Perhaps the most important question in building energy infrastructure is “who’s going to pay for it?” Under Connecticut’s ongoing procurement, and similar proceedings in other New England states, the answer is changing.
Perhaps the most important question in building energy infrastructure is “who's going to pay for it?”
Under Connecticut's ongoing procurement, and similar proceedings in other New England states, the answer is changing.
In the past, local gas utility companies, such as Yankee Gas or Connecticut Natural Gas, have been responsible for contracting with developers for pipeline capacity, and passing the costs onto their gas ratepayers.
This time, the cost of building out gas capacity would be borne by the electric utilities, and would be spread across a larger population, including electric ratepayers.
Those utilities would ask the Public Utilities Regulatory Authority for permission to include charges on electricity customers' bills to pay for the costs they incurred securing the gas.
Assuming PURA approves the final contracts, which could happen late this year, all electric ratepayers in the state, regardless of whether they use natural gas, would see an additional charge on their electric bills for natural gas.
Proponents of the gas expansion say that's a fair proposal because electric ratepayers will save more money from lower electricity costs than they will pay in additional charges.
But while Connecticut's 2015 law appears to pave the way for that cost recovery, there has been controversy in other New England states, such as Massachusetts, which is the most important target customer of the Access Northeast project because it has the highest power needs in the region.
Some policymakers in Massachusetts and Maine have opposed the rate recovery method. But in both cases, those states' utilities regulators will have the final say over the contracts.
Travis Miller, a Morningstar analyst who covers Eversource, said the state regulatory processes are “a big question mark” for Access Northeast. As such, he hasn't yet included any formal revenue projections for Access Northeast in his independent analyst reports on Eversource.
Main story: CT deals seen as linchpin for Access Northeast
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