Houston — The Federal Energy Regulatory Commission Tuesday said its staff inquiry into allegations of anticompetitive withholding of natural gas pipeline capacity on Algonquin Gas Transmission has resulted in no action.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
FERC's investigation was prompted by an August 2017 study by researchers at the Environmental Defense Fund, the University of California at Santa Barbara, the University of Wyoming and Vanderbilt University, which alleged that power customers in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont 'Paid a minimum of 20% more for electricity than they would have"
in 2013-2016 because of alleged "monopoly" power over the gas pipeline capacity Avangrid and Eversource Energy held.
"Commission staff took these allegations very seriously and conducted an extensive review of both publicly available and non-public data," a FERC statement said. "On the basis of that review, staff determined that EDF's study was flawed and led to incorrect conclusions about the alleged withholding. Commission staff found no evidence of capacity withholding."
Also, Eversource said Tuesday a new analysis conducted by Levitan & Associates, a national energy market consultancy, verified the company "acted in conformity with regulatory obligations and industry practices" in managing gas resources.
"We spent several months analyzing the allegations made by EDF and have identified critical areas where they failed to account for the basic principles underlying Eversource's obligation to its customers," said company principal Richard Levitan. "Namely, that the company is required to have sufficient gas resources on hand to address weather fluctuations, back-stop delivery failures by third-party suppliers, and meet other demand uncertainties so that customers do not suffer the loss of gas supply during the coldest periods."
While Tuesday's action may terminate FERC's involvement in the matter, a federal case remains pending at the US District Court for the District of Massachusetts, in which a dozen New England electricity consumers have filed a class-action lawsuit against Avangrid and Eversource, alleging that their natural gas pipeline activity resulted in $3.6 billion in overcharges.
But, according to Levitan, EDF failed to account for the following: * Gas utilities' obligation to serve customers with "the highest level of reliability," * The lack of profit, or benefit, available from anticompetitive pipeline capacity withholding, *The minuscule share -- about 1.5% -- of New England peak capacity represented by the capacity alleged to have been involved in "unusual scheduling practices" cited as problematic.
Eversource president of gas operations Bill Akley said "this report validates what we've said all along, which is that our gas-supply-management practices are carried out on a day-to-day basis in line with industry best practices to fulfill our core public-service obligation to customers."
No one at EDF responded with a comment on the end of the FERC probe in time for publication.