By Ted Waddell
CALLICOON — June 6, 2006 – "If the customers are willing to pay, we'll build," said Mike Armiak, an economic development consultant from Millennium Pipeline Company, LLC, of the proposed 186-mile natural gas pipeline that would extend from Corning in Steuben County to Rockland County's Ramapo.
But if the company is going to invest more than $375 million in outdated energy infrastructure, they want assurances from the affected counties along the route (Tioga, Chemung, Steuben, Broome, Delaware, Sullivan, Orange and Rockland) that local Industrial Development Agencies (IDAs) will agree to a revised PILOT (payment in lieu of taxes) program.
In Sullivan County, the proposed pipeline would cover about 35 miles in eight towns: Bethel, Cochecton, Delaware, Forestburgh, Fremont, Highland, Lumberland and Tusten.
According to Armiak, the PILOT tax abatement program would be scheduled over a 15-year period: Millennium would pay 25 percent of existing property taxes at currently assessed value (right-of-way and/or easements) for the first five years; 50 percent during the second five-year period; and 75 percent for the remaining five years.
After that, the company would pay the prevailing full current tax rate as established by the town assessor.
"Basically what we're saying is that we need some assistance up front," said Armiak at the May 22 public informational meeting held at the Delaware Community Center in Callicoon.
"It allows us to make payments to the IDAs, who in return give the money to the taxing jurisdictions in the towns," he added. "After 15 years, we would start paying property taxes just like any other taxpayer."
Millennium first pitched a tax rate increase of about 2 1/2 percent to local towns that upped the ante over what Columbia Gas Transmission was paying to about 7.5 percent after a series of negotiations with the IDAs.
Local examples (excluding school district taxes): in the Town of Fremont, Columbia Gas is paying approximately $6,100 in property taxes every year, but Armiak said if the Millennium Project is approved, after 15 years Fremont would be getting about $46,000 annually.
In the Town of Delaware, the rough numbers would be $5,500 versus $41,500.
In order for Millennium to start building the pipeline, which in essence replaces Columbia's 12-inch diameter line with a new 30-inch diameter line (utilizing more than 90 percent of existing easements), all affected counties would have to agree to the same proposal before the IDAs.
The project would require a 50-foot right-of-way.
"It's all for one, one for all," said Armiak, "If one says ‘no,’ we have to start over."
What’s It All About?
According to Millennium, interconnections with gas utilities, storage fields and major interstate pipelines at several points will significantly enhance the efficiency of the Northeast's natural gas delivery system.
At present, Columbia's 12-inch line can transport up to 200,000 decotherms per day, while the proposed 30-inch line would be capable of 525,000 decotherms daily (375,000 are already sold to utility customers including NYSEG, Orange and Rockland, Central Hudson, Keyspan Energy and Con Edison).
If the project is approved, construction of the first phase is scheduled to start in early 2007 and be completed and in service by November '07, with Columbia Gas customers then becoming customers of MPC.
The Millennium Project was first proposed in 1998 with a projected in-service date of 2000 but in essence never got off the ground "because the cost of the pipeline exceeded what the market was willing to bear," said Armiak.
"And here we sit and not a shovel of dirt has been turned," added Armiak.
Responding to the question of growth in the area, Armiak replied, "If you don't have the infrastructure in place, you're assuring it's never going to happen."
On the issue of safety, he said the natural gas pipeline industry is governed by the U.S Department of Transportation's Office of Pipeline Safety: all welds are X-rayed, the pipe is wrapped to limit corrosion, lines are protected with a minimum of three feet of groundcover; the pipelines are monitored 24/7 at several locations and cutoff valves can shut down the system; and plans have been created to deal with terrorism.
But what happens if there's a leak and the gas is ignited by a spark?
"In the worst case-scenario, there would be an explosion, a hole in the ground and the [non-toxic] gas would dissipate into the air," said Armiak.
And What About Powerlines?
In several public meetings regarding the proposed New York Regional Interconnection (NYRI) project to establish a 190-mile high-voltage direct current (HVDC) electric transmission line passing through Sullivan County, NYRI representatives have gone on record that the preferred route of their HVDC lines would utilize existing Columbia Gas/MPC ROWs/easements.
According to NYRI, if their project is approved, construction would start in 2008 with a completion date of 2011.
At the May 22 meeting, Armiak addressed that question.
"They have made one contact with us as far as I know, but we certainly have no agreement with them," he said. "In fact, I don't see how their timeline for construction could possibly mesh with ours."
In a subsequent phone conversation, Armiak added, "We do not have any right to allow them [NYRI] to build on our right of ways or easements. . . . There have been introductory calls, but no detailed discussions."