Investigative reporting is good: the plot to charge customers for putting a pipeline across MA into in Dracut was hatched by a Gas Industry lawyer last September and then circulated to the public utility commissioners last fall, documents obtained by open records requests now show. ------------------------------------------ Montague Reporter June 26, 2014 Vol.12#35 * Page A1 Paper Trail Reveals Gas Industry Lawyer Guided States’ Strategy On Tariff To Fund Pipelines By MIKE JACKSON NEW ENGLAND – Documents obtained by the Conservation Law Foundation (CLF) under the Freedom of Information Act paint a picture of private industry interests shaping the New England States Committee on Electricity (NESCOE)’s strategy for bringing new natural gas pipelines to the region. Though NESCOE apparently operates under the mandate of the executive branches of the six New England states, its executive director Heather Hunt stated in April that it would not cooperate with the CLF’s FOIA requests, as it is “not subject” to public records law. The CLF says the state of Massachusetts has also not provided any requested documents. On Tuesday, the CLF released a set of 44 emails and attached documents provided to them by the states of Maine and New Hampshire. These provide the public with a look inside what has at times been an opaque technical and policy discussion. NESCOE has driven the states’ positions on natural gas. One set of emails shows Hunt, a former Vice President of Regulatory Policy at Southern Connecticut Gas, providing talking points in support of increased gas pipeline and hydroelectric transmission capacity to the respective heads of the state utilities departments, including Massachusetts DPU head Ann Berwick. A Private Call For A Public Mechanism Another shows the genesis of NESCOE’s proposal to clear up winter market bottlenecks in gas delivery to the region’s electricity producers by placing a tax, or tariff, on electricity, and guaranteeing the proceeds to one or more pipeline companies, which have previously been unable to elicit firm commitments on the free market. On September 13, 2013, Maine Public Utilities Commission (PUC) chairman Tom Welch received an eight-page white paper written by Anthony Buxton of the law firm Preti Flaherty, a longtime registered lobbyist and industry lawyer who represents Maine’s Industrial Energy Consumer Group. This paper argued that “[a] mechanism is needed to aggregate customer demand, so that an aggregating entity can contract for pipeline capacity [and] resell it to customers…” Buxton’s paper specifically pointed to Kinder Morgan’s suggestion of a “pipeline roughly following Route 2 through Northern Massachusetts to Dracut,” along with a proposed expansion of Spectra’s Algonquin line. “Both projects,” the paper explained, “are highly useful; the challenge for New England is to cause them to be built.” “Generally I like it,” Welch replied. In a paper trail fully visible in the released documents, Welch then edited the paper lightly, and removed Buxton’s name from the top. On September 17, he sent it, along with an outline of a plan to create a regional network service tariff through ISO-NE, the region’s electrical grid operator, to Patrick Woodcock, director of the Governor’s Energy Office of that state, adding, “I admit I’m basing this on a piece Tony B. put together.” Welch also ran this draft by Buxton, asking, “Would you mind if I used [it] in my efforts to make the case to my NE colleagues?” “Emulation is the highest form of flattery,” Buxton replied to Welch. “Of course, the IECG and I are thrilled. In fact, we may ask to emulate your version.” On September 19, Welch forwarded the materials to Daniel Esty and Katie Dykes, then Commissioner and Deputy Commissioner for Connecticut’s Department of Energy and Environmental Protection – without acknowledging Buxton’s authorship. He then apparently presented them at a September 25 meeting of New England state officials in Boston. By November 19, with the goal of subsidizing added pipeline capacity a foregone conclusion, Hunt was circulating a document within NESCOE asking the states to vet the “related implementation and authority questions” for nine different configurations of a mechanism to do so, including Welch’s suggested model of a tariff through the ISO. In December, Welch started reaching out to pipeline companies for their input in shaping the tariff proposal. He set up conference calls between public officials and Spectra Energy on January 2, 2014, Kinder Morgan on January 30, and Portland Natural Gas Transmission Company (PNGTS) on January 31. According to an email sent to New Hampshire