trending Market Intelligence /marketintelligence/en/news-insights/trending/LusmS9lfmSnRHhYYQA0KwQ2 content esgSubNav
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Eversource accused of self-dealing in New England pipe expansion efforts

Blog

Essential Energy Insights - February 2021

Blog

Message in a (Word)Cloud

Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


Eversource accused of self-dealing in New England pipe expansion efforts

andNew England commercial natural gas consumers accused the region's largestelectric utility of pushing states to set new pipeline capacity at a low levelto serve its own corporate interests and cut out the Houston-based pipelineoperator's own project.

TheCoalition to Lower Energy Costs called out Eversource Energy for self-dealing by pushing for alimited expansion of pipeline capacity that could be served by a project inwhich it owns a stake, Access Northeast. The coalition, whose lawyers representKinder Morgan in other cases, favors a solution that includes both AccessNortheast and Kinder Morgan's Northeast Energy Direct project.

Thedebate over which projects should be supported comes as most New England states— with Vermont the exception — start a loosely coordinated effort to encourageelectric distribution companies to support additional pipelines and othersolutions that could help control spikes in New England energy prices in winter.

Eversourcefavors an amount of new pipeline defined by Access Northeast that would provide additional gasdelivery capacity of about 0.9 Bcf/d with its pipeline expansion and attachedLNG storage. Eversource is a partner in the project with and .

Forits part, National Grid, with agreements with both Spectra Energy's as well as Kinder Morgan's TennesseeGas Pipeline Co., backs the more expansive amount provided by bothAccess Northeast and NortheastEnergy Direct, which together would provide about 2 Bcf/d of newcapacity.

TheCoalition to Lower Energy Costs supports the 2 Bcf/d scenario. The coalition isbuilt from institutions, energy consumers and labor unions. In comments on aConnecticut Department of Energy and Environmental Protection draft request forproposals for more gas pipeline capacity, LNG infrastructure and gas storage,the coalition worried that Eversource is using considerable clout to push theNew England states toward the lower amount.

"CLECis concerned based on the status of various other regional proceedings, and thecoordinated behavior of certain utilities, that a less than optimal amount ofpipeline capacity may be developed due to the corporate interests ofEversource," it wrote in comments signed by the group's general counseland spokesman, Tony Buxton.

Eversourcecontributed comments to the Connecticut proceeding, but because they weresubmitted on the same day as the coalition's comments, March 29, they did notdirectly answer the CLEC charges. Eversource spokesman Mitch Gross said thecompany had evaluated many different options and found Access Northeast to bethe best.

"Access Northeast will provide the highest expectedsavings and reliability benefits to customers," Gross said in an April 7email. "Once online, it could save electric customers across New Englandabout $1 billion a year. Adding further capacity through the Northeast EnergyDirect project would result in higher fixed costs. When taking into account allcosts and the risk of project completion, Access Northeast provides the highestexpected value to customers."

LikeCLEC, Tennessee Gas pointed out that in Massachusetts, National Grid hassupported both the Access Northeast and Northeast Energy Direct projects. "Eversource,on the other hand, elected to contract only with its affiliate Algonquin,"Tennessee Gas wrote.

TheConnecticut request for proposals was based on a section of Public Act 15-107, "AnAct Concerning Affordable and Reliable Energy." The request was one ofthree authorized RFPs under the act; the other two covered renewable energy,electric transmission, storage, efficiency and demand response.

Ruthless game

Thereis a struggle among the different interests to keep contrary voices out of thestate proceedings. According to CLEC, Eversource attorneys have argued toexclude the group from the Massachusetts proceedings, "meaning there is noconsumer advocate, aside from the Massachusetts attorney general, who stronglyopposes pipeline capacity expansion and has urged delay at every possiblejuncture," the group said.

TheMassachusetts proceedingsthat CLEC mentioned, which resulted in a decision by the state Department ofPublic Utilities that allows utilities to support new pipeline, have beenchallenged byMassachusetts Attorney General Maura Healey, the Conservation Law Foundation,ENGIE Gas & LNG LLC f/k/a GDFSUEZ Gas NA LLC and other parties. The Supreme Judicial Court ofMassachusetts will hear oral arguments in this case on May 5.

Eversourcedenied that it pushed CLEC out of the state proceedings. "We have done nosuch thing," Gross said.

Inturn, CLEC asked Connecticut to bar Eversource from input into the state'sdecision.

"[TheDepartment of Energy & Environmental Protection, or DEEP] has theopportunity to structure its RFP to ensure that it independently determines theright amount of capacity, without letting a utility's corporate interest trumpthe public interest," CLEC wrote. "CLEC respectfully urges DEEP toexclude the utilities from its final determination. There is evidence in theon-going proceedings in Massachusetts, New Hampshire, and Maine, that ifEversource is permitted to influence or determine the right amount of capacity,New England will be saddled with continuing high costs of energy."

"Thesolution should be met through two projects," CLEC told the Connecticutagency, "which in combination will reliably serve nearly all New Englandgas-fired generators, and thereby achieve the goals of Public Act 15-107Section 1(D) to lower the cost of electricity to Connecticut consumers."

TennesseeGas also asked DEEP officials to make up their own minds without the influenceof a utility. Buxton, a partner at Preti Flaherty Beliveau & Pachios LLP,represents Kinder Morgan in Maine in addition to his position at CLEC.Tennessee Gas said the Connecticut RFP process complements EDC processes thathave begun in Massachusetts, New Hampshire and Maine and that are expected tostart in Rhode Island. The company noted that Massachusetts and New Hampshirehave made clear they are against self-dealing between EDCs and theirunregulated affiliates.

"Tennesseefully understands that a certain degree of communication and informationexchange is necessary between DEEP and the EDC/LDCs to permit a full andthrough evaluation of RFP proposals," the pipeline said. "Butincluding EDC/LDC input regarding proposal selection is unnecessary and couldpotentially undermine the integrity of the process, particularly when anEDC/LDC has an affiliated proposal under review."

Eversourceagreed that Connecticut would be making its own decision. "It is the state that will makethe decision," Gross said. "We, and the other participants, aresupporting DEEP in the review as needed. This is a very thorough and inclusiveprocess with strict rules throughout and we expect DEEP will conduct its ownindependent evaluation of all proposals received under the RFP."

Grosssaid it was important to note that under the RFP schedule, the deadline forbids is still a month away, May 6.