UPDATED: Regulator mulls pipeline options, could reconsider previous approval

MONTPELIER — The Public Service Board plans to review whether to reconsider its approval of Phase I of the Addison Rutland Natural Gas Project, and could choose to amend the project’s Certificate of Public Good in a litany of ways.
Last week the board sought remand for the case related to the Addison Rutland Natural Gas Project from the state Supreme Court, where it is on appeal. Because a proceeding cannot be before two courts at once, the Supreme Court must cede jurisdiction to the Public Service Board for that tribunal to review it.
UPDATE: The Supreme Court on Thursday morning granted remand, sending the case back to the Public Service Board for 30 days.
If the court does grant remand, the board wrote in its request that it will then consider two things: whether to reopen the Certificate of Public Good it issued the project in December 2012 and potentially impose additional conditions on Vermont Gas Systems, and also to evaluate whether the project still promotes the “general good of the state.”
The review was spurred by the Conservation Law Foundation, which in a petition to the board July 14 argued that the Certificate of Public Good no longer represented the project since Vermont Gas announced a 40 percent cost increase on July 2.
The CLF urged the board to both declare that the Certificate of Public Good needs to be amended and issue an injunction to bar Vermont Gas from working on the project.
On Sept. 4, the board issued an order seeking remand of the case. The board cannot decide on the CLF’s requests until it has jurisdiction, though it did note in its order that the Department of Public Service opposes any actions, such as an injunction, that would cause further construction delays, which would incur additional costs.
If the Supreme Court sends the case back to the Public Service Board, the board will have to determine whether the 40 percent cost increase represents a “substantial change” in the project.
Board rule 5.408 states that the Certificate of Public Good must be amended in light of such a change, which the statute defines as any change that “has the potential for significant impact” related to section 248 criteria. Section 248 of title 30 of Vermont’s statutes regulates gas and electric facilities.
In its petition to the board, the CLF argues that because Vermont Gas did not notify regulators in a timely fashion of the cost increase nor ask the board to amend its Certificate of Public Good, the project in its current state does not represent what regulators previously approved.
“The failure of VGS to seek an amended CPG or previously update cost estimates potentially affect many of the conclusions on which approval for this project is based,” wrote CLF attorney Sandra Levine.
The CLF cited legal precedents in which the board, mostly in cases related to electric utilities, has re-examined cases when projects have changed significantly.
“If a project changes significantly, the approval may no longer be justified,” Levine wrote.
In the past decade, the board decided to re-examine its certificate for the Northwest Reliability Project after costs jumped by around 90 percent, but ultimately chose not to reopen the case.
The Department of Public Service has not taken a position on whether the cost increase represents a substantial change that would necessitate reopening the certificate. Department counsel Louise Porter said the board could ask the department to weigh in on that matter.
Additional conditions imposed on Vermont Gas by the board could take a number of forms. For example, since the Department of Public Service last month asked Vermont Gas to provide regulators with quarterly cost updates to prevent any future surprises, the board could write that into the certificate.
In theory, the Public Service Board has the power to revoke a project’s certificate, though in this instance that seems extremely unlikely, given that construction is already under way and the Department of Public Service has argued that the pipeline’s benefits continue to outweigh the risks, even with the 40 percent cost increase. Vermont Gas maintains that Addison County businesses and residents are likely to save $150 million (down from an estimated $200 million) in estimated fuel costs over the next 20 years, as well as reduce the amount of carbon dioxide released in the atmosphere by 20 percent or more.
In any case, the board indicated that it would likely seek new testimony and evidence to determine whether to reconsider its approval.
“Depending on the evidence developed after remand, if any, the board may, among other things, need to directly re-address the bases for the December 23rd order,” the board wrote in its request for remand.
Vermont Gas spokesman Steve Wark said the company opposes any action that would delay work on the project.
“Delay of construction of the project will only drive costs up and delay savings to the customers in Addison County,” he said.
Vermont Gas began construction on the project in June after receiving final environmental permits. The company hopes to complete the 49-mile pipeline by the end of 2015.

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