Lawyers for the DEM, the Town of Tiverton and residents of North Tiverton affected by contaminated soil ask to be allowed to intervene in the proposed merger of National Grid and New England Gas Co.

02:51 PM EDT on Wednesday, April 26, 2006

BY GINA MACRIS
Journal Staff Writer

WARWICK -- The issue of soil contamination in Tiverton should have no bearing on state approval of the proposed merger of National Grid and New England Gas in Rhode Island, a lawyer for the gas company's parent firm argued yesterday.

Gerald Petros, lawyer for Southern Union, asked the Division of Public Utilities and Carriers to bar the state Department of Environmental Management, the Town of Tiverton, and residents affected by the contamination to have any voice in the proposed sale.

Lawyers for all three entities appeared before hearing officer John Spirito yesterday and asked to be allowed to intervene as the Division of Public Utilities and Carriers reviews the sale.

The DEM issued a letter of responsibility three years ago, citing Southern Union for the improper disposal of waste by its former subsidiary, the Fall River Gas Co., which burned coal to create gas in the early part of the last century.

Robert McConnell, lawyer for residents affected by the sale, said it is in the public interest for the Division of Public Utilities to consider whether Southern Union should be allowed to reap a $500-million profit and a sizable tax break without addressing the remediation of the toxic waste.

Brian A. Wagner, a lawyer for DEM, said, the agency wants "some level of security" that the sale is not a move by Southern Union to divest itself of its local assets and "make it as difficult as possible" for the state to pursue remediation of the contamination.

Petros said Southern Union has assets of $5.4 billion, and the sale will have no impact on DEM's ability to seek legal remedies or the rights of residents to take action in U.S. District Court, where they have filed a complaint against the company.

Laura Olton, general counsel for National Grid, said her firm believes the sale is a 'good deal" that will lead to "very efficient delivery of gas and electricity" at enhanced savings.

"National Grid is very sympathetic to Tiverton and its residents," she said, "but this proceding is not the forum to address the issue."

Petros, meanwhile, said that McConnell's request to intervene amounts to taking "129 plaintiffs in the federal court case and putting them here," Petros said.

"Tiverton's motion presumes a judgment has already been entered," Petros said.

"Regardless of what you read in the press," Petros said, "no hearing officer has determined that Southern Union is responsible" for the toxic soil dumped in the Bay Street neighborhood in North Tiverton.

He challenged the legitimacy of DEM's ruling on Southern Union's responsibility, contending that it is merely an allegation that DEM must yet prove -- in a venue outside the jurisdiction of the Division of Public Utilities and Carriers.

Wagner said DEM might agree with Southern Union's objections "if it were not the case that Southern Union has repeatedly refused to do the work to assess the damage in Tiverton."

While Southern Union contends DEM should prove the utility would lack the assets to remediate the contamination after the sale, "part of that equation is missing," Wagner said.

Southern Union is "at the table with unclean hands," he said. DEM has ordered Southern Union to come up with three remediation plans -- including costs -- and the company has refused.

"Knowing this, it's inappropriate to let them divest their ties to the local area" without addressing the environmental clean-up, Wagner said.

Like Wagner, McConnell and Tiverton's solicitor, Jeanne Scott, each said they were looking for assurances that the sale would not make it more difficult for the state to tap into assets necessary for remediation of the soil, which is contaminated with lead, arsenic, cyanide and benzo(a)pyrene.

In response to a question from Spirito, they said they were not looking for remediation funds to be placed in escrow.

Leo Wold, lawyer for the advocacy section of the Division of Public Utilities, said he believes the availability of assets for remediation is "a public interest question."

"This is not making judgment about culpability," Wold said, but whether the sale would "increase the burden" on DEM or individual residents affected by the environmental problems once the issue of liability is settled.

Besides DEM, the office of Attorney General Patrick C. Lynch has filed a broad motion to intervene in the sale as a representative of the public interest. It drew no objections yesterday.

Spokesmen for Lynch, however, have said that the environmental issues in Tiverton are one of Lynch's top concerns regarding the sale.

Spirito said he planned to issue a decision in several days that will determine whether he will allow the various petitioners to intervene.

gmacrisATprojo.com / (401) 277-7455