by Timothy McQuiston Vermont Business Magazine Vermont Gas CEO Don Rendall said at a news conference today at company headquarters in South Burlington that the company has reached agreements with 98 percent of landowners – 160 out of 164 – along the 41.2-mile Addison Natural Gas Project corridor. Nearly 11 miles of the project are completed with the next phase of construction coming by the end of the construction season in 2016 “on time and on budget,” according to Rendall, who is celebrating his first anniversary on the job.
The other significant impediment the company faces in completing the pipeline is a regulatory one. A Memorandum of Understanding Vermont Gas signed with the Department of Public Service expires January 8, 2016. It states that VGS will hold ratepayer costs for the pipeline to $134 million. But the state regulator, the Vermont Public Service Board, must conclude two related issues. It will hold hearings on the MOU in December and it still has to decide on whether to re-open the Certificate of Public Good process (essentially the building permit) for the Addison pipeline.
The PSB is considering whether to re-open the CPG because of cost hikes for the project, which Rendall revealed a year ago were up from the original $86 million. Vermont Gas anticipates having to cover the cost difference, estimated at $20 million, but which could be higher if project costs run higher. Rendall said the increase would mainly come out of profits.
Rendall said VGS would “cross that bridge” if the PSB had not ruled on the MOU by January 8 or if the issue with the CPG, which was supposed to be completed by the end of last summer, was not resolved by the time the construction season begins next April. He declined to speculate on what the company would do, even if everything went against the company.
“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 (MOU) after we have held an evidentiary hearing, followed by the briefing,” the PSB ruled. The hearings begin December 1.
In the meantime, VGS, Rendall said, has developed easement standards that include partially paying for landowner legal representations and engaging with third party mediators to reach fair agreements. Vermont Gas has only four remaining landowners with whom they are still seeking agreements.
“I am grateful to the landowners who have worked with the company to reach agreement. This process requires commitment and attention, and I want to thank them for their hard work and effort,” Rendall said. “Where possible, we will continue to work with remaining landowners to try to reach agreements.”
Short of reaching agreement with the final four landowners, he said that the company would pursue eminent domain.
Completion of the project on schedule in late 2016 will require acquisition of or access to 100 percent of the right-of-way in the pipeline corridor. Right-of-way needs include access for surveying, construction, and installation and maintenance of the underground pipeline and associated facilities.
“When I joined Vermont Gas about a year ago, I was laser focused on getting our Addison expansion project on track on time and on budget. I also committed to improving landowner negotiations by setting a new standard for this work. This project is so important to Addison County and our state because it will give thousands more residents and businesses the choice of cleaner, more affordable and reliable natural gas,” Rendall said.
The company’s construction team is currently in the process of wrapping up the 2015 construction season.
The project will bring a valuable energy choice to 4,000 households, businesses, and institutions such as schools and hospitals in Middlebury, Bristol, Vergennes, New Haven, and other Addison County communities. Natural gas is cleaner and more affordable than heating oil and propane.
Rendall also announced that in the rest of its service territory in Chittenden and Franklin counties that it will hook up another 1,000 residencies and another 300 businesses to its system as it continues to expand service and offer customers “affordable and competitive rates.”