Vernon Natural Gas Plant Off The Table After Pipeline Project Is Suspended

Apr 21, 2016

The Texas-based company Kinder Morgan says it won't build a natural gas pipeline that was supposed to run within seven miles of Vernon.

The company made the surprise announcement Wednesday, just five months after it applied for a federal permit for the Northeast Energy Direct Pipeline.

The town of Vernon was aggressively working to convince investors to build a natural gas power plant that would have used gas from the proposed pipeline. Vernon's plant project, which was estimated to cost about $750 million, will not proceed without the pipeline.

Kinder Morgan said work on the $3.3 billion pipeline would be suspended because there was not enough interest in purchasing the natural gas.

"The board's initial approval was based on existing contractual commitments at the time by local gas distribution companies (LDCs) to purchase natural gas from the project, as well as expected commitments from additional LDCs, electric distribution companies (EDCs), and other market participants in New England," the company wrote in a press release. "Unfortunately, despite working for more than two years and expending substantial shareholder resources, TGP did not receive the additional commitments it expected. As a result, there are currently neither sufficient volumes, nor a reasonable expectation of securing them, to proceed with the project as it is currently configured."

The Northeast Energy Direct project was going to bring fracked gas from Pennsylvania into New England, and the pipeline was supposed to run through southern New Hampshire near Vernon and the Vermont border.

Kinder Morgan also said low energy prices made it difficult to make long-term commitments.

Supporters in Vernon said the power plant could have hooked on to the electric switchyard outside Vermont Yankee, and the town was looking to significantly boost its tax base with the project.

The town overwhelmingly supported the plan in a special Town Meeting Day referendum this year.