The Vermont Public Service Board is reconsidering a natural gas pipeline project after cost overruns altered project plans.
The original plan for the Addison-Rutland Natural Gas pipeline project was to build a pipeline from Chittenden County south to Rutland. It was to have included a spur in Addison County that would go under Lake Champlain to supply natural gas to the International Paper Mill in Ticonderoga, New York.
But the project has been beset with problems, most notably cost increases. In January costs surged to $154 million, up from the original estimate of $86 million.
In February, Phases 2 and 3 were cancelled after International Paper backed out of the project. The mill pulled out of an agreement to pay for Phase 2 after its costs escalated from $69 million to $135 million.
The Public Service Board held two days of technical hearings on Monday and Tuesday. The regulatory board will determine whether it should revisit its December 2013 decision to grant the pipeline project a permit in light of the sharp cost increases.
Vermont Gas Spokesperson Beth Parent calls the hearings an opportunity to present the economic benefits of the pipeline and the facts about the project. “This project will bring millions of dollars of benefits to the state of Vermont. It’s a great infrastructure project and it’s going to offer more folks the choice. They’ll have a choice to choose natural gas. And this is going to bring construction jobs. And it’s going to bring along with the benefits of natural gas and an affordable and reliable and cleaner option this is going to bring construction jobs and just a real good boost to the economy.”
But pipeline opponents dispute such glowing economic claims. Vermont Fuel Dealers Association Executive Director Matt Cota says he told regulators the cost of converting must be considered. “Certainly the job losses will be substantial if this pipeline is built. But our main concern is having the public service board understand that when you compare the cost of fuels you also need to understand the cost of converting fuels. Vermont Gas has testified that there is no cost. That’s not true. There is substantial cost when you convert from one fuel source to another fuel source. For most homeowners in Vermont there is no economic advantage from converting fuel sources.”
Monday afternoon, opponents of the pipeline project held a rally and overnight vigil outside the Public Service Board building. Rising Tide Vermont Organizer Alex Prolman says opposition has been growing as ratepayers see increases in their current bills. “I am outraged about how my heating bills have been artificially increased in recent years to build up like a slush fund and how they could possibly go higher. The company’s trying to obfuscate the issue as much as they can. I remember seeing a couple of questions asked of the company’s CEO Don Rendell yesterday of the impact that this pipeline will have on existing ratepayers, existing gas customers, gas bills. The rates that they pay. And he was really diligent about dodging the question.”
Burlington resident Anna Rose is a volunteer with Rising Tide Vermont. She describes the hearing room as small and crowded with many people standing in the hallway trying to listen to the proceedings. She found most of the discussion centered on how Vermont Gas is calculating the cost of the project. “Many people feel like they’re building a completely different pipeline. They’re building a $154 million pipeline when they’re permitted to build an $86 million pipeline. The economic arguments are different. The environmental impacts need to be reconsidered as well as we reconsider the way that is going to impact ratepayers and tax customers who will be footing the bill.”
Legal briefs must be filed with the Public Service Board by July 6th.
