Vermont Gas Systems fined for environmental violation

By Mike Polhamus,
VTDigger.org

Vermont Gas Systems was fined $25,000 in late May by the Public Service Board for the destruction of a rare plant during the construction of a 41-mile natural gas pipeline. The penalty is in addition to a $33,688 fine that the state Environmental Court assessed in December against Vermont Gas for the same incident.

A contractor Vermont Gas hired, Michels Corp. of Brownsville, Wis., destroyed 77 harsh sunflower plants in Monkton last July while preparing to dig beneath the plants. The boring was intended to prevent harm to the flowers, which are listed as a threatened species in Vermont. The sunflowers are expected to grow back in the same locations, according to the PSB.

But Vermont Gas’ failure to get a permit before destroying the plants “resulted in a harm to the regulatory oversight process,” according to the Public Service Board’s order, and ultimately harmed utility customers.

Vermont Gas contracted with Michels Corp. to build the majority of the pipeline extension from Colchester to Addison County that opened this spring. Michels Corp. was also contracted to build one-third of the controversial Dakota Access crude oil pipeline.

Although Vermont Gas warned Michels Corp. workers against disturbing the plants, known as harsh sunflowers, one of the company’s employees mowed a swath down on the morning of July 18, 2016, according to the PSB order.

Michels workers were at the time preparing to drill horizontally beneath the sunflowers, instead of transplanting 717 of the 2,004 individual harsh sunflowers. Vermont Gas applied prior to that for a “takings” permit that would have allowed the company to transplant the 700 plants that lay in the pipeline’s path, but withdrew the permit application when the decision was made to drill beneath the plants instead.

Michels Corp. chief legal officer and vice president of business administration David Stegeman said questions about the incident should be referred to Vermont Gas.

“I don’t have the information on that,” Stegeman said, in reference to his company’s employees’ actions.

Michels Corp. and Vermont Gas violated state environmental law, the Vermont Gas pipeline’s construction permit, and an agreement with the Agency of Natural Resources stating that VGS would not harm threatened or endangered species without a permit.

Last month, the Department of Public Service recommended that the Public Service Board levy a separate $6,000 penalty against the company, in addition to the Environmental Court’s $34,000 fine, which would have brought the total penalty to $40,000.

But the $6,000 recommended by the DPS “does not appear to be significant enough to deter either Vermont Gas or other CPG holders from similar violations in the future,” the board order states.

There are two different aims sought through the two penalties incurred against Vermont Gas by the PSB and by the Environmental Court, the order states. The Environmental Court penalized Vermont Gas $34,000 for breaking the state’s environmental laws through the unauthorized destruction of a threatened species.

The PSB on Thursday penalized Vermont Gas another $25,000 for violating the permit that allowed construction on the pipeline to proceed, and for violating a separate agreement with the Agency of Natural Resources.

Specifically, Vermont Gas violated a provision in its certificate of public good requiring the company to secure all necessary permits before beginning construction; a separate agreement with ANR stipulates that Vermont Gas would need to secure a permit in order to kill the plants. By failing to get the permit, VGS broke both agreements.

The Environmental Court’s fine was meant to discourage VGS and others from breaking the state’s environmental laws in the future, the PSB order states. The PSB’s fine is meant to discourage VGS and others from violating conditions of their permits.

The board’s $25,000 fine “approaches the maximum” possible fine of $40,000, according to the order. The fine is less than the maximum penalty because the company notified the state of the violation on the day following the incident, the order states. Penalties in such instances may not exceed, even in the case of continued violations, 10 percent of a penalized company’s gross Vermont revenues.

The $25,000 fine represents .025 percent of the $100 million in gross revenue Vermont Gas received from Vermont customers in 2016.

Vermont Gas has also paid for other violations that occurred during the pipeline’s construction. The first was a $100,000 civil penalty ordered against Vermont Gas in 2015 for taking too long to report to the public a cost increase for the pipeline that was greater than 20 percent.

The second fine cost Vermont Gas $95,000, and it was imposed for violating federal gas safety standards over the summer of 2016. Furthermore, Vermont Gas has been subjected to a cap on earnings from the pipeline for the next three years as a result of what regulators characterized as imprudent planning and management during the project’s construction.

The Environmental Court’s penalty against the company represents the first environmental violation in connection with the pipeline, according to an affidavit signed by Vermont Gas Vice President of Operations John St. Hilaire.

Vermont Gas “has sustained … public scrutiny and reputational harm on account of this accidental incident caused by its contractor,” St. Hilaire wrote in the affidavit.

Parent said that Vermont Gas is committed to protecting the environment, and said the harsh sunflower incident was an event the company took very seriously.

“We immediately notified our regulators about the incident when it happened, and are fully cooperating to pay this fine and move forward,” Parent said. “The company is very excited to finally be serving families and businesses in Middlebury and our focus will remain on offering this important energy choice to even more customers in Addison County in the coming weeks and months.”

Environmental advocates, since the pipeline was permitted in 2013, have hounded Vermont Gas over a wide range of issues, including the pipeline’s cost, the company’s management, safety issues and new evidence of harm to the Earth’s climate.

Vermont Gas has weathered numerous suits and legal challenges along the way. At least one suit remains that challenges the company’s right to have built the structure along a section of the route where it now sits.

One of the company’s most dogged opponents along the way has been the Conservation Law Foundation, whose senior attorney, Sandra Levine, said mistakes leading to the fine imposed Thursday should be understood in the context of a long list of problems stemming from poor management of the project.

Leave a Reply

Shelburne News requires that you use your full name, along with a valid email address. Your email address will not be published, shared, or used for promotional purposes. Please see our guidelines for posting for full details.