As the Rhode Island Public Utilities Commission considers a request from National Grid to have ratepayers help subsidize a controversial pipeline project, the Massachusetts Supreme Judicial Court ruled against such pipeline tariffs in a decision released Wednesday.
“This is an incredibly important and timely decision,’ said David Ismay, the Conservation Law Foundation’s lead attorney on the case. ‘Today our highest court affirmed Massachusetts’ commitment to an open energy future by rejecting the Baker Administration’s attempt to subsidize to the dying fossil fuel industry. The course of our economy and our energy markets runs counter to the will of multi-billion dollar pipeline companies, and thanks to today’s decision, the government will no longer be able to unfairly and unlawfully tip the scales in their favor.”
The ruling by the Massachusetts Supreme Judicial Court may have an impact on National Grid‘s proposed “pipeline tariff” here in Rhode Island. The Massachusetts court deemed “it unlawful for Massachusetts to force residential electricity customers to subsidize the construction of private gas pipelines, requiring the companies themselves to shoulder the substantial risks of such projects rather than allowing that risk to be placed on hardworking families across the Commonwealth,” according the the Conservation Law Foundation (CLF) who brought the case.
The CLF was the plaintiff in the Massachusetts case. The CLF maintained in their motion to intervene in the Rhode Island case that “an electricity distribution company” entering “into a contract for natural gas transportation capacity and storage services” and receiving “cost recovery for its gas contract from electricity ratepayers” is “something that has never occurred in the United States since the Federal Power Act was enacted in 1935, during President Roosevelt’s first term in office.”
Megan Herzog, one of the two lawyers representing the CLF before the RIPUC said in a phone call that the “pipeline is a bad deal for the whole region and that the Massachusetts court affirmed that.” Though the judge ruled on the case using Massachusetts law, there are statutes in Rhode Island that reflect similar principles.
According to Craig S. Altemose, a senior advisor forthe anti-LNG advocacy group 350 Mass for a Better Future, “It is unclear how much this will be a fatal blow to any of Spectra’s proposed projects, but we have absolutely undercut their financing (to the tune of $3 billion), called into question similar pipeline tax proposals in other states, [italics added] and have given Spectra’s investors greater reason for pause. Either way, we have unambiguously won a victory that the people’s money should be not used for private projects that further commit us to climate catastrophe.”
“Today’s decision reinforces what we already know: it’s not in the public interest to subsidize new fossil fuel infrastructure. It deals a serious blow to companies like Spectra who wanted to subsidize their risky projects with handouts from ratepayers. Communities facing an onslaught of fracked gas projects in their backyards like those in Burrillville have good reason to feel hopeful right now. We urge Governor [Gina] Raimondo and the Rhode Island PUC to follow the lead of Massachusetts and reject the pipeline tax,” Ben Weilerstein, Rhode Island community organizer with Toxics Action Center said.
Though the ruling in Massachusetts has no statutory value in Rhode Island, it may establish some lines of legal reasoning that will be helpful as the Rhode Island Public Utilities (RIPUC) Commission decides on Docket 4267, the Rhode Island part of National Grid’s ambitious plan to charge electrical ratepayers not only for pipeline infrastructure investments, but also to guarantee the company’s profits as they do so.
National Grid responded with the following statement: “This is a disappointing setback for the project, which is designed to help secure New England’s clean energy future, ensure the reliability of the electricity system, and most importantly, save customers more than $1 billion annually on their electricity bills. We will explore our options for a potential path forward with Access Northeast and pursue a balanced portfolio of solutions to provide the clean, reliable, and secure energy our customers deserve. While natural gas remains a key component in helping to secure New England’s long-term energy future, the recently passed clean energy bill also presents a welcomed opportunity to support the development of large-scale clean energy, such as hydro and wind.”
Yesterday The RIPUC held a hearing on Docket 4627, asking National Grid to explain why it used such a “broad brush” in redacting information in its application. In the meeting announcement it was said that RIPUC Chair Margaret Curran thought “it is not intuitively clear how the information redacted falls within the exception to the Access to Public Records Act.” Much of what National Grid argues that much of what it wants to keep secret falls into the category of trade secrets, and releasing the information would put it at an unfair disadvantage with competitors, such as NextEra Energy Resources, LLC (NextEra).
As pointed out previously, National Grid will not release how much money ratepayers will be on the hook for if this idea is approved by the RIPUC.
Here’s full video of the hearing:
NextEra brought a separate motion to allow its lawyers access to highly confidential parts of National Grid’s application.
Here’s the full video of that hearing:
The Conservation Law Foundation (CLF) released the following statement today in response to the favorable decision from the Massachusetts Supreme Judicial Court in Conservation Law Foundation v. Massachusetts Department of Public Utilities (DPU):
‘This is an incredibly important and timely decision,’ said David Ismay, CLF’s lead attorney on the case. ‘Today our highest court affirmed Massachusetts’ commitment to an open energy future by rejecting the Baker Administration’s attempt to subsidize to the dying fossil fuel industry. The course of our economy and our energy markets runs counter to the will of multi-billion dollar pipeline companies, and thanks to today’s decision, the government will no longer be able to unfairly and unlawfully tip the scales in their favor.’
According to the opinion by Justice Cordy, DPU’s 2015 rule (“Order 15-37”) allowing Massachusetts electric customers to be charged for the construction of interstate gas pipelines is prohibited by the plain languages of statutes that have been the law of the land in Massachusetts for almost two decades.
In his opinion, Justice Cordy wrote, Order 15-37 is ‘invalid in light of the statutory language and purpose of G. L. c. 164, § 94A, as amended by the restructuring act, because, among other things, it would undermine the main objectives of the act and reexpose ratepayers to the types of financial risks from which the Legislature sought to protect them.’