Citing SJC ruling, Eversource withdraws natural gas application

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STATE HOUSE — Eversource, a gas and electric utility, on Thursday withdrew its application for approval of natural gas transportation and storage contracts, which would run along a proposed pipeline called Access Northeast.

In its filing to the Department of Public Utilities the company cited a recent Supreme Judicial Court case limiting ratepayers’ financing of such pipeline projects.

“In light of the Court’s ruling, the Companies move to withdraw their Petition without Prejudice,” wrote Danielle Winter, of Keegan Werlin. “In doing so, the Companies reserve their right to seek Department approval of the same or similar agreements in the future to the extent that, in the future, there is a change in relation to the Department’s legal authority to approve such agreements.”

The combined efforts of Spectra Energy, Eversource and National Grid, Access Northeast planned to upgrade existing Algonquin Gas Transmission pipeline and build storage facilities along the way, with an anticipated completion date in late 2018. The route would access eastern and central Massachusetts via Rhode Island.

On its website, project proponents note that during peak-demand days, natural gas-fired plants lack fuel access, and it said five new power plants will be connected to Algonquin’s system. This summer, Gov. Charlie Baker signed a law intended to diversify the state’s electricity generation, importing hydroelectric power and fostering an offshore wind industry.

The governor has favored the Access Northeast Project, which claims that 95 percent of it will be along existing pipeline and utility corridors.

“I was glad to see Eversource and National Grid come out yesterday and talk about working on a project that would support that, to widen and expand existing pipeline capacity along the existing right-of-ways,” Baker said in February 2015.

The Supreme Judicial Court ruled last Wednesday that utility companies cannot use ratepayers to finance gas pipeline construction, determining it violates a 1997 law somewhat de-regulating the energy markets.

Without legislative action, the ruling cuts off financing for the project, which claimed its energy-bill-based funding would be a net benefit to ratepayers.

“Electric consumers will pay a small surcharge, similar to existing public benefit charges, for increased gas capacity once the pipeline is finished, but will enjoy significant cost savings overall as the pipeline lowers regional energy costs,” reads an explanation on the project’s website.

Attorney General Maura Healey sided with the plaintiffs challenging the DPU’s determination that had cleared the way for Access Northeast to use surcharges to pay for the project.

Seth Schofield, Healey’s senior appellate counsel in the Energy and Environment Bureau, wrote an amicus brief, opposing the DPU and Department of Energy Resources’ “radical market intervention: obligate electric ratepayers to assume twenty years of risk (the contract length) that no other party has been willing to assume to deal with a short duration dynamic the market is already addressing.”

In May, Kinder Morgan withdrew its application to the Federal Energy Regulatory Commission for a pipeline through parts of the Berkshires to the Lowell area, citing a lack of commitments from gas utilities and other “market participants.”

— Written by Andy Metzger

Copyright State House News Service