The Massachusetts attorney general is reviewing a report saying that two utilities withheld gas transportation capacity, which led to a large inflation of gas and electricity prices, The Boston Herald reported Oct. 13.
Researchers concluded that Eversource Energy and Avangrid Inc. blocked access to capacity and as a result, "customers paid $3.6 billion more for electricity." The authors said the money went to electric power generators and their fuel suppliers. "This behavior blocks other firms from utilizing pipeline capacity, which artificially limits gas supply to the region and drives up gas and electricity prices," the report's authors wrote. "We estimate that capacity withholding increased average gas and electricity prices by 38% and 20%, respectively, over the three-year period we study."
Levi Marks of the University of California, Santa Barbara, Charles Mason of the University of Wyoming, the Environmental Defense Fund's Kristina Mohlin and Matthew Zaragoza-Watkins of Vanderbilt University wrote the report, which was released by the Environmental Defense Fund.
The office of Attorney General Maura Healy said the results of the report are "concerning" and needed careful analysis, spokeswoman Chloe Gotsis told The Boston Herald.
An Eversource spokesman called the research "false and misleading" and said it lacks "any understanding of how gas procurement actually works." The gas supply Eversource purchases for customers is "a strict pass-through cost," so the company would not benefit from higher prices caused by withholding capacity, he said. "Again, this is well understood in the industry and is further evidence that the report is not credible."