Natural gas plan wins fans
MIDDLEBURY — The Middlebury selectboard on Tuesday joined several prominent local businesses in supporting the efforts of Vermont Gas System (VGS) to secure financing to extend a natural gas pipeline into Addison County.
Vermont Gas officials were scheduled to appear before the Vermont Public Service Board the next day to lay out plans for raising the estimated $60 million to $70 million it will take to extend natural gas pipeline from Chittenden County into Middlebury and Vergennes. With that in mind, VGS President Don Gilbert was seeking support from the Middlebury selectboard to strengthen his company’s pitch to the state regulators.
He got that vote of support, though selectboard members stressed that the final project will ultimately need to meet town, state and federal permitting standards.
“Uncertain energy sources and cost volatility makes the prospect of a new energy option coming entirely from North America very welcome indeed,” reads the selectboard’s letter backing VGS’s quest for financing.
“Based on your presentations, the Middlebury selectboard hereby offers its endorsement for Vermont Gas Systems to move forward with exploration of the economic feasibility of construction the proposed (pipeline) extension.”
VGS was created in 1965 and currently supplies natural gas to 45,000 clients in Chittenden and Franklin counties. That gas comes from underground in Alberta, Canada, and is taken cross-country through the TransCanada Pipeline to Vermont Gas’s main pipeline entry point at Highgate. There, it enters a network of 678 miles of distribution pipe and 70 miles of transmission pipe to serve the company’s client base of homes, businesses and industries.
Gaz Métro of Montréal owns Northern New England Energy Corp., which in turn owns Vermont Gas. Gaz Métro is Quebec’s largest natural gas company.
The Addison Independent reported in March that VGS was looking to extend natural gas service into Vergennes and Middlebury within five years, with the eventual goal of moving into Rutland County and perhaps ultimately linking with the U.S. gas pipeline network near St. George, N.Y. Gilbert said his company hopes to lay the new pipeline along the Circumferential Highway route (around Burlington) and then proceed along either the Route 7 corridor or the Vermont Electric Power Co. right-of-way into Vergennes and Middlebury.
VGS, according to Gilbert, has already identified around 3,000 potential new customers in Vergennes and Middlebury. These new users could include businesses like Agri-Mark/Cabot, Porter Medical Center, Green Mountain Beverage and Middlebury College. Representatives of all of those businesses were present at Tuesday’s meeting and voiced support for having a natural gas option to potentially cut their heating bills by tens of thousands of dollars annually.
Gilbert touted natural gas as a relatively carbon-friendly fuel option that currently enjoys a 41-percent price advantage over fuel oil and an even greater savings over propane and electricity.
According to Gilbert, conversion to natural gas could save VGS’s targeted 3,000 Addison County customers a combined total of $44 million over 20 years, reduce fuel oil need by a combined 6.3 million gallons annually, and serve as a magnet for new jobs.
Putting in the needed natural gas infrastructure will pose financial and logistical challenges, Gilbert acknowledged. He said VGS has looked at several financing options, including the prospect of state and federal assistance — which looks very bleak at this point. The company also analyzed whether the new Addison County customer base could carry the full weight of the project on its own.
“The answer was ‘no,’” Gilbert said.
VGS has picked a different financing course — instead of passing on future reductions in the wholesale price of natural gas to existing customers, the company will ask the PSB for permission to set aside that money into a “system expansion and reliability fund” to “avoid having upward pressure on rates and to support extension of natural gas into new communities,” Gilbert said.
In essence, the existing customer base would help subsidize the infrastructure for the Addison County natural gas project. Gilbert said VGS floated its financing plan in a letter to its 45,000 customers. He said only one customer responded with reservations about re-directing money that otherwise would have gone into lower rates.
Tuesday’s meeting drew more than 20 interested spectators, many of them associated with business that figure to be natural gas users if the project is green-lighted and financed.
Middlebury College officials see natural gas as another energy source to add to its portfolio in an effort to make its campus carbon neutral. The institution has already made great strides toward that goal with its biomass-fired energy plant and hopes to eventually harness bio-methane produced at area farms. Gilbert said the natural gas pipeline could also serve as a conduit for bio-methane.
“We see it as an immediate improvement over No. 6 fuel oil, but in the long-term, as a bridge to whatever the next (green energy option) is,” he said.
Bob Foster, a Middlebury farmer representing Agri-Mark/Cabot, said the availability of natural gas could save the farmer-owned cooperative $2.3 million to $3 million annually in energy costs.
“That (money) could go back into the ag community,” he said.
SUPPORT FROM BUSINESS
Dan Rowell, vice president of operations for Middlebury-based Green Mountain Beverage, a major manufacturer of hard cider, said natural gas would cut the company’s energy bill and provide a greener energy alternative.
“We do see natural gas as being cleaner and more environmentally friendly, so we do support this project,” Rowell said.
Bill Townsend, an executive and spokesman for J.P. Carrara & Sons, also voiced support for a natural gas option. The company is a major producer of concrete products, but also owns and leases many office and manufacturing buildings on Exchange Street, Middlebury’s industrial hub.
“I know from experience that one of the first questions that comes from anybody is, ‘What are our energy costs here?’” Townsend said. “For prospective employers to this area, I think it would be a very significant issue.”
Donna Donahue, president of the Better Middlebury Partnership, added her voice to those in support of VGS’s plans.
“If you want to attract businesses and economic development … you want to have the best, most cost-efficient fuel services you can offer,” Donahue said. “We are very much in favor of it.”
Middlebury resident Steve Terry is a member of the town planning commission’s energy subcommittee and the former senior vice president of Green Mountain Power. Middlebury is currently updating its town plan — including the energy section.
“We are focused on how to make as many (energy) options available to Middlebury businesses and residents and how to do it in a safe way,” Terry said. “I am in favor of any action that allows us more competitive choices in fuel supply and the way it is delivered.”
Gilbert noted controversy surrounding the industry practice of hydraulic fracturing to more effectively bore through rock to get at natural gas in the ground. This practice involves pressure-drilling using water, sand and chemicals to more effectively create underground fissures from which to collect the natural gas. It is a practice that has helped build up what Gilbert said is a 100-year reserve of natural gas, but has also raised concerns about potential contamination of water tables.
That drilling, according to Gilbert, occurs beneath water tables and the water used in “hydrofracking” is often recycled.
“We support a processes where natural gas is collected in an environmentally sensitive manner,” Gilbert said.
If all goes according to plan, Gilbert said the VGS pipeline to Addison County could be operational by 2015.
Reporter John Flowers is at [email protected],