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

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

“If you look at this project, it’s letting people do whatthey’re best at doing,” said Iroquois’ Herb Rakebrand, director ofmarketing and transportation. “The power plant developer is doingthe power plant. Energy East is doing all the distribution work and[market development]. And Iroquois is bringing the high-pressurepipeline to the region.

“We’re just Siamese triplets,” he said. “Independent partiesthat are dependent upon one another. Right now there is no formalrelationship, but that certainly is being investigated.”

The companies expect “everybody and their aunt will be jumpinginto the pool.” Because of their “holistic” approach to the market,with gas distribution and new power service, they should buildsignificant new markets, said Rakebrand.

Energy East and subsidiary NYSEG have been more active than mostLDCs in building new distribution franchises in rural areas of NewYork and other states. NYSEG has added 52 new franchise territoriesin the last 10 years and 25 in only the last three years. Andparent Energy East, along with partner Central Maine Power,received conditional authorization in March to begin constructingnew 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 toproject design and routing. “In addition to the state and federalagencies that have to approve our plans, we are getting communityleaders and property owners involved in the planning process toobtain their input before plans are finalized and final regulatoryapprovals are sought,” said German. “We want to hear from all ofthe stakeholders and have an opportunity to address theirconcerns.”

Rakebrand said the companies have received “a tremendous welcomefrom the state of Vermont because of the fact that the project isdifferent than others that have come there. Everybody else justwanted to use Vermont to get from A to B, and said ‘hey maybe we’llbe nice enough to drop off a meter station for you.’

“There is value for New York as well,” he said. “There will bethe development of some franchises east of Albany for communitiesthat want gas that currently can’t get it. I believe that we’ll beable to beef up the current infrastructure of [Niagara Mohawk] aswell in their eastern territories. Also, we’ve been speaking todevelopers of the new turbine technology generation as well asrepowering 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 withservice by November 2001. They have met with Vermont and New Yorkand agreed to a “rough corridor on a map,” which traverses mostlyexisting right of way. The Iroquois lateral will be a new Zone (2a)on the Iroquois system. Currently there are two zones, one from theCanadian border south to Albany and another from Albany to New YorkCity.

Rakebrand said existing customers should not fear they will besubsidizing the project. “This pipe will be supported solely by themarkets it’s built to serve.”

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

Pipeline companies would be foolish not to expect significantopposition to expansion projects. One of the most recent newprojects, Independence Pipeline, has more than 1,400 interventionsin its FERC docket. And Iroquois perhaps is the company thattriggered the new era of more organized environmental and landowneropposition. Rakebrand said he doesn’t expect the level ofopposition encountered in the beginning of service because Iroquoisno longer is the “new player on the block.” Another fact in itsfavor is the amount of existing power transmission right of way ineastern New York, he said.

Rocco Canonica

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