Opinion
September 3, 2014

Taking Vermont Gas to task

By Angelo S. Lynn

Vermont Gas Systems was taken to task last week by the governor’s office for, among other things, its cost overruns on Phase 1 of the pipeline project from Colchester to Middlebury, its lack of transparency in its handling of easement rights, and for using the eminent domain process in a way that the governor’s office thought might not be fair to property owners. To remedy that latter point, the administration took the unusual step of appointing an independent appraiser to ensure easements are appraised appropriately and consistently when eminent domain is used.

The chastisement came within a five-page letter from the governor in response to a commentary written earlier this month by Sens. Christopher Bray and Claire Ayer, both Democrats from Addison Co., and Rep. Willem Jewett, D-Ripton, challenging the public good of the proposed pipeline from Middlebury to Ticonderoga, N.Y., known as Phase 2. The governor’s response addressed the legislators’ points, while maintaining its position that extending the pipeline to Rutland meets the public good criterion.

The shortcoming of the governor’s response, however, is that it missed an opportunity to challenge the gas company’s story line that Phase 2 is essential to get the pipeline extended to Rutland by 2020, and that without Phase 2 it would take 15 years longer. Rather than buy into what is a public relations statement that serves the financial interests of the gas company (and International Paper), the administration could have pressed with one central question in mind: What is the fastest way to get the pipeline extended to Rutland?

Under the current parameters, financing the pipeline to Rutland through Phase 2 is certainly a viable option, but it is not the only one.

Physical construction of the pipeline would take about two years, or a bit less, Vermont Gas officials have told this reporter. That’s once the route is determined and all permits and easements are in hand.

Furthermore, Phase 3 is a very bankable project on a scale (for utilities) that is not all that large. The state, with its Triple A bond rating, could assist in such a loan with other commercial lenders. Municipal bonds could be raised for all, or some, of the amount to shore up a financing package. Other  banking options, we’re told by those in the business, are viable.

But rather than focus on such options, the goal of getting the pipeline to Rutland was sidetracked by a lucrative offer from one large business to another that is simply too good to pass up. The gas company’s story line on getting gas to Rutland changed to match that opportunity.

Let’s remember that the driving impetus of Phase 2 and Phase 3 is to boost Rutland’s economy by providing a lower-cost fuel source. The reason it’s a pressing issue is because the price of natural gas has dropped in the past five years relative to other fuels (by as much as 40 percent to 50 percent), creating an economic disparity between those areas — like Chittenden and Franklin counties, and soon Addison County — that offer natural gas and those that do not. The longer Rutland faces this disparity, the more difficult it will be to retain its businesses that are energy-intensive and grow its economy.

In an Aug. 14 commentary by Cornwall selectboard chairman Bruce Hiland, he makes it clear that Cornwall does not want to deny natural gas to Rutland, but he draws a sharp distinction between meeting the public good in Phase 1 and Phase 3, while Phase 2 serves two commercial entities almost entirely. Serving the commercial interests of two entities, while crossing private land and employing public tools such as the eminent domain process, does not pass the muster of serving the public good under any stretch of the imagination, he says.

As a project (Phase 2) standing on its own merits, few could disagree.

But Hiland understands politics and the pressures of business better than most and nails the heart of the issue with candor: If Cornwall residents must suffer the consequences of the pipeline for the so-called public good, while in reality it primarily serves commercial interests, then the town ought to receive financial compensation on a par with the financial benefits gained by Vermont Gas and IP.

In a roundabout way, the governor’s letter seems to side with a similar notion — that fair compensation be paid to those whose land is devalued by the pipeline’s need to gain right of way through private property. The same would be true of Cornwall, Shoreham, and that part of Middlebury affected by Phase 2. Therein is the route to compromise and resolution.

Angelo Lynn is the publisher of The Addison Independent in Middlebury, a sister paper of The Mountain Times.

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