- Massachusetts regulators will allow electric utilities to enter long-term contracts for gas supply, provided the fuel is procured in a competitive and transparent process, the Daily Hampshire Gazette reports.
- Gov. Charlie Baker (R) asked the Department of Public Utilities six months ago to consider whether the contracts would be allowed, as utilities in the gas-constrained region seek ways to shore up affordable gas supplies.
- But the decision has critics, including at least one state lawmaker who believes the end result could be electric customers subsidizing gas pipeline infrastructure costs.
New England is still struggling with how to procure a steady stream of natural gas to fuel its power plants. Now Massachusetts has determined that allowing electric utilities to engage in long-term contracts — one year or longer — will help keep prices down. It's a new strategy for the state, but with pipeline capacity lagging generation, regulators and lawmakers are open to a range of approaches.
"By establishing a framework and standard of review focused on consumer benefits ... the commonwealth has advanced its ability to improve electricity grid reliability, lower and stabilize the cost of energy for ratepayers, and increase Massachusetts’ economic competitiveness,” Executive Office of Energy and Environmental Affairs spokesman Peter Lorenz told the Daily Hampshire Gazette in a statement.
Others, however, were less sure. State Rep. Stephen Kulik (D) told the media "this could open the door for electric ratepayers paying for gas pipeline infrastructure."
Pipeline developers supported the move. Tennessee Gas Pipeline Co., which is developing the Northeast Energy Direct Project, said the state's decision should "benefit consumers, as interstate pipeline companies serving the region compete to provide natural gas to electric generators across New England at the lowest cost."
“Tennessee Gas Pipeline supported the utilization of an open and transparent process during its participation in the DPU proceedings,” said Kimberly Watson, president of TGP, in a statement. “TGP’s initiation last month of its open season for its innovative PowerServe transportation solution provides a competitive market alternative that will lead to lower consumer energy costs.”