November 26, 2014

St. George missing link in Vermont Gas footprint

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By Luke Baynes

Observer staff

Four senior members of Vermont Gas Systems came to Williston last week with the intention of discussing the proposed Addison Natural Gas Project.

They ended up spending most of their time talking about potentially extending Williston’s existing natural gas service line on Vermont 2A into St. George.

The Addison Natural Gas Project, first pitched to the Williston Selectboard at its April 16 meeting, involves a proposal to bring Canadian-harvested natural gas to Addison County residents via a high pressure pipeline that would pass through Williston and St. George on its way south.

Yet despite the fact that the pipeline would be buried directly beneath the towns’ surfaces, it wouldn’t translate into any additional natural gas capacity for residents, due to the fact that the area lacks a “gate station” to step down the pressure of the gas transmission to a level suitable for residential use.

Steve Wark, director of communications for Vermont Gas, put the project in perspective for the audience members at the Williston Town Hall meeting room on July 11.

“If we build into Addison County, we can save folks, over 20 years, $44 million above and beyond the project costs,” Wark said. “I do see this as a greater good project. I frankly see this as a project that puts money back in people’s pockets.”

Eileen Simollardes, Vermont Gas vice president of supply and regulatory affairs, echoed Wark’s regional outlook.

“Economic development doesn’t stop at the county line,” Simollardes said. “It’s a small state. What’s good for one county is usually good for another, and the economic development potential here is huge.”

The general sentiment among the five Williston and two St. George residents at the meeting was favorable toward a project that would bring tax revenues to each of their hometowns.

But of more pressing concern to residents was extending the low pressure service line on Vermont 2A, which currently ends at the Old Creamery Road intersection, south through St. George and into Hinesburg to connect with the existing line at the intersection of Vermont 116 and Shelburne Falls Road.

Carroll Lawes, a resident of Lawes Drive (the private road off Vermont 2A immediately south of Old Creamery Road) elaborated on his meeting comments in a subsequent interview with the Observer.

“The key as far as I’m concerned is St. George,” Lawes said. “They have no natural gas. The key to it is how much pressure that St. George can put on Vermont Gas to get connected down there.”

St. George Selectboard member Debra Kobus, who went beyond the call of her normal duties by making the trek north to Williston for the Vermont Gas meeting, served as a spokeswoman for her constituents in a July 12 email to the Observer.

“Many St. George residents have expressed a desire to be offered the benefits of natural gas touted by Vermont Gas. Home heating oil and propane (prices) are through the roof and this is extremely hard on us all, but especially those of lower income or that are elderly and are on a fixed income,” Kobus wrote. “I am very much supportive of Vermont Gas providing the residents of St. George, as well as other Vermont towns, an option of purchasing a more reasonably priced form of energy to heat their homes.”

The reluctance on the part of Vermont Gas to extend the Vermont 2A service line past Old Creamery Road has been a matter of economics and population density.

“The problem is there’s not infrastructure, namely houses, to pay for the cost of pipe and installation,” said Brian Gray, Vermont Gas sales and marketing manager.

Kobus disagreed with Gray’s assessment in her email, stating that she estimates there are more than 220 potential residential and business customers located within a two mile stretch in St. George—well exceeding Vermont Gas’ 50-homes-per-mile minimum build-out requirement.

Simollardes explained at the meeting that one option for residents in an area of insufficient build density is an upfront customer contribution prior to pipeline construction. However, that option can be costly, because such contributions are taxed as income at a 40 percent federal rate that is passed on to the customers.

Assuming all households in the 1.6 miles of Vermont 2A between Old Creamery and Butternut roads buy into the idea of an upfront cash contribution, Vermont Gas estimates that a $4,000 contribution per household will be required.

The $4,000 contribution assumes a rate of $25 per foot of pipeline construction. However, if there is ledge located in the pipeline route, costs quadruple to $100 per foot of ledge.

Prior to learning of the $4,000 estimate at the July 11 meeting, Lawes received the signatures of more than 50 residents between Old Creamery and Butternut roads on a petition requesting natural gas connection.

Despite the four-figure price tag, he still believes that the long-term cost savings of natural gas—which costs 43 percent less than heating oil and 55 percent less than propane, according to a March 2012 study by the Vermont Department of Public Service—outweighs the upfront pinch to the pocketbook.

“Frankly, that’s not a bad deal for anyone that’s on a moderate income,” Lawes said.

The rub is that all residents must buy into the concept, and some residents on the Vermont 2A corridor can likely ill afford to write a $4,000 check in addition to their monthly mortgage and utility bills.

Toward that end, Williston Town Manager Rick McGuire, who attended the public meeting in his capacity as the town’s chief administrative officer, suggested the possibility of a special tax assessment district, similar to the district created for the Meadowridge neighborhood’s connection to the town sewer system in 2011.

“A special assessment district is a possibility,” McGuire said. “It’s feasible.”

As Meadowridge proved, a special assessment district is possible but complicated, requiring both Selectboard approval and an affirmative town vote.

Yet Lawes remains convinced of the project’s short-term viability and long-term public good.

“I really think this is a doable project and should be a doable project,” Lawes said.

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