Law Foundation Again Seeks Dismissal of Pipeline Tax
November 29, 2016
The Conservation Law Foundation (CLF) is pushing back against the idea of a pipeline tax in Rhode Island. Motivated by recent court decisions that rejected the tax in New Hampshire and Connecticut, CLF says its time for Rhode Island to do the same.
On Sept. 29 the state Public Utilities Commission (PUC) put off acting on a CLF request to dismiss the pipeline tax, claiming it would create administrative difficulties for National Grid if the utility is able to find a way around a Massachusetts Supreme Judicial Court decision that outlawed a proposed fee on electric bills. That fee, called a tariff, would help fund projects costing $3 billion to expand the Access Northeast (ANE) natural gas pipeline projects across New England.
“What was certain in September is certain now: the ANE project cannot proceed,” CLF wrote in a recent motion to the PUC. “Because it has no regional path forward, the ANE project cannot satisfy the Affordable Clean Energy Security Act … and the (PUC) cannot legally approve it.”
Passed by the General Assembly in 2014, the Affordable Clean Energy Security Act (ACESA) allows Rhode Island to join other New England states to pay for energy projects. CLF argues that since other New England states have defeated the pipeline tax, the tariff no longer meets the criteria for an ACESA project, as much of the costs for the construction would fall to ratepayers in Rhode Island.
On Aug. 17 the Massachusetts Supreme Judicial Court ruled that the Massachusetts Department of Public Utilities (DPU) lacked authority to approve or deny a pipeline tax, saying the tariff defied laws that keeps electric distribution companies such as National Grid and Eversource Energy separate from the process of generating electricity.
National Grid and Eversource then withdrew their application for the tariff. CLF subsequently made its request to have the Rhode Island PUC dismiss National Grid’s request for a pipeline tax. Instead, in late September, the PUC agreed with National Grid’s argument for a pause in its application until an alternative to the pipeline tax can advance in Massachusetts. Any solution would likely have to come from the Massachusetts Legislature, which is in recess until January.
On Sept. 21 the Maine Public Utilities Commission ruled that its pipeline tariff can go forward, but only if other New England states also approve such a fee. In early October, the New Hampshire Public Utilities Commission dismissed the ANE project saying it was inconsistent with state law.
The Connecticut Department of Energy and Environmental Protection, on Oct. 25, put a stop to the pipeline tax after concluding that the cost for the ANE project couldn’t be shared fairly by ratepayers if other states don’t allow the tariff.
“Now New Hampshire and Connecticut have joined Massachusetts, and the conditions on which Maine’s approval rest cannot be satisfied. Across the region, the ANE project has collapsed,” according to the CLF’s recent Rhode Island motion.
The PUC has yet to announce if it will hold a hearing to consider CLF’s motion to dismiss.
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