New gas pipelines not needed in region, energy report contends
New natural gas pipelines are not needed in New England since the region is unlikely to confront electricity reliability challenges over the next 15 years, according to a keenly anticipated report projecting the region's energy needs.
The report, released on Wednesday by state Attorney General Maura Healey, was greeted with enthusiasm by opponents of a Tennessee Gas Pipeline Co. proposal by Kinder Morgan. The energy company, however blasted the report as "seriously flawed."
Kinder Morgan on Friday is expected to submit a 6,000-page formal application to federal regulators for approval of the $3.3 billion, 412-mile Northeast Energy Direct pipeline. The proposal has generated robust opposition in the Berkshires by residents concerned about potential environmental damage and the use of gas extracted in Pennsylvania by the controversial hydraulic fracturing, or fracking, technique.
In an Eagle phone interview, Healey said the "thorough, robust study" creates "an opportunity to protect ratepayers and the environment at the same time. It shows we can do both. Our best investment is energy efficiency, and with respect to proposed pipeline projects such as Kinder Morgan's, there is no justification for having electricity ratepayers foot the bill."
Healey cited concerns that "as proposed, the project is too big. It isn't fair or justified for ratepayers to bear the burden for something that's not needed."
The three-month study was commissioned by Healey and conducted by the Boston-based Analysis Group, one of the nation's largest economic consulting firms. It includes the impact of the Pilgrim nuclear plant's shutdown by June 2019, and found that through 2030, the reliability of the regional power system would be sustained even in the coldest months.
The report used extremely conservative assumptions, according to Healey, including power needs during the severe cold wave of 2004.
Under a worst-case scenario, if the region becomes more dependent on natural gas to power electricity-generating plants, there would only be a shortage for a few hours on nine extremely cold days during the winter of 2029-2030, the study argued.
Examining various options to meet an unanticipated supply shortfall, the study recommended enhanced energy efficiency and response to customers needs as the best solution. That approach would save customers money and reduce greenhouse gas emissions. But new gas pipelines would result in reduced customer services and would drive up emissions, the report stated.
Kinder Morgan was quick to blast the report.
In a statement, the company said the recommendations "will do nothing to lower unnecessarily high electricity costs for ratepayers or provide long-term solutions to the region's chronic energy problems and environmental challenges."
Kinder Morgan argued that in its review of natural gas needs in Massachusetts, the report focused only on the state's and the region's electric power market, "ignoring the need for more natural gas from local gas utilities struggling to meet increased demand from residents and businesses seeking to switch from oil to gas."
As a result, according to the statement, "the study paints an incomplete and inaccurate picture to reach its conclusions."
Healey said she was not surprised that Kinder Morgan criticized the findings of the report.
"They're talking past the issue," she said. "We question the company's statements on the need for more natural gas. Facts are facts, this was an independent, quite detailed study, demonstrating clearly that the best investment we can make with our dollars is on energy efficiency and demand response, and away from oversized natural gas pipelines. The stakes are really high."
Healey has sent a copy of the study to the Federal Energy Regulatory Commission, which is expected to review Kinder Morgan's application for the next 12 months or more before deciding whether to approve or reject it. The company hopes for a green light that would enable construction to begin in 2017 in time for an in-service date of November 2018.
The attorney general voiced hope that federal regulators will review the study as "an important data point."
During a media conference call, municipal, business and environmental leaders embraced the findings of the attorney general's report.
"Information is powerful," said George Bacharach, president of the Environmental League of Massachusetts. "I hope FERC and others will read the report and make it a part of their decision-making process. We are not the government but we're providing and underscoring information for regulators."
According to Peter Shattuck, the state director for the Acadia Center, an advocacy group for energy efficiency and renewable energy, "We're in a very different place now from two years ago, when the 'polar vortex' exposed the pitfalls of over-reliance on natural gas in the winter."
