State to provide independent appraisers in pipeline eminent domain cases

MONTPELIER — Gov. Peter Shumlin on Monday directed the Department of Public Service to provide independent appraisals for landowners entering eminent domain proceedings with Vermont Gas Systems for Phase I of the Addison Rutland Natural Gas Project.
The governor announced the policy changes in replying to a letter written by three Addison County legislators earlier this month, who expressed concerns about the project.
“I have asked the department to participate in the valuation portion of any eminent domain proceedings that may be filed in any phase of the project, and to hire an expert outside appraiser,” Shumlin wrote.
Landowners along the route of the Phase I pipeline from Colchester to Middlebury have asked state regulators for months to provide independent appraisals. Some said they don’t believe the appraisals of their land done by Vermont Gas are accurate.
Last week, the Independent reported how other states have property rights advocates that provide resources to landowners faced with eminent domain proceedings, including independent appraisals. Vermont has no such advocate.
Department of Public Service Commissioner Chris Recchia said Monday that he strongly supports the governor’s position. He said his staff is looking into other ways the department can help landowners.
Addison County Sens. Claire Ayer and Christopher Bray, along with Rep. Willem Jewett of Ripton penned a letter to Shumlin Aug. 2, in which the trio of Democrats expressed concern that Phase II of the pipeline — the segment from Middlebury to Ticonderoga, N.Y. — may not be in the public good.
Shumlin himself criticized how Vermont Gas has handled the project so far, expressing disappointment that the company did not promptly notify regulators about a 40 percent cost increase for Phase I.
“I am extremely disappointed that the cost overruns Vermont Gas recently disclosed are so high,” the governor wrote, adding that he was also “concerned about the matter in which the company delayed notification to the board.”
In an effort to increase oversight of the project, Shumlin said the department will require Vermont Gas to provide quarterly cost updates to both Phase I and Phase II. When the company in July announced the 40 percent, $35 million increase for Phase I, more than a year had passed since it last submitted a budget to the Public Service Board.
Still, Shumlin said the project fits with the state’s energy goals.
“Vermont Gas must work harder to demonstrate the public benefit of these projects in order to avoid risking the project’s success,” the governor wrote. “I firmly believe that the introduction of natural gas is an important option for Vermonters’ homes and businesses.”
Shumlin’s announcement will not completely mollify landowners, but it will provide them with another resource as they negotiate with Vermont Gas. Shumlin stopped short of calling for the creation of a legal fund to help landowners, or directing the department to provide legal advice to landowners, two things they have sought.
The policy shift does indicate that the governor agrees, at least to some degree, with the opinion of some landowners and legislators that the balance of power in these negotiations is heavily tipped towards Vermont Gas.
“I am concerned with the transparency and equity issues that have been raised by Vermont Gas’ negotiations with landowners,” Shumlin said.
While the governor’s offer to provide independent appraisers to landowners may help level the playing field, it does not address the disparity in legal resources between landowners and the utility.
As the entire cost of the Phase I project, presently estimated at $121.6 million, will be borne by ratepayers, Vermont Gas will be reimbursed for all the legal fees the company incurs.
Landowners, meanwhile, are left to pay for counsel out of their own pocket. Some have said they’re wary of hiring a lawyer, because they fear their legal bills will exceed the compensation they receive for their land from Vermont Gas.
Vermont Gas spokesman Steve Wark said earlier this month that the company had secured easements from 70 percent of the 221 landowners along the Phase I route. Wark said the company believes it can reach agreements with another 20 percent, but will pursue eminent domain against the remaining 10 percent, or about 20 landowners.
After receiving approval from the Public Service Board in December, Vermont Gas began work on Phase I of the pipeline, which will run from Colchester to Middlebury, in June. The company hopes to complete the project by next November.
The Public Service Board is presently evaluating Phase II, which would run from Middlebury, under Lake Champlain, to the International Paper mill in Ticonderoga, N.Y.

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