Kinder Morgan shelves $3 billion pipeline project

Ben Garver/The Berkshire Eagle via AP

Protesters marched in Cummington on March 17 against the Kinder Morgan natural gas pipeline proposed for Western Massachusetts.

By Jon Chesto Globe Staff  April 20, 2016

Energy giant Kinder Morgan Inc. has pulled the plug on its controversial natural gas pipeline proposed through parts of Massachusetts and southern New Hampshire, after failing to sign up enough utility customers and facing stiff consumer and political opposition.

Kinder Morgan said on Wednesday that its Northeast Energy Direct project didn’t receive the commitments from big customers that it needed to proceed with the $3.3 billion plan, which would involve building a 188-mile pipeline from a point west of Albany, N.Y., to Dracut.

The company’s withdrawal represents a huge victory for its array of opponents, ranging from grass-roots organizations to established environmental groups to powerful politicians. They also included residents of the many towns that would be affected by pipeline construction and activists who worried it could make New England overly dependent on natural gas.

And the decision could provide a big boost to the other large pipeline construction project proposed for New England, Spectra Energy Partners’ Access Northeast, which has the financial backing of utilities Eversource Energy and National Grid.

“There was probably room for only one of the two competing projects,” said Paul Flemming, director at ESAI Power, a research and consulting firm in Wakefield.

Kinder Morgan had submitted plans for the project to federal regulators in November, and needed their approval before starting construction.

Kinder Morgan’s initial decision to proceed with the project, through its Tennessee Gas Pipeline subsidiary, was based on existing contracts it had with some gas utilities, as well as the expectation that others would sign on to buy gas from the line. Executives at the Texas company were also counting on an unprecedented shift pursued by state regulators in New England that would allow electric customers to be charged for pipeline construction costs.

That change, driven by Governor Charlie Baker’s administration and top officials in other states, is aimed at curbing New England’s relatively high electricity rates by bringing in cheaper natural gas to fuel power plants. Their theory: the cost of new pipeline construction would be more than offset by savings in electric rates because more cheap gas could flow from Pennsylvania’s Marcellus Shale. Roughly half of New England’s electricity comes from natural gas power plants.

“This was our big chance to pay lower energy costs, like everybody else,” said Anthony Buxton, general counsel for the Coalition to Lower Energy Costs, a group of industrial and commercial electricity consumers. “That opportunity is gone. ... For the short run and the medium run, there are going to be manufacturers in the Commonwealth who are going to be saying, ‘Whoa, wait a minute, what does this mean for us?’ ”

In a statement, Kinder Morgan suggested it did not have enough business to justify moving ahead with the project, saying “there are currently neither sufficient volumes, nor a reasonable expectation of securing them, to proceed with the project as it is currently configured.”

"This Is Going To Be A National Crisis"

"This Is Going To Be A National Crisis" - One Of The Largest U.S. Pension Funds Set To Cut Retiree Benefits

Submitted by Tyler Durden on 04/20/2016 17:42 -0400

inShare2

A dark storm is brewing in the world of private pensions, and all hell could break loose when it finally hits.

As the Washington Post reports, the Central States Pension Fund, which handles retirement benefits for current and former Teamster union truck drivers across various states including Texas, Michigan, Wisconsin, Missouri, New York, and Minnesota, and is one of the largest pension funds in the nation, has filed an application to cut participant benefits, which would be effective July 1 2016, as it "projects" it will become officially insolvent by 2025. In 2015, the fund returned -0.81%, underperforming the 0.37% return of its benchmark.

Over a quarter of a million people depend on their pension being handled by the CSPF; for most it is their only source of fixed income.

Pension funds applying to lower promised benefits is a new development, albeit not unexpected (we warned of this mounting issue numerous times in the past). For many years there existed federal protections which shielded pensions from being cut, but that all changed in December 2014, when folded neatly into a $1.1 trillion government spending bill, was a proposal to allow multi employer pension plans to cut pension benefits so long as they are projected to run out of money in the next 10 to 20 years. Between rising benefit payouts as participants become eligible, the global financial crisis, and the current interest rate environment, it was certainly just a matter of time before these steps were taken to allow pension plans to cut benefits to stave off insolvency.

The Central States Pension Fund is currently paying out $3.46 in pension benefits for every $1 it receives from employers, which has resulted in the fund paying out $2 billion more in benefits than it receives in employer contributions each year.

As a result, Thomas Nyhan, executive director of the Central States Pension Fund said that the fund could become insolvent by 2025 if nothing is done. The fund currently pays out $2.8 billion a year in benefits according to Nyhan, and if the plan becomes insolvent it would overwhelm the Pension Benefit Guaranty Corporation (designed by the government to absorb insolvent plans and continue paying benefits), who at the end of fiscal 2015 only had $1.9 billion in total assets itself. Incidentally as we also pointed out last month, the PBGC projects that they will also be insolvent by 2025 - it appears there is something very foreboding about that particular year.

As the Washington Post writes:

Ava Miller, 64, and her husband, Ed Northrup, 68, could see their combined monthly pension income cut to about $3,000 from the nearly $7,000 they receive now, according to a letter they received from Central States in October.

If the cuts go through, Miller, who worked as a dispatcher in Flint, Mich., said they will need to dip into their savings to help cover their $1,300 mortgage payment, heating bills and trips to visit her 84-year old mother. Northrup, a retired car hauler, has started applying for truck driving jobs that could supplement their potentially smaller pension payments.

What makes the cuts more painful, Miller said, is that she took pay cuts so that the company could continue making contributions to the pension.

"I did everything I was supposed to," Miller said, adding that she and her husband made extra payments on their car loan to cut down on their monthly bills after they received letters in October informing them of the potential cuts.

ZBA Meeting... April 26th... 6:30 pm... KIVA

ZBA Meeting... April 26th... 6:30 pm...  KIVA

On April 26^th, there will be a joint meeting with the ZBA and the Planning Board. The meeting will be the first meeting concerning the new Elementary School.

    

This is an important meeting and we urge anyone who lives near or travels through the area to attend and voice your opinions for the good of our town. It is important for us all to have a total discussion and voice now or forget it in the future as you will have lost your chance to be heard. 

             NRHS KIVA Room at 6:30 pm,  NOT the Town Hall!