Spectra committed to gas pipeline project

NPCA Online via Flickr The construction of a gas pipeline similar to the one that would go into Massachusetts is pictured here.

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By State House News Service

The company leading the push for a major natural gas pipeline project that would serve New England appeared undeterred Tuesday by news that both Eversource and National Grid this week withdrew related applications for approval of natural gas transportation and storage contracts.

In filings on Monday to the Department of Public Utilities (DPU), Eversource and National Grid cited last week's Supreme Judicial Court decision barring ratepayer financing of pipeline projects, such as the proposed Access Northeast project.

In response to a News Service inquiry, Arthur Diestel, stakeholder outreach director at Spectra Energy, said Tuesday, "We are committed to assuring that Access Northeast remains on track to meet strong demand in Massachusetts and New England to bring to the region the energy that is so desperately needed."

The SJC decision "provides no solution to the energy cost, reliability, and environmental challenges that the New England region faces today," Diestel said. He said in an email that "our work to obtain contract approval will continue throughout the New England states. As we evaluate our path forward in Massachusetts, we remain confident that the Access Northeast project will ultimately provide substantial benefits to consumers across the New England region."

Diestel added, "Without targeted expansion of natural gas capacity, New England energy consumers are at significant risk for ever-increasing energy prices and ever-diminishing supply reliability."

In February 2015, Spectra and Eversource officials announced National Grid was enlisting as a co-developer of the $3 billion effort to expand existing pipelines to bring an additional 1 billion cubic feet of natural gas to the region for electricity generation. They said the project could lead to a more than 20 percent increase in natural gas supply to New England and cost savings for ratepayers.

The SJC ruling represented a blow to Gov. Charlie Baker's efforts to increase the flow of natural gas to the region, and arrived as the administration prepares to implement a new law authorizing the purchase of large-scale hydropower and offshore wind resources.

In a opinion written by recently retired Justice Robert Cordy, the state's top court said the pipeline tariff would "reexpose ratepayers to the very types of risks that the Legislature sought to protect them from" with a 1997 law deregulating the electricity generation market.

The ruling marked a win for environmental groups and policy leaders who have argued that additional natural gas capacity is not required to meet energy demands, and runs counter to the state's goals of decreasing reliance on fossil fuels and reducing greenhouse gas emissions.

The Department of Public Utilities in October 2015 concluded that it had the authority under existing law to approve long-term contracts by utilities like Eversource and National Grid for the purchase of natural gas capacity that would allow for the cost of pipeline construction to be passed on to ratepayers.

"With the SJC's decision in Massachusetts last week, we withdrew our petition before the DPU as part of the legal and regulatory process," National Grid spokeswoman Amie O'Hearn said in an email. "In our motion to withdraw, we also asked to reserve our right to seek department approval of similar agreements in the future, in the event there is a change in the DPU's legal authority to approve such agreements. Our Rhode Island petition remains before the Rhode Island Public Utilities Commission."

The National Grid spokeswoman called the ruling "a disappointing setback for the project, which is designed to help secure New England's clean energy future, ensure the reliability of the electricity system, and most importantly, save customers more than $1 billion annually on their electricity bills."

"In line with our company values of offering a diverse energy portfolio at reasonable costs, we will continue to explore our options for a potential path forward with Access Northeast and pursue a balanced portfolio of solutions to provide the clean, reliable, and secure energy our customers deserve," O'Hearn wrote. "Last week's decision only addressed the Department's lack of authority to approve certain types of contracts for gas pipeline capacity; it was not a declaration of the benefits that this project delivers to the region. The project remains a key component in helping to secure New England's long-term energy future, and the recently passed clean energy bill also presents a welcomed opportunity to support the development of large-scale clean energy, such as hydro and wind."

In withdrawing its petition, Eversource cited the SJC's conclusion that the DPU "did not have authority . . . to review and approve ratepayer-backed, long-term contracts by electric distribution companies for natural gas capacity."