Eversource takes state pipeline decision to Supreme Court
New Hampshire’s largest utility is taking its case for a proposed natural gas pipeline expansion project to the state’s highest court.
Eversource Energy says it wants to expand the existing Algonquin pipeline system in Connecticut and Massachusetts through a project called Access Northeast. The $3 billion joint venture proposed by Eversource, Spectra Energy and National Grid is designed to bring more natural gas into New England to power gas-fired generation plants.
The New Hampshire Public Utilities Commission (PUC) ruled in October that the funding scheme to finance the project would violate the state’s 1996 electricity restructuring law. Eversource is now appealing that decision with the state Supreme Court.
“Expanding the supply of gas into New England is one of the necessary actions that must occur as part of the effort to reduce energy costs and ensure reliability,” said Bill Quinlan, Eversource NH’s president of operations, to the New Hampshire Union Leader. “We believe it’s important that proposals like this one have the opportunity to be fully considered.”
The PUC did acknowledge in its ruling the potential for the scheme, which involves purchasing space on the pipeline and reselling it to power plant owners at times of high market prices (such as cold spells), to reduce electricity costs for ratepayers. The 1996 restructuring law, however, forbids utilities from owning power plants or generating capacity, and opponents argued successfully that Eversource selling space on the pipeline amounts to a form of ownership.
The Massachusetts Supreme Court also ruled last fall that the funding scheme for the pipeline was illegal, arguing it puts ratepayers at too much risk along with violating laws passed to deregulate the New England energy market.
Eversource says the New Hampshire PUC and Massachusetts Supreme Court misinterpret the deregulation legislation, arguing it was designed to increase competition and decrease rates, not simply to separate ownership of generation from distribution of supply.
The struggle to build the Access Northeast expansion in New England is emblematic of the financing issues that plague pipeline builders in the region. While power plant owners, whose income is impacted by constantly fluctuating fuel prices, will not commit to contracts that last more than a few years, pipeline owners will not commit to multibillion dollar infrastructure projects without assurances there will be enough power plant owners willing to buy fuel for at least a decade or longer.
Last Spring, energy giant Kinder Morgan was forced to abandon its Northeast Energy Direct pipeline project that would connect New England to gas-rich shale fields in Pennsylvania due to a lack of natural gas-fired power plants and local distribution companies willing to buy space on the pipeline.
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