Mass. once again playing catchup on energy

Lawmakers should clarify DPU role on gas pipeline financing

RIGHT NOW, IT SEEMS LIKE Massachusetts remains on the slow boat to natural gas pipeline expansion, which is impacting prices for customers and reliability for power generators. The region needs an expedient solution to avoid an energy crisis which may only have been tempered by the recent drop in oil prices that made LNG more affordable (even though New England paid the highest prices in the world for LNG this past winter). Must we wait for real action to be taken until we are in the midst of even more severe price spikes and scrambling to maintain grid reliability?

As promised by the Baker Administration, an inquiry has been launched by the Department of Public Utilities (DPU) at the request of the Department of Energy Resources (DOER) to explore a means of natural gas pipeline expansion where electricity customers foot, at least in part, the cost of capacity contracts signed by the electric distribution companies. Capacity contracts literally reserve capacity (or space) on the pipelines. Historically, capacity costs have been borne by natural gas distribution companies.

Both the DOER petition and the DPU order opening the investigation offer a long laundry list of questions about the legal and regulatory concerns in taking this approach. A big part of the inquiry focuses on the legal ability of the DPU in ordering such an approach and the standard of review to be applied in reviewing the pass-through of charges. To spend time now looking at these issues in a public forum will substantially delay getting resolution of this critical problem and invite opponents to raise the potential for appeal with corresponding delay in implementation once the investigation concludes that the approach is permissible.

The quickest way to resolve these questions is for the Legislature to tell the DPU it supports this path. That is what the legislatures in Rhode Island, Connecticut, and Maine did last year.

Once again, Massachusetts is playing catch-up and, once again, the Commonwealth has the potential of further delaying resolution, as it did last year with the “grand bargain” of linking regional support of transmission for renewable energy to regional support of natural gas pipeline expansion. The two should not be linked. Natural gas pipeline expansion should be addressed immediately.

Meet the Author
The DPU acts under delegated authority of the Legislature. Even if the DPU concludes that it has the authority to order this approach, the Legislature could reverse them. So, let’s clear this up now and short-circuit what has been teed up as a laborious and protracted process. The Legislature should act now and quickly on these narrow but critically important questions.

Cynthia A. Arcate, a former state energy regulator, is president and chief executive officer of PowerOptions, an energy-buying consortium serving more than 500 nonprofit institutions, agencies, and municipalities throughout Massachusetts.