Customers Pull Contracts from Spectra Pipeline Expansion Project After Court Ruling

Map overview from Spectra Energy

A natural gas pipeline expansion project has been pushed back after losing major customers due to a significant ruling made by Massachusetts’ Supreme Judicial Court that said electric utilities cannot pass along costs of capacity on the pipeline to consumers.

As a result of the court ruling, electric utilities National Grid PLC and Eversource Energy withdrew petitions with the Massachusetts Department of Public Utilities that would contract 20 years of taking gas from Spectra’s Algonquin Gas Transmission system. The pipeline system has plans to expand if Spectra can secure enough customers.

Spectra said both National Grid and Eversource are still co-developers for the expansion and that the project will still move forward as it could find other customers for the capacity. The company added that it is confident that the need for natural gas in the New England area will eventually call for gas supply made available by the developers.

Supporters of the plan argue that the New England area does not have enough pipelines to support the need for electricity and, as a result, have seen electricity costs rise. Moreover, supporters believe new pipelines would save customers money.

The pipeline expansion, referred to as the Access Northeast Project, would provide natural gas capacity and market area storage to ensure the reliability of New England’s power generation fleet during peak demand periods, according to the project’s website.

Source:
Wall Street Journal
Spectra Energy