Feds Clear Natural Gas Distributors Of Allegations They Artificially Constrained Supply

Feb 27, 2018

Federal regulators are rejecting an environmental group’s allegations that regional natural gas distributors unnecessarily withheld pipeline capacity during times of high demand, costing energy consumers billions of dollars.

The Federal Energy Regulatory Commission says based on its own review, the Environmental Defense Fund’s report was “flawed and led to incorrect conclusions about the alleged withholding.”

The FERC’s decision came on the same day that one of the companies, Eversource, published an independent energy market consultant’s report finding much the same.

“The modeling technique was way off the mark. And it was something we took much care about, in concluding that their allegations were uninformed, baseless, and dream-like,” says Richard Levitan, president of Levitan Associates.

Environmental groups have been arguing for years that would-be pipeline developers exaggerate the need for new natural gas capacity to fuel electricity generation in this region.

Regulators in Connecticut and the Massachusetts Attorney General are still examining EDF’s contention that the need was artificially inflated by Eversource and by Avangrid, the parent company of Central Maine Power. But in its new order, the FERC says it will drop its inquiry into the question.

In an email, an EDF spokesman says the organization stands by its analysis.

“We stand by the rigorous analysis by academic researchers from three top universities, and our recommendations for preventing these costly issues in the future by bringing gas and electricity markets up to date with modern needs,” the statement reads. “EDF has been clear from the outset. Whether intentional or not, and regardless of business motives, the scheduling decisions by these two companies had a multi-billion-dollar side-effect on New England electricity users.”