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Eversource not giving up on pipeline

By DAVE SOLOMON
State House Bureau

September 05. 2016 10:10PM




Executives at Eversource, the state’s largest utility, say they are still committed to the Access Northeast natural gas pipeline project, even though the Massachusetts Supreme Court recently ruled that the project’s funding scheme is illegal.

Opponents of the project, including New Hampshire’s Consumer Advocate in the Public Utilities Commission, believe the Bay State ruling will be the death knell for the only major New England pipeline project left standing.

In April, energy giant Kinder Morgan had to pull the plug on the massive Northeast Energy Direct project, a new pipeline that would connect New England directly to the natural gas fracking fields in Pennsylvania, via Southern New Hampshire.

And on Aug. 17, the other pipeline project in the region hit a major roadblock, as the Massachusetts Supreme Judicial Court ruled in favor of the Conservation Law Foundation, which challenged approval of the Access Northeast plan by Bay State regulators.

Unlike the Kinder Morgan plan, which involved more than 100 miles of new construction across western Massachusetts and southern New Hampshire, the Access Northeast project is an upgrade to the existing Algonquin pipeline system in Connecticut and Massachusetts with bigger pipe, new compressor stations, additional laterals and new storage facilities for liquefied natural gas.

Spectra Energy, owner of the Algonquin system, has partnered with electric utilities Eversource in New Hampshire and National Grid in Massachusetts on Access Northeast, since the project is designed primarily to get natural gas to the gas-fired power plants that feed the New England grid.

The Kinder Morgan project failed because the company couldn’t get enough natural gas power plants or local distribution companies to sign up for space on the pipeline.

Funding alternative

The Access Northeast proposal was built on an alternative proposition: If big natural gas customers won’t pay for new pipeline capacity, get electricity ratepayers to foot the bill.

New England governors first floated that proposition in 2013, in the hope that more natural gas coming into the region would lower electricity prices, especially during the winter when most of the pipeline capacity we now have is used for home heating.

But the Massachusetts high court ruled that such a funding scheme exposes ratepayers to too much financial risk, and runs afoul of laws that were passed to deregulate the energy market in the region.

Although it was widely reported that the Bay State ruling means the end of Access Northeast, that’s not necessarily the case, according to Eversource Executive Vice President Lee Olivier. “Our work to obtain contract approval will continue throughout the New England states while an alternative path is established in Massachusetts,” he wrote in an Aug. 24 letter to policymakers.

Eversource spokesman Martin Murray said the plan remains in front of the New Hampshire Public Utilities Commission for its consideration.

“We can’t continue to increase demand and reliance on natural gas for electricity without addressing the supply,” said Murray. “The Massachusetts court decision does not solve that challenge and, for our part, Eversource will continue to work to help develop a solution.”

Wishful thinking

Don Kreis, who heads up the Office of Consumer Advocate in the New Hampshire PUC, suggests that Eversource is engaging in some wishful thinking.

“Eversource cannot state it is continuing to move forward with a petition based on the testimony it submitted to the PUC in February,” he said.

The proposal submitted in February is based on a project to be jointly funded by electric customers in all six of the New England states.

“Those facts are no longer operative,” he said. “The PUC doesn’t issue rulings based on hypothetical — or, indeed, fictional — scenarios.”

Eversource believes it can still keep Massachusetts in the project, either by coming up with a new way for Bay State customers to pay their share, or by asking the Massachusetts Legislature to override the court’s decision.

“My office is still evaluating what we intend to do,” said Kreis.

One option is asking the PUC in New Hampshire to dismiss or to stay the Access Northeast proceeding. Another is to simply await the PUC’s decision on the legal issues, which Kreis says are similar to the issues decided by the court in Massachusetts.

Substantial risk

“There’s a substantial risk to Eversource that the (New Hampshire) PUC will give the same answer, as a matter of New Hampshire law, that the Massachusetts court gave under Massachusetts law,” he said.

If the PUC rules in Eversource’s favor, Kreis says he would likely ask the New Hampshire Supreme Court to hear an appeal immediately.

All of which has proponents of new energy projects wondering if natural gas capacity into New England can ever be expanded.

“While the merits of ratepayer financing of pipelines are debatable, the Massachusetts ruling ostensibly squashed the prospects of any natural gas pipeline expansion that could ease the volatility of natural gas prices and electricity prices in the region,” said Marc Brown, executive director of the New England Ratepayers Association.

dsolomon@unionleader.com


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