Vermont Gas Pipeline Cost Estimate Goes Up Again

Jun 21, 2016

Vermont Gas Systems says the estimated cost of its controversial pipeline is going up nearly $12 million.

The company says based on a number of factors, estimated costs will rise to a total of more than $165 million.

The latest estimate is nearly double the original price tag of the pipeline to Middlebury.

Vermont Gas blames the lion’s share of the increase on construction costs, specifically the need to do more drilling and blasting than anticipated.

It also cites higher than expected costs of agreements reached with landowners along the pipeline’s route and disruptions by opponents of the pipeline.

An agreement with the Department of Public Service limits how much of the cost can be passed on to ratepayers.  

In a statement, Vermont Gas Systems says about $525,000 of the increased costs do not fall under the cost cap agreement and could be passed to ratepayers. To do so would require the approval of the quasi-judicial Public Service Board.

Those costs include $225,000 related to “unreasonable interference with construction" and $300,000 associated with difficulty securing rights of way.

Public Service Commissioner Christopher Recchia says his department will also weigh in on whether the costs can be passed along.

“As part of the agreement we have, those type of costs which are beyond VGS’s control could go above the cap,” says Recchia. “We’ll evaluate those but it doesn’t mean they automatically get them.”

However, Recchia says nearly all of the cost increases fall under the cap and can’t be passed to ratepayers.

“It’s disappointing that the price is continuing to go up. That said, I’m very, very pleased that we entered into the agreement we did to cap the construction costs,” he said.

Responding to the Vermont Gas Systems announcement, AARP Vermont issued a statement calling on state regulators to take steps to further protect Vermont ratepayers.

“Costs continue to pile up and the company now expects customers to pay for right of way access delays and protests,” said Greg Marchildon, AARP Vermont State Director. “The system expansion will only benefit the company’s bottom line – not the ratepayers who are bearing the ever-rising cost.”