Ruling setback for Access Northeast pipeline project

NEW  ENERGY: Access Northeast is a natural gas pipeline expansion project by Spectra Energy Corp., Eversource Energy and National Grid PLC. The venture recently hit a roadblock in Massachusetts, where the Supreme Judicial Court rejected a proposal for ratepayers to subsidize the cost of new gas pipelines. / PBN GRAPHIC/DARRYL P. GREENLEE
NEW ENERGY: Access Northeast is a natural gas pipeline expansion project by Spectra Energy Corp., Eversource Energy and National Grid PLC. The venture recently hit a roadblock in Massachusetts, where the Supreme Judicial Court rejected a proposal for ratepayers to subsidize the cost of new gas pipelines. / PBN GRAPHIC/DARRYL P. GREENLEE

The Massachusetts Supreme Judicial Court last month rejected a request from electric utilities to make ratepayers cover the costs to pay for new natural gas pipelines, and the decision is having a reverberating effect in Rhode Island.

While the ruling only affects Massachusetts ratepayers, it has cast uncertainty on the feasibility of a $3 billion, regional natural gas pipeline-expansion venture known as the Access Northeast Project.

David Ismay, staff attorney for the Conservation Law Foundation Massachusetts and lead attorney in the SJC case, says losing Massachusetts in this project is significant.

“Massachusetts ratepayers will not be participating in Access Northeast,” Ismay said. “That’s like a mall losing its anchor tenant. Access Northeast lost Massachusetts – its anchor tenant.”

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National Grid PLC, the largest utility serving Rhode Island, is asking the R.I. Public Utilities Commission to approve a similar contract for the Access Northeast Project in Rhode Island. The 20-year contract would be between the utility and the Algonquin Gas Transmission Company LLC, a subsidiary of Spectra Energy Corp. Access Northeast is being developed by Eversource Energy, National Grid and Spectra Energy.

Following the Massachusetts decision, however, Cynthia G. Wilson-Frias, PUC deputy chief of legal services, called a meeting between the various Rhode Island stakeholders to review the potential fallout locally following the SJC decision.

“Given the uncertainty in [Massachusetts], I have advised the commissioners that it may make sense to extend the schedule,” she wrote in an email shared with Providence Business News.

National Grid initially proposed the contract on June 30, with a 120-day review period – a relatively short period of time in energy regulatory proceeding. For that reason, Wilson-Frias proposed extending the proceedings and moving the decision deadline from Oct. 28 to the beginning of next year.

“Massachusetts is now – at the very least – in limbo, and according to initial testimony, the desire was really to get the New England states, minus Vermont, onboard,” Wilson-Frias said in an interview. “Now there are a lot of questions about one state potentially not able to be involved right now that has 60 percent of New England’s electric load.”

Without the financial support from Massachusetts ratepayers, it’s unclear whether Access Northeast will be able to move ahead in its current form. National Grid, in its proposal to the PUC, wrote about the importance of approvals from all participating states.

“The solution proposed by the [Access New England] project is sized as a regional solution and will require other New England states and other electric-distribution companies to take responsibility for proportional share of the costs of the projects,” according to a National Grid filing.

“This is 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,” according to the company.

The push for natural gas pipeline expansion – which has been widely supported by New England governors, including Gov. Gina M. Raimondo – picked up political steam beginning in 2014 after two consecutive years of electricity costs spiking during winter months.

But environmentalists have been pushing back, saying rushing to augment the region’s access to more gas is a step in the wrong direction.

“The pipeline is a bad deal for Rhode Island and the region,” said Megan M. Herzog, the lead CLF attorney fighting National Grid’s proposal in Rhode Island. “Families and businesses should not be footing the bill for this risky deal.”

Access Northeast advocates, however, argue that natural gas is the cheapest form of electricity right now and it’s needed to ensure prices remain low in the long term.

National Grid projects Access Northeast would save New England retail electric customers about $1.6 billion per year under “normal weather conditions,” from 2019 through 2038, according to its initial filing. The analysis estimates Rhode Island would accrue about $141 million of those cost savings over the 20-year period.

“While natural gas remains a key component in helping to secure New England’s long-term energy future, 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,” according to the company. •

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