Merger enhances Canada’s role in Mass. energy puzzle

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BOSTON — The expected interest from Hydro Quebec in delivering hydropower to Massachusetts under its new renewable energy law isn’t the only aspect of the local energy puzzle that’s shifting northward.

Houston-based Spectra Energy, which is pushing a controversial pipeline project to deliver more natural gas to New England, announced last week that it expects to merge with Enbridge Inc., a Canadian company, to create “the largest energy infrastructure company in North America” valued at $127 billion.

Al Monaco is president and CEO of Enbridge Inc., and Spectra president and CEO Greg Ebel will become chairman of Enbridge following the closing of the transaction, the companies said.

Ebel said the combined company would “support a large capital program to fund the continued development of Spectra Energy’s existing, preeminent project inventory in addition to allowing the combined company to compete for and win the most attractive new growth projects.”

According to Enbridge, it “operates the world’s longest crude oil and liquids transportation system across Canada and the U.S., and has a significant and growing involvement in natural gas gathering, transmission and midstream business, as well as an increasing involvement in power transmission.” It owns and operates Canada’s largest natural gas distribution company, serving customers in Ontario, Quebec, New Brunswick and New York. And it has interests in nearly 2,000 megawatts of net renewable and alternative generating capacity, and is expanding into wind, solar and geothermal power.

In late August, Spectra officials were undeterred by news that Eversource and National Grid withdrew related applications for approval of natural gas transportation and storage contracts. In state filings, Eversource and National Grid cited a Massachusetts Supreme Judicial Court decision barring ratepayer financing of pipeline projects, such as the proposed Access Northeast project.

In response to a News Service inquiry, Arthur Diestel, stakeholder outreach director at Spectra Energy, said Spectra was “committed to assuring that Access Northeast remains on track to meet strong demand in Massachusetts and New England to bring to the region the energy that is so desperately needed.”

The SJC decision “provides no solution to the energy cost, reliability, and environmental challenges that the New England region faces today,” Diestel said. He said in an email that “our work to obtain contract approval will continue throughout the New England states. As we evaluate our path forward in Massachusetts, we remain confident that the Access Northeast project will ultimately provide substantial benefits to consumers across the New England region.”

In February 2015, Spectra and Eversource officials announced National Grid was enlisting as a co-developer of the $3 billion effort to expand existing pipelines to bring an additional 1 billion cubic feet of natural gas to the region for electricity generation. They said the Access Northeast project could lead to a more than 20 percent increase in natural gas supply to New England and cost savings for ratepayers.

Natural gas pipeline projects have faced persistent opposition from groups that favor more renewable energy. Twenty-nine candidates for state office – including eight Democratic lawmakers – have taken a pledge to reject campaign money from 10 major energy corporations, 350 Mass Action announced in August. The pledge, which has been made available to candidates seeking all 200 seats in the Legislature this November, calls on those running for office not to accept donations over $200 from executives, in-house lobbyists or others employed by the “top ten climate-disrupting corporations.”

That list put together by 350 Mass Action includes British Petroleum, Chevron, Eversource, Exxon Mobile, Global Partners, Global Petroleum, Kinder Morgan, National Grid, Shell and Spectra Energy.

“You can see the influence present from the utilities, Spectra Energy and other dirty energy companies. The ultimate goal is to undermine their political influence,” said Craig Altemose, executive director of 350 Mass Action and the Better Future Project.

Pipeline opponents in late April celebrated Kinder Morgan’s announcement that it was suspending work on its $3.3 billion Northeast Energy Direct pipeline project, citing inadequate commitments from prospective customers.

During a Spectra earnings call in May, Ebel said Spectra was pleased to be working on Access Northeast with Eversource and National Grid, major players in the Massachusetts and regional energy markets. “We’ve got great partners who know the region and give us the advantage of a very strong ground game,” Ebel said at the time.

In late August, New England governors and five eastern Canadian premiers met in Boston for talks that centered largely around solving regional energy problems.

Hydro Quebec, the Canadian company that could become a hydropower supplier for Massachusetts, is investing in research aimed at developing a climate change modeling tool focused on Quebec and New England. The company announced in August that it will provide $100,000 in Canadian currency to pay for research led by the Massachusetts Institute of Technology in Cambridge, the Montreal-based climate change think tank Ouranos, and the business school HEC Montreal.

— Written by Michael P. Norton

Copyright State House News Service