Daily GPI / Regulatory / Infrastructure

Massachusetts Lawmakers Oppose Customers Paying For NatGas Pipeline Expansions

April 13, 2016
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Two key lawmakers in the Massachusetts House of Representatives say nearly 100 members are opposed to a proposal in a state omnibus energy bill that calls for electricity customers to pay for the expansion of natural gas pipelines.

According to reports, Rep. Stephen Kulik (D-Worthington) and House Minority Leader Bradley H. Jones Jr. (R-North Reading) said they are against a proposal for electric ratepayers to pay for the cost of the pipeline expansions, which would be collected through a surcharge, tax or tariff. They estimate the costs would be $5-8 billion. Jones and Kulik outlined their opposition in a letter dated April 6 to House Speaker Robert DeLeo, and reportedly plan to give the letter to him on Wednesday.

"Ordinarily, the natural gas producers would be expected to pay for this infrastructure expansion, if the expected revenue from natural gas sales would justify the cost," Jones and Kulik wrote. "The fact that this is not happening means industry players have determined the risk is not worth the reward. Why should the ratepayer shoulder the risk when private industry is unwilling to?"

On Tuesday, Kulik tweeted that 97 representatives had signed the letter, adding "risk not worth reward." The letter appears to hinge on lawmakers' opposition to Tennessee Gas Pipeline Co. (TGP) LLC's Northeast Energy Direct (NED) project, but other projects of note in the region include Spectra Energy Corp's Algonquin Incremental Market, Atlantic Bridge and Access Northeast projects (see Daily GPI, Oct. 28, 2015), as well as TGP's proposed Connecticut Expansion Project (see Shale Daily,March 28).

Jones and Kulik also took aim at the state Department of Public Utilities (DPU), after it ruled last fall that electric utilities in Massachusetts could enter into long-term contracts for pipeline capacity, and could pass the costs for natural gas pipeline expansions on to their customers (see Daily GPIOct. 5, 2015).

The largest utilities in Massachusetts -- National Grid and Eversource Energy -- provide natural gas and electricity service. The costs for obtaining gas for power generation have not been passed on to consumers since the state's power generation industry was deregulated, but the DPU ruling means such a move is permissible.

Opposition to pipeline projects in New England is strong, with foes filing comments with FERC over the aforementioned projects and petitioning their elected leaders in Washington -- including Democratic presidential candidate Sen. Bernie Sanders (D-VT) -- to investigate the Federal Energy Regulatory Commission for its perceived cozy relationship with pipeline companies (see Daily GPIJan. 19). Massachusetts Attorney General Maura Healey is also a vocal opponent of the NED project (see Daily GPINov. 18, 2015).

Last month, a landowners group in Massachusetts asked FERC to deny TGP permission for it to cut trees for its Connecticut Expansion Project (see Shale DailyMarch 28).

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