Massachusetts Supreme Judicial Court

October 26, 2016

Pipeline tariff killed in Connecticut, Rhode Island an outlier

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The Connecticut Department of Energy and Environmental Protection (DEEP) has decided against the proposal for gas capacity tariffs on the Spectra Access Northeast pipeline. This announcement comes on the heels of decisions by the Massachusetts Supreme Judicial Court and New Hampshire Public Utilities Commission rejecting similar proposals. The Rhode Island Public Utilities Commission (RIPUC) declined to kill the local version of the plan in September, but the plan seems doomed anyway.

“With yet another state abandoning proposals for more natural gas pipeline capacity, these efforts to expand fossil fuel infrastructure in New England have hit a virtually unsurpassable roadblock,” said Conservation Law Foundation (CLF) president Bradley Campbell in a statement. “Without Massachusetts, New Hampshire or Connecticut in the mix, Spectra has lost a whopping 84 percent of the customer base needed to finance this ill-conceived proposal. It’s time to kill this project altogether and look forward to opportunities for the clean, renewable alternatives that our families demand, our markets expect and our laws require.”

It is unknown when the RIPUC will act to reject the proposal here.

October 12, 2016

New Hampshire joins Mass. in rejecting pipeline tariff

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National Grid’s proposed pipeline tariff, now under an indefinite stay per the Public Utilities Commission here in Rhode Island, was rejected in New Hampshire last week. The controversial and complicated plan, which would make electricity ratepayers in New England financially responsible for the creation and profitability of a new fracked gas pipeline, involves multiple companies working together across multiple states. Here’s a description from the New Hampshire Public Utilities Commission:

“Eversource is a public utility headquartered in Manchester, operating under the laws of the State of New Hampshire as an electric distribution company (EDC). Algonquin is an owner-operator of an interstate gas pipeline located in New England. Algonquin is owned by a parent company, Spectra Energy Corp (Spectra), a publicly-traded corporation headquartered in Houston, Texas. Algonquin has partnered with Eversource’s corporate parent, Eversource Energy, headquartered in Boston, Massachusetts, and Hartford, Connecticut, and with National Grid, the parent company of EDC subsidiaries in Rhode Island and Massachusetts, to develop the Access Northeast pipeline. In general terms, Eversource Energy’s EDC subsidiaries in Connecticut, Massachusetts, and New Hampshire and National Grid’s EDC subsidiaries in Rhode Island and Massachusetts, are each individually seeking regulatory approval of gas capacity on the Access Northeast pipeline.”

When the Massachusetts Supreme Judicial Court ruled against National Grid’s pipeline tariff in Massachusetts, the Conservation Law Foundation brought a motion to dismiss the proposal here in Rhode Island. Instead, the PUC issued an indefinite stay in the proceedings, with the caveat that National Grid file a progress report on January 13, 2017.

Last week the New Hampshire PUC ruled against their state’s involvement in the plan, writing,

“The proposal before us would have Eversource purchase long-term gas pipeline capacity to be used by gas-fired electric generators, and include the net costs of its purchases and sales in its electric distribution rates. That proposal, however, goes against the overriding principle of restructuring, which is to harness the power of competitive markets to reduce costs to consumers by separating unregulated generation from fully regulated distribution. It would allow Eversource to reenter the generation market for an extended period, placing the risk of that decision on its customers. We cannot approve such an arrangement under existing laws. Accordingly, we dismiss Eversource’s petition.

“We acknowledge that the increased dependence on natural gas-fueled generation plants within the region and the constraints on gas capacity during peak periods of demand have resulted in electric price volatility. Eversource’s proposal is an interesting one, with the potential to reduce that volatility; but it is an approach that, in practice, would violate New Hampshire law following the restructuring of the electric industry. If the General Court believes EDCs should be allowed to make long-term commitments to purchase gas capacity and include the costs in distribution rates, the statutes can be amended to permit such activities.”

The Maine Public Utilities commission has voted in favor of the pipeline tariff.

September 29, 2016September 29, 2016

PUC declines to kill pipeline tariff, but it’s dying any way

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The Rhode Island Public Utilities Commission (RIPUC) today ruled against Conservation Law Foundation (CLF)’s motion to dismiss National Grid‘s proposed pipeline tariff and instead issued an indefinite stay. CLF argued that National Grid’s plan to charge electrical consumers to underwrite and guarantee profits for its proposed ANE pipeline is no longer viable given a recent Massachusetts Supreme Judicial Court ruling that declared such pipeline tariffs unconstitutional under state law.

