Eversource facing big Beacon Hill challenge

Utility seeks to overcome resistance to gas pipeline financing plan

EVERSOURCE ENERGY FACES a monumental lobbying challenge this year – convincing Beacon Hill lawmakers to pass legislation allowing electric ratepayers to finance the construction of a natural gas pipeline into the region.

The challenge is immense because the Supreme Judicial Court ruled in August that the novel financing scheme is not allowed under existing Massachusetts law, which means the Legislature must approve legislation making it legal. Yet the entire Senate – Democrats and Republicans alike – voted in June in favor of an amendment prohibiting electric ratepayers from financing a natural gas pipeline. The House never took up the Senate amendment, but many House members hold a similar view.

Eversource has been reviewing a number of options for financing the pipeline in the wake of the Supreme Judicial Court’s decision. But in a conference call with financial analysts on Wednesday, utility officials said they have concluded that the best and perhaps only way to get a pipeline built is to stick with the original plan – having the region’s electric ratepayers pay for it.

Eversource wants to build the Access Northeast Pipeline along with its partners Spectra Energy and National Grid. Four of the New England states are on board with Access Northeast’s novel financing plan, but the project faces big hurdles in New Hampshire and Massachusetts.

In New Hampshire, the Public Utilities Commission concluded last October that it lacked the legal authority to approve the financing arrangement. Eversource officials say they are challenging that ruling before the New Hampshire Supreme Court and also pushing legislation that would allow electric ratepayers to finance a natural gas pipeline.

In Massachusetts, Eversource officials said they haven’t filed any legislation yet. Instead, they are doing outreach work to lawmakers and business leaders on the need for a new pipeline. Company officials say a new pipeline would bring cheap gas into the region and help hold down prices, particularly in winter months when the region has difficulty meeting demand for gas to both heat homes and to run power plants.

Lee Olivier, Eversource’s executive vice president, said on Wednesday the winter bottlenecks for gas drive up the region’s electricity bill by about $1 billion.

Olivier indicated a key part of Eversource’s education strategy will be a report due out this summer from the operator of the regional power grid, ISO-New England. The grid operator has called repeatedly for the construction of new pipeline capacity, but Olivier indicated the new report will spell out in detail the cost of not moving ahead. “I don’t see how they can maintain reliability without bringing gas supply into the region,” he said.

Olivier said the report will make the case that the status quo is not acceptable, and that carbon emissions will increase without new pipeline capacity. When gas-fired power plants don’t run, typically other plants running on coal and oil have to fill the gap.

Marcia Blomberg, a spokeswoman for ISO-New England, said in an email that the study will update a report done in 2014 and examine “the power system’s ability to reliably serve demand over an extended cold spell when the region’s fuel infrastructure is constrained.”

There had been speculation last year that Eversource could possibly finance the Access Northeast pipeline the traditional way, with financing provided by customers of local gas utilities. But Olivier ruled that out on Wednesday, saying “that will not work.”

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Bruce Mohl

Editor, CommonWealth

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.

He also said the pipeline could not be built without financial support from Massachusetts. The state accounts for 42 percent of New England’s electricity consumption and the other five New England states would balk at financing a pipeline that would primarily benefit the Bay State.

Peter Shattuck, the director of the Massachusetts office of the Acadia Center, an environmental advocacy group, said he didn’t think Eversource would be successful in winning support for pipeline financing on Beacon Hill. “Last session the Senate voted unanimously to block the pipeline tariff, and with continuing grassroots opposition and another uneventful winter, legislation is unlikely,” he said.

George Bachrach, president of the Environmental League of Massachusetts and a former state senator, said he didn’t think Eversource could pull it off. “But these are hardball players with a lot of lobbyists,” he said.

  • Mhmjjj2012

    Eversource is all about privatizing the profits while socializing the costs…and the risks.

  • NortheasternEE

    The best solution is the repeal of the Green Communities Act and the Global Warming Act. The mandate for intermittent and variable wind and solar energy is forcing the early retirement of coal and nuclear. ISO-NE cannot run the grid reliably without additional natural gas firming from natural gas for wind and solar energy.

    The push for a clean energy future is leaving us overly dependent on natural gas supply (so much for the All of the above Strategy), no net reduction on Greenhouse Gases, and skyrocketing rates.

    Beacon Hill is legislating solutions that defy the laws of Physics!

  • I’m on the Mass. Energy Efficiency Advisory Council. At our most recent meeting, we were informed by Eversource and National Grid that LEDs is penetrating the market much faster than we could have anticipated one or two years ago. LEDs are a critical piece in taming winter peak demand. Far cheaper than financing a gas pipeline. ISO and utilities need to adjust their business models.