The Department of Public Service is recommending that state regulators order Vermont Gas to pay a $35,000 fine for the delayed announcement of a 40 percent cost increase to the company's pipeline extension.

The Public Service Board approved Vermont Gas' 41-mile natural gas pipeline extension through Addison County in December. The company announced this month that the cost of the pipeline is now estimated at $121 million, $35 million more than expected when regulators approved the project.

The department said the company should have known about market forces that would increase the cost of the pipeline well before it notified state regulators.

"The utility is obligated to pay attention to the costs in the industry," Public Service Commissioner Chris Recchia said.

Nonetheless, he said the benefits of the project still outweigh the recent cost estimate.

Vermont Gas, which is a subsidiary of Gaz Metro, has started the construction of the pipeline that will connect Chittenden and Franklin counties to Middlebury. Pipeline opponents want the construction halted until state regulators consider the new cost estimate.

Recchia said the department is now asking the company to provide quarterly reports on cost estimates.


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