ONE OF THE BIG MYSTERIES on Beacon Hill is how Gov. Charlie Baker is going to accomplish one of his top remaining energy priorities – building a new natural gas pipeline into the region.
His original plan was dealt a mortal blow a couple weeks ago when the Supreme Judicial Court ruled that existing state law doesn’t allow an electric utility to charge its customers for the money to finance a natural gas pipeline.
Yet the governor is pushing ahead, and so are the companies behind the Access Northeast pipeline project – Spectra Energy, Eversource Energy, and National Grid. Both the governor and the firms argue that a new pipeline will bring in enough cheap natural gas during the winter months to reduce electricity prices and save ratepayers billions of dollars. In a letter to policymakers last week, officials from the three companies said “a do-nothing scenario is untenable” and “our path forward is clear.”
The problem is that the path forward is anything but clear, which is probably why they didn’t mention what path they will follow in their letter. Through a spokesman they turned down a request for an interview.
In the wake of the SJC decision, executing on Baker’s original plan now requires a change in state law, and that’s not going to be easy in a Legislature that went on record in opposition during the current session. The Senate voted 39-0 to block the plan, and close to 100 House members expressed a similar viewpoint in a letter to House Speaker Robert DeLeo.
Environmental groups are also mobilizing on the issue. The group 350 Mass Action is calling on lawmakers to sign a pledge not to accept any checks above $200 from executives, in-house lobbyists, and other employees of coal, oil, and gas companies and the utilities that transport their products. The 10 targeted companies include Spectra Energy, Eversource, and National Grid, the three firms behind the Access Northeast pipeline project. More than 30 lawmakers and legislative candidates have signed the pledge.
Earlier this week, Baker’s secretary of energy and environmental affairs, Matthew Beaton, raised the possibility of a pipeline Plan B. Under his Plan B, natural gas utilities instead of electric utilities would sign the long-term contracts for natural gas capacity that are needed to finance a new pipeline. Beaton’s approach avoids the legal problems cited by the SJC in its decision, but it raises others.
Natural gas utilities currently purchase gas under long-term contracts for their customers. The utilities typically buy more gas than they need as a cushion in case demand rises unexpectedly because of unusually cold weather. If the cushion isn’t needed, the unneeded gas is sold on the spot market, typically to power generators who need gas but are unwilling to enter into long-term contracts for the fuel. (Power generators typically contract to sell power in three-year increments, while long-term contracts for natural gas pipeline capacity last 20 years.)
The cushion has worked reasonably well in winters past, except in 2013-14 when unusually low temperatures caused homeowner demand for gas to rise, eliminating the cushion. During that winter, many power generators couldn’t find enough gas to operate their power plants, and the gas that was available skyrocketed in price. The end result was a huge spike in electricity prices.
Beaton hasn’t laid out in detail his Plan B, but it appears from his brief comments this week that gas utilities would increase the size of their cushion, enough to finance a new pipeline. The utilities would provide gas needed by their customers, and what’s left over would be sold on the spot market to power plant operators who need fuel.
The upside of plan B is that it utilizes the existing system for purchasing gas. The downside is that it takes the existing system to the breaking point. Several experts consulted by CommonWealth suggested state regulators would have a problem with a gas utility buying more gas than its customers need just so the region’s power generators won’t run short of fuel. In a sense, the experts said, Plan B has gas customers subsidizing the rates of electricity ratepayers. The experts said Plan B would either be shot down by state regulators or end up before the Supreme Judicial Court, the same place where Plan A lost steam.
“Conceivably it would work,” said Dan Dolan, president of the New England Power Generators Association, of Plan B. “But I still don’t think it would pass legal muster.”
digboston’s “PIPE SCHEMES: RESEARCHERS WORRY GAS LEAKS LEFT UNREPAIRED” is worth a read. An MIT researcher analyzed Greater Boston gas leaks and released a report, “Lost Leaks,” identifying more than 4,000 “natural gas leaks that weren’t repaired,” but that “vanished from public utility company data between 2014 and 2015.”
What’s interesting about gas leaks is digboston linked other articles to its story and Weymouth has 657 gas leaks with the oldest dating back 25 years. According to the MIT researcher, “Methane is an asphyxiant. It can also cause headache, dizziness, weakness, nausea, vomiting, and loss of coordination. Have you noticed how air sometimes feels better outside of the city? That’s not an illusion. Natural gas—methane, ethane, propane, butane—is likely one of those things making you feel bad.”
According to digboston, the MIT researcher said the gas leak data released by the gas utilities is horrible to track and questioned how local fire departments could possibly monitor them. Considering the explosive risk gas leaks pose that is concerning.
The digboston article noted since Massachusetts enacted a law in 2014 requiring gas utilities to report moderate and mild leaks as well as serious leaks along with repair data the Attorney General noted: “[Gas] companies propose to … remove the minimum considerations when classifying natural gas leaks … [and] require only one year retention for documents … The AGO recommends that the Department [of Public Utilities] refrain from altering clear statutory definitions and processes in the 2014 legislation. Many comments suggest the broadening of definitions and procedures … with regards to topics such as leak grade qualifications and mandated time frames … However, a pattern of consistent annual classification of leaks is important to track a company’s accuracy and performance.”
And to think while Massachusetts is littered with tens of thousands of gas leaks Governor Baker’s secretary of energy and environmental affairs is trying to figure out how to make a new gas pipeline a reality. That’s like a homeowner with multiple roof leaks investing in a new kitchen. What homeowner in their right mind would do that?