PUC Approves Liberty Utilities Agreement for Gas Pipeline

The New Hampshire Public Utilities Commission (PUC) approved Liberty Utilities’ request for a 20-year contract for long-term, firm natural gas pipeline capacity on the proposed Northeast Energy Direct pipeline.

“We find that the Stipulation and Settlement Agreement is just, reasonable and consistent with the public interest, and that the capacity contract is prudent and reasonable,” the PUC wrote in its decision.

Liberty said last year the corporation signed a 20-year agreement with Kinder Morgan to transport up to 115,000 dekatherms per day (DTH/d) of lower cost natural gas to its New Hampshire customers on the proposed pipeline project, then filed a petition for approval with the PUC on Dec. 31.

Cherylann Pierce, a vocal opponent of the project in Londonderry, who has organized workshops for residents to write letters of opposition to the Federal Regulatory Commission (FERC), said she was disappointed to learn the PUC opted to approve the agreement between Liberty Utilities (EnergyNorth) and Kinder Morgan, despite testimony from the PUC’s expert witness and the agency’s consumer advocate that the company’s filing failed to support the premise that an on-system demand growth will offset excess capacity under the purchase agreement in the time frame and magnitude presented in the proceeding.

“Their witnesses testified to that, and the PUC said, ‘oh well,’” Pierce said. “I cannot comprehend how the PUC could just cross off all these pages of opposition to them, settling to allow the precedent. It just doesn’t make sense,” she said.

Among such testimony was that of Melissa Whitten, a consultant for La Capra Associates, who stated, “The filing is not accompanied by sufficient evidence to allow the Commission to determine that the company requires the full 115,000 Dth/day of firm capacity to meet a reasonable estimate of design-day demand going forward; and the filing is notably lacking in an adequately-developed cost-benefit analysis of the purchase agreement to support its claim that the purchase agreement is the ‘best-cost,’ or least-cost option for ratepayers.”

The PUC addressed concerns the agreement would leave Liberty with excess capacity by including in the terms of the settlement reached on June 29 financial penalties for Liberty, should the company’s customer demand fail to grow as anticipated.

“EnergyNorth avers that it needs the Precedent Agreement’s capacity to reliably satisfy existing and future customer load requirements in its service area. EnergyNorth identified its need for additional, firm capacity in its last approved Least Cost Integrated Resource Plan (IRP) (DG 13-313), and EnergyNorth’s capacity needs have increased since then,” the PUC wrote in its decision. “The Precedent Agreement will provide EnergyNorth with opportunities to expand the reach of its distribution service and to increase distribution system reliability via West Nashua, which will be a new delivery point on the west end of EnergyNorth’s distribution system.”
But Pierce thinks EnergyNorth Natural Gas should have to use a planning model less than 20 years in advance.

“There were pages and pages of public comment,” she said. “It doesn’t make sense to me at all.”

“EnergyNorth has established that, based on both price and non-price factors, the contracted capacity represents the most viable, reasonably available alternative for EnergyNorth to meet its current and forecasted customer requirements in a least-cost, and reliable manner,” the PUC wrote. “We note that the decision of whether to approve the proposed arrangement between EnergyNorth and Tennessee Gas is an important one involving a long-term commitment of substantial ratepayer dollars. Therefore, we believe it is reasonable to review the prudence of the Company’s proposal in advance of the final decision to enter into the proposed arrangement.”

Continuing on, Pierce said she will be watching the PUC as it considers an additional docket related to the pipeline project, which will ultimately determine if rate payer fees could be used to fund the project.

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