NatGrid backs away from pipeline financing proposal, environmentalist declare victory

NATIONAL GRID has withdrawn its initial financing proposal before the R.I. Public Utilities Commission for the expansion of natural gas capacity in New England, but the utility says that it continues to work with other entities to find a new way to complete the project, known as Access Northeast. / PBN GRAPHIC/DARRYL GREENLEE
NATIONAL GRID has withdrawn its initial financing proposal before the R.I. Public Utilities Commission for the expansion of natural gas capacity in New England, but the utility says that it continues to work with other entities to find a new way to complete the project, known as Access Northeast. / PBN GRAPHIC/DARRYL GREENLEE

WARWICK – Environmentalists rejoiced Friday, as the state’s largest utility withdrew a proposal to use ratepayer-backed funds to pay for the expansion of natural-gas pipelines in Rhode Island.

National Grid PLC asked the R.I. Public Utilities Commission to withdraw its proposal to enhance natural-gas pipelines in Rhode Island. The effort was part of a larger, regional infrastructure project called Access Northeast.

The utility maintains its decision to withdraw doesn’t signal defeat, but rather allows it to explore other ways to finance and complete the region-wide project.

Tim Horan, president of National Grid in Rhode Island, says building out the state’s scant pipeline system is necessary to ensure future price stability for electricity ratepayers.

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“Our electric customers have literally been paying the price for major constraints on the network of pipelines that supply natural gas to the region’s power plants,” he said. “These constraints have led to significant volatility in the cost of electricity and to our customers paying among the highest price in the country.”

The Conservation Law Foundation, however, disagrees and is celebrating the new development, as the environmental law group has fought the proposed project since inception. The group argues the pipelines are unneeded, harmful to the environment and cannot be paid for by electricity ratepayers in accordance with federal law.

“CLF unequivocally sees this as a win,” said Jerry Elmer, senior attorney at CLF in Rhode Island. “In its filing today, [National] Grid conceded the arguments that CLF made … were correct. We won, we defeated this particular gas-pipeline proposal. It’s a big win for CLF, it’s a big win for the environment, and it’s a big win for electricity ratepayers in Rhode Island.”

National Grid’s proposal would have established a 20-year contract between the utility and the Algonquin Gas Transmission Co. LLC, a subsidiary of Spectra Energy Corp. The utility estimated the project would have saved Rhode Island ratepayers about $141 million over the duration of the contract.

The project received early support from New England governors and other elected officials, but pipeline-advocates have been playing defense ever since the Massachusetts Supreme Judicial Court in August rejected a similar proposal in Massachusetts, ruling it unlawful to build gas pipelines on the back of electricity ratepayers.

The decision has had a ripple effect on the project in other New England states.

“It is illegal under federal law to build gas pipeline and charge electricity ratepayers for it,” Elmer said. “That’s why this has never happened in the history of the United States.”

The withdrawn proposal, albeit a win for environmentalists, does not close the door for future efforts. National Grid in its filing said it’s actively engaged in coordination with other New England utilities regarding “next steps for contracting effort with the ANE Project,” according to documents filed with the PUC on Friday.

“The coordination is productive and is continuing to progress to a workable solution that could be presented to the PUC for approval consistent with Rhode Island law,” according to the filing.

The Friday filing met a deadline set by the PUC in September, asking National Grid to provide an update on the status of the regional project in Massachusetts and elsewhere in New England.

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