by Timothy McQuiston Vermont Business Magazine Last July, as Vermont Gas Systems built its pipeline extension from Chittenden County to Middlebury, the town of Monkton became a battleground for the contentious project. Vermont Gas was already spending more on the pipeline than it anticipated and was fending off lawsuits, fracking protesters and disgruntled residents, some of whom were facing a land taking. Vermont Gas also encountered the harsh sunflower, a “rare, threatened, or endangered (RTE) plant species.”
A communication breakdown between Vermont Gas and its contractor led to 77 of the 2,004 harsh sunflower plants in a Monkton field being mown down, which resulted in $59,000 in penalties. The case was finally resolved by the Public Service Board last week.
Vermont Gas issued the following statement: “Vermont Gashas a strong commitment to environmental protection, including land conservation and habitat protection. Earlier this month, our teams partnered withtheIntervale Center to plant over 200 trees along theAllenBrook. Last year’s 'inadvertent taking' of harsh sunflowers is an issuewe take very seriously. We immediately notified our regulators about the incident when it happenedand are fully cooperating to pay this fine and move forward. The Company is very excited to finally be serving families and businesses inMiddlebury and our focus will remain on offering this important energy choice to even more customers in Addison County in the coming weeks and months."
Last July in Monkton, because Vermont Gas could not simply dig through the RTE area, it initially considered taking the land through the legal process. It would then have transplanted the sunflower, laid the pipe with the typical open trench method, and restored the area. Instead it chose a less legalistic and more timely approach and decided to just tunnel under the Helianthus strumosus in a process called horizontal directional drilling (HDD).
The original takings permit application indicated that 717 individual plants, approximately 36 percent of the 2,004 total, would be affected by project work if the pipeline was installed using open trenching.
On July 14, 2016, the Agency of Natural Resources notified potentially interested persons of the takings permit application, scheduled a public informational hearing for Thursday, July 28,2016, and established a public comment deadline of August 15, 2016, in connection with the application.
VGS quickly concluded that utilizing HDD was a preferable construction technique that could be used to completely avoid the sunflowers, the legal delay and the consternation which could ensue. It withdrew the takings permit on Friday, July 15.
Utilizing HDD would result in "no disturbance or impact to harsh sunflowers or other protected species," VGS said in its paperwork.
Despite a preconstruction meeting with its contractors to discuss the need to avoid the sunflowers, on Monday, July 18, an employee of Michels Corporation, Vermont Gas’ pipeline contractor, inexplicably cleared a path through vegetation on the property in preparation for the HDD work. The clearing included the area where harsh sunflowers were growing.
The damage was discovered later that day by a VGS environmental compliance contractor. The company immediately stopped all work at the site. VGS self-reported the damage to the plants the next day
The Environmental Court eventually fined Vermont Gas $34,000. Initially, the PSB was only going to add $6,000 to that penalty. The rationale was that the maximum penalty for such a PSB violation is $40,000.
However, the PSB’s hearing officer on the case, Michael Tousley, Esq, argued in his recommendation filed May 2, 2017, that the PSB and Environmental Court are separate entities and that the E-Court’s ruling is separate from the PSB. He also wrote that a $6,000 fine is neither an adequate deterrent nor sufficient enough a penalty given the general harm it did to the regulatory oversight process.
He also wrote that Vermont Gas adversely affected the interests of utility customers because such failures are unnecessarily burdensome and diminish the credibility of the regulatory process.
“The penalty imposed in this case should be sufficient to both specifically deter the Company from committing a similar violation of a Board order in the future and generally deter other CPG holders from committing similar violations,” Tousley wrote.
In other words, Vermont Gas had to be made an example of. Tousley also noted that Vermont Gas had been fined twice previously for separate violations.
The first was a civil penalty of $100,000 for failing to “timely report” a cost estimate increase in excess of 20 percent.
The second civil penalty was $95,000 for the company's failure to fully comply with comprehensive written specifications prepared consistent with federal gas safety standards.
“These prior incidents reflect a lack of compliance with Board rules and orders while constructing the pipeline and should be accounted for in determining an appropriate penalty amount for the current violation.”
Tousley recommended a fine of $25,000 on top of the $34,000 from the E-Court.
He backed off recommending the maximum penalty of $40,000 because VGS self-reported the incident, stopped working on the site for 10 days, developed and implemented a harsh sunflower avoidance plan and took responsibility for the incident.
“I believe the Board should accord the Company's mitigating steps significant weight in determining the appropriate amount of any penalty imposed in this case,” Tousley wrote.
The Public Service Board members (James Volz, Margaret Cheney and Sarah Hoffman) generally agreed with Tousley, but split off the $6,000, which originally was a voluntary contribution from Vermont Gas to the New England Wildflower Society (NEWS), and made the actual penalty $19,000.
It’s expected that the sunflowers, which are perennials, will grow back in the subject locations, and the harm will not be permanent.
The PSB order was filed May 25, 2017.
Vermont Gas completed the 41-mile pipeline and began serving customers in Middlebury on April 12, 2017. It began construction June 24, 2014.
Vermont Gas, based in South Burlington, was to have completed the pipeline last year. It has faced cost increases, court challenges, including one still before the Vermont Supreme Court, and virulent opposition from groups as diverse as landowners, natural gas fracking opponents and the AARP. During the nearly three-year process it fired its first contractor and hired a new president.
The original cost of the project was $86 million. It then went to $121.6 million and $153.6 million. Vermont Gas agreed to cap the ratepayer cost at $134 million regardless of the ultimate cost and take the rest out of profits.
The original concept for the pipeline was to extend service to the International Paper plant in Ticonderoga, NY, but cost increases led to that phase being canceled. Rutland also was considered for an extension, but those plans have been put on hold indefinitely.
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