Two utility partners pull contracts for natural gas pipeline expansion
The $3 billion Access Northeast natural gas pipeline expansion, touted by its developers as a project that would lower New England’s electricity costs by ensuring a more reliable supply of natural gas, has lost two of its utility partners. That development creates additional uncertainty over a plan conditionally approved by Maine’s Public Utilities Commission last month that would have Maine electricity customers help subsidize expansion of New England’s natural gas pipeline capacity if other New England states took similar action.
The Wall Street Journal reported that earlier this week, National Grid PLC and Eversource Energy withdrew petitions they had filed with the Massachusetts Department of Public Utilities for 20-year agreements to acquire gas from Spectra Energy Corp., which is pursuing an expansion of the Algonquin Gas Transmission system that would fill “last mile” gaps in the existing pipeline system. Those withdrawals come on the heels of last week’s decision by the Supreme Judicial Court of Massachusetts blocking a plan for electricity ratepayers in Massachusetts to pay a portion of the cost of expanding natural gas capacity in New England.
Spectra Energy, however, told the WSJ the expansion project is moving forward, that National Grid and Eversource remain onboard as co-developers and that it is seeking other customers in Massachusetts and New England to pay for the expanded pipeline. “We are confident that, ultimately, the interests of New England’s consumers will prevail with [a] desperately needed gas supply made available by Access Northeast,” Spectra said in a statement to the WSJ.
Added uncertainty for Maine
The actions taken by National Grid and Eversource Energy create additional uncertainty for a plan unanimously approved last month by the Maine PUC that would have state electricity customers pay up to $75 million annually to expand natural gas pipeline capacity in New England as a way of lowering Maine’s electricity costs. Maine's PUC stipulated that Massachusetts, Connecticut, Rhode Island and New Hampshire adopt similar plans before that subsidy could begin. The PUC still needs to issue a final order in that case.
Two of the three Maine PUC commissioners endorsed the Access Northeast project in the commission's July 19 ruling, but the commission also left the door open for pivoting to an alternative proposal favored by Commissioner Carlisle McLean at the July 19 meeting, which would provide ratepayer support for the much smaller Portland Natural Gas Transmission System's Continent to Coast expansion project connecting Atlantic Canada natural gas supplies with the Maritimes & Northeast Pipeline in Westbrook.
Ben Tettlebaum, a staff attorney with the Conservation Law Foundation in Maine, told Mainebiz in a phone interview last week that in light of the Massachusetts court ruling CLF believes the best response by Maine's PUC is to “dismiss the proceeding” and drop the plan approved on July 19. He also said CLF opposes shifting that support to the smaller Continent to Coast expansion project as well.
CLF was among the parties that had successfully challenged ratepayer support in Massachusetts' highest court.
Preti Flaherty lawyer Anthony Buxton, who serves as counsel to the Coalition to Lower Energy Costs and the Industrial Energy Consumer Group, told Mainebiz in a written statement last week that securing additional natural gas pipeline capacity is critical to the economic health of Maine and the other New England states.
“The reality recognized by five New England states is that electric ratepayers already pay year in and year out the huge windfall costs caused by inadequate gas pipeline capacity,” he said. “High energy costs severely impair the health and welfare of New England society.”
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PUC: Ratepayers would pay up to $75M for expanded gas pipeline
Mass. ruling casts doubt on Maine plan to subsidize natural gas pipeline expansion
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