Gas pipeline firm says it’s full-speed ahead
In wake of SJC ruling, ‘do nothing scenario is untenable’
What follows is a letter from the three top officials of Access Northeast to New England policymakers on the need for new natural gas pipeline infrastructure in the region.
LAST WEEK, the Massachusetts Supreme Judicial Court issued a ruling touching on the critical effort underway across New England to reduce the cost of electric supply for consumers and to improve the reliability of that supply for the entire New England region. In short, the Court found that the Department of Public Utilities (MDPU) does not have the authority to approve long-term contracts by electric distribution companies for increased natural gas infrastructure.
The court’s decision provides no solution to the energy cost, reliability and environmental challenges that the New England region faces today. One thing is certain, the status quo is not sustainable. As such, our work to obtain contract approval will continue throughout the New England states while an alternative path is established in Massachusetts.
Why does the court’s decision matter? Over the past 20 years, as New England moved away from the use of oil and coal to fuel our electric grid, cleaner burning natural gas filled the gap. Making this transition reduced greenhouse gas (GHG) emissions from electric generators located within Massachusetts by 45 percent from 1990 to 2012. Had adequate natural gas supplies been available in the winter of 2014-15 to offset oil and coal-fired generation, New England GHG emissions would have been reduced by 3.4 million tons, which is the equivalent of taking 650,000 cars off the road for a year. However, New England’s natural gas infrastructure has not kept pace with the increased demand. Sufficient low-cost domestic natural gas cannot be delivered to New England during peak demand times to meet the needs of gas-fired electric generators. Consequently, electric customers remain fully exposed to the risk of high prices, diminished reliability and greater environmental impacts, while electric generators continue to reap windfall profits from those higher prices.
Why not just increase the use of renewable power to cover the gap? Increasing our use of renewable power sources like hydropower, wind, and solar as part of our energy mix is an important step in securing our energy future. But the truth is these renewable resources will not be available at the levels needed to meet the region’s energy demand for many years to come. Moreover, many of these resources are intermittent sources of power, so that even abundant amounts of these resources requires gas-fired generation as a quick start back-up to fill the supply gap when the sun isn’t shining or the wind isn’t blowing.
Why should electric consumers support gas infrastructure? Prices for electricity are higher in New England than almost everywhere else because the availability of natural gas is limited. When there is high demand for electricity, there is high demand for natural gas to produce electricity, driving higher and higher prices for customers (and greater profit for generators). More gas supply will lower the price of gas and reduce the cost of electricity significantly. In fact, studies estimate that for every $1 of gas infrastructure that customers pay for, the price of electricity would be reduced by as much as $3 to $4 in normal weather. This significant “net benefit” is a good result for homes and businesses across the Commonwealth and the New England region – and a result ignored by the court’s ruling.
Where do we go from here? New England is at a pivotal moment in determining its energy future and the “do nothing” scenario is untenable. Without targeted expansion of natural gas pipeline capacity, New England energy consumers will inevitably bear the brunt of ever-increasing energy prices and ever-diminishing supply reliability.For this reason, we have put the Court’s decision behind us. We remain firmly committed to our part in solving New England’s energy challenge. There is a sizeable need for natural gas in Massachusetts and throughout New England that is unabated by the Court’s decision. To date, each participating state jurisdiction is progressing independently with its own process to approve contracts for the Access Northeast Project and these processes are unaffected by the Massachusetts process. No individual state jurisdiction will pay more than its pro-rata share of the project and approvals may be conditioned to that effect.
Therefore, our path forward is clear and our mission to reestablish the Massachusetts contribution is full-speed ahead. We are confident that, ultimately, the interests of New England’s consumers will prevail with desperately needed gas supply made available by Access Northeast.