Mass. setback casts shadow over large-scale hydro

‘We see gas and hydro as linked.’
MARION GOLD
R.I. Office of Energy  Resources commissioner
‘We see gas and hydro as linked.’ MARION GOLD R.I. Office of Energy Resources commissioner

The plan by New England governors to finance new natural gas pipelines and electrical transmissions lines with charges on energy bills has been thrown into uncertainty.
Lawmakers in Massachusetts, where a proposal to build a natural gas pipeline along the state’s northern tier has spurred protests, last month refused to pass a bill pushed by Gov. Deval L. Patrick to jump-start imports of Canadian hydropower.
Although technically unconnected to gas pipelines, Canadian hydropower is a key part of a joint energy strategy being pursued by the six New England governors to expand and diversify the region’s energy sources. R.I. Gov. Lincoln D. Chafee in particular has made hydropower the cornerstone of his energy policy.
Over the past several years, the New England states have passed bills clearing the way for hydropower imports, including Rhode Island’s “Affordable Clean Energy Security Act” enacted earlier this summer.
As the most populous state in the region, Massachusetts’ absence blows a hole in the plan, agreed to by the governors in December through the New England States Committee on Electricity, to make bulk, multistate hydropower purchases.
As the transmission lines to bring large-scale hydropower into New England currently do not exist, creating the marketplace for bulk energy purchases is seen as the first step to building them. There are now as many as six high-voltage transmission-line proposals, including not only connections to Canadian hydro but resources in Maine – currently in planning, according to Janet Gail Besser, vice president of policy and government affairs at the New England Clean Energy Council.
According to NESCOE, the governors intend to finance new transmission lines by charging a tariff, administered by regional power-grid operator ISO New England, on electricity bills. The idea is that while the charges will cost ratepayers upfront, the additional supply of power entering the system will drive costs down in the long term. “The discussions are about New England energy infrastructure constraints, which have created energy reliability problems,” said Marion Gold, commissioner of the R.I. Office of Energy Resources.
To prevent price spikes during peak demand for natural gas, the states propose importing more hydropower and adding pipeline capacity to the shale-gas fields to the west that have driven prices down and made gas so popular in the first place. Energy efficiency and local production of renewable energy are also part of the plan, but would not produce the kind of near-term volume as gas and large-scale hydro.
Rhode Island’s Energy Security Act includes specific language not only authorizing officials to participate in NESCOE hydropower bidding and transmission-line planning, but natural gas pipeline project planning.
Perhaps a result of the controversy about a pipeline running through its fields and forests, Massachusetts’ failed bill was limited to directing utilities to solicit bills for hydropower and renewable energy contracts and did not mention pipelines or spell out financing mechanisms for new infrastructure.
So where does Massachusetts’ failure to pass a Canadian hydro bill leave the rest of the states’ energy plans and the future of a new gas pipeline?
On Aug. 1, NESCOE announced that it was delaying filing a tariff mechanism, the ratepayer financing proposal, to give Massachusetts officials a chance to “evaluate options” to move forward.
“It requires us to look at plan B,” Gold said before heading to another NESCOE meeting earlier this month. “By doing gas and transmission lines as a package, it keeps gas from playing an outsized role in the power sector. We see gas and hydro as linked.” While electricity tariffs are commonly used to pay for new electrical transmission infrastructure, those involved with the project say they are not aware of it being used to pay for a gas pipeline. After all, a primary driver of gas shortages is that electricity production is only one of the things gas is used for and home-heating contracts take priority over power-plant demands.
In fact, Houston pipeline company Kinder Morgan, which is proposing to build the nearly 200-mile extension of its Tennessee Gas Pipeline through Massachusetts, does not say whether it even needs tariff financing.
Kinder Morgan spokesman Richard Wheatley said he was unfamiliar with the Massachusetts bill and the company has been working to sign customers to use the pipeline in order to finance it.
On July 31, Kinder Morgan announced its first agreements with gas-distribution companies, a set of deals to transport 500,000 dekatherms per day across Massachusetts.
The company is still surveying land in Massachusetts to finalize the pipeline route.
Meanwhile, regional environmental groups have problems with both the pipeline and hydropower agendas being pursued by NESCOE.
Seth Kaplan, Conservation Law Foundation vice president for policy and climate advocacy, said the size of the proposed hydropower procurement could force out investment in locally produced renewables.
And last week, Burrillville residents protested a planned expansion of a natural gas pipeline that runs through town. Spectra Energy is seeking to expand the pipeline. •

No posts to display