Opinion: Trust lost in pipeline debate
The Vermont Gas Pipeline: costs versus benefits, who really knows; however, trust is priceless and trust does matter.
After attending both days of the technical hearings last month on the Addison Natural Gas pipeline, I walked away with as many questions as I did answers. One of the major concerns I had was what metric method and whose numbers should I rely on.
Throughout the project Vermont Gas has presented so many financial models and varying numbers it has been hard to keep track, but from the hearings my understanding was they stand by $100 million or so in economic benefits to Vermont over 20 years. The Department of Public Service has drastically scaled the benefits down to $44 million with the worst case showing a net loss. VGS’ witness admitted that his analysis was incomplete. DPS wasn’t 100 percent sure of its modeling. AARP’s expert and independent witness projected an economic net loss of over $198 million.
Very simply put, the difference in these numbers is astronomical; hundreds of millions of dollars. How can any of them be trusted enough to just keep forging ahead with this project as it stands today?
Another critical question is what Vermont Gas knew and when they knew it on the cost increases that now total over 79 percent. For me, this puts directly into question the commitment to transparency that Vermont Gas so often speaks of but doesn’t always demonstrate.
During the June 2015 hearings, Mr. Roam, a cost consultant to Vermont Gas from PricewaterhouseCoopers, testified that he suspected in September of 2014 that the number was based on an inadequate methodology. Roam told AARP’s lawyer Jim Dumont that he had an “ah-ha” moment about the methodology and the potential for another big cost increase.
“It was in the roughly September time frame,” Roam explained. “Honestly, Mr. Dumont, I don’t have a specific date when in September. I just remember it being in September.” Dumont pushed Roam on the witness stand to find out if this realization happened before Sept. 26, 2014 — the day that the Public Service Board held its first set of hearings to determine if the state permit needed to be reopened.
Vermont Gas’ lawyer then requested a word with his witness before asking Roam when he knew. Roam responded that it wasn’t until December. How can both these answers be credible? For the actual transcript (see pages 109-114 of the June 22, 2015, PSB website, http://psb.vermont.gov).
The questions continue: VGS learned of the second big potential cost increase nine months ago — at least 10 days before the board issued its Oct. 10, 2014, decision not to reopen the permits. The board’s analysis was based on $121.6 million. VGS’ witnesses had testified then that they were confident in their $121.6 million number despite the “ah-ha” moment. The Public Service Board wrote that they weren’t persuaded by opponents’ arguments that the price would go up again.
There is still a decision pending from the board on what penalties should be enforced on Vermont Gas for not submitting the first cost increase timely, as required by law. The department is also under scrutiny for not telling the board when it became clear that VGS was holding back. The hearing on those questions was in March of this year.
Under new leadership and promises of candor and transparency, not a single witness mentioned that the company already knew about the second increase last September or two months before Mr. Rendell announced it in December. The department says that VGS was right not to tell the board of the second cost increase until it knew the exact amount. That’s in spite of Commissioner Recchia’s apology for the same position last time around or the fact that VGS knew of the second cost increase while the first cost increase was under review.
Trust should become one the most important components in the analysis of this project as well as the entire process that brought us to where we are today. The public needs to have trust in the Public Service Department as advocates for taxpayers as well as the Public Service Board’s process for a huge project such as this. Between the countless and varying estimates of costs, hugely varying analysis on the benefits, and debatable timetables on project, financial and regulatory management this project has too many questionable undertones for it to continue without further scrutiny. And that’s assuming we even have all the facts today.
Trust matters, and this entire project and process appears to not meet the high standards of trust that all Vermonters deserve from our government officials and the utility companies that ask their ratepayers to fund their infrastructure. No matter how you spin it, 50,000 VGS ratepayers are footing the bill for this entire and now questionable $154 million project so another 2,000-3,000 Vermonters will maybe choose to sign up for the gas if it becomes available.
Trust is priceless and cannot be bought; trust is earned. The question is, have both this project and the process in which it has been handled earned enough trust to go forward without further analysis?
Mark A. Nelson of Bristol
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