- Two generators have asked federal regulators to block utility plans to back the Access Northeast pipeline expansion proposal, saying regulators in Massachusetts, New Hampshire, Connecticut and Rhode Island "are on the verge of implementing a scheme expressly intended to artificially suppress prices in wholesale energy markets in New England."
- National Grid and Eversource Energy received approval from Massachusetts last year to enter long-term contracts for gas supply, in order to support the Access Northeast proposal. That decision is currently being challenged at the state's Supreme Judicial Court, RTO Insider reports.
- However, NextEra Energy and Public Service Enterprise Group told FERC that the utilities would have no need for the gas capacity and would wind up releasing the gas at below-market rates, in turn driving down energy prices.
A court decision is expected soon, RTO Insider reports, on whether utility contracts for long-term pipeline capacity are legal. But regardless, two generators have asked FERC to move quickly to block utility support for a pipeline they say will bring unneeded capacity and skew markets.
"Having no use for the pipeline capacity, the [electric distribution companies] would release the capacity at below market rates — first to gas-fired generators, if the Federal Energy Regulatory Commission ... supports this preference in a separate proceeding, and then whatever is left will be released to the marketplace," said NextEra and PSEG. "This transportation subsidy would artificially flood ISO-New England markets with gas, thereby unreasonably suppressing gas prices and wholesale power prices."
The generators say the utilities "have no use for natural gas or pipeline capacity — it is purely a scheme to suppress wholesale prices, as all concerned freely admit." The petition can be found here.
The Access Northeast project is being developed by Spectra Energy, and is designed to expand natural gas access in New England by up to 1 Bcf/d. Project backers say that it will save electric customers an average of $1 billion a year during normal weather conditions.
A similar project, Northeast Energy Direct, was scrapped by Kinder Morgan when the company struggled to win firm commitments.
Generators told FERC that the evidence utilities presented to state commissions supporting the pipeline deals "is almost exclusively directed at demonstrating that the purchase by the EDCs of a product they will not use, gas capacity, will push down prices in the market for another product, wholesale electricity."