VPIRG claims feds have jurisdiction over pipeline

MONTPELIER — VPIRG has asked the Public Service Board to halt deliberations on Vermont Gas’ proposal to build a natural gas pipeline from Vermont to Ticonderoga, N.Y.
The environmental group filed a motion to dismiss with the board on Monday.
Bristol attorney James Dumont, representing VPIRG, argues the pipeline is under the jurisdiction of the Federal Energy Regulatory Commission — not the Vermont Public Service Board — because the pipeline would cross state lines.
International Paper, which has a paper production factory in Ticonderoga, would be the sole beneficiary of the piped gas on the New York side. IP would pay $62 million of the $64.4 million cost to extend the Vermont Gas line from Cornwall and Shoreham to its facility in New York state, according to documents filed with the PSB. The project, to be completed in 2015, would include a 10-inch transmission line under Lake Champlain.
The pipeline buildout to Ticonderoga is phase 2 of the Vermont Gas project. In phase 1,which was approved by the Public Service Board in December, the company is building a 43-mile gas pipeline from Colchester to Middlebury at a cost of $86 million.
VPIRG opposes the pipeline expansion because Vermont Gas gets some of its gas from hydraulic fracturing, a process the group says damages surrounding land and causes water pollution.
Vermont Gas has not yet filed a petition for an interstate exemption from FERC. Steve Wark, a spokesman for the company, says Vermont Gas will ask for a waiver within a “reasonable timeframe.” The company’s primary filing, he said, is with the Vermont Public Service Board.
Dumont insists that without approval from FERC, the Public Service Board has no authority to rule on the case. FERC has interstate jurisdiction, unlike regulatory bodies in New York and Vermont. It is not at all clear, he says, that FERC will give Vermont Gas a waiver. If the board moves ahead without the federal ruling, it could be wasting time on the case, Dumont says.
The situation also puts Dumont’s client — VPIRG — and residents of Shoreham and Cornwall in the difficult position of having to monitor two costly legal proceedings simultaneously.
“It’s an issue of fairness,” Dumont said. “If FERC is not granting a motion then everything at the PSB will be a waste of time and money.”
The board has said its jurisdiction to conduct a regulatory certification review may be preempted by the Natural Gas Act, and it asked Vermont Gas and the Vermont Agency of Natural Resources to submit comments on the matter by Jan. 21.
Attorneys for Vermont Gas, in comments to the board, said the company must cross state lines because of the local geography, and so it is asking FERC for a limited service area determination.
The lawyers argue that FERC “has consistently recognized that Section 7(f) service area determinations are appropriate for a company primarily engaged in the business of local distribution of natural gas, but whose facilities cross state lines for certain geographical reasons.”
Vermont Gas says FERC preemption is not an issue because when Congress created the Natural Gas Act it did not envision federal regulation of the “entire natural gas field.”
Dumont says the Vermont Gas petition for phase two opens the window on a “constellation” of issues. The bed of Lake Champlain is owned by the residents of New York and Vermont, and any project that crosses underneath the lake must be considered a public good. Building a pipeline under the lake bed to serve a single private corporation might not meet that test, he says.
Editor’s note: This story provided by VTDigger.

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