Gov. Peter Shumlin wants the Department of Public Service to hire an independent property appraiser to participate in eminent domain proceedings for the Addison-Rutland Natural Gas Project.
“I am concerned at the transparency and equity issues that have been raised by Vermont Gas’s negotiations with landowners,” Shumlin wrote in a letter Monday. “I want to ensure consistent third-party valuations for property subject to condemnation in the event eminent domain proceedings occur.”
Eminent domain is the power to take private property for public use, and Vermont Gas Systems Inc. expects that 10 percent of property disputes along the pipeline’s route will end up in court.
Currently, the company reports that 70 percent of landowners have reached agreements with it to avoid eminent domain proceedings and 20 percent are undergoing productive negotiations.
Public Service Commissioner Chris Recchia said the department has had many complaints from landowners who are in negotiations. He said the complaints center on how Vermont Gas has been handling the land use discussions.
“There have been some miscommunications between some of our land agents and landowners,” said Steve Wark, spokesman for Vermont Gas.
“We welcome the governor’s comments,” Wark said. “It makes sense since there’s been difficulty in rolling this out. We want to get this right.”
The governor’s statement was part of a five-page letter to Democratic Addison County Sens. Claire Ayer and Christopher Bray and Rep. Willem Jewett, D-Ripton, in response to the legislators’ concerns about the natural gas pipeline project.
The project’s first phase will extend Vermont Gas Systems Inc.’s underground pipeline to Middlebury, and the second phase would extend it west to International Paper’s mill in Ticonderoga, New York, according to the gas company’s petition for a certificate of public good.
The company petitioned for second-phase approval in November and has run into controversy with landowners in Monkton, Cornwall and Middlebury, all in Addison County. Residents are concerned about the environmental impact of a natural gas pipeline and their own private property rights, Ayer said.
Others, Wark said, own businesses in Middlebury and “are very happy to have natural gas in Middlebury.” The company expects to be able to cut utility bills in half if natural gas is made available in the region.
But in a letter dated Aug. 1, the three legislators asked the governor, the Department of Public Service and the Public Service Board not to issue a certificate of public good “unless and until the state provides clear and convincing answers to the serious concerns” that they listed in the letter.
The letter included seven major concerns, including natural gas’s impact on climate change, the project’s cost-benefit analysis, and the project’s constitutionality.
The legislators argued that 99 percent of the second phase of the pipeline would serve an out-of-state customer, International Paper, and therefore the gas company’s petition should be denied based on a violation of the Vermont Constitution.
In the letter Monday, Shumlin said he would “leave it to the lawyers to determine this issue,” but said the constitution protects private property owners from land use “without just compensation.”
“While landowners still may choose to retain their own valuation expert, as well as their own representation,” he wrote, “in these proceedings, a natural valuation expert retained for all such proceedings seems appropriate and necessary in these circumstances.”
He said property should be used “hopefully by agreement, but if necessary, eminent domain.”
According to a Vermont statute, governments and private entities may not take private property for public use in economic development, but public utilities and gas distribution are both exempted.
Shumlin’s request comes two weeks after Vermont Gas Systems Inc. brought in an independent mediator to handle agreements with landowners.
“We’ve never done it before,” Recchia said, referring to the independent appraisal process. “We’ve never weighed in on the appraisal process, but this is unique, and we’re doing it, and we think it’s important.”
“Between the two, we might have this bookended,” he said.
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