Access Northeast pipeline to cost twice as much as projected, study says
The cost of a new natural gas pipeline expansion project in New England could be more than double what pipeline sponsors say, according to a new report.
The report, prepared by Cambridge-based Synapse Energy Economics, claims that the proposed Access Northeast pipeline project could cost consumers $6.6 billion, more than twice the $3.2 billion figure cited by developers. The report also claims regional demand, which pipeline proponents have used to justify new gas infrastructure, will decline dramatically after the pipeline is constructed, rendering the pipeline useless.
In addition, the report claims the pipeline will increase costs on consumers by at least $85 million over the life of the pipeline, and possibly by as much as $1.9 billion, if construction costs were to be shared by electric utility customers. Spectra Energy, which is building the project, has proposed financing the pipeline by relying on ratepayer money from electric utilities.
Environmental activists praised the report’s findings, calling the analysis a welcome reality check for pipeline proponents.
“This report tears apart every argument that the pipeline proponents have made,” said Martha Klein, chair of Sierra Club of Connecticut. “The pipeline costs will be more than double what the utilities claim, consumer’s electric bills will go up not down, and the pipelines will be underused and unneeded. The people of Connecticut deserve real solutions that look to the future, not more unneeded fracked gas pipelines that contribute to global warming and harm our environment.”
The study predicts increased implementation of energy efficiency and tougher renewable energy requirements will result in a 27 percent reduction in the use of natural gas by 2023 compared to 2015. By 2030, the report projects that natural gas usage will be 41 percent lower.
Eversource Energy, a Connecticut and Massachusetts-based utility and strong backer of the pipeline project, condemned the report and questioned its methodology, noting that in December New Englanders paid electricity prices that were 47 percent higher than the national average.
“The report is flawed and fails to recognize the energy challenges facing consumers and businesses in New England. The lack of adequate natural gas infrastructure is threatening our region’s energy reliability, driving up costs and hurting efforts to lower greenhouse gas emissions,” Eversource said in a statement.
The study “does a disservice to consumers by overstating the costs of the project, underestimating the impact on families and businesses of doing nothing, and ignoring the real reliability concerns that must be addressed,” the statement said.
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