Mass. AG And Opponents Fight Electric Bill Charge To Fund Pipeline

Jun 15, 2016

While activists are still celebrating the suspension of one major natural gas pipeline, they are also battling to stop another one in the Northeast.

The Massachusetts Department of Public Utilities recently held a public hearing in Pittsfield on petitions by Eversource and National Grid seeking approval of agreements regarding the yet to be built Access Northeast pipeline. The project is an expansion of an existing pipeline network. The electric companies want the authority to recover costs associated with the project from ratepayers.

Last year, state Attorney General Maura Healey, a Democrat, released a study saying additional gas capacity was not needed. Assistant Attorney General Kerry Strayer read a statement from Healey. Strayer says the companies’ requests raise a host of legal issues and urged the DPU to delay going forward with them.

“On May 5, the Supreme Judicial Court heard arguments regarding the department’s [DPU] authority under state law to approve gas contracts executed by electric companies,” Strayer said. “Given the legal uncertainty regarding the department’s authority the Attorney General’s Office has moved the department to stay these proceedings, DPU 15-181 Eversource and DPU 16-05 National Grid, until the SJC issues its decision. The department is yet to rule on the AGO’s motions and is moving forward with these proceedings.”

Access Northeast is being developed by Eversource, National Grid and Spectra Energy, which owns Algonquin Gas. The companies say the project is designed to maximize pipeline interconnects to 60 percent of New England’s power plants. Eversource spokesperson Priscilla Ress says a study done for ISO New England, which oversees the region’s power grid, finds a project like Access Northeast could save a billion dollars a year.

“The purpose of Access Northeast is to bring a reliable source of much-needed natural gas to our regional electricity generators,” Ress said. “This is going to save customers a significant amount of money.”

National Grid spokesperson Danielle Williamson says customers will net a 4 to 7 percent savings over the course of a 20-year contract for Access Northeast depending on use and other factors. Strayer says the companies’ actions have raised questions of self-dealing.

“Eversource and National Grid have each separately contracted with Algonquin to acquire a 40 percent and a 20 percent equity interest in the ownership of the Access Northeast project, respectively,” Strayer said. “Essentially the companies are on both sides of the proposed Access Northeast transaction, seeking to commit their respective electric ratepayers to pay for the transportation rights to the pipeline gas on the one hand and owning share of the pipeline’s assets and proceeds on the other.”

Ress says Eversource is making the investment because it’s good for its customers. Williamson says National Grid’s decisions to invest in and sign a contract with the Access Northeast project were made independently by separate groups within the company in the best interest of customers. She says that process is reviewed by regulators. Strayer says the Attorney General’s Office is examining the petitions and has brought in experts to review the companies’ proposals and claims. Legal counsel for the companies attended the hearing, but did not comment. Rosemary Wessel heads the group No Fracked Gas in Mass and has been a vocal opponent of recent pipeline proposals, specifically the now suspended Northeast Energy Direct pipeline.

“It’s basically subsidized the cost for a private profit company,” Wessel said. “That opens the door to make a lot of other projects profitable. It could open the door to son of NED, another smaller pipeline that Kinder Morgan might want to propose.”

Working with a number of state environmental groups, Consumers for Sensible Energy is campaigning against the companies’ efforts.

An amendment to ban a tax on electric bills to fund pipeline expansion was dropped from energy legislation currently being worked on in the State House. The DPU’s public comment period on the petitions ends June 17. Three weeks of evidentiary hearings are expected to start July 26 before DPU rules on the petitions. If approved, the Access Northeast project is scheduled to be in service by November 2018.