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Editorial: The PSB’s mandate to VGS

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Posted on June 10, 2013 |
By Angelo Lynn



To understand the push south into Addison County by Vermont Gas Systems, it’s helpful to understand their mandate as dictated by the Public Service Board.

Similar to utility companies in the state, Vermont Gas Systems is a highly regulated business. It earns money based on the dollar value of the pipeline that is laid throughout the state (not on the fuel that flows through its pipes), and it is charged with serving the public good by expanding into vital markets in an effective and cost-efficient manner. What that means is that VGS is compelled to expand throughout the state as long as it can maintain competitive rates for existing customers (in Chittenden and Franklin counties) and push into new markets that would, in turn, offer residents and businesses more options to control heating and cooling costs.

Several years ago, the PSB agreed to a deal that allowed VGS to increase its rates to existing customers in Franklin and Chittenden Counties by a small percentage (rather than provide them with further rate discounts) in order to stockpile enough cash to facilitate expansion to Middlebury and on south to Rutland. The PSB agreed to the deal because it furthered the state’s objective of providing a public good to those areas: that good being lower priced fuel that adds less pollution into the atmosphere than the fossil fuels that are currently used. Natural gas prices are currently about 45-50 percent cheaper than oil and 55 percent cheaper than propane, while producing 25 percent less carbon monoxide pollution (or more) compared to other fossil fuels.

The mandate that VGS is trying to fulfill with the Phase I project to Middlebury, then, is to develop that pipeline as efficiently as possible in terms of money spent and years to completion.

In the latest talks with Monkton, VGS and two members of the selectboard had drafted concessions along the preferred route to assure that landowners (where the pipeline was proposed to go) had adequate setbacks from homes and buildings to provide safety and provide hook-ups where feasible, among other things. The selectboard rejected that memorandum of understanding in a 3-2 vote last week, however, which could leave the decision in the hands of the PSB: that is, shall the PSB deny the proposed route through Monkton because they agree it was unfair to local residents there, or approve it because it serves the public good according to the mandate they have previously established for VGS?

Before contemplating that answer, it’s good to know what other circumstances the PSB would consider to make their decision, namely, the track record of VGS in developing the pipeline throughout Franklin and Chittenden counties. There, the vast majority of residents and all towns to date have welcomed the gas company with open arms. If residents there have so warmly embraced natural gas, the PSB is likely to reason, what’s going on in Addison County is based more on unfounded fears and a bit of nimbyism than it is a fault of the company. That’s just logic.

That does not mean area residents don’t have a voice, nor that the pipeline is a done deal regardless of what residents say. On the contrary, the state and the gas company want Vermont residents to be served in a responsible manner. Hammering out the details that assure the gas company is responsible in its delivery of the natural gas is the public’s business. But, like providing electric transmission lines throughout the Green Mountain state via VELCO, the state has determined there is a public good in the basic distribution.

What is that good? To date it has been based on creating a stronger economic base. When hospitals, schools, businesses, institutions, industries and home owners can reduce heating and cooling expenses by 40 to 50 percent, that increases the quality of living, makes businesses more competitive and meets a public good. When the state can attract new industry and jobs to town because of less expensive fuel (and a mix of energy resources that keep downward pressure on all fuel prices) that meets a public good. And when natural gas could help boost the economic development in faltering areas like Rutland, and decrease pollution, that too fulfills the mission.

The core issue here is about the PSB’s mandate to VGS to serve the public good. The public’s role in the past has been to assure VGS does it well. To argue now that the public good would be better represented by denying economic and environmental benefits for the next couple of decades to Middlebury, Rutland and beyond, and instead embrace the arguments of opponents is within reason, but hardly a likely outcome.

Angelo S. Lynn

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