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'Siamese Triplets' to Deliver Gas to Vermont

'Siamese Triplets' to Deliver Gas to Vermont

New York State Electric and Gas parent company Energy East Corp. is teaming up with Iroquois Gas Transmission and Vermont Energy Park Holdings on a combined transmission, distribution and electric generation project to serve southwestern Vermont.

Iroquois will be responsible for building a new 55-mile, 24-inch diameter lateral off its mainline to carry up to 300 MMcf/d of gas to the Bennington area of Vermont from a point southwest of Albany, NY. In Bennington, a Vermont subsidiary of Energy East would begin a new distribution system that would deliver gas to industrial, commercial and about 30,000 residential customers in southern Vermont along a route that would terminate in Rutland. Vermont Energy would build two new combined-cycle gas-fired generation plants in Bennington and Rutland counties that would soak up the majority of the supply delivered by the transmission and distribution lines.

"If you look at this project, it's letting people do what they're best at doing," said Iroquois' Herb Rakebrand, director of marketing and transportation. "The power plant developer is doing the power plant. Energy East is doing all the distribution work and [market development]. And Iroquois is bringing the high-pressure pipeline to the region.

"We're just Siamese triplets," he said. "Independent parties that are dependent upon one another. Right now there is no formal relationship, but that certainly is being investigated."

The companies expect "everybody and their aunt will be jumping into the pool." Because of their "holistic" approach to the market, with gas distribution and new power service, they should build significant new markets, said Rakebrand.

Energy East and subsidiary NYSEG have been more active than most LDCs in building new distribution franchises in rural areas of New York and other states. NYSEG has added 52 new franchise territories in the last 10 years and 25 in only the last three years. And parent Energy East, along with partner Central Maine Power, received conditional authorization in March to begin constructing new distribution in five areas of Maine, centered on Augusta, Bangor, Bath-Brunswick, Rumford, and Waterville.

Michael I. German, senior vice president of Energy East, attributes their success to allowing all parties to contribute to project design and routing. "In addition to the state and federal agencies that have to approve our plans, we are getting community leaders and property owners involved in the planning process to obtain their input before plans are finalized and final regulatory approvals are sought," said German. "We want to hear from all of the stakeholders and have an opportunity to address their concerns."

Rakebrand said the companies have received "a tremendous welcome from the state of Vermont because of the fact that the project is different than others that have come there. Everybody else just wanted to use Vermont to get from A to B, and said 'hey maybe we'll be nice enough to drop off a meter station for you.'

"There is value for New York as well," he said. "There will be the development of some franchises east of Albany for communities that want gas that currently can't get it. I believe that we'll be able to beef up the current infrastructure of [Niagara Mohawk] as well in their eastern territories. Also, we've been speaking to developers of the new turbine technology generation as well as repowering some of the NiMo plants that will be sold. However, Vermont is going to be a major effort."

The companies plan to file their applications in 1Q99 with service by November 2001. They have met with Vermont and New York and agreed to a "rough corridor on a map," which traverses mostly existing right of way. The Iroquois lateral will be a new Zone (2a) on the Iroquois system. Currently there are two zones, one from the Canadian border south to Albany and another from Albany to New York City.

Rakebrand said existing customers should not fear they will be subsidizing the project. "This pipe will be supported solely by the markets it's built to serve."

Iroquois' most recent major expansion project, the addition of the Athens compressor station, will add 35 MMcf/d to system capacity by November, but the pipeline has not attempted an expansion of this size since going into service in 1991.

Pipeline companies would be foolish not to expect significant opposition to expansion projects. One of the most recent new projects, Independence Pipeline, has more than 1,400 interventions in its FERC docket. And Iroquois perhaps is the company that triggered the new era of more organized environmental and landowner opposition. Rakebrand said he doesn't expect the level of opposition encountered in the beginning of service because Iroquois no longer is the "new player on the block." Another fact in its favor is the amount of existing power transmission right of way in eastern New York, he said.

Rocco Canonica

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