Appeal from Public Utility Commission James Volz, Chair
Levine, Vermont Advocacy Center, Montpelier, for Appellant.
Craig S. Nolan and Owen J. McClain of Sheehey Furlong &
Behm P.C., Burlington, for Appellee Vermont Gas Systems, Inc.
C. Burke, Department of Public Service, Montpelier, for
Appellee Vermont Department of Public Service.
PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll,
1. The question in this case is whether steep increases in
project cost estimates for the Addison Natural Gas Project,
combined with changes in energy markets, create a
"substantial change" such that Vermont Gas System,
Inc. (VGS) must secure an amended certificate of public good
under Public Utility Commission Rule 5.408. In ruling on
Conservation Law Foundation's (CLF) separate petition for
declaratory relief, distinct from post-judgment review of the
Commission's certificate of public good, the Commission
held that increased cost estimates for VGS's natural gas
pipeline project, coupled with changes in the energy markets,
were not a "substantial change" under Rule 5.408.
We defer to the Commission's reasonable interpretation of
Rule 5.408 and accordingly affirm.
2. The relevant, undisputed facts and procedural history are
as follows. In December 2013, under docket 7970, the
Commission approved a certificate of public good
(CPG) for VGS's forty-one-mile natural gas pipeline
traversing Addison and Chittenden Counties (the Project).
Considering the criteria in 30 V.S.A. § 248, the
Commission concluded that the Project "will promote the
general good of the State of Vermont, " subject to a
condition (among others) that:
Construction, operation, and maintenance of the proposed
Project shall be in accordance with plans and evidence
submitted in this proceeding. Any material deviation from
these plans or a substantial change to the Project must be
approved by the [Commission].
3. In July 2014, while an appeal of the CPG was pending
before this Court, VGS, pursuant to Commission Rule 5.409,
filed an updated capital cost estimate with the Commission.
The updated estimate reflected a 41% net change in estimated
cost, from $86.6 million at the time of the CPG award to
$121, 655, 000. In September 2014, this Court granted the
Commission's request for a remand of the CPG proceeding
so that it could determine whether to reopen the CPG
proceedings under Vermont Rule of Civil Procedure
60(b) due to the estimated Project cost
4. On remand, the Commission held a hearing and CLF filed a
post-hearing brief arguing that the Commission should reopen
the CPG proceedings. In a thirty-page decision released in
October 2014, the Commission ruled that the Project cost
estimate increase was "not of such a material and
controlling nature so as to change [the Commission's]
previous determination that approval of the Project pursuant
to the criteria of 30 V.S.A. § 248 will promote the
general good of Vermont."
5. In December 2014, VGS filed a second update of the
estimated capital costs of the project. By that time,
estimated project costs had risen to $153.6 million,
representing a 78% increase over the original estimate at the
time of the CPG award. In February 2015, this Court granted
the Commission's request for a second remand in docket
7970 to enable the Commission to again consider whether to
reopen the CPG proceedings under Rule 60(b).
6. After an opportunity for discovery, the Commission held
evidentiary hearings. The Commission considered the revised
cost estimates as well as arguments that the CPG did not
serve the public good in light of changes in energy markets.
CLF filed a post-hearing brief. On January 8, 2016, the
Commission held that the new evidence-"the most
significant of which" being "the much higher
estimated cost of the Project"-did not alter its
previous conclusion that the Project "promot[ed] the
general good and is in the best interest of the state"
under § 248 criteria.
7. Meanwhile, in July 2014, during the pendency of
proceedings in docket 7970, CLF filed a separate petition
(docket 8330) seeking a declaratory ruling from the
Commission that the Project cost increases and changes in
energy markets represented a "substantial change"
under Commission Rule 5.408, thus requiring an amended CPG.
Commission Rule 5.408 states:
An amendment to a certificate of public good for construction
of generation or transmission facilities, issued under 30
V.S.A. § 248, shall be required for a substantial change
in the approved proposal. For the purpose of this subsection,
a substantial change is a change in the approved proposal
that has the potential for significant impact with respect to