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Vermont Gas Pipeline To IP Ticonderoga Mill Canceled

Addison County Regional Planning Commission

The second phase of a natural gas pipeline that would have extended underneath Lake Champlain to International Paper in Ticonderoga, New York has been canceled.

The Addison-Rutland Pipeline project being constructed by Vermont Gas would bring natural gas from Chittenden County to Rutland in three phases.  
The plan for Phase 2 was to bring natural gas service to Cornwall, Shoreham, and under Lake Champlain to International Paper in Ticonderoga, New York.

But on Tuesday, Vermont Gas and International Paper announced that the spur to the mill in New York is off the table. IP Ticonderoga spokesperson Donna Wadsworth says they decided to pull out of the project.  “We entered an agreement with Vermont Gas in October of 2012 to pay for Phase 2 of the pipeline and some upgrades to Phase 1.  The estimated cost at that time was $69 million. Then in May of 2014 Vermont Gas notified us that due to a lot of escalation and construction costs and legal costs and so on, that they were estimating the project cost to us would now be $99 million. And then just a few days ago they notified us that once again the cost had significantly increased and they were estimating $135 million. Given that cost increase and the uncertainty of the time-line it didn’t make business sense  for us to continue.”

Vermont Public Interest Research Group Executive Director Paul Burns is elated.   “It calls into question whether this project is ever going to get gas down to Rutland which company officials at least have said is so vitally important in order to make the numbers work. And therefore is there really any need for the project at all?”

International Paper was paying a share of the Phase 2 and 3 pipeline costs.  
Vermont Gas President and CEO Don Rendell emphasizes that Phase 1 of the project is still viable.  “This means that it’s time to go back and redouble our thinking about how most effectively to expand natural gas service beyond Middlebury. So Phase 2 is over. We have asked to withdraw that petition to our Public Service Board. We will not proceed with Phase 2. Phase 1 is still in process and still very viable. We are confident that we will complete that project. Beyond those two phases we will explore creative ways to bring natural gas service to more communities.”

AARP Vermont says the cancelation of Phase 2 calls into question the viability of the entire project.  State Director Greg Marchildon explains that they started monitoring pipeline issues when the first cost increase was announced in June 2014.  “We submitted a public records request and learned some very disheartening things. The company had been collecting ratepayer money and putting it essentially in their own fund.  We sort-of caught them with their hand in the cookie jar. The other thing that we found that was incredibly disheartening was that both the Shumlin Administration and the Department of Public Service knew about these cost increases months before it was reported to the public. We do not believe that Vermont’s Department of Public Service is doing due diligence on this project.”

Ticonderoga Supervisor Bill Grinnell is not worried about the future of the IP plant, saying it’s a stable and adaptable facility. But he is disappointed about the canceled project.  “Our major employer for the county was really hoping to get this up and running to help with their energy costs. To see it go down is disheartening. There was always the thought in the back of many minds that we were going to have an opportunity somewhere down the road to expand natural gas through a portion of upstate New York that doesn’t have it and is really looking for an access point and struggling to get it.”

International Paper’s Donna Wadsworth said the company will look at alternatives to pipeline natural gas and are committed to maximizing fuel mix alternatives. Energy efficiency will play a crucial role in how the plant moves forward.

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