Lots of legal wrangling, but Northern Pass is still the end game

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The ramifications of a simple decision to close a docket can be substantial in the world of public utilities.

A world where the real intent is often to be discerned by dissecting the legal strategies utilized by utility lawyers.

Several months ago, the state Supreme Court in a split decision ruled the Public Utilities Commission misinterpreted the state’s electric deregulation statutes in denying Eversource’s proposal to invest in the Access Northeast natural gas pipeline.

The court ruled the real intent of the law was to lower electric costs not separate generation and transmission costs to create a competitive energy market that would drive down costs as the PUC said in its 2016 ruling.

When the legislature approved deregulation, lawmakers said ratepayers would no longer carry the financial risk of developing and maintaining generation facilities and instead the risk would be on developers and their stockholders.

After the May 22 ruling, which also sent the issue back to the PUC for further action, Eversource appealed the PUC’s denial along with project developer Algonquin Gas. Eversource told regulators it would withdraw the proposed pipeline contract and would present a new, up-to-date proposal in the future and asked the PUC to keep the docket open.

However, several intervenors objected saying the docket should be closed because the pipeline proposal has been withdrawn by Algonquin, Eversource and National Grid after the Massachusetts Supreme Court said the pipeline’s costs could not be included in consumer electric rates for the same reason as New Hampshire regulators, because it violates that state’s deregulation law.

The project was also withdrawn from federal consideration at the time and a company spokesman said it could only go forward if the Massachusetts legislature changes the deregulation law.

New Hampshire Consumer Advocate D. Maurice Kreis said Eversource’s request is “moot as academic, dead, or both.”

“The Commission should close Docket DE 16-241 and make clear to PSNH that any subsequent proposal to force electric customers to pay for natural gas pipeline capacity must be made via a new petition with the requisite supporting testimony and exhibits,” Kreis wrote. “Any other course of action would be manifestly unfair and would raise serious issues of due process.”

In the Aug. 3 letter closing the docket, PUC Executive Director Debra Howland writes: “The Commission has determined that there is no administrative efficiency to be gained from considering a new proposal within the context of this docket. Accordingly, the Commission has closed the docket.”

And she says any new proposal must be opened in a new docket, which means Eversource, Algonquin and National Grid would have to start from the beginning with new testimony, exhibits, witnesses etc., which means a longer process to arrive at a decision.

However, this docket may not be the real prize here for Eversource which said after the May 22 ruling the PUC turned down its proposed power purchase contract with Hydro-Quebec associated with the Northern Pass Transmission project for the same reason, contrary to the state’s deregulation statute.

When Eversource asked to keep the pipeline docket open it also asked the PUC to vacate its decision in the power purchase contract, although by that time the Site Evaluation Committee rejected the $1.6 billion, 192-mile transmission line and the Massachusetts Clean Energy Project turned to Central Maine Power to deliver Hydro-Quebec energy to the Commonwealth.

Kreis notes the power purchase docket should also be closed and the Eversource motion to vacate the decision denied.

“Again, in the interests of fundamental fairness and due process, the Commission should now close Docket No. DE 16-693 and make clear that any similar power purchase agreements that might arise out of some future version of Northern Pass would require an entirely new filing,” Kreis wrote. “The Commission should not issue the requested order vacating the Commission’s previous determination; at best, this would be an empty gesture and at worst it would effectively amount to a declaratory order on a hypothetical scenario in violation of N.H. Code Admin. Rules Puc 207.0l(c) and the relevant case law supporting the rule.”

A number of other intervenors in the case also objected to the vacate request including the Society for the Protection of New Hampshire Forests, the New England Power Generators Association and the Conservation Law Foundation.

They noted the 30-day appeal period for Eversource to challenge the order had passed so the decision stands to deny the power purchase contract.

“Eversource already exhausted this exclusive procedural avenue when its motion for rehearing and motion for clarification were denied and Eversource declined to appeal to the New Hampshire Supreme Court, effectively bringing the docket to conclusion,” wrote attorneys for the three intervenors.

They also note Eversource voluntarily withdrew the power purchase proposal from the Northern Pass proposal before the Site Evaluation Committee which voted 7-0 to deny the project’s application because developers failed to prove the project would not adversely impact the orderly development of the region.

Eversource appealed the decision and was turned down on the same 7-0 vote.

The written ruling denying the reconsideration request was issued July 12, and Eversource said it will appeal that decision to the state Supreme Court within the 30-day period to legally challenge the ruling.

Northern Pass is the end game in all this legal maneuvering.

Eversource is trying to leverage the earlier ruling on the pipeline to raise procedural issues about the SEC’s denial of Northern Pass.

However the SEC’s Northern Pass decision had little to do with power purchase agreements and the PUC was essentially telling Eversource by closing the earlier docket we are not going to help you make your case, you have to go back and start all over again if you want us to hear another proposal on a project that is essentially dead.

Massachusetts is economically essential for the Access New England pipeline proposal to work.

The PUC has not ruled on the request to vacate its ruling on the Hydro-Quebec power purchase contract. Either the PUC will take its time and let the Supreme Court appeal run its course or is hedging its bets until it sees what Eversource’s appeal of the SEC’s Northern Pass decision says.

In any event, Eversource is trying to keeps as many balls in play as possible hoping one hits its target, while regulators want to have as few as possible in play.

Eversource has invested between $200 million and $300 million in Northern Pass and they are not going to give that up easily.

The legal chess game continues.

Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London. Reach him at garry.rayno@yahoo.com