An energy company is appealing a Dane County zoning decision requiring an additional $25 million in insurance before it can start a pipeline expansion project.
Enbridge Corporation filed an appeal on May 4 asking the Dane County Board of Supervisors to overturn the Dane County Zoning and Land Regulation Committee’s decision.
Company lawyers said county zoning is stepping outside its legal authority by requiring the company to get environmental impairment insurance (EIL) on a conditional use permit for substation upgrades in the Town of Medina.
The company’s plan is to double the volume of tar sand oil being transported through the county on Line 61 that runs from Superior to northern Illinois.
Enbridge lawyers say federal laws govern interstate pipeline safety and the county decision is shutting down the entire Line 61 expansion project unnecessarily, which may lead to high oil prices for consumers.
The company contends the zoning committee and the town have no valid basis under county ordinances to impose insurance requirements.
County zoning unanimously approved the CUP last month after an insurance expert consultant, David Dybdahl, recommended the additional EIL insurance coverage because it specifically covers clean-up, restoration and natural resources damage and fills in the gap of the general liability coverage.
Environmental groups – including the Sierra Club and 350 Madison – advocated for the additional insurance coverage because of the threat of an oil spill, citing the company’s track record with previous spills.
Enbridge says it has more than enough insurance to cover spills — $700 million in general liability insurance and an additional $100 million per incident offered, where it would name Dane County as the insured.
The company said the zoning committee’s decision to require additional insurance was based on erroneous legal standard and political pressure, and not on substantial evidence. It also said the county did not act in a timely manner, delaying the decision on the August 2014 application until April 2015.
Enbridge spokesperson Jennifer Smith said the company wants to work with the county on a “plausible” solution.
“We appreciate the county’s due diligence in looking into this insurance condition but we believe the additional insurance is not necessary, and obtaining EIL is unsustainable,” Smith said.
Smith did not say how much the additional EIL would cost the company but said it is only available on a limited basis and is market driven by other events or factors unrelated to Enbridge. She said the company could not guarantee compliance with the CUP requirements.
“It is not something that we would be able to sustain going forward,” Smith said.
The Line 61 expansion project was expected to be completed by the end of the year but has been held up by the county’s decision delay, and now the appeal process, Smith said. Upgrades have taken place on substations from Superior to Pontiac, Ill., already.
Smith said Line 61 and the Waterloo pump station are critical infrastructures for the region and will provide energy security and reliability for years to come.
Environmental advocacy group, 350 Madison, which urged the county to ask for EIL coverage, is encouraging supporters to come to the June 4 county board meeting where the appeal will be heard.
Roger Lane, Dane County Zoning Administrator, said that there’s only been a handful of zoning appeals since the process changed in 2014.