Eversource takes pipeline case to NH Supreme Court
CONCORD — The state’s largest utility is taking its case for a natural gas pipeline expansion project to the state Supreme Court.
Eversource-NH on Friday filed an appeal with the high court, in the hope of overturning an October ruling by the Public Utilities Commission.
The PUC last fall ruled against the funding mechanism for expansion of the existing Algonquin Natural Gas Pipeline in New England, through a project called Access Northeast.
Regulators refused to allow Eversource to charge electricity ratepayers for a longterm contract to reserve space on the natural gas pipeline.
“We’ve been hearing loud and clear from business and residential customers about the need to lower and stabilize prices,” said Bill Quinlan, New Hampshire operations president for Eversource.
“Expanding the supply of gas into New England is one of the necessary actions that must occur as part of the effort to reduce energy costs and ensure reliability. We believe it’s important that proposals like this one have the opportunity to be fully considered.”
Access Northeast is a $3 billion joint venture proposed by Eversource, Spectra Energy and National Grid to be funded by electricity ratepayers.
It’s designed to bring more natural gas into New England to fuel power plants that run on natural gas, especially in the coldest days of winter when supplies are short and prices high.
In its Oct. 6 decision, the PUC acknowledged that the Eversource proposal to purchase space on the pipeline and re-sell it to power plant owners at times of high market prices has the potential to reduce electricity rates, but ruled the agreement violates the state’s 1996 electric restructuring law.
That law established that utilities can deliver power, but should not own power plants or generating capacity. Opponents of the Access Northeast plan argued successfully before the PUC and the Massachusetts Supreme Court that the Eversource contract for space on the pipeline amounts to a form of generation ownership.
In its appeal, Eversource focuses on that legal question, pointing out that the overriding purpose of the restructuring of New Hampshire’s electric utilities was to reduce electricity rates, and therefore proposals that would reduce customer energy costs should not be restricted.
Attorney Don Kreis, the state’s consumer advocate on utility issues, said he will argue in favor of the PUC decision.
“Since we were a party to the PUC proceeding and believe the PUC’s decision was correct, we will look forward to an opportunity to defend the PUC’s decision vigorously,” said Kreis. “Forcing electric customers to pay via their distribution rates for a natural gas pipeline violates not just the Restructuring Act but fundamental tenets of utility rate-making as well.”
Eversource argued that the PUC is taking too narrow a view of the restructuring statute.
“This case presents an opportunity for the court to interpret and clarify the Electric Utility Restructuring statute and the policy principles of that statute, which the New Hampshire Legislature expressly described as ‘guidelines’ for the commission,” according to the Eversource appeal.
“The commission misconstrued the statute, and divined an overriding Legislative intent from one policy principle while ignoring others,” the appeal states.
The Access Northeast project is widely viewed as the last best chance for expanded natural gas capacity into New England, at least for the foreseeable future.
Another $3 billion project proposed by Kinder Morgan failed last year because the company couldn’t get enough natural gas power plants or local distribution companies to sign up for space on the pipeline.
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 in August 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. That was followed two months later by a similar PUC ruling in New Hampshire.