AARP Vermont Files Motion Citing Lack of Transparency

A motion was filed today by AARP Vermont with the Vermont Public Service Board showing that, once again, Vermont Gas Systems (VGS) has failed to disclose highly material information with the Board in relation to their Addison Natural Gas Project. The evidence concerns lawsuits between their primary pipeline contractor, Over and Under Piping Contractors, Inc. As it turns out, VGS has never had a signed contract with the firm, terminated them last November and the contractor is suing for over $11 million and has placed contractor liens on VGS real property and pipeline equipment. Much of this information was not disclosed to regulators when the company was testifying to the projected costs of the project.

 

“Unfortunately, this information we have discovered is yet another example of a continuing lack of trust and transparency on the part of Vermont Gas -- even when they have admitted and been fined for the same incomplete and misleading behavior in the recent past,” said Greg Marchildon, AARP Vermont state director. “Our members and all ratepayers should be even more concerned now that they are bearing the risk and paying the price through rates for a project that is on very shaky ground – both legally and financially. We have lost all confidence in the Vermont Gas and their dealings with both regulators and customers on this project.”

 

The AARP motion highlights the following conflicting and misstated claims regarding what they knew and were liable for in relation to dealing with Over and Under Piping Contractors:

 

-VGS has again withheld relevant, highly material information from the Board and the parties at the September 26, 2014, June 22, 2015 and June 23, 2015 hearings in this matter, including the contractor’s request for $11.2 million in damages, and liens on VGS property that is necessary for completion of the project.

 

-VGS knew that the contractor responsible for over a third of the costs of the then-estimated $121 million project had never signed the fixed-price contract (for $45 million) submitted to it by VGS and could end up foreclosing on the portion of the pipeline already constructed if the contractor’s judgment isn’t paid. In other words, there was never a signed contract on the project yet the ground was broken and pipeline constructed.

 

-VGS has consistently represented to regulators that they can rely on their new project cost estimates, because the project is more "mature" and "now that we have a construction season behind us."

 

- In fining VGS the $100,000, the Board said “trust and transparency” are “essential” to the regulatory process. And while VGS had already agreed to pay the penalty imposed by the PSB for lack of transparency and had promised to mend its ways months ago to provide greater transparency going forward, the company has continued to withhold highly relevant and material information from the public and from regulators.

 

“The public and ratepayers deserve better,” said Marchildon. “Our recent statewide survey revealed that Vermonters have serious concerns about the project and the need for better transparency.” He cited the following finding from the July, 2015 survey report:

 

-94% believe VGS should have disclosed cost increases as soon as they were discovered.

-94% believe customer should have been informed of pipeline issues.

-84% feel the company should pay for the cost overruns – not gas customers

-88% think there should be better financial transparency of construction costs

 

The motion filed today is a request to add this evidence to the official record as the Public Service Board considers reopening the matter for further review. AARP Vermont is an official party to this case along with the Vermont Fuel Dealers Association, Conservation Law Foundation and certain landowners impacted by the pipeline.