Gas pipeline dealt possibly fatal blow

CT calls off procurement after NH, MA rulings

By Bruce Mohl/Commonwealth Magazine

October 26, 2016

VTdemo

THE PUSH FOR A NEW PIPELINE into New England may have been dealt a fatal blow when Connecticut officials called off a process to procure more natural gas largely because of decisions in Massachusetts and New Hampshire that eliminated a financing mechanism for the project.

In announcing its decision on Tuesday, the Connecticut Department of Energy and Environmental Protection said decisions issued by the New Hampshire Public Utilities Commission and the Massachusetts Supreme Judicial Court “have materially reduced the ability for the costs of projects to be shared among a substantial portion of the region’s ratepayers.”

The Connecticut agency said it halted its procurement process because “regional investment is necessary to ensure that no one state disproportionately bears the costs of addressing what is a problem endemic to our regional electric system.”

The Baker administration supports construction of the Access Northeast pipeline as a way to bring additional natural gas into the region and hold down electricity prices, particularly during winter months.  Access Northeast is being pushed by Spectra Energy of Houston and the region’s two big utilities, Eversource Energy and National Grid.

The Baker administration had given the green light for Eversource and National Grid to tap their ratepayers for the money needed to build the pipeline, but the Supreme Judicial Court ruled in August that existing state law did not allow such a financing scheme.

The New Hampshire Public Utilities Commission reached a similar conclusion earlier this month, holding that using electric ratepayers to finance a natural gas pipeline was inconsistent with the purposes of utility restructuring, which was designed to remove the companies from electricity generation.

“We acknowledge that the increased dependence on natural gas-fueled generation plants within the region and the constraints on gas capacity during peak periods of demand have resulted in electric price volatility,” the commission said in its ruling. “Eversource’s proposal is an interesting one, with the potential to reduce that volatility; but it is an approach that, in practice, would violate New Hampshire laws following the restructuring of the electric industry.”

Eversource spokesman Michael Durand said the company and its partners remain firmly committed to Access Northeast. “The significant need for natural gas in our region cannot be understated.  In fact, ISO New England recently characterized the region’s energy situation as “precarious.”  We are evaluating next steps for the project, which would bring urgently needed infrastructure to New England to ensure reliable and lower-cost electricity for customers,” he said in a statement.

While the Baker administration has remained optimistic a new pipeline could still be built, Bradly Campbell, the president of the Conservation Law Foundation, said that was unlikely. The foundation filed the suit that led to the Supreme Judicial Court decision in Massachusetts.

“With yet another state abandoning proposals for more natural gas pipeline capacity, these efforts to expand fossil fuel infrastructure in New England have hit a virtually unsurpassable roadblock,” Campbell said. “Without Massachusetts, New Hampshire or Connecticut in the mix, Spectra has lost a whopping 84 percent of the customer base needed to finance this ill-conceived proposal. It’s time to kill this project altogether and look forward to opportunities for the clean, renewable alternatives that our families demand, our markets expect and our laws require.”

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