By Matt Murphy
STATE HOUSE NEWS SERVICE
HARTFORD, CONNECTICUT — The six New England governors renewed their commitment to pursuing a regional solution to the energy supply “crisis” in the region on Thursday, but key elements of a joint solution, including who might pay for the infrastructure, remain in flux.
The loose parameters of the agreement, announced after five governors and a top energy official from New Hampshire huddled for over two hours, call for each state to individually take steps to advance the region’s goal of increasing natural gas capacity and bringing hydropower to New England from Canada.
State leaders are also interested in partnering for the large-scale procurement of additional renewable energy sources, but acknowledged that each state faces its own set of regulatory and legislative hurdles.
New Hampshire’s participation in helping to pay for any new gas or hydro infrastructure remains tenuous, according Massachusetts Energy Secretary Matthew Beaton, while Vermont, on account of its size and small percentage of consumption in the region, has not agreed to help foot the bill.
“Those of us in New England are pledged to working together in an attempt to increase our reliability and lower our costs, and we very much remain committed to that,” Connecticut Gov. Dannel Malloy said. “Obviously, it involves a little bit of everything. It’s about renewables. It’s about electric generation. It’s about gas. It’s about all of the challenges that all of us in our states and the Commonwealth of Massachusetts face.”
The governors, who were hosted by Malloy at the Hartford Convention Center, agreed to follow up with a telephone conference in June and another meeting in September where they can report to one another on the progress made.
Gov. Charlie Baker, one of two Republicans governors in New England, said he continues to support Massachusetts’s carbon emission reduction goals developed under former Gov. Deval Patrick, despite his support for increased natural gas capacity.
“I think the most important thing we need to do is to continue to reduce our carbon footprint and at the same time not write $7.5 billion checks across the New England region to the energy producers because we don’t have enough capacity to meet demand,” Baker said.
The governors said New England paid a combined $5.5 billion in added costs in the winter of 2013 and 2014 because its infrastructure could not support the demand for low-cost energy options. This past winter, the six states paid an estimated $2.5 billion extra to make up for the lack of capacity.
ISO New England CEO Gordon van Welie said the grid operator this past winter had to purchase costly oil and coal energy on the spot market to meet demand, resulting in price spikes for consumers. The scheduled closures of several fossil fuel plants by 2020 in the region will only make the problem worse, he said.
The new contours of the working agreement between the governors focused on taking state-by-state steps to respond to the energy problem. It marked a departure for previous talks when Patrick was governor.
The Patrick administration, facing pressure from anti-pipeline groups and some lawmakers, backed away from the New England governors’ previous strategy of exploring a tariff on ratepayers through the Federal Energy Regulatory Commission to pay for gas pipeline expansion.
Maine Gov. Paul LePage, who was angry with Patrick at the time and wrote a letter in the summer of 2014 calling the move a “colossal mistake,” said he noticed a shift in talks with Baker, a fellow Republican.
“He’s more collaborative and more open minded rather than being held hostage by an ideology,” LePage said of Baker, after a press conference with the governors.
Malloy did not rule out future tariffs to pay for pipeline and transmission infrastructure, but said for now the states’ are pursuing other options.
“That always remains a possibility. On the other hand, what I think we’re looking at and trying to discover is because we’re separate political entities tied together by a common purchasing authority perhaps the better way for us to do what we want to do is to work out the things and get authority to do the things together that we would otherwise individually want to do,” Malloy said. “It’s not for tariffs, or against tariffs.”
Asked about a tariff on ratepayers, Baker, gesturing to Malloy, said, “That depends to some extent on where we end up and where his legislation ends up and what we can do on a collaborative basis.”
Beaton, who participated in the meeting with Baker, said the blueprint for collaboration is intended to send signals to stakeholders, including lawmakers, in each state that the governors are serious about working together.
“As symbolic as this statement is, it’s very powerful,” Beaton said.
Beaton, a former Republican representative from Shrewsbury, said legislation would be required in Massachusetts to give the administration authority to pursue a project to bring transmission lines from Canada through New Hampshire, Vermont or Maine for hydropower.
“The biggest challenge is who’s paying for it, so if we figure out who’s paying our regional partnerships will allow us to get this built,” Beaton said.
Baker said it’s premature to throw his weight behind any one pipeline or transmission line project, but continues to favor those that take advantage of existing utility corridors, rather than going through “virgin territory.” He said any proposal to bring large-scale hydropower to Massachusetts has “a long way to go before they bear fruit.”
The governor backed off his opposition of the proposed Kinder Morgan Tennessee Gas pipeline when the route was altered last year to run along existing rights-of-way in southern New Hampshire.
Beaton said Massachusetts is still working with Connecticut and Rhode Island on a collaborative draft request for proposals from energy suppliers for renewable energy like wind, solar, and other non-carbon emitting sources.
Department of Public Utilities Chairwoman Angela O’Connor also said the DPU would soon open a formal review, at the request of the Baker administration, of options to increase natural gas capacity to the state.
“I prefer to think of it as an all options approach, but if you’re going to pursue an all options approach at some point you need to pursue it collaboratively,” Baker said.
Maine’s public utilities commission is considering using its authority to contract for additional natural gas capacity to benefit its ratepayers, according to the agreement, but stated a preference for working collectively with other states.
Rhode Island already has statutory authority to participate in regional purchasing of transmission or gas pipeline related infrastructure, and said it’s ready to be a partner.
Malloy said he pushing legislation in Hartford that would authorize his administration to support new natural gas infrastructure, transmission projects and other measures to reduce demand on fossil fuels through long-term contracts.
New Hampshire Gov. Maggie Hassan, who could not attend the summit due to a funeral, recently signed a law updating the membership of her state’s siting panel and requiring additional public hearings on projects, including the Northern Pass project that would extend transmission lines from Canada.
With new siting criteria due out for New Hampshire later this year, Beaton said the level of New Hampshire’s participation moving forward remains a question mark.
While Vermont has not committed to share in the cost of regional gas infrastructure or electric transmission, it could wind up playing host to a transmission project and is currently reviewing an application for a transmission line to bring hydropower to southern Vermont where it could connect power to greater New England.
Peter Rothstein, president of the New England Clean Energy Center, said it will become important for the governors to develop clear goals and “not get enamored with one source” of energy.
Outside the convention center, a group of protesters from around New England, including opponents of the Kinder Morgan and Spectra pipelines, urged the governors to “turn their backs” on new fossil fuels.
The protesters, representing 43 different energy and environmental groups, called for the focus to be placed instead on renewable energy sources, upgrading the electric grid, repairing leaks in existing gas pipelines and investing in energy efficiency programs.
“While the governors have private roundtables, I am seeing concerned citizens gathering in living rooms to discuss real visionary solutions,” Toxics Action Center organizer Claire Miller said.