Public Utilities Commissioner Robert Scott, Welch “lead [sic] a discussion for the states” with representatives of Kinder Morgan. “The primary question” for the company, according to the document, “was whether a stream of revenues from a FERC-approved ISO electric tariff would provide sufficient security to move forward and build/contract for new pipeline capacity.” By that time, the company’s land agents were knocking on doors from Pittsfield to Dracut, scouting out a pipeline route that would cross both the Connecticut and Millers rivers at Montague. In March, a public document filed in Maine showed that Anthony Buxton of Preti Flaherty was working directly as counsel for Kinder Morgan’s subsidiary Tennessee Gas Pipeline. Is NESCOE a Public Body? On December 6, the region’s six state governors signed a letter “commit[ting] to continue to work together… through NESCOE” (emphasis added) over a laundry list of shared energy goals that included “development of new natural gas pipeline infrastructure.” Consumers who have objected to the idea of a private entity proposing an electricity tariff to fund private development might be surprised to learn that exactly such a mechanism funds the organization. NESCOE was founded in 2006 as a limited liability corporation of the nonprofit New England Governor’s Conference. The next year, the NEGC, the ISO-NE and the New England Power Pool applied to the Federal Energy Regulatory Commission to allow the ISO to add a tariff to fund the organization. NESCOE became a 501(c)4 nonprofit organization in 2010 under new executive director Hunt, who has built the organization since then to its current complement of six staffers, whose salaries and benefits exceeded $930,000 last year. The governors have appointed Berwick, Welch, Scott, and Dykes, as well as Vermont Department of Public Service commissioner Chris Recchia and Rhode Island Public Utilities Commission chair Margaret Curran, to oversee the organization as its “managers.” Tasked with relieving an apparent bottleneck of energy delivery that has caused brief wintertime spikes in the price power plants pay for natural gas, NESCOE finds itself in the public spotlight for the first time. Behind Closed Doors Critics of NESCOE’s favored proposals – simultaneous investments in gas pipeline infrastructure and hydroelectric transmission – say the emails released Tuesday vindicate their complaints that its lack of transparency hides a too-cozy relationship with private-sector interests. “The documents show a hostility toward working out the details in a public forum,” said CLF attorney Christophe Courchesne, “and a distressing level of close communication between state officials, pipeline companies, and the gas and electric utilities that stand to benefit the most. “What the plan suggests is billions of dollars of infrastructure investment throughout the region – that’s a debate that needs to happen in public, with a wider variety of stakeholders.” “The very foundations of the plan,” he continued, “are based on an incomplete and cursory analysis of the problems, and a complete lack of attention to lower-cost alternatives which would be better for electricity customers and the environment.” One email released this week shows Hunt telling public officials that one of the scenarios for the region’s future energy use analyzed by consultants Black & Veatch, the “Clean Energy Future,” need not be released publicly. “The Clean Energy Future is as you might expect costly,” Hunt explained. “There is the potential for various interests to use/misuse the results.” Another, dating to last August, shows NESCOE counsel Ben D’Antonio recommending that the states’ strategy in pursuing both gas pipelines and hydro transmission be kept “behind closed doors,” since the perception that either deal is within reach could reduce their bargaining position for the other. “The court of public opinion,” he pointed out, “can be fickle and recalcitrant.” “True,” agreed Welch. More To Come? The CLF says the documents – available for download at clf.org – represent “a mere fraction” of those it filed for, and that it may pursue “legal action to force compliance” with their requests. Katy Eiseman, director of Massachusetts Pipeline Awareness Network, a coalition of five regional groups of opponents to Kinder Morgan’s proposed pipeline, says her organization called on Wednesday for a legislative hearing on the process. A call to the phone number provided on NESCOE’s website was answered by a recorded message saying that its voicemail box was full.
Posted on: Sat, 05 Jul 2014 13:56:16 +0000
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