Monthly Archives: October 2017

Natural gas pipeline groups call on US Army Corps to break permitting logjam

S&P Global
October 25 2017

Faced with repeated rejections of interstate natural gas pipelines in New York, a key industry trade group is hoping the US Army Corps of Engineers may be able to assist, as well as exploring whether to pursue Clean Water Act changes.

“Unfortunately, we now are seeing the natural gas equivalent of a single state erecting a roadblock on the interstate highway system,” said Jeffrey Bruner, Iroquois Pipeline Operating Company president and the incoming chairman of the board of the Interstate Natural Gas Association of America. “We’ve seen a single state threaten to turn the process for approving interstate natural gas pipelines on its head by that state’s manipulation of delegated authority,” he said, in a briefing for reporters a day before the INGAA board was schedule to vote him in as chair.

The comments come as Williams’ Constitution Pipeline and National Fuel Gas Supply’s and Empire Pipeline’s Northern Access Project have been blocked through water permit denials by New York state regulators, as was a Millennium Pipeline project before recently getting relief from the US Federal Energy Regulatory Commission. 

Industry hopes of further relief in court were dimmed earlier this month when the 2nd US Circuit Court of Appeals declined to rehear a decision upholding New York’s denial of Constitution. Northern Access’ pending 2nd Circuit appeal is slated for oral arguments November 16.


Adding to the industry’s challenges, environmental groups objecting to projects are increasingly turning to state water reviews as an avenue for litigation. On Wednesday, Appalachian Mountain Advocates and others wrote to Virginia’s State Water Control Board to say it cannot approve the Atlantic Coast Pipeline and Mountain Valley Pipeline projects at this time because it lacks adequate information from project sponsors and the Department of Environmental Quality about erosion and sediment controls and stormwater management.

Bruner and INGAA President and CEO Donald Santa emphasized that their member companies need to continue to work with states, and don’t have objections to states imposing conditions to ensure water quality is protected.

“Hopefully, by doing that we can blunt any additional states from taking that course,” of saying “we don’t want to work with you. We don’t want pipelines,” Bruner said. 

”That clearly is a role that has been given to them under the Clean Water Act,” Santa said.

“The problem becomes when acting ostensibly pursuant to the Clean Water Act is really a reason to effectively second-guess FERC’s determination that the facility is in the public convenience and that there’s a need for it.”

Santa laid out several avenues that may be open for the industry, including seeking more guidance from the Corps.


Specifically, he asked whether the Corps could weigh in on the part of the Clean Water Act that says states need to act on Section 401 permits within a reasonable time period, not to exceed a year.

While current Corps regulation referencing a 60-day time period “is probably unrealistic, should the Corps update that guidance but then make it very clear that the state will be held to that,” Santa asked. 

INGAA on October 18 filed a series of recommendations to the Corps. One of those asked the Corps to clarify that while sponsors need to provide “reasonably reliable and accurate information,” 100% of ground surveys do not need to be completed before an application can be processed. Incomplete surveys held up New Jersey’s processing of the PennEast Pipeline project. 

Bruner and Santa also suggested legislation may ultimately be needed to amend the Clean Water Act, although they were not yet sure of details.

The goal would be to “reemphasize what we had thought was the original balance in terms of states having the ability to act within the scope of water quality standards but not having ability via delay either or denial of that certification to effectively override FERC’s determination of [whether] facilities is needed,” Santa said. 

In the near term, Santa also noted that companies facing prolonged delays in state reviews can pursue the path recently taken by Millennium Pipeline, of seeking FERC’s finding that a state has waived its authority through inaction.

Through its recent waiver for Millennium, in the wake of a DC Circuit Court of Appeals case clarifying FERC authority, “FERC made clear that it was ready to step up and fulfill that role,” he said.

Santa described the Millennium case as “pretty straightforward,” and said several others pending “may present more complex facts” for the commission. Constitution and Northern Access are also seeking orders from FERC declaring New York waived its water quality review.

