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Massachusetts Court Rejects Gas Pipeline Subsidy Plan

August 24, 2016

Last Wednesday, August 17, the Massachusetts Supreme Court ruled against a Massachusetts Department of Public Utilities proposal that would have charged customers for new natural gas pipeline projects. The Court intimated that the subsidy bid would unfairly expose consumers to higher energy costs. The proposition was made to expand natural gas supply and avoid high prices that have plagued New England over the past few years, especially in the winter. In addition, the decision puts a wrench into Spectra Energy’s $3 billion Access Northeast natural gas endeavor. Spectra was understandably very disappointed with the ruling, and said it will reevaluate its path and work on a plan consistent with the court’s rejection. The verdict puts New England in a difficult position. It lacks sufficient gas capacity for electric generation in cold winters.

New England is a region that is particularly reliant on natural gas. For example, gas-fired plants generated over 60 percent of power in New England last Wednesday. Massachusetts is also heavily reliant on natural gas. Bottlenecks on its system increase the risk of supply shortages and price spikes when demand is highest on the coldest and hottest days. Some electric suppliers are happy with the decision. They believe that an influx of natural gas from new pipelines would drive down the cost of power prices for generators. Massachusetts Attorney General Maura Healey was also happy with the ruling, but for a different reason. She favors cleaner and cheaper options than pipelines.