The Commonwealth’s Ratepayer Advocate Concludes that More Natural Gas Pipeline Capacity Is Not the Way to Save Electricity Customers Money

 

On November 20, the Boston Globe posted my opinion piece on Attorney General Maura Healey’s report on natural gas and the reliability of the electric system in New England.  The report’s analysis was done by the consulting firm The Analysis Group.

The bottom line finding of the study is that the region’s electric system will remain reliable through 2030 (the period the study examined) without any additional gas pipeline capacity.  An even more stunning finding, given the insistence in many quarters (including the Baker Administration) that additional pipeline capacity is necessary in order to lower electricity costs, is that increased investments in energy efficiency and demand response would actually lower electricity costs more than new gas pipeline capacity.  Note, especially in light of these findings, that the Attorney General is the state’s “ratepayer advocate,” charged with protecting consumers with respect to the cost of energy.

The study also found that even in the hypothetical “stressed system” scenario modeled, there would be only 26 hours of deficiency per year in gas supply, spread out over a maximum of nine days.

According to the report, increased pipeline capacity would also make it impossible for the region to achieve its climate-related goals.  (Actually, in Massachusetts, we have, by law, climate-related obligations, not just goals.)  By contrast, strategies like energy efficiency and the import of clean power could make future climate-related obligations less expensive and easier to achieve.

The climate-related findings seem self-evident.  Similarly, increasing our over-dependence on natural gas by using more of it seems like an obviously bad idea, and may have dangerous long-term implications for reliability.

It is important to note that the Attorney General’s study only relates to whether the region needs more natural gas pipeline capacity for electric reliability purposes and to lower the cost of electricity.  These are important questions, in light of the drumbeat that has been sounding the need for more pipeline capacity to address precisely these concerns.  However, note that the question of whether we need more natural gas for other purposes, like for building heating and for manufacturing, is outside the scope of the study.

Also outside the scope of the study is the question of whether changes in the law would be needed in order to impose the cost of additional natural gas pipeline capacity on electric ratepayers.  The Department of Public Utilities has already concluded, in an October 2, 2015 Order (D.P.U. 15-37), that no changes in law would be required.  It remains to be seen whether the SJC agrees with that conclusion.

In the meantime, the debate on whether we need additional gas pipeline capacity for electricity purposes has been vigorous, to say the least.  There are thoughtful studies on both sides of the issue.  Hopefully stakeholders on both sides will examine the conclusions of the studies with equal thoughtfulness.

 

 

 

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One Comment . Leave a comment below.
  1. Meanwhile, at FERC

    Ms. Berwick, do you think this analysis will get a fair hearing at the Federal Energy Regulatory Commission?

    It sounds as though that is the next stop, unless the SJC says otherwise.

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Wed 26 Apr 5:44 AM