PSB hears VELCO on power line delays and cost

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(Host) The cost of a proposed transmission line from Waterbury to Stowe has doubled, and the project will be delayed for a year.

Officials from the Vermont Electric Power Company were before the Public Service Board today to explain the reasons behind the cost increase.

VPR’s John Dillon reports:

(Dillon) The Public Service Board is considering whether it should re-open the Velco case, now that the price has jumped from $20 million dollars to $41 million.

But first, the board wanted to know why the costs estimates have doubled. Velco project manager David Haas gave this explanation.

(Haas) “The cost drivers are the market conditions. The escalation has probably about 50% of the added $20 million for this project. Another 25% is what we feel is more realistic estimates on the right of way and land acquisitions.”

(Dillon) The ten-mile-long power line will run from Waterbury to Stowe. It’s designed to fix a transmission bottleneck in the fast-growing resort area. If the power line isn’t built, the area could face blackouts.

Haas said the transmission company hopes to avoid any disruptions in power supply.

(Haas) “And they’re looking hard at basically how to keep the lights on in the Lamoille area, knowing this project has matured, knowing this project will not be completed by the end of ’07.”

(Dillon) The Department of Public Service, which represents ratepayers, does not want the board to reopen the case. Public Service Commissioner David O’Brien says it’s clear that the transmission upgrade is needed, and he doesn’t want it delayed any longer. But O’Brien is also not satisfied with Velco’s performance.

(O’Brien) “We’re not happy about a doubling of the project cost, which originally was going to be a $12 million project, became a $20 million project, and now it’s a $40 million project. I’m very disappointed that Velco seems to be citing costs that should – should it appears – have been anticipated better in the beginning, so people knew what the price tag was going in.”

(Dillon) But even with the project now at $4 million-dollars-a-mile, O’Brien says alternatives, such as aggressive conservation programs, would probably not be worth it. He says the transmission system is simply too strained, and needs an immediate fix.

(O’Brien) “Just to put this in perspective, this is a situation where if all lines are working, if there’s no fault, if a tree doesn’t fall on a line or a substation doesn’t go out, this system today could fail under certain conditions. That’s well beyond the comfort level we want in terms of reliability.”

(Dillon) The Public Service Board will also examine whether the system for allocating the costs of the project among local utilities is fair. A larger Velco line in the western side of the state is considered a regional upgrade and will be paid for by utilities throughout New England. But the cost for the Lamoille project will be borne locally.

The western Vermont project also turned out to be far more expensive than projected.

Board Member David Coen reminded a Velco witness of the company’s history of making inaccurate estimates. “Deja vu,” Coen said, “is an awful thing.”

For Vermont Public Radio, I’m John Dillon in Montpelier.

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