ATTORNEY GENERAL MAURA HEALEY on Thursday sought to delay action on a bid by Eversource Energy to tap its electric ratepayers for money to finance a natural gas pipeline expansion project in which an Eversource subsidiary has a 40 percent stake.
Matthew Saunders, an assistant attorney general speaking on Healey’s behalf, urged the Department of Public Utilities to put off action on the issue until after the Supreme Judicial Court rules on a challenge to an earlier DPU ruling that permitted electric ratepayers to finance natural gas infrastructure. The SJC decision is not expected until May. (Due to a reporting error, Saunders’s name was not cited properly in the original version of this story.)
Eversource, which is urging the DPU to act on its proposal by Oct. 1, opposes the delay. “Any undue delay sets us back from offering customers relief from high electricity prices, which limit economic growth and competitiveness,” said Caroline Pretyman, the utility’s spokeswoman.
On some very cold days in the winter, there is not enough capacity in existing gas pipelines coming into New England to supply all the power plants that run on gas. The power plants themselves haven’t contracted for new pipeline capacity because they have no guarantee they will recoup their money through electricity sales. So the Baker administration directed utilities to purchase 20-year contracts for natural gas pipeline capacity on behalf of their electricity customers. Utilities in other New England states are going through a similar process.
Eversource solicited bids and selected a project called Access Northeast, which is owned by Spectra Energy (40 percent), an affiliate of Eversource (40 percent), and National Grid (20 percent). Separately, National Grid is seeking approval to purchase natural gas pipeline capacity on behalf of its electric customers from Kinder Morgan. (Due to a reporting error, the precise ownership positions in Access Northeast were reported incorrectly in the original version of this story.)
The theory behind the pipeline capacity purchases is that new supplies of gas from the Marcellus Shale in Pennsylvania will result in savings that more than offset the costs associated with the pipeline capacity purchases. Eversources estimates its deal with Access Northeast will yield annual average savings for New England electric customers of between $900 million to $1.4 billion under normal weather conditions, and $2.4 billion during more severe winters. About 40 percent of the savings and 40 percent of the costs will be borne by Massachusetts customers.
The DPU hearing room was packed, mostly by Massachusetts residents opposed to building new natural gas pipeline capacity. Many say the state should not increase its reliance on natural gas, given the difficulty it is having in reaching greenhouse gas reduction targets.
Healey hasn’t signaled where she stands on the Eversource request, but her office is likely to oppose the pipeline expansion. A study she commissioned in November suggested the region will face a power shortfall for only 26 hours over nine days over the next 15 years.
Saunders also raised questions about Eversource pushing for a project in which an Eversource affiliate owns a 40 percent stake. “With a total project construction cost for Access Northeast estimated at $3 billion, the potential is apparent for self-dealing ,” Saunders said.
Michael Durand of Eversource said the part of his company that is partnering with Spectra and National Grid on Access Northeast “is separate and distinct from our local electric delivery companies seeking to enter into contracts to buy natural gas for use by regional power plants.” He also noted the entire process is subject to regulatory review.
The reason we are running out of natural gas in the winter is because of state and regional mandates for wind and solar are squeezing serviceable coal and nuclear power plants, with more than 20 years of life left, off the grid. Yes, they are old. But, the forced integration of wind and solar is forcing them to operate intermittently, and that is what is killing them, not their age.
New England states are forcing ISO-NE to modify the market for electricity away from the goal for the most reliable and lowest cost, to a future goal of 25% to 50% from renewables at any cost.
A clean energy future may not even be possible. Germany can’t do it, Spain can’t do it, and here, Texas with just 10% wind penetration , has begun to turn away from renewables.
Please disclose what utility or energy company you represent. I am a ratepayer, not a utility lobbyist. Why would we lock the ratepayers of the Commonwealth into long term contracts for new energy infrastructure during such a volatile energy market? Why don’t we conduct a full energy need review of the region -an independent study not done by self-interested utilities and gas industry –to discern whether we could meet our transition needs through LNG, hydro. conservation and renewables –before locking ourselves into 50 year infrastructure projects? (thanks for listening)
As I read this, wholesale power prices are an incredibly low 1.4 cents. This is one winter in which those pipelines would have been a burden to ratepayers, not a help, while blowing our greenhouse gas budget. I’m with the Mass Energy Consumers Alliance and we stand by the AG’s study which pointed out that efficiency and demand response are better deals for consumers than fracked methane.
I too am an ordinary ratepayer, not a utility lobbyist. From my observations the only way to transition to a clean energy future is with a combination of wind, solar, energy storage, hydro, and nuclear.
The problem we have is that without energy storage, wind and solar need firming from natural gas. To make room for more natural gas, nuclear along with coal is being forced into early retirement. If or when storage becomes available natural gas can be eliminated.
The obvious solution is to subsidize bulk storage, and let the market take its course. I suspect we are not doing that because there are no lobbyists for bulk energy storage.
Thanks for your thoughtful response and clarification. And I apologize for making any presumption about where you were coming from.
Attorney Kernel Healy’s position paper is not worth the paper it was written on. She had her conclusion formed before she put ink to paper. FERC is in the business of verifying whether a new pipeline has an adequate customer demand when the permit is applied for. This is the rate making model of the Interstate Commerce Commission or the old Federal Power Commission from the New Deal. All the silly environmental requirement are mere window dressing for FERC because it is not the agencies’ primary mission. Ratemaking and having sound economic footing for a new pipeline are job number one.