State wants explanation for VELCO estimate increase

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(Host) The Vermont Electric Power Company has doubled its cost estimate for a new power line in Lamoille County.

The state is not pleased by the news. The head of the agency that represents consumers says he wants a detailed explanation about why the costs have climbed so sharply.

VPR’s John Dillon reports:

(Dillon) VELCO first projected that the line from Waterbury to Stowe would cost about $13.5 million dollars.

Then it upped the estimate to $20 million. Now, the transmission company says it will cost about $40 million to build the 10-mile line.

Public Service Commissioner David O’Brien, whose department represents consumers, wants to know why the estimates were so off.

(O’Brien) “I think what’s most troubling to us, and where our disappointment lies is the scale of the increase. I mean, being approaching 100 percent increase of the cost, we’re starting to worry about the degree to which we can rely on the prices that are given to us at the outset of a proposal.”

(Dillon) VELCO disclosed last year that its estimates to complete the Northwest Reliability Project – a power line now being built on the western side of the state – had jumped by 100 million dollars.

O’Brien points out that ratepayers from all over New England will pay for the northwest project, since it’s considered part of the bulk transmission system. He says in the case of the Lamoille County power line, Vermont ratepayers in the area served by the project will pick up most of the tab.

(Obrien) “And we’ve got to have answers. I mean we’ve got to understand how we can be off by this scale. I understand that it’s a tough environment, but you know, we’re just not coming close.”

(Dillon) VELCO spokesman Craig Armstrong says everything connected with building a power line has gone up in price, including the cost of steel and labor. He says the rebuilding work that followed Hurricane Katrina has also driven up the cost for infrastructure projects like power lines.

(Armstrong) “It’s clear that with the cost variations that have gone up, anyone in the business who has the responsibility of building these projects understands that it is terrifically difficult to pinpoint a level of accuracy when you’ve had terrific fluctuations in the cost of materials, in the cost of materials, and the catastrophic events that have hit the Untied States, such as Katrina.”

(Dillon) O’Brien says that despite the large price increase, there’s a tremendous need for the Lamoille project. The new 115 kilovolt line is designed to serve the fast-growing Stowe resort community, and the transmission network is already severely strained in the region.

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

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