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Natural gas plant eyed in Vernon

Town officials are talking with a potential developer of a plant that, in theory, would use existing VY electrical infrastructure and connect to a proposed pipeline in northern Mass.

VERNON—In a town hit hard by the shutdown of Vermont Yankee, officials say a natural-gas plant — with development costs estimated at $750 million — may be in the works.

The optimism in Vernon is carefully qualified, however.

For one thing, the plant is far from a sure bet, and it’s not yet been disclosed which sites are under consideration.

Also, there have been a few recent hints of opposition from the general public, though the town government has been generally supportive of the concept so far.

And the proposed pipeline upon which the plant would depend is the subject of bitter, organized opposition from multiple grassroots groups and town governments throughout western Massachusetts and New York state.

But this much is clear: The Vernon Planning Commission has been meeting regularly with a coordinator and potential developer who is interested in pursuing a gas plant that would tie into the proposed Kinder Morgan Northeast Energy Direct pipeline project in neighboring Massachusetts.

“We’ve probably got four or five sites under consideration,” said Don Campbell, a Winhall resident who has experience in utility finance and is guiding the gas-plant effort. “The one that we would go forward with is the one that has the most appeal to Vernon.”

A meeting to gauge the public’s support for a plant proposal may be imminent, and those who are backing the project say time is of the essence.

“We have an opportunity to cause this to happen now,” Campbell said. “We won’t have that opportunity in another year.”

Value in the electrical infrastructure

Vernon, like all of Windham County, still is in the early phases of grappling with the economic blow of Vermont Yankee’s shutdown. The workforce has been cut roughly in half since the plant stopped producing power Dec. 29, and more job losses are scheduled for 2016.

Decommissioning the plant is expected to take decades, and spent nuclear fuel will be stored on site for the foreseeable future.

So those involved in the gas-plant effort are quick to say that they are not looking to redevelop the core Vermont Yankee property, which will be encumbered with long-term nuclear-regulatory issues.

At the same time, the group sees much value in the electrical infrastructure that served VY for four decades.

“Our feeling is [...] right in the vicinity of the plant is the most-obvious choice,” Vernon Planning Commission Chairman Bob Spencer said at a recent meeting. “And it’s an economical choice for the developer because of the connection to the existing power lines and the other infrastructure that’s there — whether it’s on Entergy property or adjacent property.”

In an interview Sept. 18, Campbell put it this way: “We continue to work with the town to evaluate all the options to come up with the best plan for retasking that part of the Vermont Yankee infrastructure that has continued value.”

Campbell and a partner in the venture, Brattleboro resident Hervey Scudder, are no strangers in Vernon. Last year, they sat down with the Selectboard to discuss the possibility of a biomass-fueled power plant with a possible natural-gas component.

Complications with that proposal, including the controversy that has plagued some biomass projects, led to the idea being scuttled.

“We just concluded that would be too heavy of a lift,” Campbell said.

Now, attention has turned to a fully gas-powered plant. The key component of Vernon’s idea is the proposed Northeast Energy Direct gas pipeline, pursued by Houston-based Kinder Morgan as a way to bring large quantities of relatively cheap natural gas from the shale fields of Pennsylvania to the New England market.

Kinder Morgan maps show the pipeline curling out of New York state and into northwest and north-central Massachusetts before turning north into New Hampshire and ultimately terminating in Dracut, Mass., on that state’s border with New Hampshire.

The project has not yet received approval from the Federal Energy Regulatory Commission, but Kinder Morgan is projecting that the pipeline could be in service by late 2018.

The proposed pipeline is by no means a fait accomplis. In Northfield, Mass., Vernon’s neighbor to the south, a group, Northfield Gas Pipeline Resistance, has formed, and the town’s Board of Health in August ordered Kinder Morgan and “any of their subsidiaries or affiliated companies to immediately cease from carrying on the activities associated with the pipeline.” Opponents to the project are finding allies in their state lawmakers, and a number of towns along the pipeline’s route have voted to stand against it.

