Five Things You Should Know About The Vermont Gas Pipeline

Nov 19, 2015

The Vermont Gas Systems pipeline is embroiled in a public controversy as well as a complex and slow-moving regulatory battle. Environmentalists are engaged in a public campaign to defeat the project, claiming that the state should be advancing renewable energy infrastructure, not fossil fuel infrastructure.

Internal problems at Vermont Gas jeopardized the project. In 2014, the project's cost projections rose from $86.6 million to $154 million. That gave regulators pause, and the project's permit - granted in late 2013 - is now in jeopardy.

This winter could be a major turning point for the project. Here is where the project stands, and what is still in play. 

1. Vermont Gas has been building the pipeline all year even though the project’s permit might be revoked.

In December 2014, Don Rendall, the new CEO of Vermont Gas, announced that the pipeline’s cost estimates – which had already risen from $86.6 million to $122.66 million – were increasing again.

This time, the projections increased to $154 million.

Shortly after the announcement, the Public Service Board announced that it may revoke permission for the project because the rising cost of the project changed the cost-benefit analysis of the pipeline.

In order for a utility project to be approved by the board, the board must determine that the project is in the overall “public good” of the state.

Currently, the board has yet to issue a decision on what – if anything – will happen with the pipeline’s permit.

Despite that uncertainty, Vermont Gas continued building the pipeline for the entire 2015 construction season. Rendall said Thursday that the work completed in 2015 will improve reliability on the company’s existing distribution system even before the rest of the pipeline is built.

2. Vermont Gas doesn’t have land rights for the entire pipeline route yet.

Vermont Gas has agreements in place with 160 of 164 property owners along the pipeline route, Rendall said Thursday.

Two of the project’s most vocal opponents, Jane and Nate Palmer of Monkton, are no longer among those 164 landowners.

The Palmers opposed the company’s plan to bring the pipeline across their property and even hired a lawyer to represent them before the Public Service Board.

Asked by VTDigger’s Erin Mansfield Thursday, Rendall said the company has changed its route in order to avoid the Palmers's land. 

3. Efforts to speed up the regulatory process actually slowed it down.

In October, Vermont Gas and the Department of Public Service announced an agreement to limit the project costs the company is allowed to pass on to ratepayers. Under the deal, Vermont Gas can recover no more than $134 million of the $154 million project cost from ratepayers (with some exceptions.)

At a Public Service Board proceeding, activists held up signs in opposition to the Vermont Gas pipeline and the Oct. 7, 2015 agreement between the company and the Department of Public Service.
Credit Taylor Dobbs / VPR File

The deal also includes an expiration date.

If the Public Service Board doesn’t make up its mind about the project permit by January 8, the agreement is void. Officials at the Department of Public Service and Vermont Gas said they hoped the deadline on that consumer protection would get the board to make a decision sooner so the agreement would stay intact.

Instead, the agreement sparked controversy. Opponents claimed it was a backroom deal designed to exert control over the regulators at the Public Service Board.

Now, the board has called new hearings to decide what to do with the agreement. Those end December 10, with additional filing deadlines stretching to December 23, 16 days before the agreement expires.

4. January 8 is the next major deadline for the project.

Vermont Gas officials insist the ratepayer protection agreement is a good thing for customers, but they’ve previously refused to say why the company and the Department of Public Service thought it was a good idea to put an expiration date on the deal.

5. Vermont Gas officials aren’t sure if they’ll finish the project.

When asked Thursday morning what Vermont Gas will do if the board doesn’t rule on the project permit by January 8, Rendall didn’t rule out cancelling the project.

Vermont Gas Systems CEO Don Rendall.
Credit Taylor Dobbs / VPR

That could all be moot if the Public Service Board rules to uphold or overturn its permit for the project before January 8. Whatever the timing of the decision, the project’s future is not a sure thing.