Healey study: No new pipelines needed

AG and Baker now at odds on energy policy

A STUDY COMMISSIONED BY ATTORNEY GENERAL MAURA HEALEY indicates new natural gas pipelines are not needed because the region’s power grid will face no “reliability deficiency” through 2030.

Even with more power plant retirements than expected, the study said the grid would face a power shortfall for only 26 hours over nine days during that 15-year period. The greatest shortfall, of more than 2,000 megawatts, would occur in the 2029-2030 winter season, the report said.

The report concluded that Massachusetts and New England don’t have to take any action to insure the reliability of the region’s power grid. The study said the combination of declining peak winter demand for electricity and the addition of power plants that can run on oil when natural gas is in short supply should be enough to forestall any shortages.

But the report nevertheless compared the status-quo to a series of options being considered by policymakers to address any potential shortfall that might occur if more power plants than expected shut down over the next 15 years. The report concluded the best approach, in terms of ratepayer cost and environmental impact, would be to invest in programs that entice homeowners and businesses to reduce their consumption of electricity and voluntarily curb power usage during high-demand periods. The report said $101 million spent on these programs would yield savings of $247 million and a reduction in greenhouse gas emissions of 1.86 million tons.

By contrast, expanding the region’s natural gas pipeline capacity to meet the potential power shortfall would cost $66 million and yield savings of $127 million, while increasing greenhouse gas emissions by 80,000 tons.

The report said the cost of energy efficiency measures plus the importation of hydro-electricity from Canada would cost $604 million and yield savings of just $502 million, but would reduce greenhouse gas emissions by 4.86 million tons. The report said the hydro option was the only approach that would allow the region to meet its 2030 climate goals.

“This study demonstrates that we do not need increased gas capacity to meet electric reliability needs, and that electric ratepayers shouldn’t foot the bill for additional pipelines,” said a statement released by Healey. “This study demonstrates that a much more cost-effective solution is to embrace energy efficiency and demand response programs that protect ratepayers and significantly reduce greenhouse gas emissions.”

With the release of the report, Healey is now squarely at odds with the Baker administration on energy policy. While Healey favors energy efficiency initiatives and programs that entice businesses and homeowners to reduce electricity consumption at times of peak demand, Gov. Charlie Baker  favors what he calls a “combo platter” approach on energy, which includes the promotion of energy efficiency efforts and renewables as well as new natural gas pipeline capacity and transmission lines bringing hydro-electricity from Canada.

The governor said he is not only interested in a reliable power grid but lower electricity prices. Massachusetts electricity prices are 30 percent above the national average and rank among the highest in the nation.

Baker’s Department of Public Utilities has already authorized local electric utilities to seek bids for natural gas pipeline capacity and he is pushing legislation that would allow local utilities to negotiate long-term contracts for hydro-electricity.

Meet the Author

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.

Baker’s thinking is more in line with the operator of the region’s power grid and local utilities, who favor expanding natural gas pipeline infrastructure. Eversource and National Grid issued statements on Wednesday broadly criticizing the report. National Grid said in its statement that “there’s no getting around the need for more pipelines to moderate exorbitant electricity prices – customers in New England have been subjected to more than $7 billion in electricity price increases over the last three winters.”

Kinder Morgan’s Tennessee Gas Pipeline Co., which is seeking to build a new pipeline into the region, issued a statement echoing the themes raised by local utilities while also pointing out that the status quo approach included in the report supported the continued use of oil to generate electricity during periods of high demand.

The report was prepared by Analysis Group Inc. of Boston and paid for by the Barr Foundation, which has made fighting climate change a focus of its philanthropy work. The lead author of the report, Paul Hibbard, could not be reached for comment.

  • Andrei Radulescu-Banu

    So the study was financed by a foundation who “has made fighting climate change a focus of its philanthropy work”.

    I would have written that closer to the beginning of the article – because it brings in question the independence of the study. The AG, by law, is supposed to represent the interests of the rate payers, and in this case it has outsourced that to a climate change philanthropy.

    Yes, saving the climate is an important fight. We all have a stake in saving the planet. Still, call me old fashioned, but government works best when it really represents the interests of people it is chartered to represent.

    It was inappropriate for Maura Healey to use this report as a proxy in the climate battles.

  • boston scared

    “It is worth noting that during winter in New England,
    as in large parts of the country, demand for natural
    gas peaks, and therefore there may not be a business
    case to construct pipelines to facilitate this short
    period of peak demand.”

    Source: Brookings Institute
    Natural Gas Briefing Document #3: Prevailing Debates Related to Natural Gas Infrastructure: Investments and Emissions
    Boersma T., Ebinger C.
    January 2014

  • politicalmadman

    One study says we do not need a pipeline. So if there are other studies that say we do need a pipeline, then what ? Do we wait until our rates go through the roof to say, hey, we need to build a pipeline now ? If we act like that then why on earth did they ever build the highways going to nowhere back in the 1960’s ? Build the infrastructure now so it is there when we need it.

    • Mhmjjj2012

      Then we have an informed debate. The only real beneficiary of the Kinder-Morgan pipeline is Kinder-Morgan. There are lots of profit to be made exporting fracked gas. Once you realize that then everything else falls into place.

      • politicalmadman

        Of course Kinder Morgan benefits from this project. I am guessing you don’t work for free either do you ? Then who pays you for what you do and why do they do it ? If there was no benefit then things wouldn’t get done. Imagine if Bill Gates didn’t feel he was going to benefit from his work. Or Steve Jobs for that matter. Neither one of us would be communicating right now right ? So I am guessing that you would rather import our energy needs, sending money out of the country, as opposed to export them, keeping the money here ?

    • mrmetrowest

      Hard to think of anything more idiotic than building out massive infrastructure with the idea that it might be needed someday. Do you see bridges being built because they might be needed at some point? Build an airport because planes might land there someday? Multi-billion dollar infrastructure projects are built based on current need and sized for future growth. As the AG’s study shows, there is no current need, nor is there going to be one for at least 15 years. NED, and the Spectra project, will bring more than two billion cubic feet of gas per day into New England. New England will have eroded and washed into the ocean before we ever use that much gas.

      Obviously, the desire of Kinder Morgan is to eventually make money sending gas to planned LNG export facilities in Nova Scotia. Given the low price of gas and LNG worldwide, these facilities are unlikely to be built soon. Were Kinder Morgan risking their own money this might be enough to kill NED outright, but Gov Baker has helpfully stepped in to provide a guaranteed revenue stream via an electric rate payer tariff. No a tax mind you – you only have to pay if you use electricity. That’s 21st century capitalism.