December 12, 2019
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Nuke, oil generators complain to feds about state gas ‘pipeline scheme’

RICK WILKING | REUTERS
RICK WILKING | REUTERS
A sign marking the location of a natural gas pipeline is seen in Golden, Colorado in this February 2, 2015 file photo.

PORTLAND, Maine — Two New England power suppliers have asked federal regulators to intervene in state plans for expanding natural gas pipelines serving New England’s increasingly gas-dependent power grid.

NextEra Energy Resources and the PSEG Companies last week filed their complaint with the Federal Energy Regulatory Commission, asking them to investigate and create market fixes to mitigate what they call the “state pipeline scheme.”

“There are many legitimate ways to lower prices to customers, such as by increasing efficiency, but this is not one of them,” the complaint states.

NextEra owns a majority stake in the Seabrook Station nuclear power plant in New Hampshire, and PSEG has oil and coal generation units at facilities in Connecticut.

The complaint tees up another battleground over cases, as in Maine, where regulators are considering having electric ratepayers cover long-term contracts for gas pipeline capacity.

Spectra Energy, a leading developer of a regional expansion proposal that’s bid for a contract with Maine utilities, wants the commission to hear the complaint and rule on its merits, too. And quickly, as regulatory hearings in Maine and other states could come this month.

“By the very act of filing their complaint at this time, while considerable state and federal activity on this issue is coming to a head at almost every level, NextEra and PSEG seek to have this commission interfere with and cast a federal regulatory pall over this solution,” an attorney for Spectra’s gas subsidiary Algonquin Gas Transmission wrote in a response filed Tuesday.

That request came in response to a motion by the regional grid operator, ISO-New England, to dismiss the case because the issue is “unripe.”

“The complaint is based on unsupported allegations that are contingent on a number of future events,” the grid operator wrote.

Algonquin said dismissing the case on those grounds will just leave the issue undecided and create uncertainty for proceedings in Maine and elsewhere, whenever they may come up for votes.

Maine regulators haven’t yet decided whether its worth it to direct electric utilities to enter long-term deals with gas pipeline companies, with the idea that it would eventually lower power costs across the system.

In the Maine proceeding, staff for the Public Utilities Commission recommended against approving such a contract. That recommendation has a wide range of objectors, including the Office of the Public Advocate, who have argued for contracts at various amounts in filings in response to the staff recommendation.

The Industrial Energy Consumers Group, representing large power customers including paper mills, has advocated Maine utilities contract for the full capacity available from Spectra in an effort to put Maine’s wholesale power costs on par with other states.

“When stratospheric prices have occurred and the cause has not been remediated, businesses cannot predict their energy costs. Their estimates for production costs inflate to account for this risk,” an attorney for IECG wrote in June to Maine regulators.

Maine regulators have not yet placed the case on an upcoming agenda for a vote. For the FERC complaint, parties involved have until July 28 to submit comments.

Central Maine Power Co. has filed a request to participate in that case as an intervenor, along with its sister company United Illuminating Co., as both stand to have state regulators direct them to enter contracts with pipeline companies.

In its complaint, NextEra suggested that FERC change market rules for ISO-New England, creating mechanisms by which generators would pay for costs of the pipeline rather than collecting those costs through the rates of transmission and distribution companies.

NextEra noted in its complaint that acceptance of its suggestions for market changes might alter how the states consider having electric utilities enter those natural gas contracts.

“The first state expected to take the next step and possibly lock in retail ratepayer commitment to provide subsidies, irreversibly, for 20 years, is Massachusetts, which is expected to act as early as October,” an attorney for NextEra wrote. “Commission action in this case, before then, could send a powerful message that 20 years of subsidies will not be allowed to cause the intended price suppression.”

 



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