Natural gas falls out of favor on Beacon Hill
Senate votes 39-0 against pipeline financing plan
AS THE LEGISLATURE RUSHES to embrace offshore wind and Canadian hydroelectricity, the Senate on Thursday voted 39-0 to cut off the chief means of financing new natural gas pipelines coming into the region. The Senate’s approach has strong support among House members as well.
The growing opposition to natural gas would have been unthinkable two years ago, when the push began to bring new pipelines into the region to avoid a replay of the sky-high electricity prices that battered the region following the grueling winter of 2013-14. Officials said the high prices were the result of inadequate pipeline capacity.
Several companies announced plans to build new pipelines into the region, but the proposals depended on a novel financing scheme. Electric power generators were unwilling to sign long-term commitments to purchase natural gas pipeline capacity because they had no guarantee they could recover their investments. So their backers suggested utilities should tap electricity ratepayers for the money. The pipeline promoters promised that the cost to ratepayers would be more than offset by the savings from additional, cheap gas coming into the region.
The Baker administration hopped on board, saying the proposal would stabilize electricity rates and avoid the need to burn oil and coal when gas supplies were in short supply during the winter months. In October, Baker’s Department of Public Utilities gave electric utilities the green light to file plans to charge their ratepayers for natural gas capacity.
In April, Kinder Morgan pulled the plug on its Northeast Energy Direct pipeline, citing inadequate capacity commitments from potential customers.
The Conservation Law Foundation, backed by Healey, challenged in court the view of the Department of Public Utilities that electric ratepayers could be charged for natural gas pipelines. The Supreme Judicial Court heard the challenge in May and is expected to rule later this summer.
Not wanting to take a chance on the court’s ruling, Sen. Patricia Jehlen of Somerville filed an amendment to the Senate energy bill that would prohibit the Baker administration from approving contracts for natural gas pipeline capacity that would be paid for by electric ratepayers. She slapped a catchy title on the amendment: “Protecting ratepayers from unwarranted taxation.”
Senate Republicans and Democrats alike voted for the measure, as did all of the Senate’s leaders. Jehlen’s argument was simple: If companies believe natural gas pipelines are a good investment, let them invest their own money, not the money of electric ratepayers.
The only one to voice any concern about Jehlen’s amendment was Sen. Viriano de Macedo of Plymouth, who said there is a need for additional pipeline capacity. But even he voted in favor of the amendment.The amendment, along with the rest of the Senate energy bill, will now go to a conference committee with the House charged with resolving differences between the two branches. The differences are many, so it’s unclear whether Jehlen’s provision will survive.
When the House was debating its energy bill, Republican Rep. James Lyons of Andover pushed an amendment that was similar to Jehlen’s. House leaders ruled it out of order, saying the bill didn’t have any provisions affecting natural gas. But there is strong support in the House for blocking what is being called the “pipeline tax.” Between 90 and 100 members of the House signed a letter to House Speaker Robert DeLeo urging him not to include language in the House energy bill authorizing a pipeline tax, and the language wasn’t included.