Lenox seeks standing in Berkshire Gas bid to tap into proposed pipeline
LENOX — The town is seeking a seat at the table as Berkshire Gas Co. seeks state approval of its second request for additional natural gas supplies from the proposed 412-mile Tennessee Gas Pipeline Co. pipeline project.
The town's special counsel, Boston attorney Richard Kanoff, filed a request on Tuesday for "full intervenor status" as the Department of Public Utilities reviews the Dec. 23 Berkshire Gas application for the state to green-light proposed contracts to draw supplies from the project over a 20-year period. The Selectboard approved the petition.
Last August, the state agency approved the company's initial request for a portion of the gas flowing from the pipeline if the $5 billion project is approved by federal regulators. Several other utilities in the region received the same go-ahead. But the approvals have been challenged in court by multiple opponents.
Berkshire Gas — part of Iberdrola, an international conglomerate based in Spain — has described a supply shortfall and has declined requests for new natural gas hookups to customers in the Pioneer Valley, where it seeks to expand its territory. But that moratorium has not been imposed by the company in Berkshire County, so far.
At a special meeting on Tuesday, Selectman Channing Gibson explained that the petition to intervene was being filed because Berkshire Gas serves municipal needs as well as individual residential and business customers in Lenox.
The goal is "to be in the loop, to have a seat at the table," he said, adding that the town's future legal strategy remains under discussion in Selectboard executive sessions.
Also filing petitions as potential intervenors were the Pipeline Awareness Network of the Northeast (PLAN), jointly with state Rep. Stephen Kulik, who represents 19 western and central Massachusetts towns; the Franklin County town of Montague, and Northeast Energy Solutions (NEES) based in Great Barrington, which represents Lenox, the Berkshire Natural Resources Council, the Richmond Land Trust, Green Berkshires and numerous statewide environmental groups.
"It is critically important for ratepayers and affected communities to have a say in these proceedings, and for all interested parties to have an opportunity to understand the risks and costs that the local utilities are asking us to bear, before the state agency rules on such contracts," said Kathryn Eiseman, PLAN president.
In the Lenox petition to the DPU, attorney Kanoff states that the moratorium on new connections imposed by Berkshire Gas in its eastern region has "created unnecessary uncertainties in Lenox as current and future ratepayers believe the moratorium may be extended in the future to Lenox and other communities" in Berkshire County.
"This uncertainty has adversely impacted economic development in Lenox and is wholly inconsistent with the company's obligation to provide service in the public interest," the petition added. "Lenox will be harmed if the company does not reasonably assess alternatives and makes an unwise (and costly) policy choice."
If the Lenox petition is accepted by the DPU, it sets the stage for further legal intervention by the town, subject to Selectboard approval.
Full intervenors may have attorneys and expert witnesses examine and evaluate both the public and confidential aspects of the gas company's proposed contract, to challenge the data and the assumptions behind the contract, and to present alternatives to the so-called "precedent agreement."
In a conference call to the Selectboard, Kanoff noted that if the state agency approves the Berkshire Gas filing and the Tennessee Gas project gets a go-ahead in Washington, D.C., there could be rate impacts on customers.
The attorney commented that the town's petition is also designed to illustrate that state Attorney General Maura Healey's intervention in the Berkshire Gas filing is not "one-stop shopping."
"She certainly plays an active role for certain types of ratepayers," Kanoff added, "but it doesn't usually extend to municipalities and that's what we wanted to emphasize here."
State statute allows the Attorney General's Office to hire consultants for up to $150,000 to help with a review of DPU cases. By state law, the amount of money paid by the AG's Office to consultants for any review on DPU cases is paid by company customers.
Healey has challenged the DPU's approval of distributor agreements along the pipeline route "without knowing all the facts." She has also suggested that Berkshire Gas is overstating its need for additional natural gas supplies as it seeks to expand its service territory.
Iberdrola paid $3 billion on Dec. 16 to purchase UIL Holdings Corp., the parent company of Berkshire Gas and several other regional energy firms. Under the deal, the combined company operates as Avangrid Inc. and trades on the New York Stock Exchange.
As part of regulators' approval of that merger agreement, Healey and the state's energy office negotiated $4 million in bill credits for Berkshire Gas customers. In addition, Berkshire Gas rates cannot increase before June 2018.
Berkshire Gas is an $80 million investor in Northeast Energy Direct, the Tennessee Gas Pipeline Co. project. Tennessee Gas is a subsidiary of the energy giant Kinder Morgan.
The recent Berkshire Gas filing seeks to tap into the project's "supply path" for natural gas extracted from the shale fields of southwest Pennsylvania and piped to a hub in Wright, N.Y. The agreement approved by the state last August would allow the company to purchase gas from the "market path" of the pipeline between Wright, about 40 miles west of Schenectady, to the existing terminal in Dracut, north of Lowell.
The current route sought by Tennessee Gas passes through Hancock, Lanesborough, Cheshire, Dalton, Hinsdale, Peru and Windsor before exiting into the Pioneer Valley and looping through 17 southern New Hampshire towns before re-entering northeast Massachusetts.
The Federal Energy Regulatory Commission is studying Kinder Morgan's formal application for the project. The company hopes for approval by this November so it can build the pipeline and put it into service in late 2018.
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