Healey pushes for delay on pipeline contracts

ATTORNEY GENERAL MAURA HEALEY on Thursday sought to delay action on a bid by Eversource Energy to tap its electric ratepayers for money to finance a natural gas pipeline expansion project in which an Eversource subsidiary has a 40 percent stake.

Matthew Saunders, an assistant attorney general speaking on Healey’s behalf, urged the Department of Public Utilities to put off action on the issue until after the Supreme Judicial Court rules on a challenge to an earlier DPU ruling that permitted electric ratepayers to finance natural gas infrastructure. The SJC decision is not expected until May. (Due to a reporting error, Saunders’s name was not cited properly in the original version of this story.)

Eversource, which is urging the DPU to act on its proposal by Oct. 1, opposes the delay.  “Any undue delay sets us back from offering customers relief from high electricity prices, which limit economic growth and competitiveness,” said Caroline Pretyman, the utility’s spokeswoman.

On some very cold days in the winter, there is not enough capacity in existing gas pipelines coming into New England to supply all the power plants that run on gas. The power plants themselves haven’t contracted for new pipeline capacity because they have no guarantee they will recoup their money through electricity sales. So the Baker administration directed utilities to purchase 20-year contracts for natural gas pipeline capacity on behalf of their electricity customers. Utilities in other New England states are going through a similar process.

Eversource solicited bids and selected a project called Access Northeast, which is owned by Spectra Energy (40 percent), an affiliate of Eversource (40 percent), and National Grid (20 percent). Separately, National Grid is seeking approval to purchase natural gas pipeline capacity on behalf of its electric customers from Kinder Morgan. (Due to a reporting error, the precise ownership positions in Access Northeast were reported incorrectly in the original version of this story.)

The theory behind the pipeline capacity purchases is that new supplies of gas from the Marcellus Shale in Pennsylvania will result in savings that more than offset the costs associated with the pipeline capacity purchases. Eversources estimates its deal with Access Northeast will yield annual average savings for New England electric customers of between $900 million to $1.4 billion under normal weather conditions, and $2.4 billion during more severe winters. About 40 percent of the savings and 40 percent of the costs will be borne by Massachusetts customers.

The DPU hearing room was packed, mostly by Massachusetts residents opposed to building new natural gas pipeline capacity. Many say the state should not increase its reliance on natural gas, given the difficulty it is having in reaching greenhouse gas reduction targets.

Healey hasn’t signaled where she stands on the Eversource request, but her office is likely to oppose the pipeline expansion. A study she commissioned in November suggested the region will face a power shortfall for only 26 hours over nine days over the next 15 years.

Saunders also raised questions about Eversource pushing for a project in which an Eversource affiliate owns a 40 percent stake. “With a total project construction cost for Access Northeast estimated at $3 billion, the potential is apparent for self-dealing ,” Saunders said.

Michael Durand of Eversource said the part of his company that is partnering with Spectra and National Grid on Access Northeast “is separate and distinct from our local electric delivery companies seeking to enter into contracts to buy natural gas for use by regional power plants.” He also noted the entire process is subject to regulatory review.