked gas salesmen.

  • Melanie Peyser

    What all of this boils down to is the same problem everyone, affected by the pipeline, has experienced from the beginning. State agencies insist that they must rely on information provided by VGS even though, over and over, VGS’ statements turn out not to be very reliable. And, somehow, VGS is still given the benefit of the doubt every single time even though their excuses have not always proved accurate. For taxpayers and ratepayers it’s pay now or pay later. Agencies can do reasonable due diligence upfront, or they can hope no one finds any errors in the future. Unfortunately, when these things happen, the cost of going back and doing a thorough investigation turns out to be a lot more expensive than just doing things right the first time around (think Health Connect). And, it always seems to be ratepayers and taxpayers, who have to pick up the tab. In this case, Secretary Markowitz is speaking awfully soon, and her statement that this whole thing was an oversight on VGS’ part is not only premature. It also doesn’t seem to fit with the historical record. The phrase, “Think harder, Homer” comes to mind. So, ummm…was it also an “accidental oversight” that ANR didn’t use its own publicly available data to check VGS’ delineation of the wetlands in Geprags Park? Did ANR commit an “accidental non-oversight?” Apparently, the Town of Monkton has been told that the ANR person, responsible for oversight of the project, doesn’t get out to the field much so the Town shouldn’t expect much oversight of work in wetlands here. It’s one thing to identify a mistake pre-construction. How many “accidental oversights” are being committed during construction yet are going unseen?

  • Barrie Bailey

    Chris Rechiccia, head of the Dept. of Public Service: all three memnbers of the Public Service Board: and now Deb Markowitz, head of the Agency of Natural Resources (all Shumlin appointees and unfortunately our top regulators) all follow Shumlins marching orders. Shove a foreign, private corporation’s fracked fossil fuel pipeline down Vermonters throats and tell them its for their own public good! Do it by grabbing their properties with bullying threats of eminent domain for private gain. Do it while promoting state goals to get off fossil fuels Even a Vermont child can tell you its disaster when the foxes tend the hen house.

  • Michael Bald

    So…. if the initial surveys and environmental impact work was faulty, for whatever reason, what does that mean for monitoring during implementation and afterwards? A very troubling start, not a good indicator.
    Seems to me the folks stewarding the site as a public park were doing quite the good job. A private company taking the land through Eminent Domain would be a step backwards in terms of environmental stewardship here.
    If Eminent Domain is for the greater long-term good, the benefit of all… no, I don’t see that working.
    Even an escrow fund would not help keep the science up to standards here.
    The company would pass that cost on to its consumers as well, so there would be zero leverage.

  • “Accidental oversight” Deb Markowitz!!! When a road intersection has too many accidents you put up a stop sign. It’s time to put up the stop sign NOW.

  • The fact that construction continues despite everything, indicates to me that the outcome was “bought” long ago. Otherwise, why would Gaz Metro continue to pour money into something that might be stopped by a government agency in the future?

  • Randy Martin

    Could the corruption and collusion get any worse? We have a board who has he authority to order the construction to cease, as well as holding Vermont Gas in Contempt, what do they do? Ask VT Gas why they shouldn’t be held accountable. SICKENING. All of Shumlins minions side with VT Gas, accidental oversight, I don’t think so. What has happened to our little state?