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Vernon gas plant project on hold after losing fuel supply

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2016-04-22

By Mike Faher, as seen in vtdigger: https://vtdigger.org/2016/04/21/vernon-gas-plant-project-on-hold/

VERNON — After more than a year of intense planning and debate, the Vernon natural gas plant project has come to an abrupt halt.

Energy giant Kinder Morgan decided this week to pull the plug — at least for now — on its Northeast Energy Direct pipeline, and that means there will be no fuel supply for a proposed 600-megawatt gas-fired Vernon plant.

Local officials noted that Kinder Morgan has suspended the pipeline project, meaning work might resume. But they’re also prepared to move on to other projects that could help replace tax revenue and jobs lost due to the closing of the Vermont Yankee nuclear plant.

“I think what we discovered is that we can get a lot of town support for something that we research properly, if it’s the right fit,” said Janet Rasmussen, Vernon Planning Commission vice chairwoman.

The Vernon gas plant concept surfaced last year as Planning Commission members talked with two area residents who were developing the proposal — Don Campbell, of Winhall, who has a background in utility investment, and Hervey Scudder, of Brattleboro.

At one point, Campbell described the project as “the sun, the moon and the stars in alignment”: Vernon has extensive electrical infrastructure remaining from Vermont Yankee, and Kinder Morgan had designed its gas pipeline to pass through northern Massachusetts. Only a 7-mile spur would have been necessary to tie the pipeline to a Vernon plant, officials said.

The Vernon Planning Commission invested much time in working with Campbell, researching the issue and hosting two public forums. Opponents raised concerns about safety and environmental impacts, but advocates pointed to economic benefits as well as the need for more regional power generation.

Ultimately, the general sentiment seemed clear in a nonbinding referendum March 1: Vernon residents voted 677-153 in support of the town hosting a gas plant.

But the project still had many hurdles to clear. Chief among them was Kinder Morgan following through with its $3 billion pipeline plans, which had ignited fierce opposition in some Massachusetts and New Hampshire communities.

The company did not cite such opposition when announcing Wednesday that it had “suspended further work and expenditures” on the Northeast Energy Direct project. Instead, Kinder Morgan blamed “inadequate capacity commitments from prospective customers” — meaning there wasn’t enough interest in buying the pipeline’s gas.

“Despite working for more than two years and expending substantial shareholder resources, (Kinder Morgan) did not receive the additional commitments it expected,” the company’s statement said. “As a result, there are currently neither sufficient volumes, nor a reasonable expectation of securing them, to proceed with the project as it is currently configured.”

Campbell said it was “an unanticipated announcement that caught a lot of energy sector professionals by surprise.” But he does not believe it signals the end, either for the pipeline or the gas plant.

“It’s not unusual for projects to get suspended or tabled and come back either reconstituted or in their original form,” Campbell said. “In my view, the operative word here is ‘suspend,’ not ‘cancel.’”

Citing a lack of natural gas supplies in New England, along with regional power needs, Campbell said he believes Northeast Energy Direct “remains a project with considerable regional merit.” And he still wants to pursue a gas plant in Vernon if Kinder Morgan reconsiders its pipeline stance.

“We still think that the existing infrastructure makes it an optimal site,” Campbell said.

From her perspective as a Planning Commission member, Rasmussen said she was shocked by Kinder Morgan’s announcement. But, like Campbell, she isn’t yet willing to give up on the pipeline project.

“There are just too many unanswered questions about this at this point,” Rasmussen said.

Even if the gas plant proposal is not revived, Rasmussen believes Vernon still could host some sort of energy generation project. In addition to heavy-duty electrical infrastructure, “we’ve got the rail line, we’ve got the river, we’ve got the land,” she said. “There’s something we can do with it.”

“I think we have a mandate from the town to do something energy-related,” Rasmussen added.

Vernon resident Bronna Zlochiver isn’t so sure about that. Zlochiver, who had opposed the gas plant, said she’s hoping that an upcoming community planning process facilitated by the Vermont Council on Rural Development will help the town come up with a clear vision for the future.

Zlochiver particularly is interested in technology and communication; she serves on a committee that’s seeking a fiber-optic network for Vernon. She also believes the region can collectively market assets including quality of life, strong schools and a thriving arts community.

“We need to just be creative and come together as a community, and not be fractured as we have been,” she said.

Art Miller also is looking ahead. At a February public meeting, Miller disclosed that a portion of his family’s dairy farm along Route 142 was under consideration as a gas plant site. But Miller on Thursday said his family never signed any sales deal, and it’s been business as usual this spring at the farm.

“I am not surprised,” Miller said of Kinder Morgan’s announcement. “There were just so many hurdles for the plant to happen. Our expectation was that it had a slim chance of happening to begin with, but, if it did, we were open to discussing having it on this land.”

That’s because Miller believes that the state needs more power production. And he’s not sold on solar power, as he worries that large photovoltaic arrays will eat up prime farmland.

“Is that what we want in this state?” Miller asked. “That was part of what motivated us.”