New England’s governors push for electricity tariff for construction of natural gas lines
- [OTA comments in bold]
Here’s one more reason to complain about this bitter cold snap we’re all experiencing: It could cause our electric bills to go up again next year.
We saw this already in the past year, with National Grid’s and NStar’s rates rising by double-digit percentages this winter. Blame New England’s constrained pipeline capacity [But not the corporate quest for profits??]: On cold days, the natural gas pipelines are filled to capacity, but power plants that normally rely on that gas get bypassed to ensure heating customers get what they need. To keep the lights on, more expensive gas is imported from Canada, and rarely used oil and coal turbines are fired up. (During this cold weekend, as much as 35 percent of New England’s electricity came from coal and oil, compared to less than 4 percent normally.) This pattern of tight natural gas supplies and high wholesale electric prices already happened last February, driving up the cost of electricity to consumers this winter. [What about all the existing gas lost from leaking pipelines that are not being repaired??]
Well, top state officials across New England are paying attention, and they’ve come up with an unprecedented solution. The New England States Committee on Electricity, a group of the six governors’ top electricity regulators, sent a letter to electric grid operator ISO New England last week on behalf of the states’ governors. In that letter, the regulators ask ISO New England to approve a tariff on electricity that would help pay for increased natural gas pipeline capacity into New England by the end of 2017.[Taxation without representation! Does that sound familiar?]
The letter also asked ISO New England for similar assistance to develop new transmission lines to import clean electricity from outside New England (most likely in the form of hydropower in Canada).
But it’s the request for help to bring more of that cheap [fracked] shale gas from Pennsylvania that’s particularly unusual. ISO New England is in the electricity business, not the gas business. But the letter underscores just how hard it is to separate the two — more than half of New England’s electricity generation capacity comes from natural gas-fired power plants.
The letter is already sparking some controversy. Both the Conservation Law Foundation and the New England Power Generators Association — two groups that often are at opposite sides of the table on energy issues — immediately raised concerns about the dramatic nature of the governors’ request.
The CLF issued a public statement from its clean energy director, Jonathan Peress. He lambasted the “closed-door meetings” that preceded this request. And he says there’s a very real risk that the states could end up building too much natural gas infrastructure, a move that he says could increase our overreliance on the fuel and leave the public holding the bag.
Dan Dolan, president of the power generators group, expressed a similar concern when I talked to him on Friday about this letter. Dolan says the governors clearly want to see electricity customers subsidize natural gas pipeline construction, with the hope that an increased supply of cheap natural gas in the winter would, in the long run, curb electricity prices here. However, Dolan says he wants to “preach a little bit of patience” and allow for the free market to work its magic [there is no free market] — because there are two key projects under way to expand the pipeline capacity into New England from the west. Spectra Energy’s “AIM” project along its Algonquin pipeline, involving lifting and replacing existing sections with wider pipes, could be done before 2017, largely because it uses the existing right-of-way. Kinder Morgan’s proposed expansion of its Tennessee Gas pipeline, Dolan says, would probably take longer to complete.
The governors’ driving worry seems to be our escalating electric costs, caused by our dependence on natural gas and our restrained ability to import that gas from cheap sources from the west. [Where’s the part about CONSERVATION??] ISO New England, meanwhile, is more concerned with reliability. As New England becomes increasingly dependent on natural gas for its electricity, it’s easy to see how keeping the lights on during the winter could get tougher over the next few years.
In fact, ISO New England has identified this overreliance on natural gas coupled with the constrained pipeline capacity as the biggest threat to the electricity grid’s reliability. Marcia Blomberg, a spokeswoman for the grid operator, tells me that officials at the Holyoke-based organization view this proposal from the governors as a novel approach [novel!] to spurring gas pipeline construction, but also one that could break the logjam that has previously stymied the level of pipeline expansion needed to meet New England’s needs.
In the end, the question of whether ISO New England can impose such a tariff will probably be up to the Federal Energy Regulatory Commission.
Then there’s the question of who will pay for all this construction work. Electricity consumers, through a tariff on their bills? Natural gas consumers, through increased rates imposed by gas utilities to help recoup their costs? A mixture of both?
It’s hard to know how this will all play out. But one thing’s almost certain: We’ll probably all end up paying a price, in some way or another, because of our increasingly precarious position at the end of the pipeline.
[But not because of greedy corporados?]