THE FEDERAL ENERGY REGULATORY COMMISSION said on Tuesday that a report released by the Environmental Defense Fund accusing Eversource Energy and Avangrid Inc. of artificially driving up electricity prices in New England “was flawed and led to incorrect conclusions.”
The report, released in August 2017, said gas utilities owned by Eversource and Avangrid routinely placed large orders for natural gas on the Algonquin Pipeline that runs from New Jersey to Massachusetts and then sharply reduced those orders at the last minute.
“This behavior blocks other firms from utilizing pipeline capacity, which artificially limits gas supply to the region and drives up gas and electricity prices,” the report said. “We estimate that capacity withholding increased average gas and electricity prices by 38 percent and 20 percent, respectively, over the three-year period we study. As a result, customers paid $3.6 billion more for electricity.” The three-year period ran from August 1, 2013, to July 31, 2016.
FERC said its staff conducted a review of the allegations contained in the report using both public and non-public data and found no evidence of anticompetitive withholding of natural gas pipeline capacity.
At the time of the report’s release, Eversource denied the allegations and called the study a “complete fabrication.” Still, the report’s release prompted Attorney General Maura Healey and the state Department of Public Utilities to launch inquiries, neither of which have produced any findings.
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About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
The original
report was written by four researchers from the Environmental Defense Fund, the University of California San Diego, the University of Wyoming, and Vanderbilt. A spokeswoman for the Environmental Defense Fund could not be reached for comment last night.
Eversource released a study of its own on Tuesday that indicated the report released by the Environmental Defense Fund included a number of false claims. The report, written by Levitan & Associates, said Eversource was following standard industry practice in placing orders for natural gas, that it did not benefit or profit from the actions it allegedly took, and that the capacity quantities it put on hold were an “infinitesimal portion of average demand.”
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