Wednesday, April 13, 2016

Ratepayers could be put on hook for natural gas project

As the official tasked by statute with representing residential utility customers before the Public Utilities Commission, I share the concern expressed in the April 7 Sentinel editorial about New Hampshire electric customers being forced to pay for natural gas capacity. I write, however, to offer some clarification. However problematic Kinder Morgan’s proposed Northeast Energy Direct (NED) pipeline is, it is actually an entirely different project, called Access Northeast, that raises the immediate specter of electric customers guaranteeing a pipeline deal. Access Northeast is a joint project of a Texas company, Spectra Energy, and New England’s two biggest electric utilities, Eversource and National Grid.
Although the Access Northeast project would, if built, not cross New Hampshire, Granite Staters still have much to worry about here. Eversource has asked the PUC to approve its unprecedented 20-year deal with Access Northeast and thus double down on natural gas as our fuel of choice for making electricity. This is so even though natural gas prices can be volatile, renewable resources are likely to be cheaper in the long run, we could make much more use of energy efficiency, and New Hampshire has restructured its electric industry.

The latter point — about restructuring — is especially important. Twenty years ago, the Legislature decided to break up our vertically integrated electric utilities and leave them responsible for providing the poles and wires — so-called distribution service. In the case of Eversource, the company is only now getting around to divesting the last of its generation assets and truly becoming a distribution-only utility in New Hampshire. Putting natural gas capacity into distribution service rates is a backdoor way of undoing restructuring.

The Sentinel editorial suggested that New Hampshire has already blessed the legality of such a deal. Not so. My office intends to argue vigorously to the contrary at the PUC and, if necessary, in the courts. Electric customers have paid dearly since 1996, through stranded cost charges associated among other things with the Seabrook nuclear plant and the ill-advised mercury scrubber at the Eversource coal plant in Bow, for the right to be free from the kind of longterm energy obligation Eversource now seeks to impose on them anew.
In short, the conclusion of the editorial is exactly right: We still need to import some of our energy in the form of natural gas, but to get it ratepayers should not be “on the hook while the company that stands to profit gets a pass.”

Consumer Advocate
Office of Consumer Advocate
21 South Fruit St. Suite 18

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