2 major natural gas pipeline projects nixed
Last year, the Connecticut legislature passed a law that would allow electric utilities to increase rates for the purpose of building an interstate natural gas pipeline. The bill was specifically intended to support Kinder Morgan's $3.3 billion Northeast Energy Direct (NED) project. CEMA opposed the legislation, but despite our efforts Governor Malloy and the Department of Energy and Environmental Protection (DEEP) were able to successfully get the bill passed. After the bill was signed into law, CEMA, in coordination with our sister association in Massachusetts (MEMA) along with NEFI, began to work with other interested parties to fight similar efforts by Kinder Morgan in Massachusetts to garner additional approvals that were necessary to make the project viable. Last week, Kinder Morgan pulled the plug on the project citing that they were unable to get enough guarantees that ratepayers would help pay for the cost of building the massive pipeline system. While Connecticut did provide guarantees to help Kinder Morgan pay for the pipeline, it was contingent upon Massachusetts and the other New England states to adopt similar support. Kinder Morgan's decision to drop this project is consistent with CEMA's assertions that if pipeline expansion projects need ratepayer subsidy to be economically viable — they are not worth doing. Just two days after the NED project was abandoned, New York state regulators denied Kinder Morgan's application to expand the Constitution Pipeline by 124 miles into New England because it did not comply with the state's water quality standards. CEMA will continue to work with our members so that we can get their local legislators to rethink their natural gas expansion policy. Ignoring economics and the environment will cost all of Connecticut in the long run and policy makers need to come to that realization like they did in New York. Our members are not able to go to their customers to help them when they want to build storage, buy new trucks or expand their business — therefore the utilities and pipeline owners should be required to invest their own capital if they want to expand. The failure of both of these projects is a significant setback in Connecticut's efforts to bring additional natural gas capacity to the state.