But advocates for a Vernon gas plant can see that, on the pipeline’s route through Massachusetts, it passes tantalizingly close to the Vermont border. Campbell said a 7-mile spur running along existing utility infrastructure could reach Vernon.

Campbell said he has been in touch with Kinder Morgan, where a spokesman for the pipeline project did not respond to a request for comment. He has not yet contacted federal or state officials.

But Campbell said he has been busy assembling a “first-tier” development team for a potential Vernon gas plant including technical, financial, and legal partners. He declined to name those partners but said they “are very close by. I’m going back to New York on a regular basis.”

Campbell said he is relying on his experience and expertise to piece together the Vernon proposal. He worked as an investment banker “specializing in investor and publicly owned electric and gas utilities for two decades.” He lists Kidder, Peabody & Co.; Credit Suisse First Boston; and Paine Webber on his resume. In Vermont, he has set up a company called Stonewall Energy Advisors LLC.

But those credentials, and the groundwork already laid for the gas project, may not mean much without a go-ahead signal from Vernon. Campbell repeatedly said that, without broad support in the town, the project won’t proceed, and he resists the term “developer” at this stage of the game.

“We’re supporting Vernon as facilitators,” Campbell said. “When Vernon says, ‘Now you’re charged [with pursuing a gas plant],’ then we’re wearing the developer hat.”

“If it’s right for the town, and there’s town support, then we’ll go the next steps,” he added. “We have zero commercial relationship with anybody. The only master we have is Vernon.”

‘No authority or approval process’

The Vernon Planning Commission, given that its mission includes land-use planning and economic development, has been talking with Campbell and Scudder throughout 2015.

At a recent meeting, Spencer assured Selectboard members and residents that the commission has been acting in an advisory and information-gathering role. He also noted that Vernon has no zoning regulations.

“We have no authority or approval process as a planning commission,” Spencer said. “We’re doing this more as informational and actually trying to give feedback when they ask us a question.”

While not advocating for a Vernon gas plant, Spencer and other planning commission members say they believe there is a place and a need for such a project in the area. They cite the loss of Vermont Yankee’s 650 megawatts of power generation, and they argue that renewable energy alone cannot keep the electric grid stable.

“If we’re going to achieve our [renewables] goal, we’re going to have to do things like this gas plant,” said Patty O’Donnell, a former Selectboard chairwoman who now serves on the town Planning Commission. “There is going to be a gas plant somewhere, because the region needs it.”

Such a project would not come without controversy. If the Vernon initiative moves forward, there will be questions about the safety and environmental impact of a gas plant, not to mention concerns about natural-gas extraction itself: Both Vermont and New York have banned the practice of hydraulic fracturing, known as fracking.

Later in the Aug. 31 Vernon Selectboard meeting where Spencer gave his presentation, resident Bronna Zlochiver flatly declared, “For the record, I am opposed to a gas-powered plant coming to Vernon.”

Taking the plan to the public

Officials say they expect to soon take the gas-plant proposal — with more detail than is currently available — to the townspeople.

Vernon Selectboard Chairwoman Chris Howe said she believes the Planning Commission is “doing a fantastic job,” but she wants more public input soon.

“As far as the gas plant goes, I don’t have any comments to speak of one way or the other as of yet,” Howe said. “I really think, though, that it is important to let the people of Vernon decide if we should pursue this any further.”

Planning Commission member Janet Rasmussen said that’s the intent, but not before there is more to talk about. The idea is that, “when we come to the town, we can present you with as much information as we possibly can, which we don’t have yet,” she said.

Looming above the debate is the idea that, even if Vernon decides it wants a gas plant, it may not get one.

“We’re likely not the only town in this corridor that’s thought of this,” Rasmussen said.

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Originally published in The Commons issue #324 (Wednesday, September 23, 2015). This story appeared on page A1.

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