New England governors sign energy agreement

Updated: 12:20 p.m., Friday, December 6, 2013

Representatives of consumers and New England’s largest utility reacted with cautious optimism Friday to a pact announced Thursday night that commits the governors of Connecticut and five other states to expand gas and electric transmission lines, without endorsing any specific project.

“This agreement today represents a major step forward,” Daniel C. Esty, the commissioner of energy and environmental protection, said Thursday, outlining the agreement that took the industry by suprise..

Esty touted the agreement signed by the six New England governors as “historic,” but it was not immediately clear how it would break what Esty characterized a regulatory logjam that’s slowed the approval of transmission projects into the region.

The Northern Pass transmission line proposed by Northeast Utilities, for example, faces opposition in New Hampshire. The pact signed Thursday does not represent an endorsement of Northern Pass by New Hampshire’s governor, Maggie Hassan, Esty said.

“There are many different transmission projects that are being proposed across the New England region,” Esty said. “The Northern Pass is only one.”

Still, an NU representative said the company was encouraged by the pact.

“We are pleased to see the New England governors working cooperatively on the significant energy challenges facing our region,” said Lauren Collins, a spokeswoman for the Northern Pass project. “There is a clear need to develop new sources of clean and reliable energy that will both lower energy costs and reduce carbon emissions.  ISO-New England consistently warns that our region is over-reliant on natural gas and is about to experience the major loss of power generation through the retirement and closure of plants.  We have a unique and exciting opportunity to transform our energy future.”

Northern Pass would provide better access to hydro-electric power generated in Canada.

“We believe Northern Pass is an ideal fit with the goals outlined in this agreement,” Collins said. “We understand that regional leaders must consider a multitude of options to address our energy challenges; no other project in all of New England comes closer to being able to deliver – any sooner or more economically – than Northern Pass.”

Elin Swanson Katz, the state consumer counsel, said greater transmission capacity is vital to lowering costs for consumers, but she, too, is awaiting more details.

“As this joint regional undertaking moves ahead, I look forward to working with them on the details to ensure that the many potential benefits of this agreement reach all Connecticut residents in the form of lower energy costs and a brighter, more secure energy future for our children and future generations,” she said.

Esty said the agreement represents a recognition that the states need to “step in and drive the market here. That’s a big deal.”

The heart of the two-page agreement is a statement of cooperation:

“New England ratepayers can benefit if the states collaborate to advance our common goals. The Governors therefore commit to continue to work together, in coordination with ISO-New England and through the New England States Committee on Electricity (NESCOE), to advance a regional energy infrastructure initiative that diversifies our energy supply portfolio while ensuring that the benefits and costs of transmission and pipeline investments are shared appropriately among the New England States. At the same time, we must respect individual state perspectives, particularly those of host states, as well as the natural resources, environment, and economy of the States, and ensure that the citizens and other stakeholders of our region, including NEPOOL, are involved in the process. The Governors are committed to achieving consensus as we move forward, consistent with laws and policies across the region.”

Esty said NESCOE would act as a banker to finance projects, committing ratepayer funds.

The commissioner said that ultimately would lower costs for ratepayers by lowering the cost of natural gas and electricity into a region that historically has had some of the nation’s highest power costs.

Esty said that New York City, which built a pipeline into the Marcellus Shale natural gas fields of Pennsylvania and New York State, now is paying about half what New England pays for natural gas.

“We have the promise of matching that New York price,” Esty said.

But Esty said he did not anticipate a new gas transmission line into Connecticut.

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