Time to turn page on natural gas
Debunking the Access Northeast letter to policymakers
AS REPORTED LAST WEEK, the Massachusetts Supreme Judicial Court ruled that a utility-proposed cost-recovery scheme – the “pipeline tax” that would have helped finance Spectra’s Access Northeast project – violated the 1997 Restructuring Act. In response to this ruling, the project’s developers, National Grid, Eversource, and Spectra Energy, represented by John Flynn, Lee Olivier, and Bill Yardley, respectively, delivered a letter to policymakers assuring all that their companies are undeterred and remain firmly committed to the construction of new gas infrastructure.
This reassurance comes after National Grid and Eversource formally withdrew petitions for contract approval that were before the Department of Public Utilities. They did so while reserving “their right to seek Department approval of the same or similar agreements in the future to the extent that, in the future, there is a change in relation to the Department’s legal authority to approve such agreements.”
If legislative change altering DPU’s authority is an avenue being considered by the utilities, it should be noted that the Legislature has made clear its position on ratepayer protections. In June, the Senate voted unanimously, 39-0, to ban a pipeline tax as part of its energy bill. A 97-member majority in the House took a similar stance in a letter delivered to leadership last April. The public, too, has been adamantly opposed to the pipeline tax.
Couched as a commitment to helping the region address its energy needs, Spectra Energy’s letter to policymakers is laden with dubious claims of reliability and price concerns that have been thoroughly discredited by a study released by The Analysis Group on behalf of Attorney General Maura Healey’s office, as well as in testimony submitted to the DPU by the Attorney General, the Conservation Law Foundation, and other energy experts.
The court’s decision was crystal clear on the one point that mattered most in the case: Massachusetts electric ratepayers cannot be made to bear the burden of new gas infrastructure.
Justice Robert Cordy wrote for a unanimous court: “The department’s stated motive in issuing the order is to correct a perceived failure of market-based incentives to encourage wholesale generators to contract for adequate pipeline capacity. However, its means of doing so, namely by reallocating risk onto the ratepayers, is clearly prohibited by legislative policy.”
On this, other states should take note. It is not that ratepayer financing does not make sense only for customers in the Bay State; the risks consumers would be exposed to do not make sense in any state for any electric ratepayer.
At the very least, other states in the region should consider how this decision will impact the costs and risks their ratepayers are being asked to bear and perhaps reevaluate how other measures (e.g., efficiency, hydro, renewables, etc.) now stack up against a newly constructed pipeline for which they may be on the hook for 20 years.
Massachusetts has a statutory obligation under the Global Warming Solutions Act (GWSA) to substantially reduce greenhouse gas emissions by 2020 and 2050. In fact, the Supreme Judicial Court ruled in May that the state has an imperative to achieve “declining annual aggregate emissions” by 2020. We cannot build out and use massive new gas infrastructure and comply with the mandates of GWSA.
On the claim that new gas pipelines are needed to keep the lights on in New England, The Analysis Group’s conclusion is unambiguous: “No. Under business-as-usual circumstances, the region can maintain electric reliability through 2030, even without additional new natural gas pipelines. Even under a ‘stressed system’ scenario, there are cheaper, less carbon intensive ways to ensure electric reliability, like energy efficiency and demand response, that are less risky for ratepayers.”States across the region are already successfully reducing demand for natural gas and gradually increasing the contribution made by energy efficiency and renewable resources. The comprehensive energy bill passed last month by the Legislature and signed by Gov. Charlie Baker two weeks ago will lead to even greater amounts of hydroelectricity and offshore wind brought online by 2030. These are the resources capable of meeting demand, ensuring reliability, and helping comply with greenhouse gas emission reduction mandates.
Eugenia Gibbons is the clean energy program director at Mass Energy Consumers Alliance, a nonprofit seeking to make energy more affordable and sustainable.