• Pipeline: VGS ups Phase II cost by $10 million
     | August 05,2014

    Already facing criticism and a proposed fine for failing to provide a timely cost update for Phase I of its natural gas pipeline, Vermont Gas Systems told the Public Service Board last week that the second phase of the Addison Rutland Natural Gas Project will cost 15.4 percent more than its initial estimate.

    Vermont Gas spokesman Steve Wark said Monday the revised Phase II estimate “goes from $64.4 million to $74.4 million.”

    Phase II would extend the pipeline from Middlebury, southwest and under Lake Champlain, to serve the International Paper mill in Ticonderoga, N.Y.

    Wark said IP is committed to picking up 96 percent of the cost of Phase II.

    In discussing the Phase I cost increase last month, Wark said the company stood by the $64.4 million Phase II estimate.

    But Monday, Wark said he misspoke at the time and that the 15 percent increase was accounted for in documents. He said the error occurred when he misread the information and made it public.

    “It turns out it was something I missed,” Wark said.

    Last month, the company revised the cost estimate for the first leg of the its pipeline expansion to $121 million — a 40 percent increase. The company attributed much of the increase to higher labor costs associated with the demand for natural gas and drilling contractors.

    Phase I, which is already under construction, extends the pipeline from Chittenden County south to Vergennes and Middlebury.

    Phase II is under review by the PSB.

    Wark said the increased labor costs for both phases caught the company by surprise.

    Now opponents, including the Conservation Law Foundation, say the revised cost estimates are just another reason why the project is bad for Vermonters.

    “The ballooning costs of the gas pipeline show that this is a bad overall investment for Vermont,” Sandy Levine, a CLF senior attorney, said in an email.



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