PUBLISHED: | UPDATED:

I write to address statements in a letter to the editor from Carl Canner (“Didn’t Say That,” Jan. 2, 2015) regarding a proposal by the Massachusetts Municipal Wholesale Electric Company (MMWEC).

As a nonprofit electric utility with the interests of consumers at its core, MMWEC understands and supports the need for additional natural gas pipeline capacity in New England, 1) to ensure a reliable supply of electricity for the region, and 2) to contain the cost of electricity, an essential public service, for consumers.

To that end, MMWEC has offered its nonprofit, tax-exempt structure, which enables it to finance and own energy facilities, including natural gas pipelines, as a vehicle to build publicly owned natural gas pipeline capacity to meet the electric generation needs of the region. MMWEC’s proposal is in support of the New England governors’ plan for natural gas infrastructure development, which calls for a regionwide charge or tariff on consumers to pay for pipelines needed to support electric generation.

Under the MMWEC proposal, there would be no risk, financial obligation, or special benefit for MMWEC or its member municipal utilities. The benefits of MMWEC’s proposal, which include billions of dollars in avoided costs due to nonprofit ownership of pipeline facilities, would flow to all of the electricity consumers in New England.

MMWEC has proposed that it be allowed to own and finance any gas pipeline capacity paid for with a tariff on the region’s electric consumers. The credit support for that ownership and any risks associated with it are tied to the tariff, which would generate revenue from all New England consumers to pay for the pipeline. There would be no ownership entitlement or financial obligation for MMWEC’s current member utilities, except as part of the broader group of all New England electricity consumers that would in effect own and pay for a share of the pipeline.

The MMWEC proposal is all about public, nonprofit ownership of pipeline facilities needed for electric generation, with MMWEC as the vehicle to achieve that objective. Whether it is financed with a new tariff charge on the region’s electric consumers or some other means, nonprofit ownership of the pipeline will save consumers billions of dollars, as opposed to the profit-motivated plans of investor-owned utilities to build the same pipeline capacity.

Under the MMWEC plan, it does not matter which pipeline company builds and operates the needed capacity, so long as it is owned by a nonprofit, public entity. To the best of our knowledge, there is not another such entity in the region that has the statutory authority and willingness to do what MMWEC is proposing, which is why MMWEC stepped forward with its proposal. If the MMWEC proposal is implemented, there eventually may be a joint ownership agreement between MMWEC and one or more pipeline companies, but there currently is no agreement between MMWEC and Kinder Morgan or any other pipeline company regarding this proposal.

In fact, the MMWEC proposal isn’t very popular with the region’s investor-owned utilities and pipeline companies, which would need to forego billions of dollars in profit for the benefit of consumers; but it is something we hope that those with official responsibilities for protecting consumer interests will come to support.

David Tuohey

Director of Communications & External Affairs

MMWEC

(413) 308-1392

dtuohey@mmwec.org