Letter to Governor Baker on tariffs

April 8th, 2015

Massachusetts State House
Office of the Governor
Room 105
Boston, MA 02133

Governor Baker,

I have heard that you will soon be meeting with other New England governors about the natural gas pipeline tariff; I have feedback for that meeting:

  • I do not support a natural gas pipeline tariff.
  • I also do not support an indirect tariff by requiring electric utilities buy natural gas (as outlined in your February 25th press release: “Baker-Polito Statement on Regional Clean Energy RFP and DPU Docket on Natural Gas Expansion”)

There are four core reasons:

  1. There should be no subsidies nor incentives for fossil fuels.

    We are and should be trying to step away from fossil fuels. This seems clear.

  2. Will pipelines solve any problem(s)?

    This is not clear. ISO-NE’s stated goal is fuel certainty however this is not so simple: more gas supply will not mean more gas will be available to Massachusetts. The reason is these pipeline(s) are changing Massachusetts from a last-stop on energy infrastructure into an off-ramp on a gas superhighway to Canada. The existing Maritimes and Northeast pipeline from Dracut to Canada is being reversed and import terminals in New Brunswick are being converted to export terminals.

    The Massachusetts market will be fighting world demand for the gas in these pipelines and foreign markets pay much more for gas then we do. Even Black&Veatch, the consultants that stated more pipelines are needed to the New England Governors (NESCOE) outright states in their “Bear Head [LNG] Export Project” review that gas prices in New England will rise above last year’s peak rates once export begins (http://energy.gov/sites/prod/files/2015/02/f20/Appendix%20C.pdf) and Kinder Morgan consistently and plainly states they can not stop the gas from being exported.

    I challenge you to find a study that shows either prices will fall or that we’ll have ample supply once LNG export begins. If neither happens we’ve solved nothing.

  3. The pipelines will create problems.

    The most glaring short-term problem I see is electric generation is increasingly concentrated on one fuel source (natural gas) via one transport method (pipeline) from one location (Marcellus). We’re already at 47% gas generation. I challenge you to show what hedges the risk of a all-eggs-in-one-basket energy portfolio. I read hundreds of pages of energy reports and I can’t find it. FERC doesn’t handle that, ISO-NE punts it to the states and state DOER programs are too small relative to the problem. Is more gas really the solution? Note that this does not even look at higher-order problems like climate change and the ethical dilemma of eminent domain for private gain.

  4. There are other solutions that will work.

    Heavy investment in renewables is both attainable and has been shown to work. This is not pie-in-the sky. Just look at Germany’s energiewende. It may not be the easy route but it is the best route for Massachusetts to (for the first time in history) reduce our energy imports and grow our new domestic energy industry.

ISO-NE keeps saying it was a market failure that we don’t have the pipelines already and that’s why they need a tariff. It seems to me the market worked in this case — the market saw that Massachusetts is a national leader in efficiency and renewable growth so therefore was not a solid investment for fossil fuels. Why, exactly, are we trying to change that? Do we incentivize pipelines we’re looking to step away from in the long term, we’re not certain will actually solve anything and will create problems? Is a desperate move to do something quick a good solution? I don’t think so. We should be doubling down on our pioneering renewable path, not throwing the system into reverse.

Letter to Governor Baker on tariffs

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