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The proposed US$3 billion Access Northeast natural gas pipeline expansion, which would bring more natural gas to New England, now faces a major setback due to losing two of its key utility partners in Massachusetts. This comes just days after an unfavorable ruling made by the state鈥檚 Supreme Judicial Court, according to the Wall Street Journal, Mass Live and MaineBiz.

This recent development creates additional uncertainty over a plan that was conditionally approved by Maine's Public Utilities Commission, with an overall aim to lower New England's electricity costs by ensuring a more reliable supply of natural gas.

The recent Supreme Judicial Court decision disallowed electric companies in Masachusetts from charging customers for the cost of building natural gas pipelines. According to Mass Live, if pipeline advocates asserted the tariffs, they would save New Englanders US$1 billion each year through lowering the cost of wholesale electricity.

As a result of the ruling, National Grid PLC and Eversource Energy withdrew the petitions they had filed with the Massachusetts Department of Public Utilities for 20 year agreements to acquire gas from Spectra Energy Corp鈥檚 Algonquin gas transmission system.

Spectra, National Grid and Eversource had initially hoped to expand Spectra鈥檚 Algonquin system in an effort to bring up to 1 billion ft3 of gas to New England every day from 2018.

However, according to the Wall Street Journal: 鈥淓versource said in a statement that it withdrew its contract petition in light of the court鈥檚 ruling.鈥� The Eversource statement also noted: 鈥溾�淭his does not affect our commitment to the project.鈥�

Spectra has stated that the pipeline system continues to move forward and that National Grid and Eversource are still co-developers. It is also set to develop further if the company can secure more customers.

鈥淲e have put the court鈥檚 decision behind us. We are confident that, ultimately, the interests of New England鈥檚 consumers will prevail with desperately needed gas supply made available by Access Northeast,鈥� Spectra commented on the Court ruling.

Construction cost has always been a key issue. While pipeline companies want to know that they will have customers before they spend billions of dollars putting pipes in the ground, power companies buy gas to fuel generators on a need-to-have it basis. Therefore, utility companies are in fact extremely restricted in the extent to which they can pass on higher costs to consumers.

The Conservation Law Foundation sued the company, describing the deal as a 鈥榩ipeline tax鈥� that would shift the burden of funding pipeline construction onto consumers.

鈥淭he Massachusetts Supreme Judicial Court made it clear last week that electric companies can鈥檛 gamble on pipelines with the hard earned money of businesses and families across our state. That is exactly what these contracts would have done,鈥� said Josh Block, a spokesman for the Conservation Law Foundation.

The high court ruling that vacated the so-called 鈥榩ipeline tax鈥� now raises questions about the future of Access Northeast.

Edited from various sources by

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Read the article online at: /project-news/26082016/partners-withdraw-petitions-to-take-gas-from-access-northeast-pipeline/