Independent analysis finds Massachusetts electric ratepayers would be forced to pay an additional $141 million to cover pipeline costs
February 7, 2017 – The costs of the proposed Access Northeast pipeline to transport fracked gas into Massachusetts and other New England states would be more than double what pipeline sponsors claim -- $6.6 billion versus the projected $3.2 billion – according to a dramatic new report by Synapse Energy Economics.
Furthermore, the report projects that the use of natural gas in New England for electric generation will decrease by 27% by 2023, compared to 2015, leaving the pipelines underused and unneeded.
The report was sponsored by a coalition of environmental groups, including the Sierra Club of Massachusetts, Consumers for Sensible Energy, Pipeline Awareness Network of the Northeast, Mass Energy Consumers Alliance, Connecticut Fund for the Environment and the Sierra Club of Connecticut.
Rather than reduce consumers’ bills, as claimed by the pipeline sponsors, the pipeline would increase costs for Massachusetts consumers by $141 million over the life of the pipeline, according the Synapse report.
“This report confirms what we’ve been saying all along- these pipelines aren’t needed, would raise costs on consumers, contribute to climate change, and put us in non-compliance with Massachusetts’ energy and environmental laws.” said Emily Norton of the Executive Director of the Massachusetts Sierra Club. “Massachusetts has a proud legacy of being a leader in the fight for our environment, but this would be a giant step backwards, toward increased reliance on fossil fuels. We deserve real solutions that look to the future, not more fracked gas pipelines that contribute to global warming, harm our environment and pick our pockets.”
“This study provides a reality check on the costs of Access Northeast to consumers and demonstrates that forging ahead with massive gas infrastructure expansion is incompatible with legal mandates throughout the region, said Kathryn R. Eiseman, President, Pipe Line Awareness Network for the Northeast, Inc. “We know that to comply with the law and sound climate policy, we must reject this gas infrastructure overbuild and double down on renewables, energy storage, and demand-side solutions -- and this study shows that.”
The use of gas-fired electricity will decline dramatically, according to the Synapse report, because electricity demand is expected to be flat for the foreseeable future and state laws require the use of more renewable resources which will force gas out of the system.
Beyond the projected 27% reduction in the use of natural gas for electric generation by 2023, compared to 2015, the report projects that natural gas usage will be 41 percent lower by 2030.
The report also finds that the $3.2 billion pipeline construction cost, cited frequently by the proponents, excludes other significant costs such as operations, maintenance, depreciation and return on equity, making the full cost of the ANE pipeline $6.6 billion -- more than double the pipeline proponents’ claim.
Contrary to the utilities’ claim that the pipeline would lower consumer rates, the Synapse report found that New England ratepayers would be forced to pay an additional $277 million over the lifetime of the pipeline.
The pipeline partners had initially proposed that the pipeline be paid for through a pipeline tax added to monthly electric bills. The pipeline tax was overruled by the Massachusetts Supreme Court and rejected by the New Hampshire Public Utilities Commission.
“Our research clearly shows that Massachusetts and New England ratepayers would face substantial cost increases on their utility bills, if the Access Northeast Pipeline is built” said Pat Knight of Synapse. “Furthermore, Massachusetts ratepayers would be making an enormous investment in a pipeline that would be unneeded almost as soon as it is built, as the use of gas is displaced by mandated renewable power. “
Synapse Energy Economics is a research and consulting firm specializing in energy, economic, and environmental topics. Since its inception in 1996, Synapse has grown to become a leader in providing rigorous analysis of the electric power and natural gas sectors for public interest and governmental clients.
The report can be accessed here:
CONTACT: Charlie Perkins
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