"Now, we're much better prepared through improved planning and regional reform," Shattuck said, "and from clean-energy alternatives coming online. Subsidizing overbuilt natural gas pipelines is a risky proposition for electricity ratepayers. The facts on the ground back up the findings of the forward-looking attorney general's report."
Acadia Center was among the members of an advisory group that helped prepare the study.
Since electricity supply rates are coming down for the winter — a 27 percent reduction for Eversource and 25 percent for National Grid — Shattuck contended that better planning by power plant operators to make sure they have enough supply has helped reduce rates compared to last winter.
"This is a very encouraging, enlightening report," said Andy Savitz, director of sustainability for the city of Newton, just outside Boston. "Cities and towns are working hard on renewable energy projects but can't reach local goals if the grid is producing more and more carbon. We need to de-carbonize the grid and continue to reduce reliance on fossil fuels. We can continue the transition to renewable energy safely, reliably, economically."
A Northfield selectman, where opposition to a proposed Kinder Morgan compressor station has been intense, said that the study shows clean-energy solutions can meet the region's needs without new pipelines.
"The study repudiates claims of energy suppliers and outlines the ways we can go without increasing our reliance on carbon," said Selectman Jed Proujansky. Northfield is a member of a seven-town coalition opposing the Northeast Energy Direct project.
However, Kinder Morgan argued that the report's findings "are contradicted by every other analysis in a long line of public studies, including a comprehensive review prepared for the Patrick administration's Department of Energy Resources, all of which found that Massachusetts and New England need substantially more natural gas capacity."
The company added that ISO New England, which operates the region's power grid, "has also underscored the pressing need for expanding natural gas infrastructure, noting that nearly half of the region's electricity is now produced with natural gas, a number that will steadily increase as more coal and oil generators are retired."
To make its case, the energy company contended that lack of adequate pipeline capacity has cost New England $7 billion more for electricity during the past two winters than nearby regions with access to low-cost natural gas. Kinder Morgan claims that the attorney general's study acknowledges that "additional natural gas supplies will provide a net savings and rate reduction to consumers."
Kinder Morgan also stated that its $3.3 billion pipeline investment "would be funded entirely by the company." Critics have stated that some costs would be passed on to individual ratepayers.
The Tennessee Gas Pipeline route would pass through parts of Hancock, Cheshire, Lanesborough, Dalton, Hinsdale, Peru and Windsor after entering Berkshire County from Stephentown, N.Y. It exits into Franklin and Hampshire counties before looping northward into southern New Hampshire, passing through 17 towns in that state before re-entering Massachusetts for the existing terminal in Dracut, north of Lowell.
For Attorney General Healey's full report: www.mass.gov/ago/docs/energy-utilities/reros-study-final.pdf
Contact Clarence Fanto at 413-637-2551.
In their own words ...
Reaction to the release on Wednesday of Attorney General Maura Healey's study on the region's power supply needs through 2030:
"Having spent more than a decade building natural gas electric generators to replace coal and oil facilities and reduce carbon emissions, the state has been forced to burn coal and oil in recent winters due to inadequate natural gas supplies. Given the severe constraints on pipeline capacity, this pattern will likely repeat itself this winter and in the future. This approach will not only deny relief to Massachusetts residents, businesses and industries burdened by sky-high energy costs, but also contribute to higher carbon emissions and make it more difficult to meet the goals of the state's Global Warming Act."
— Kinder Morgan statement
"Wind and hydroelectricity projects coming on line over the next few years will displace natural gas. Pipelines are a risky gamble, they're not needed for reliability or from the cost perspective. Clean energy is a better deal for ratepayers."
— Peter Shattuck, state director, Acadia Center
"We're a major energy user from a traditional industry, we've been implementing numerous energy-conservation measures. We want and need actions that provide reliability and cost-effective sources of energy, The attorney-general's solution is the best to keep costs down. State leaders must focus on creating a diversified energy portfolio.
— Tedd Saunders, chief sustainability officer, the Saunders Hotel Group (including Boston's Lenox Hotel)