» See original article


Pipeline charges prompt lots of questions: Who’s looking out for ratepayers?

by Kathryn R. Eiseman, Commonwealth Magazine
October 20, 2017

ACCUSATIONS AND INVESTIGATIONS are underway in response to an academic white paper posted by the Environmental Defense Fund concerning artificially created pipeline capacity constraints and resultant spikes in energy prices. The sides are lining up as usual, with the region’s ratepayer advocates expressing a need for further investigation and better rules to protect consumers, and the Northeast Gas Association seeking to discredit the analysis with an op-ed published in as many New England states as possible. This white paper comes right on the heels of another report published in September with a more pointed title: “Art of the Self-Deal: How Regulatory Failure Lets Gas Pipeline Companies Fabricate Need and Fleece Ratepayers.”
It’s too soon to understand the full ramifications of Eversource and Avangrid’s pipeline capacity scheduling practices, but the findings of the white paper compel many questions that must be answered.

• Were excessive capacity withholding practices a critical factor in moving forward Kinder Morgan’s Connecticut Expansion project in the Berkshires and the AIM and Atlantic Bridge projects of Spectra (now Enbridge)?

• Who is looking out for ratepayers, anyway? Apparently not our current regulators in Massachusetts.
• Will the report’s findings impact ISO New England’s regional fuel security study and overall approach to the realities of a grid in transition?

Activists bring pipeline protest to downtown Northampton

By Sarah Robertson, Daily Hampshire Gazette
October 24, 2017

NORTHAMPTON — As part of a global, weeklong anti-pipeline push called “Divest the Globe,” a group of indigenous water protectors and local activists gathered outside the TD Bank downtown Tuesday afternoon to urge divestment from the bank and from fossil fuels.

“We are putting pressure on the banks financing these illegal pipelines,” said 31-year-old Jerica “Mountain Lion” Meditz, one of the group of approximately 20 protesters.

Referring to the Connecticut Expansion natural gas pipeline project through Otis State Forest in Sandisfield, she said, “The Kinder Morgan pipeline is not approved by the state, and it is being federally pushed through protected state forests, sacred sites of indigenous peoples, wetlands and vernal pools, and not following regulations and destroying the area.”

The action is part of a worldwide “Divest the Globe” movement organized after the Standing Rock protests in North Dakota. In western Massachusetts, members of the Sugar Shack Alliance partnered with the group We Are the Earth’s Resistance, identified by the acronym, “W.A.T.E.R.” to organize a week of direct action protests to recognize the movement.

“The Sugar Shack Alliance is a nonviolent direct action group opposing fossil fuel overbuild in our region and advocating for clean energy,” member Irvine Sobelman of Northampton said.

As a retired registered nurse, Sobelman describes herself as a “full-time lover of the Earth” and “organizer on behalf of the Earth and future generations.” She was working as the event’s “police liaison.”

“I interface between the police officers and the participants in the action,” Sobelman said. “It’s a part of classic, nonviolent direct action protests. Some actions have peacekeepers. As a police liaison, we don’t have specific training for it, but the skills required would be listening, patience, communication, and respect.”

According to Meditz, most members of the W.A.T.E.R activist group lived and met at the Oceti Sakowin Camp in North Dakota during the Standing Rock protests against the Dakota Access Pipeline.

“We are water protectors, and we are committed to stopping the pipeline,” she said.

» Read the full story

Our friends at Firm B (Eversource) have some ‘splaining to do

by D. Maurice Kreis, NH Consumer Advocate
Manchester Ink / Power to the People

October 23, 2017

New Hampshire uses about 9 percent of New England’s electricity. So, if a couple of rogue utilities pulled some sneaky tricks over three years that caused wholesale electricity prices in New England to be $3.6 billion higher than they should have been, that’s $324 million that was siphoned out of the pockets of electric customers in the Granite State.

It’s enough to attract the fervent interest of the office tasked with protecting the interests of New Hampshire’s residential utility customers. And, believe me, we’re interested.

Who are these potentially rogue utilities? They are cheekily referred to as Firm A and Firm B throughout most of the charging document – a white paper circulated a couple of weeks ago entitled “Vertical Market Power in Interconnected Natural Gas and Electricity Markets.”

