Eversource confident on gas pipeline project

EVERSOURCE ENERGY officials confidently predicted this week they would begin construction of the $3 billion Access Northeast natural gas pipeline in 2019 and floated several possible ways to finance it.

Eversource had pinned its hopes on having electric ratepayers in New England foot the bill for the natural gas pipeline, but that plan unraveled this summer when the Massachusetts Supreme Judicial Court ruled that state law didn’t permit that approach. New Hampshire regulators reached the same conclusion in September. And Connecticut, wary of pushing forward without the other states, backed off in October, leaving the pipeline project in a precarious position.

In a conference call with financial analysts on Wednesday, Eversource officials said they are not throwing in the towel. They predicted construction of the pipeline would start in the late spring or early summer of 2019 and be completed by late 2020.

Company officials were less specific about how the pipeline would be financed. Lee Olivier, an executive vice president at Eversource, said the company will push the Massachusetts Legislature during its session next year to approve a law allowing electric ratepayers to pay higher rates to finance a natural gas pipeline. The utility believes more plentiful supplies of cheap gas coming into New England will result in lower electricity prices, saving electric customers money in the long run.

But that financing approach is likely to find tough sledding in the Legislature. During the last session, the Senate voted unanimously in favor of a legislative provision that would have prohibited such a financing arrangement. While the House didn’t go along with that provision, a large number of House members are on record opposed to having electric ratepayers finance a natural gas pipeline.

Olivier said another option would be to have electric ratepayers in Connecticut, Rhode Island, Maine, and possibly Vermont finance the pipeline along with natural gas customers in Massachusetts. He said a number of natural gas distribution companies in Massachusetts had signed on to procure gas on the Kinder Morgan natural gas pipeline. With that project now canceled, he said, the distribution companies might be inclined to sign on with Access Northeast.

Olivier seemed to suggest the hybrid gas-electric financing approach wasn’t all that different from the company’s earlier all-electric plan because natural gas customers were also electric customers.

The Access Northeast pipeline project is a joint effort of three companies. Spectra Energy of Houston and Eversource each have 40 percent shares in the project, while National Grid holds a 20 percent share. Eversource and National Grid own both electric and gas distribution companies.

Massachusetts could become a battle ground in the fight over the pipeline project. Many environmentalists and political leaders in the state are opposed to building a new natural gas pipeline into the region and would prefer to devote available resources to renewables and energy conservation. But Gov. Charlie Baker is strongly in favor of a new pipeline, as is the operator of the regional power grid and the state’s utilities.

In his presentation to the Wall Street analysts, Olivier said more pipeline capacity is needed to bring down electricity prices during winter months. He said the energy market is rapidly changing, with recent legislation in Massachusetts calling for the development of offshore wind and the importation of hydroelectricity from Canada. These resources will be coming on line as coal and nuclear power plants are shut down.

“One fact that hasn’t changed is the need for Access Northeast,” he said.