Public Service Board delays Phase II pipeline hearings

MONTPELIER — The Public Service Board on Friday postponed technical hearings related to Phase II of the Addison Rutland Natural Gas Project while it considers whether to examine its approval of Phase I of the pipeline.
The board said it was also postponing the hearing because the Federal Energy Regulatory Commission, which regulates interstate utility projects, had not yet weighed in on Phase II. That part of the project would run from Middlebury to Ticonderoga, N.Y., where it would deliver gas to the International Paper plant.
In its order, the board reasoned that it does not make sense to continue evaluating Phase II when it may amend its approval of the earlier phase of the same project.
“Because the pipeline under review in Phase II would physically connect to the pipeline that was approved in Phase I, any approval of a Certificate of Public Good for the construction of the Phase II pipeline presumes construction of the Phase I pipeline,” the board wrote.
The technical hearings for Phase II were supposed to take place in early October, but the board moved them to mid-January. Using the length of the Phase I approval process for the sake of comparison, the board is now unlikely to issue a decision on Phase II approval until the spring.
The board decided to reevaluate its approval of Phase I after Vermont Gas in July informed the board that the cost of that project had ballooned by 40 percent, from $86.6 million to $121.6 million.
The Public Service Department criticized Vermont Gas for not keeping regulators appraised of the skyrocketing costs — the company had not submitted a cost update for more than a year before the July bombshell — and the department levied a $35,000 fine on Vermont Gas.
Earlier this month, the Vermont Supreme Court, which was hearing an appeal on Phase I, agreed to send the case back to the Public Service Board (a case cannot be before two tribunals at once). Based on Vermont Gas’ actions, the board will decide whether to impose additional conditions on the company to ensure Phase I stays on track.
The board also has the power to revoke its approval of Phase I, though this seems unlikely as Vermont Gas began construction on the project in June.
Because Phase II of the project would cross state lines, jurisdiction lies with the Federal Energy Regulatory Commission. The FERC could choose to cede jurisdiction to the Public Service Board, but first Vermont Gas needs to get approval of the PSB’s New York counterpart, the Public Service Commission.
Vermont Gas first submitted Phase II for board consideration in November 2013, a month before the company approved Phase I of the project. The company hopes to complete Phase I, which will run from Colchester to Middlebury, late next year.

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