The authors are four economists: Levi Marks of the University of California at Santa Barbara, Charles F. Mason of the University of Wyoming, Kristina Mohlin of the Environmental Defense Fund, and Matthew Zaragoza-Watkins of Vanderbilt University.

The two companies are utility conglomerates that own both natural gas and electric utilities in various New England locations. Firm A is Avangrid, parent company of Central Maine Power, United Illuminating and, critically for this situation, Berkshire Natural Gas, Connecticut Natural Gas and Southern Connecticut Gas.

Firm B is Eversource.

Here in the Granite State, Eversource is familiar as the parent company of the utility formerly known as Public Service Company of New Hampshire (PSNH). Eversource also owns electric and natural gas utilities in Massachusetts and Connecticut. And for purposes of our present story, those natural gas holdings loom large indeed.

According to the authors of the white paper, during a three-year study period that began in 2013 there was a distinct pattern of Firm A and Firm B buying up and holding onto natural gas pipeline capacity – that is, the right to take fuel out of a federally regulated wholesale pipeline in order to serve the utilities’ retail gas customers.

“These unusual scheduling practices tied up capacity that, in a well-functioning market, should have been released, or would have otherwise [been] made available to other shippers,” the authors allege. “Instead, significant quantities of pipeline capacity went unutilized on many of the coldest days of the year, pushing up the price of gas.”

The period the professors studied included the brutal “Polar Vortex” winter of 2013-14, often cited as the time when natural gas became so scarce that the electricity grid almost went down because generators could not get enough fuel.

Indeed, the authors allege that the Polar Vortex period accounts for about half of the $3.6 billion they believe electric customers should not have coughed up.

What does the price of natural gas have to do with electricity?

Well, roughly half of the region’s electricity is produced via natural gas at facilities owned by non-utilities that sell their output into the region’s wholesale electricity market.

They could guarantee their fuel supply by purchasing “firm” capacity on natural gas pipelines, but they generally find that too expensive. On the chilliest days of a chilly winter like 2013-14, the price of “spot” capacity on natural gas pipelines soared and, although the lights did not go out, the wholesale price of electricity likewise zoomed upward.

According to the paper’s authors, the odd pattern of natural gas capacity withholding took place at pipeline delivery “nodes” along the Algonquin pipeline in Connecticut and Rhode Island – a key source of fuel for generators throughout the region.

The authors state that Eversource and Avangrid are “the only two firms operating on the pipeline with substantial assets and operations in both the gas distribution market and the electricity generation market.”

Moreover, the authors point out, Firm A and Firm B are distinctive in that their generation assets are mostly not natural gas units. Think of the coal-burning units in Bow and Portsmouth that Eversource is now in the process of divesting.

The authors thus claim that Eversource and Avangrid had an incentive to drive up the costs of gas generators owned by rival firms, increasing the wholesale price of electricity and benefitting the entire generation sector at the expense of New England electric ratepayers.

Eversource has denounced these claims as a “complete fabrication.” And the utility’s argument is not without some merit.

For one thing, Eversource’s generation assets – all in New Hampshire, and all scheduled to be sold off on January 1 – currently operate for the benefit of Eversource customers rather than Eversource shareholders.

Though Eversource customers in New Hampshire are about to start paying off some $600 million in stranded costs (the majority associated with the company’s profligate investment of $418 million in mercury scrubber technology at Merrimack Station in Bow) one consequence is that, pre-divestiture, if those coal units get dispatched more often and/or command a higher price on the wholesale market, the financial gain is credited to customers.

Another argument in Eversource’s favor – indeed, one explicitly conceded by the economists – is that the capacity withholding appears to have been legal. There are penalties for pipeline capacity users that reserve such rights (known in industry parlance as “nomination”) and then fail to use them.

But each day there is a so-called “clean up cycle” that utilities can use to match their nominations to their actual use of gas to serve customers. There was a lot of that cleaning up happening on the pipeline nodes studied by the authors during the period they examined.

