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HomeMy WebLinkAboutAppendix F(4) - Reply ltr to Yarmouth (4.17.25) via email April 17, 2025 Mark Grylls, Director of Inspectional Services/Building Commissioner Robert Whritenour, Town Administrator Yarmouth Town Hall 1146 Route 28 South Yarmouth, MA 02664 Re: National Grid LNG Tank Replacement Project Dear Commissioner Grylls & Administrator Whritenour: I am writing on behalf of Boston Gas Company d/b/a National Grid (“National Grid” or the “Company”) regarding the liquified natural gas (“LNG”) tank replacement project (the “Project”) that the Company plans to undertake at the site of the existing tank on Company- owned property at 127 White’s Path, South Yarmouth, MA (the “Property”). At the Town’s request, the Company provided a legal opinion that the Project did not require local zoning approval because the facility as well as the entire Property were exempted from local zoning by order of the Department of Public Utilities (DPU) in 1968 and 1971 pursuant to G.L. c. 40A, § 10.1 The Company subsequently provided copies of those DPU orders. Town Counsel responded as follows: I find this dubious. While I see it as likely that they will get an exemption from DPU, I believe they need to apply for it. The original exemption cannot reasonably be read to exclude all future permitting and the statute (and history in this matter) contemplate separate applications for each new requirement for an exemption. Mark: This [i.e., the DPU orders] does nothing to alter my original position. In fact, these decisions are for very specific installations. The second one also expressly notes certain limitations on the size of tanks so if they are now exceeding that, they need further relief. In my opinion, they need to go back to DPU again to get an amended decision. Since I have not been provided with Town Counsel’s name or contact information and he has not contacted me directly, I write to provide the Town and Town Counsel with additional relevant information about the Project and to respond specifically to Town Counsel’s opinions. Accordingly, I ask that you please pass this on to Town Counsel. 1 G.L. c. 40A, § 10 is the predecessor of G.L. c. 40A, § 3. Mark R. Rielly Asst. General Counsel & Director 170 Data Drive, Waltham, MA 02451 T: 781-902-4208 ◼ C: 781-589-0283 ◼ Mark.Rielly@nationalgrid.com ◼ www.nationalgrid.com Mark Grylls, Director of Inspectional Services/Building Commissioner Robert Whritenour, Town Administrator April 17, 2025 Page 2 I. Project Need and Background The South Yarmouth LNG plant (the “Plant”) is an essential element of the natural gas distribution system that is needed to supply over 120,000 customers on Cape Cod. The existing tank has operated safely and reliably for approximately 50 years; however, the Company’s assessments of the tank condition reveals that it is rapidly approaching the end of its useful life. Given the importance of the Plant to system reliability on the coldest winter days, National Grid must replace the tank. The Project represents a straightforward maintenance and replacement activity that is proposed to continue safe and reliable service from the Plant. The Project consists of the necessary “like-for-like” in-kind replacement of the existing LNG tank (other than using improved, industry-standard versions of the same equipment). In light of Town Counsel’s opinion that “if they are now exceeding that, they need further relief” from the DPU, it is important to highlight that the new tank will not increase the LNG storage capacity at the Property; in fact, the capacity will be decreased by approximately 20% (2.1M gallons to 1.7 M gallons). II. Neither the Statute nor the DPU Orders Require the Company to Petition the DPU to Amend or Obtain New Zoning Exemptions. Town Counsel opines that “[t]he original exemption cannot reasonably be read to exclude all future permitting and the statute (and history in this matter) contemplate separate applications for each new requirement for an exemption.” This view is incorrect for several reasons. First, the operative statue, G.L. c. 40A, § 3, grants the DPU broad authority to exempt both “lands or structures” from local zoning. In this case, it is undisputable that the DPU exercised its authority in both respects; it exempted the LNG and propane facilities proposed at the time and also the entire approximately 29-acre Property. Second, the DPU expressly stated that its zoning exemption decision would remain in effect “to the extent that they may be used for or in connection with the processing, transportation, liquefaction and regasification and storage of natural gas”. This sentence makes absolutely clear that the DPU did not intend for the exemption to apply only to the operation of the current LNG Plant. The current Project merely replaces an asset; it does not change the LNG use of the Property or the Plant. Third, the DPU did not impose a condition that directed the Company to return to the DPU to amend its decision when the Company replaced, modified, or modernized the facility over time. In that regard, while the DPU decision imposes many conditions on its grant of the exemption of the Plant, only one exemption relates to the Property itself – that it continue to be used for LNG purposes. This is a condition with which the Company’s Project clearly complies. The only reason why the Company might need to seek an amended or a new exemption would be if the Company exceeded the storage limits imposed by the DPU or if the Company proposed a project that would not “be used for or in connection with the processing, transportation, liquefaction and regasification and storage of natural gas.” Mark Grylls, Director of Inspectional Services/Building Commissioner Robert Whritenour, Town Administrator April 17, 2025 Page 3 The DPU’s 1971 Order bears out this interpretation of the DPU’s Orders. The Company petitioned the DPU again because it proposed to add more propane storage than the 1969 Order allowed. Specifically, to provide peak shaving gas for the 1971-72 heating season, the Company proposed to install two additional propane tanks for a total of 60,000 gallons. That exceeded the total propane storage of 9,000 gallons that the DPU allowed under Condition H of its 1969 Order. Thus, the Company returned to the DPU not merely because it proposed to add new equipment to the Plant, but only because it would exceed the storage limitations previously imposed by the DPU. By contrast, the Company now proposes to reduce the total LNG storage capacity on site. Lastly, the fact that the DPU Orders are over 50 years old is irrelevant. As noted above, only one condition was placed on the exemption of the Property - that it continue to be used for LNG purposes. No conditions established any time limitations or ownership constraints. It bears recognizing that National Grid, Eversource and other utilities own and operate a host of old assets and facilities, many of which are subject to DPU zoning exemptions. For instance, the DPU routinely granted zoning exemptions for electrical transmission lines when they were originally constructed in the 1950s and 1960s. When the Company refurbishes those lines, which it does regularly and which often involve the replacement of hundreds of structures from wood to steel, the Company does not need to petition the DPU to amend its original zoning exemption order. Similarly here, the replacement of an old asset does not trigger the need for a new zoning exemption (unless, as discussed, there is an exceedance of condition or limitation). There is no support or precedent for the proposition that the replacement of a utility asset that has been granted an exemption by the DPU for both the facility (here the LNG Plant) and the Property requires a further exemption or other form of zoning relief by virtue of replacing that facility at the end of its useful life. In closing, I hope that this letter helps to explain why the replacement of an existing Plant asset is exempt from local zoning and why the Company is not required to return to the EFSB for any further exemption or to amend the existing exemptions. I ask that the Town or Town Counsel respond to this letter so the Company knows what the Town’s position is on this issue. In the meantime, please do not hesitate to reach out if you have any questions or would like to discuss further. Yours truly, Mark R. Rielly Assistant General Counsel National Grid Service Company Inc. cc: Brendan Maloney, Project Manager, NG Bill Ciocca, Community Manager, NG