by Erin Mansfield vtdigger.org Regulators will hold three more days of hearings to hear testimony over an embattled natural gas pipeline project, following allegations from opponents that ratepayer advocates and Vermont Gas were trying to thwart the legal process. The Public Service Board ruled Monday that it would hold three days of hearings starting Dec. 1 to hear testimony on a memorandum of understanding that Vermont Gas and the Public Service Department submitted Oct. 15. Under the agreement, ratepayers would pay for $134 million of the Addison Rutland Natural Gas Project.
The $134 million price cap is roughly $20 million less than the current cost estimate of $153.6 million for the pipeline under construction between Colchester and Middlebury. The project has been under regulatory scrutiny for nearly a year because cost estimates for the project ballooned from $121.6 million to $153.6 million in December 2014.
At issue is whether the Public Service Board should re-open the project’s state-level permit, called a certificate of public good. The board held two full days of hearings on the issue in June. The hearings centered on tension between AARP and Vermont Gas over whether the project would create an economic benefit or loss for the state.
“Having considered all of the comments we received from the Parties, we have concluded that the public interest will best be served by our ruling on the (Vermont Gas agreement) after we have held an evidentiary hearing, followed by the briefing,” the board ruled.
“This process will help us to more fully understand the nature of the commitment contained in the MOU and the weight, if any, that the board should accord those commiments,” the ruling continues, adding that the hearings will give “the parties a fair opportunity to cross-examine and to present evidence.”
Greg Marchildon, the executive director of AARP Vermont, has been one of the strongest opponents of the project to date. AARP’s lawyer, Jim Dumont, argued in documents in October that Vermont Gas should be required to submit economic analyses on how the memorandum of understanding would affect rates, among other things.
In Monday’s ruling, the PSB agreed: “We find the information requested by AARP to be potentially relevant and material to our consideration of the MOU. Therefore, we hereby direct (Vermont Gas) and the Department to (file paperwork) on these specific subjects, in addition to any other testimony that (Vermont Gas) or the Department believes to be relevant and material.”
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Marchildon said AARP applauds the board’s action “to uphold a fair and transparent review process of an agreement that was reached behind closed doors.”
“It confirms AARP’s strong belief that Vermonters would be best served by a consumer advocacy unit that is more independent and solely driven by a mission to ensure fairness in all matters concerning our public utilities,” Marchildon said in a statement.
Beth Parent, the spokesperson for Vermont Gas, issued a statement saying the Addison-Rutland Natural Gas Project would bring “important economic and environmental benefits” to Vermont and highlighted the agreement signed with the Public Service Department to “cap costs to ratepayers at a level near the amount last approved by the Public Service Board.”
“The project remains on time and on budget near the end of a successful 2015 construction season,” Parent said. “The company has successfully reset the project as announced by new CEO Don Rendall last winter. We appreciate the time, effort, and attention of the many landowners – almost 160 – with whom we have reached agreement along the pipeline corridor.”
Timeline of the Addison-Rutland Natural Gas Project
Protesters outside Vermont Gas headquarters in May 2014. Vermont Business Magazine photo.
Dec. 2013: Public Service Board grants Certificate of Public Good for an $86.6 million Addison-Rutland Natural Gas project.
March 2014: Public Service Department begins telling Vermont Gas to notify the Public Service Board of a potential price increase.
April 2014: Landowner Kristin Lyons appeals the CPG to the Vermont Supreme Court.
June 2014: Vermont Gas starts pipeline construction in Chittenden County.
July 2014: Vermont Gas announces price increase to $121.6 million.
Sep. 2014: Public Service Board asks Vermont Supreme Court for permission to review the project in a legal process called a “remand.”
Oct. 2014: Public Service Board rules that the CPG should not be reopened.
Dec. 2014: The new president and chief executive officer of Vermont Gas announces a second price increase to $153.6 million in a news conference.
Jan. 2015: Public Service Board asks Vermont Supreme Court for another remand.
Feb. 2015: The Vermont Supreme Court grants the remand to the Public Service Board.
Feb. 2015: International Paper backs out of Phase II of the project, which would have run from Middlebury to Ticonderoga, N.Y. through Cornwall and other towns.
June 2015: Public Service Board holds more hearings on the second price increase to figure out whether to reopen the CPG.
July 2015: Two lawsuits emerge between Vermont Gas and its former contractor. Vermont Gas then names a new company from Wisconsin to finish the pipeline.
Oct. 2015: Vermont Gas and the Public Service Department sign a memorandum of understanding saying ratepayers would only be responsible for $134 million of the project costs and ask the Public Service Board to admit the agreement as evidence.
Nov. 2015: The Public Service Board declines to rule on whether the memorandum of understanding should be official evidence and instead orders new hearings in December.