Since National Grid’s plan required the consent of all New England states, CLF moved to dismiss the docket here in Rhode Island, yet Meg Curran, chair of the RIPUC, didn’t agree that the project was necessarily dead, saying she still had questions about the project. Curran felt that National Grid’s offer to withdraw their application and refile at a later date or accept a ruling that the docket be put on hold were better options.

RIPUC board member Herbert DeSimone Jr agreed. He said that dismissal would not be appropriate, and withdrawing the application would create “unnecessary redundancies” upon refiling, as all the evidence heard to date would have to be heard again and all motions re-decided. DeSimone suggested that the RIPUC issue an indefinite stay in the proceedings, with the caveat that National Grid file a progress report on January 13, 2017.

Curran and DeSimone then unanimously voted in favor of the plan. Marion Gold, the third member of the RIPUC, had recused herself.

The meeting was attended by representatives from and members of People’s Power and Light, the FANG Collective, Food and Water Watch, Toxics Action Center, Fossil Free RI, NoLNGinPVD and the RI Sierra Club.

“The Commission’s decision to delay this proceeding is a step toward the inevitable death of the pipeline tax. Forcing Rhode Island electric customers to foot the bill for a gas pipeline we don’t need defies our best interest and our laws,” Megan Herzog with the Conservation Law Foundation said. “Both Massachusetts and the federal government have rejected the project, and we will keep fighting until Rhode Island follows suit.”

“Rhode Island consumers should not have to take on the long-term risk of a new, unnecessary natural gas pipeline. We must protect electric customers from being charged for a natural gas pipeline, and the Massachusetts Supreme Judicial Court has already done this by deciding that the unprecedented cost-recovery scheme proposed by utilities is illegal, according to Mass. law,” said Priscilla De La Cruz of People’s Power and Light, also in attendance.

August 22, 2016August 26, 2016

CLF moves to finish off pipeline tariff

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In response to the Massachusetts Supreme Judicial Court’s decision against National Grid’s plan to charge consumers to underwrite and guarantee profits for its proposed ANE pipeline, the Conservation Law Foundation (CLF) has moved to close the Docket on a similar proposal here in Rhode Island.

Closing the docket would essentially end National Grid’s plan. According to the motion, National Grid provided testimony in the Massachusetts case claiming that “the fate of the ANE Project is dependent on approvals of full cost-recovery in other New England states—especially Massachusetts, which National Grid assumed would provide a substantial portion of the financing for the proposed project.”

As National Grid further states, “If there is any possibility of less than full cost recovery over the entire term of the contracts, the Proposed Agreement has a negative expected value for the Company’s investors…” National Grid wants to place the risks of this investment on ratepayers, not its investors.

The motion to dismiss, filed by CLF attorneys Jerry Elmer, Megan Herzog and Max Greene, supplies several reasons supporting the contention that Docket 4627 needs to be closed in light of the Massachusetts decision.

The first reason is that the project cannot proceed without Massachusetts. “Massachusetts was to receive the lion’s share—more than 43 percent—of the Access Northeast project’s gas capacity,” says the motion to dismiss, “In effect, Massachusetts’ non-participation cripples the project.”

Even if National Grid decides to proceed with the motion, by deciding to actually assume the financial risks, says the CLF, that isn’t the plan as proposed in Docket 4627. The scheme, says the CLF, “is so substantially altered by [the Massachusetts opinion] that the Petition, as filed, fails to represent fairly the costs and benefits of the ANE Project.”

Without the State of Massachusetts buying in, “The resulting proposition is an entirely new, and raw, deal for Rhode Island. In effect, National Grid is now asking Rhode Island ratepayers to subsidize a project that it alleges will benefit all of New England; yet a substantial share of New England ratepayers—including millions of ratepayers in Massachusetts—will be insulated from bearing a proportional share of the risks of this experimental and uncertain scheme.”

Also, even though the Massachusetts decision was based on Massachusetts state law and has no direct legal bearing on Rhode Island, “the reasoning underlying the Massachusetts Supreme Judicial Court’s decision… applies with equal force here.”

Rhode Island has laws similar to those in Massachusetts regarding “the core principles of electricity market restructuring,” says the CLF, and approving National Grid’s plan “would undermine the main objectives of the [restructuring] act and re-expose ratepayers to the types of financial risks from which the Legislature sought to protect them.”

August 17, 2016August 26, 2016

Court kills pipeline tariff in Mass, RI still considering

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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.’