Finally, it’s possible that some or even all of the odd capacity usage patterns detected by the authors is attributable to natural gas generators located along those nodes in southern New England rather than to the natural gas utilities owned by Eversource and Avangrid.

That will require further investigation. Ergo, those who claim this looks a lot like the next Enron scandal are probably overstating their case.

But Eversource still has plenty of ‘splaining to do. Its claim of “complete fabrication” amounts to a denial of any wrongdoing or criminal intent – and thus no grounds to pay back any of that $3.6 billion. This begs the question of whether something is in dire need of a fix here.

In other words, maybe we need to take a look at the way we manage capacity on New England’s interstate natural gas pipeline network before we declare the system so broken – i.e., so unable to meet the needs of electric and natural gas customers during cold winters – that we need to embrace a novel scheme like the Access Northeast project.

Access Northeast is a planned expansion of the very same Algonquin pipeline at issue here. Eversource would own 40 percent of the expansion project. It wants its electric distribution subsidiaries, including PSNH, to buy 20 years of “firm” capacity on the project – capacity they will never use directly because they are (or will be, post-divestiture) not generation companies – and force their customers to pay for it.

The theory is that the capacity will be sold to non-utility generators, wholesale electric prices will abate, and customers will benefit. The reality is that Eversource wants to get back into the business of making big investments and receive a guaranteed return on investment from customers – the very 1950s business model that restructuring was supposed to end.

Could it be that Eversource’s zest for this 1950s business model accounts for the way its natural gas subsidiaries managed their capacity purchases during the period studied by the economists? That’s the $3.6 billion question.

If this anomalous pattern of pipeline capacity management truly accounted for even a significant fraction of this sum, we obviously need to be very careful about how we regulate all of this.

Access Northeast is currently on hold, because the Supreme Judicial Court of Massachusetts deemed the scheme inconsistent with the Bay State’s restructuring law and the New Hampshire Supreme Court is currently mulling the same question under our restructuring statute. That opens up some time for a thorough investigation of the allegations of the four economists.

Connecticut’s utility regulator, which has direct authority over the natural gas utilities in question, has laudably opened a docket for this purpose. So should the Federal Energy Regulatory Commission. We need to get to the bottom of this.

Power to the People is NH Consumer Advocate D. Maurice Kreis’ column about what happens long before you turn on the lights.  Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere. co-publishes Power to the People with Manchester Ink Link.  


» See the original article

Doctor says natural gas from proposed compressor could ignite

By Jessica Trufant, The Patriot Ledger
October 23, 2017 

WEYMOUTH – A local doctor working with residents fighting a proposed 7,700-horsepower natural-gas compressor station in North Weymouth said his rough analysis shows even small releases of natural gas could create flammable conditions on the Fore River Bridge.

“Doesn’t this matter? Can’t we have (the experts) look at this?” Dr. Curtis Nordgaard said Monday night at the Fore River Clubhouse in Quincy. “I can create under seemingly reasonable conditions results that show that this is a possible risk, and this is something that should be looked at further.”

Several dozen South Shore residents attended a presentation by Nordgaard and the Fore River Residents Against the Compressor Station about information they say is absent from Algonquin Gas Transmission’s air report to the state regarding blowdowns – releases of natural gas often used to relieve pressure in pipelines.

State Reps. James Murphy, D-Weymouth and Joan Meschino, D-Hull, and state Sen. Walter Timilty, D-Milton, attended the meeting, along with officials from Weymouth and Hingham.

The residents and Nordgaard have conducted independent air-quality testing in their fight against the compressor station that Algonquin, a subsidiary of Spectra Energy-Enbridge, wants to build on the banks of the Fore River. Nordgaard, a pediatrician from Newton who practices in Dorchester and sees many South Shore patients, has been leading the testing for the past year.

Nordgaard said Algonquin did not adequately study the consequences of blowdowns. The company is not required to release blowdowns through smoke stacks, meaning the gas and chemicals could be released at ground level. Residents have questioned whether natural gas from a blowdown could ignite from static or vehicles crossing the Fore River Bridge, directly adjacent to the proposed site.

» Read full article