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Lowell Wind: PSB refuses to stop construction

State regulators said this week they won’t stop Green Mountain Power from preparing groundwork for the Lowell wind project.

The Vermont Public Service Board denied motions by the towns of Albany and Craftsbury and the Lowell Mountain Group to stop construction pending appeals.

GMP contractors began clearing fields off Route 100 in Lowell this week, working on a staging area where construction trailers will be set up and big equipment parked, and also reinforcing logging roads to the ridge line.

The Public Service Board, in an order issued Tuesday, also reiterated its initial finding that the $150 million wind project called Kingdom Community Wind is in the public good.

GMP opted to begin construction while appeals continue because the board has issued strong orders about the public good of the project and because the utility has worked with the state to address or mitigate the environmental impact of the project.

“It’s in the public good,” GMP spokeswoman Dorothy Schnure said Thursday.

The towns of Albany and Craftsbury sought “a stay of the certificate of public good” issued by the board May 31. The towns and the Lowell Mountain Group also wanted a temporary stop to all tree clearing and construction activities pending appeal to Vermont Supreme Court.

The towns said the board made a mistake allowing GMP to go ahead with construction without easement agreements with landowners on land to be conserved in mitigation for the project.

The easement agreements, like some outstanding conditions, must be in place and approved by the board before the 21 turbines to be erected on the Lowell ridge line are turned on.

The towns and Lowell Mountain Group argued that they are likely to prevail in appeals. The towns also said that a stay order to stop construction is necessary to prevent irreparable harm, will not substantially harm other parties and will best serve the public interest.

The towns argued that the board improperly considered the economic interests of GMP in deciding whether to amend the deadline on the easements.

GMP would receive $47 million in federal production tax credits if the project goes online before the end of 2012. GMP argues that would reduce the rates that its customers and those of Vermont Electric Cooperative would pay for electricity from the project.

GMP estimated that the cost of the electricity of the project would go up by 24 percent, or $3.4 million annually, if the production tax credits were lost, the board said.

“We deny the towns’ motion because the towns misunderstand the basis for our decision to extend the deadline for obtaining the easements,” wrote board members James Volz and David Coen.

“The basis for extending the deadline is unrelated to GMP’s profitability and is instead directly related to promoting the general good of the state,” they said, which is their obligation under Act 248.

In a footnote, the board members noted that the towns don’t understand how utilities are regulated.

“The towns argue that the board has placed the natural environment at risk for undue adverse impacts ‘simply for the potential of ensuring that [GMP] can maximize their profits through federal tax credits.’ Not only are the towns incorrect in their interpretation of our reasoning for extending the deadline, their argument also evidences a fundamental lack of understanding about regulated utility ratemaking principles. Any cost reductions resulting from the production tax credits would flow through to ratepayers in rates and would not serve to ‘maximize’ profits for GMP,” the board members said.

In their order, the board members said that the benefits are “a source of long-term, stably priced power for GMP and VEC.” The project, they said, will assist the state in meeting its legislative policy goals for development of in-state renewable energy projects.

GMP, the board members said, isn’t relieved of the obligations. GMP still has to get those easements in place before the turbines can generate power.

The board members also said the Vermont Agency of Natural Resources also agreed that the easement deadline could be delayed.

“Taking all these factors into account, we exercised our discretion and concluded that the general good of the state would be best served if construction could be completed in a timely fashion so that access to the production tax credits could be preserved, and the risk to the natural environment was sufficiently minimized to move the deadline,” the board members said.

They said the towns are not likely to succeed on the merits of their appeal. They also said that a decision to stay the construction pending appeals would substantially harm the project.

The towns asserted that the risk to the natural environment is too high to allow construction to proceed until after the easements are obtained by GMP.

The board disagreed on that as well.

The board rejected the motion by Lowell Mountain Group to stop construction pending appeal.

The group’s attorney said that the unauthorized clearing of land to be conserved – which delayed the start of construction while remediation took place – is evidence that the group’s appeal will succeed.

The board members denied Lowell Mountain Group’s motions for the same reasons as those for the towns.

There are various appeals already before Vermont Supreme Court.