Massachusetts Courts are NOT YET Ready for Natural Gas Benefits

(First published Sept 2016 – recovered November 2017)

As a women in the energy industry, I welcome ALL measures that can get consumers the energy they need to live their daily lives, while prolonging the destruction of the ozone layer so long as humanly possible – emphasis on “humanly possible.” Some states welcome the change toward a cleaner, natural gas than its fossil fuel counterparts (emitting 50-60% less carbon dioxide) and other states are not yet ready for its benefits, even if they use them daily…BOO!

These past few years, natural gas has made the U.S. THE top leader in shale gas production. So, what’s up with Massachusetts? In 2015, Massachusetts Dept. of Public Utilities approved long-term contracts for utility companies to buy natural gas from the Kinder Morgan’s Northeast Energy Direct Pipeline. Long story short, the 3 utility companies wanted to buy the natural gas and then sell it to power plants, then pass the costs to their customers, which would SAVE the customer money for what they’re currently paying anyway (especially in winter). The idea is that this would be stable financing to expand natural gas in the New England areas, which would drive down the costs of wholesale electricity.

But, a few weeks ago, the contract deal was struck down by Massachusetts highest court. The argument: this would “undermine the objectives of the state’s 1997 utility restructuring act and expose ratepayers to financial risks that lawmakers sought to eliminate two decades ago.” HOWEVER, what parts of this EXACTLY undermine this act (where utility companies are already heavy regulated, combined with prices that they charge being controlled)? If anything, it actually BUILDS UPON the Act.

First things first, (intro)

“…to establish forthwith a comprehensive framework for the restructuring of the electric utility industry, to establish consumer electricity rate savings by March 1, 1998, and to make certain other changes in law, necessary or appropriate to effectuate important public purposes, therefore it is hereby declared to be an emergency law…”

Is anyone seeing what I’m seeing? Establish consumer electricity rate savings by March 1, 1998? HALF of Massachusetts‘ power generation depends on natural gas and as Arthur C. Diestel so obviously added, “The lack of gas infrastructure cost electric consumers $2.5 billion dollars during the Polar Vortex winter of 2013 and 2014.” So, check ✔️. This has the potential for saving customers a ton of money on something they already intended on purchasing.

Then you actually go into the Act, Section 1(b),

“affordable electric service should be available to all consumers on reasonable terms and conditions…”

Do we see a pattern here? Again, this effort could make energy costs more affordable. Heck, if it doesn’t, then write into the new law whatever “terms and conditions” would help. For instance, these pipeline developers need to have these types of contracts in place in some way in order for them to even meet Federal approval, so, the pipeline and utility companies need one another in some respect. That the developing of the pipeline itself be complete, follow all other state and federal rules and regulations, or maybe show reports of where money was spent, could be some quick examples of those very terms and conditions this Act describes. ✔️

Section 1(c)(ii) “(c) ratepayers and the commonwealth will be best served by moving from (i) the regulatory framework extant on July 1, 1997…to (ii) a framework under which competitive producers will supply electric power and customers will gain the right to choose their electric power supplier”.

Again, the very core of this Act would not be undermined at all – competition. If utility company “A” contracts with Pipeline Developer “A” and then passes the costs to the customer, it ends up being more expensive than what people are ALREADY BEING CHARGED, then said customer would simply just go with a different utility company until they find what fits – like shopping for shoes. ✔️

Section 1(f)

“the introduction of competition in the electric generation market will encourage innovation…”

and Section 1(g)

“competitive markets in generation should…(ii) open markets for new and improved technologies.”

Innovation and improved technologies alone are at the heart of natural gas exploration and development. Check ✔️ and check ✔️

The entire Act was very lengthy, so if you’d like to read more, click here. I’m going to abstain from doing a legal brief…for now.

So, what do you think? Is anti-fracking Massachusetts shooting themselves in the foot or is it the Marcellus/Utica shale-loving areas of PA/OH/WV that have it wrong? Comment below and let me know your thoughts on this!