Nonprofit coalition flags Berkshire Gas parent's pipeline investment

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PITTSFIELD >> A coalition of nonprofit environmental organizations is asking federal and state officials to review the decision by Berkshire Gas Co.'s parent company to invest in Kinder Morgan's proposed Tennessee Gas Pipeline project.

New Jersey-based Northeast Energy Solutions, which provides economic and environmental analysis of proposed energy projects in the region, is questioning why UIL Holdings Corp. has decided to invest in the pipeline while enforcing a moratorium on adding new natural gas customers in parts of its coverage area.

In a letter to the state Attorney General's Office, NEES claims the fact that the investment was not disclosed by either UIL Holdings or Tennessee Gas until the nonprofit questioned the moratorium "speaks volumes" to the "ham-handed nature" of their approach to ratepayers, land owners and municipal and state administrators.

UIL Holdings Corp. recently announced that it had decided to invest $80 million for a 2.5 percent stake in Kinder Morgan's $3.3 billion pipeline project, which is scheduled to pass through Berkshire County on its way from Wright, N.Y., to Dracut, north of Lowell.

The decision will eventually allow Berkshire Gas to lift a moratorium on adding new natural gas customers in eight municipalities of Franklin and Hampshire counties, UIL has said.

But NEES claims the pledge to lift the moratorium if the gas pipeline project is built without disclosing their financial interest in the proposal — at least initially — was, "at a minium, a breach of public trust and service as a regulated public utility."

The Attorney General's Office is reviewing the letter, which was sent by Vincent DeVito an attorney in the Boston law firm Bowditch & Dewey, who also serves as counsel for NEES. The letter also has been sent to U.S. Rep. Jim McGovern, D-Mass.

In April, Berkshire Gas filed a petition with the state Department of Public Utilities seeking approval of the company's precedent agreement for a 20-year firm transportation contact with Tennessee Gas Pipeline Co., according to a brief filed by the Attorney General's Office.

In that brief, the Attorney General's Office asked the DPU not to approve that transportation agreement as filed because Berkshire Gas had failed to prove that the agreement "is consistent with the public interest."

In June, NEES filed a brief with the DPU stating that Berkshire Gas had not "explained the impact of the moratorium on present and future potential future demand of what impact, if any, lifting the moratorium would have on demand."

DeVito said he was not calling for officials to take specific action against UIL Holdings and Berkshire Gas, but to review how the company's decision to invest in the pipeline was reached.

"If I was in a position to levy an investigation, what I would look at are the communications between the investor and the developer to find out how this moratorium is attached to this investment decision as a tool or a motivating factor to get this pipeline approved," DeVito said.

"What I'm asking for seems to be a likely scenario," he said. "Let's find out if they are violating the ratepayers' role to protect the public interest."

UIL spokesman Michael West said he has not seen the documentation filed by NEES, but said his company has been actively working on opportunities to raise the capacity for natural gas transmission to the New England region for several years.

UIL also operates two other gas companies in Connecticut. West said the company decided to invest in the proposal so that it could be part of a regional solution, that doesn't solely involve Berkshire Gas.

"Even if UIL did not choose to have an operational stake once the pipeline goes into operation," West said, "the moratorium would still be lifted."

"The point were trying to make is that there are no smoke and mirrors here," he said. "The real issue is that the gas does not exist and we don't have access."

Contact Tony Dobrowolski at 413-496-6224.


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