State's highest court rejects pipeline tariff
BOSTON – A Texas natural gas company says it’s reevaluating one of its proposed pipeline construction projects in North Weymouth following a ruling from the state’s highest court that electricity consumers can’t be forced to cover the cost.
In the ruling released Wednesday morning, the Supreme Judicial Court said passing on the cost and risk of pipeline construction to electricity customers violates state law that bars energy distribution companies from owning energy generation assets.
In a statement, a Spectra official said the company is “extremely disappointed” with the decision and that it leaves New England at risk of future gas shortages.
“While the court’s decision is certainly a setback, we will reevaluate our path forward and remain committed to working with the New England states to provide the infrastructure so urgently needed for electric consumers,” Arthur Diestel, Spectra’s director of stakeholder outreach, said in the statement.
Access Northeast calls for four miles of new pipeline in Braintree and Weymouth and expansion of a yet-to-be-built compressor station in North Weymouth. The compressor is part of another pipeline project currently seeking state and federal approval.
The ruling vacates an order issued last year by the Department of Public Utilities that triggered a backlash from environmental groups and pipeline opponents who dubbed it a “pipeline tax.”
“The department's interpretation of the statute as permitting electric distribution companies to shift the entire risk of the investment to the ratepayers is unreasonable, as it is precisely this type of shift that the Legislature sought to preclude through the restructuring act,” recently retired Justice Robert Cordy wrote in the opinion shortly before he stepped down.
Pipeline opponents proclaimed the ruling a victory in the efforts to halt both pipeline projects that would impact North Weymouth.
The ruling came after Engie Gas & LNG, which ships liquefied natural gas into the Boston area, and the Conservation Law Foundation challenged the new rules in court.
Both the shipping company and the foundation applauded the court’s decision, as did Attorney General Maura Healey and Senate President Stanley Rosenberg.
Electricity distributors National Grid and Eversource had sought approval of 20-year contracts to buy capacity on the Access Northeast project. The distributors planned to pass the cost on to ratepayers to pay Spectra, which would have used that money to help build the pipeline expansion.
The Department of Public Utilities has suspended evidentiary hearings on the contracts until it can review the court’s decision.
Spectra wants to build a 7,700-horsepower compressor station just north of the Weymouth end of the Fore River Bridge as part of its Atlantic Bridge Project. Access Northeast would more than double the size of the compressor station.
Compressor stations are placed along underground pipelines to keep them pressurized so the gas keeps flowing. Neighbors and elected officials say the facility could vent harmful gasses, explode or become a target for terrorism in the middle of dense residential and industrial areas.
The court decision comes less than two weeks after Spectra agreed to a request from state regulators to push back the deadline for a review of the project by up to a year until August of 2017. Pipeline opponents have hailed the delay as a victory, but Spectra says it won’t hold up plans to begin construction in the spring and have the compressor station up and running by November 2017.
Material from State House News Service was used in this report.
Christian Schiavone may be reached at cschiavone@ledger.com or follow him on Twitter @CSchiavo_Ledger.
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