Pipeline Tax

“Pipeline tax” is a phrase that’s been adopted to describe plans by electric generation companies to make their ratepayers recover the costs of pipeline capacity contracts. This is a means by which they would avoid investing in these contracts directly – socializing their business costs for private profit of the company.

There have been multiple attempts to establish pipeline taxes in New England over the last few years. The first was in 2013/14, when an overall pipeline tax on all ratepayers in all six New England States was considered. After much protest and public pressure, Gov. Deval Patrick (then Gov. of Mass.) put a suspension on plans to institute this plan, kicking the can down the road to the next administration.

In 2015/16, what had been a regional plan was broken up for each state to consider individually. Massachusetts planned to go ahead, not as a matter of legislatively passed policy, but by the Dept. of Public Utilities (DPU) approving the procedure in Docket #15-37, allowing individual electric generators to go ahead and file petitions to start taxing their ratepayers. The state of Maine made approval contingent on other states doing the same, and other states pursued their own plans.

In August of 2016, the Massachusetts Supreme Judicial Court, in a case brought up by Conservation Law Foundation, rule that the DPU’s approval of #15-37 was illegal in Massachusetts. Since that ruling, the two companies who had filed petitions to tax their customers have withdrawn them (with the caveat that they retain the right to file again if the law changes). The decision is also rippling to other states as they decide how to proceed (see articles below). We’ll be watching to see if there are attempts to change the law in Massachusetts that currently bans public utilities from charging tariffs.  Any such attempts will be listed here.

8/22/16 — National Grid files Motion to Withdraw DPU Application #16-05 that would have sought capacity on Access Northeast.

8/22/16 — Eversource files Motion to Withdraw DPU Application #15-181 that would have sought capacity on Access Northeast.

8/17/16 — “Pipeline tax” on electric bills that would have funded electric generation customer investment in Access Northeast declared illegal by Mass. Supreme Judicial Court.

New Hampshire:
Joint Supplemental Briefing Regarding the Legality of Petitioner’s Proposal
Filed by Conservation Law Foundation, Nextera Energy Resources LLC and Office of Consumer Advocate to the State of NH Public Utilities Commission

» NatGrid backs away from pipeline financing proposal, environmentalist declare victory
By Eli Sherman, Providence Business News
January 13, 2017

» Motion to Dismiss Pipeline Tax Filed in Three States
By TIM FAULKNER/ecoRI News staff
August 23, 2016

» Massachusetts Court Deals Blow To Regional Natural Gas Pipeline
by Gregory B. Hladky, Hartford Courant
August 25, 2016

» Kathryn R. Eiseman: Get tax out of the pipeline
Berkshire Eagle, July 13, 2016

» DPU-Eversource communications probed: Email raises questions about improper pipeline discussions
By Bruce Mohl, Commonwealth Magazine Jul 26, 2016

» Maine regulators approve expansion of gas pipeline capacity
By Tux Turkel, Portland Press Herald, July 20, 2016

» Maine Approves Scheme Allowing Big Gas to Gamble Public’s Money
Conservation Law Foundation, Jul 19, 2016