Vermont Gas to pay VELCO for right-of-way

VERMONT — The state’s transmission utility has set a price for Vermont Gas to use its utility corridor as part of Phase 1 of its natural gas pipeline extension through Addison County.
Vermont Gas spokesman Steve Wark late last month said the company intends to pay $450,000 for about 51 acres within the utility corridor. The price includes access roads, he said.
The company plans to route sections of a 41-mile pipeline extension through a utility corridor owned by Vermont Electric Power Co., or Velco. Vermont Gas said it has already started site work in one section of the corridor.
Wark said Vermont Gas supports the financial agreement with Velco but has not signed it.
“We believe it to be fair. Obviously, we would like it to be less if we could,” Wark said.
Velco Vice President Kerrick Johnson said the price is designed to strike a balance between state land use and energy planning policy, the safety and reliability of the state’s electric grid, and flexibility to accommodate any future uses of the corridor, such as new transmission lines.
Johnson said the right of way for Vermont Gas could set a new precedent for future uses in utility corridors, including co-locating electric and gas infrastructure.
The cost of the company’s pipeline will be $121 million, up from the original estimate of $83 million submitted to state regulators last year.
Wark said the cost of using the utility corridor was included in the company’s most recent estimate filed to the Vermont Public Service Board.
The Vermont Public Service Board has ordered the company not to work in all but one section of the corridor as part of its investigation into soil contamination resulting from a toxic chemical used to treat utility poles.
Separately, state regulators also late last month questioned whether to postpone review of Vermont Gas’ proposed pipeline extension from Middlebury to New York, what is known as Phase 2.
The South Burlington natural gas utility must obtain a federal regulatory waiver before the state has the authority to approve the pipeline project that crosses state lines to the International Paper mill in Ticonderoga, N.Y.
But first Vermont Gas must submit an application for a section of the project to New York regulators for approval. Wark said the company won’t file an application until September.
Without this application, federal regulators may not decide on the waiver. Until Vermont Gas obtains the waiver, the state does not have full authority to permit the pipeline.
Vermont Gas applied for the state permit last year. The Vermont Public Service Board is now asking parties involved in the permit application if hearings scheduled for October should be changed.
Wark said Vermont Gas wants to keep the hearings scheduled for October.
The Federal Energy Regulatory Commission, or FERC, must issue the company a federal review exemption under the Natural Gas Act in order for Vermont regulators to have jurisdiction over the project.
Vermont Public Interest Research Group, an environmental advocacy group opposing the pipeline, requested in January that Vermont regulators throw out the case because it did not have jurisdiction. VPIRG also asked FERC to deny Vermont Gas’ waiver request.
The board denied VPIRG’s motion to dismiss the case in February based on information Vermont Gas provided indicating it would receive a decision on the waiver from FERC by late spring this year, the board said in last month’s ruling.
Vermont Gas on Aug. 1 told the Public Service Board it would have its application to New York regulators completed shortly.
But Wark said the company had to relocate a gate station on the New York side of the project. The other part of the application includes a section of pipeline to connect the gas to the paper mill.
Jim Dumont is a Bristol attorney representing pipeline opponents, including VPIRG. He requested that state regulators drop the case because he said it remains unclear whether the state’s Section 248 review process is even the right process. He said the parties are spending time and money on a case that may not exist.
The Conservation Law Foundation, an environmental law firm opposing the pipeline, joined VPIRG in asking the board to dismiss the case.
“The fact that Vermont Gas has not made all the required filings for FERC to rule is very troubling,” Sandra Levine, a senior attorney at the Conservation Law Foundation, said. “Vermont Gas continues to try and steamroll the Vermont project ahead without doing its own homework to make sure all of the pieces are in place.”
Without the waiver, the Public Service Board’s decision would only represent Vermont positions on the pipeline before the FERC review process, regulators say.
If a waiver is not granted, FERC would conduct an environmental impact assessment of the project on both sides of Lake Champlain. Dumont said this could take six to 12 months followed by a public comment period.

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