Maine PUC Endorses Natural Gas Pipeline Expansion at Expense of Ratepayers

by | Jul 26, 2016

Despite a staff report that opposed its decision, the Maine Public Utilities Commission (MPUC) voted 3-0 last week (Docket No. ME: 2014-00071) that ratepayers in the Pine Tree State would benefit by investing in expansion of natural gas pipeline capacity – and that, therefore, they can be charged for the planned extension.

Implementation of the order will be contingent on whether other New England states take similar action and on a series of hurdles being cleared, according to a report by Maine Public Broadcasting (MPB).

The PUC’s deliberations were complicated. In the end, commission Chair Mark Vannoy told MPB that it’s not yet clear what the cost to consumers will be on their monthly bills.

“That’s going to depend on a number of things,” Vannoy stated, adding, “The rest of the region is going to have to get behind the project …We’re going to have to negotiate a final precedent agreement. “So we have an idea of what the cost will be but we don’t have it down to the final yet.”

Vannoy said his go-ahead vote relied heavily on arguments from Public Advocate Tim Schneider, who supports pipeline expansion based on cost-benefits modeling. “We think that as the region becomes more reliant on natural gas, which is something that’s happening right now, there’s not enough gas pipeline capacity and – without government intervention, there won’t be,” Schneider told MPB.

Without additional capacity, Schneider believes that New England is likely to see price spikes in the future, as it did two years ago. “[This is] the best way to move forward and the least risky,” Schneider remarked.

What’s more, there’s another big decision still pending: Although the commissioners voted unanimously to move forward with a contract for pipeline expansion, they disagreed over which of two existing pipeline projects to support. Two recommended the Texas-based Spectra Energy Algonquin Pipeline project, which already is under construction – stretching from New York through Connecticut, Rhode Island, and Massachusetts.

Another contended that the state should proceed with the smaller Portland (Maine) Natural Gas Transmission System (PNGTS) instead. The PNGTS, in use since 1999, starts at the Canadian border and winds through Maine and down through New Hampshire to Massachusetts.

Commissioners did agree that both projects meet the criteria of the Energy Cost Reduction Act, a bill passed by the Maine Legislature in 2013 with the intent of avoiding electricity rate increases.

On the other hand, environmental advocates also are not in complete support of the extension. “…We are talking about $1 billion of consumer money being put at risk. The costs are certain in this case. The benefits are speculative,” said Ben Tettlebaum, a staff attorney with the Conservation Law Foundation. “I mean in some ways it’s like going to Vegas and betting this in a slot machine.”

Next, the pipeline extension will go to the desk of Maine Governor Paul LePage, whose signature is by no means guaranteed.

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