On October 23, 2015

Administration, Vermont Gas agree: consumers will subsidize gas pipeline

By Anne Galloway, VTDigger.org

Ratepayers will pick up most of the tab for a natural gas pipeline under a new agreement between the state and Vermont Gas.

The deal with the Department of Public Service allows the Gaz Metro subsidiary to recover up to $134 million of the cost of the 41-mile pipeline from customers.

The current budget for the project, which will extend pipeline infrastructure from Colchester to Middlebury,is $154 million.

Vermont Gas will absorb the $20 million difference unless the construction project is delayed by factors deemed beyond the company’s control, such as weather, right of way disputes and demonstrations by protesters that interrupt construction work. The deadline for the project is December, 2016.

Don Rendall, the CEO of Vermont Gas, says the company agreed to the compromise with the state because “we have the confidence we will get the project done on time and on budget.”

Critics say the pipeline extension will give Vermont Gas an opportunity to expand its market at the expense of ratepayers in Chittenden and Franklin counties. Gas rates are expected to go up 10 percent to 12 percent as a result of the buildout in Addison County.

Chris Recchia, the commissioner of the Department of Public Service, says the memorandum of understanding with Vermont Gas limits the liability for ratepayers. It was never the state’s intention to allow ratepayers to be on the hook for the whole cost of the buildout, he said.

In addition to the cap, the pipeline expenditure will be subject to a “full cost review,” Recchia said.

For more information visit vtdigger.com.

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