Energy

National Grid Wants to Buy Natural Gas Contracts

An environmental legal group is challenging a new rule in Massachusetts that allows electric utilities such as National Grid and Eversource to buy natural gas contracts — contracts that are essential to fund the many pipeline projects proposed or underway across southern New England.

The Conservation Law Foundation (CLF) and other environmental groups oppose the pipelines, fearing they will lock the region into decades of natural gas use at a time when states should be cutting their fossil fuel use to lessen the impacts of climate change.

Big electric users such as Walmart also have questioned the practice of letting electric utilities — also called electric distribution companies (EDCs) — buy the contracts for fear it will increase energy bills.

“In fact, having EDCs procure any pipeline capacity may unnecessarily over-allocate costs and risks to the EDC (and Massachusetts retail ratepayers) without sufficient demonstration of a defined benefit to its retail customers,” Walmart wrote in a letter to the Department of Public Utilities prior to its approval of the new rule.

Large gas users such as power plants and distribution companies typically buy the 20-year pipeline capacity contracts to ensure they have gas to run their power facilities or deliver it to homes and businesses. Pipeline companies rely on the contracts to secure Wall Street financing and build the projects, which have big price tags.

The controversial Northeast Energy Direct Project, proposed by Kinder Morgan Inc., costs $3.3 billion. Houston-based Spectra Energy has a $3 billion natural gas pipeline projects in the works, in Connecticut, Rhode Island, and Massachusetts.

Thanks to the pipeline contracts, opponents say, these expensive projects will be paid by the public.

“Massachusetts has no legal authority to require the hardworking families and businesses that pay their monthly electric bills to bankroll the construction of a gas pipeline that will be obsolete by the time it’s completed,” CLF president Bradley Campbell said in a prepared statement.

With the backing of Gov. Charlie Baker, the Massachusetts Department of Public Utilities (DPU) approved the practice Oct. 2 without a public hearing. The action was questioned or opposed by Attorney General Maura Healey, the Low-Income Energy Affordability Network, Rep. Gailanne Cariddi, D-North Adams, Essential Power Massachusetts LLC, Food & Water Watch New England, RENEW Northeast, 350 Massachusetts for a Better Future, the town of Northfield, Environmental Entrepreneurs, Environmental Defense Fund, Acadia Center, Environmental League of Massachusetts, Mass Energy and Entergy Nuclear Power LLC.

Natural-gas companies and electric utilities support the measure. National Grid argued that pipeline capacity contracts are needed to fund more pipelines that will meet winter demand for natural gas. During a cold snap in January and February 2014 the heightened need for natural gas caused a 50 percent increase in gas rates for retail customers.

“So, even though there are ample supplies of low-cost domestic natural gas available from the Marcellus supply region and elsewhere in North America, the lack of additional pipeline capacity results in extremely high prices for those natural gas buyers, particularly electric generators in Massachusetts and throughout New England, who do not hold firm capacity,” National Grid wrote in its letter of support to the DPU.

Opponents argued that thanks to reserves of liquefied natural gas, natural-gas demand was met during a much colder spell in February. Many of the opponents of the PUC decision argued that future peak demand could be met with better planning and increased use of renewable energy and energy-efficiency programs.

“Expanded gas pipeline capacity for the purposes of electricity generation may undermine our state’s transition to renewable energy resources and presents the possibility of significant stranded assets should such pipeline infrastructure prove unneeded,” wrote the Environmental League of Massachusetts in its comments to the DPU.

Meanwhile, local opposition to the pipeline projects are ongoing across southern New England. The latest in Sharon and Peabody, Mass.

The Conservation Law Foundation’s appeal was filed in the Massachusetts Supreme Judicial Court on Oct 26. Legal proceeding are not expected until after Jan. 1.

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  1. Nuclear power is the only way to stop making CO2 that actually works.

    A Myth is Being Foisted on you:

    Fact: Renewable Energy mandates cause more CO2 to be produced, not less, and renewable energy doubles or more your electric bill. The reasons are as follows:

    Since solar “works” 15% of the time and wind “works” 20% of the time, we need either energy storage technology we don’t have or ambient temperature superconductors and we don’t have them either. Wind and solar are so intermittent that electric companies are forced to build new generator capacity that can load-follow very fast, and that means natural gas fired gas turbines. The gas turbines have to be kept spinning at full speed all the time to ramp up quickly enough. The result is that wind and solar not only double your electric bill, wind and solar also cause MORE CO2 to be produced.

    We do not have battery or energy storage technology that could smooth out wind and solar at a price that would be possible to do. The energy storage would "cost" in the neighborhood of a QUADRILLION dollars for the US. That is an imaginary price because we could not get the materials to do it if we had that much money.

    The only real way to reduce CO2 production from electricity generation is to replace all fossil fueled power plants with the newest available generation of nuclear; unless you live near Niagara Falls. Nuclear can load-follow fast enough as long as wind and solar power are not connected to the grid.

    MYTHS: The myths being perpetrated by wind turbine marketers are that:

    Wind and solar energy are free and will lower your electric bill

    and

    Wind and solar energy are CO2 free and will reduce the total CO2 produced by electricity generation.

    But

    Californians are paying twice as much for electricity as I am and Germans are paying 4 times as much as I am. The reason is renewables mandates. Illinois has 6 nuclear power plants and we are working hard to keep them. I am paying 7&1/2 cents /kilowatt hour. What are you paying?

    And

    Californians and Germans are making more CO2 per kilowatt hour than Illinoisans. It turns out that even without burning natural gas or coal to make up for the intermittency of wind and solar, wind turbines and large scale solar collectors require more concrete and steel per kilowatt hour than nuclear power does.

    FALLACIES: The fallacies in the myth are failure to do the math and failure to do all of the engineering required. The myth is easy to propagate among most people because there is quite a lot of math to do and there is a lot of engineering to learn. University electrical engineering departments offer electrical engineering degrees with specialization in power transmission [electric grids]. That is only part of the engineering that needs to be done to figure the whole thing out.

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