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NED Naysayers Seek to Nix Contracts in Massachusetts

The Conservation Law Foundation (CLF) doesn't want New England to meet its energy needs with a large-scale newbuild natural gas pipeline -- namely Kinder Morgan Inc.'s (KMI) Northeast Energy Direct (NED) -- so it's seeking to overturn Massachusetts utility capacity contracts that support the project.

CLF is appealing the Massachusetts Department of Public Utilities' (DPU) approval of NED capacity contracts with utilities Boston Gas Co., Bay State Gas Co. (known as Columbia Gas of Massachusetts since 2010 and a NiSource Inc. company), and Berkshire Gas Co. The appeals were filed with DPU and the Massachusetts Supreme Judicial Court.

"When considering these three cases, the DPU unlawfully failed to assess the environmental impacts of the significant greenhouse gas emissions that would result, as required by the [Massachusetts] Global Warming Solutions Act (GWSA). Had they followed the law, they would have found that approving an overbuild of natural gas pipelines defies legal obligations, economic logic, environmental consciousness, and common sense," said CLF President Bradley Campbell.

GWSA was signed into law in August 2008 and created a framework for reducing heat-trapping emissions. It requires reductions from all sectors of the economy to reach a target of a 25% reduction of greenhouse gas (GHG) emissions by 2020 and an 80% reduction by 2050.

According to one of the filings, National Grid unit Boston Gas' NED contract will result in the release of 2.1 million metric tons of additional carbon dioxide (CO2) per year. Columbia Gas’ contract would generate an additional 1.2 million metric tons of CO2 per year, CLF said, and UIL Holdings Co. unit Berkshire's contract would add another 700,000 metric tons per year.

Campbell said the three cases turn on one question: "[I]s the GWSA merely a set of guidelines that can be altered and ignored, or does it impose legal mandates that are binding and enforceable?"

CLF attorney Caitlin Peale Sloan told NGI that "the record does not exist for DPU to find that these contracts meet the public interest standard. When you're talking about economics here, we see this as the company trying to put more risk on the ratepayers than they need to be carrying because we don't see the [utility] company as having made an adequate case for the size of the procurement, the size of the gas contract, or for the company having done adequate consideration of alternatives."

The group would prefer that instead of NED, Massachusetts and other New England utilities turn to projects that could expand existing pipeline and/or liquefied natural gas (LNG) infrastructure. Sloan told NGI that creating excess pipeline capacity would incentivise increased reliance on natural gas when renewable energy solutions should be pursued instead.

CLF has also weighed in on the pipeline debate in neighboring New Hampshire, where regulatory staff recently released a report that said a CLF suggestion of meeting peak demand with LNG would be inadequate (see Daily GPISept. 18). That report also said NED was the best solution for reducing wintertime electric power price spikes.

KMI spokesman Richard Wheatley told NGI the DPU orders approving the NED utility contracts, "...are thoughtful, substantive and well-supported by the record. Independent studies demonstrate that increasing New England's natural gas supply will lower consumers' electric and gas bills, dramatically reduce carbon dioxide and sulfur dioxide emissions, and provide essential support for increased use of renewable energy sources."

Wheatley called CLF a "professional plaintiffs' organization" and said such groups will fight every energy project "because that is how they make their money."

National Grid spokeswoman Jackie Barry said in an email that the pipeline was necessary for Boston Gas to meet customer needs. "A recent study by ICF International supports the need for the pipeline and says that New England customers could have saved $3.7 billion in electricity costs had the Northeast Energy Direct project been in service during the Polar Vortex [see Daily GPISept. 9]," she said.

Columbia Gas said the same is true of its utility. "Columbia Gas of Massachusetts has an obligation to secure adequate volumes of natural gas that provide safe and reliable service to our customers," said spokeswoman Sheila Doiron. "Based on all potential available supply options, the contract with the Kinder Morgan NED project represent a reliable, cost-effective choice for our comprehensive supply portfolio, which is designed to serve the needs of our customers."

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