Documents Reveal Governors’ Gas and Hydropower Plan Shaped by Industry and Incomplete Analysis

Jun 24, 2014 by  | Bio |  24 Comment »

In January, the New England Governors announced a plan to finance new gas pipelines and electric transmission lines across the region with billions of dollars in funding from residents and businesses. In an effort to bring transparency to the process that led to and continues to inform the Governors’ plan, in March, Conservation Law Foundation filed public records requests, seeking documents from the states and the New England States Committee on Electricity (NESCOE), the agency that is working to implement this massive infrastructure initiative.

Today, we are making available to the public a detailed briefing (PDF) on the documents we have received to date, along with an archive of the 48 documents (zip file, 25MB) cited in the briefing.

In short, the documents we have obtained reveal not only outright hostility to conducting the planning process in the open, but also a troubling willingness on the part of state officials to take enormous risks with our money, our region’s energy progress, and our climate.

  • “Behind Closed Doors.” The states and NESCOE are deliberately working out the details of this plan in secret, consistent with the view of one of NESCOE’s staffers that the plan should be “formulated behind closed doors” because the “court of public opinion can be fickle and recalcitrant.” Despite public statements that NESCOE is open to feedback, the agency and state representatives have repeatedly shielded analysis of the plan from public scrutiny.
  • Conflicts of Private and Public Interest. The Governors’ initiative is premised on extensive influence, behind closed doors, from the very pipeline and utility companies that stand to earn billions if this plan is implemented.
    • The documents show, for example, that Maine Public Utilities Commission Chair Tom Welch, a chief architect of the governors’ plan, argued in its favor using a memorandum from Tony Buxton, an industry lawyer who represents both a gas pipeline company and industrial companies that use gas for non-electric purposes. Now, Welch is overseeing a case that will decide whether the State of Maine will invest in financing a pipeline project proposed by Buxton’s client.
    • Through a series of private meetings and calls with NESCOE and state representatives, the electric and gas utilities who stand to benefit most from the governors’ plan are now helping to define their roles as middlemen. In fact, Northeast Utilities itself drafted the document the states and NESCOE are using to manage conflicts of interest when utilities buy power from their own transmission projects, like NU’s Northern Pass project.
  • Ignoring Smaller, More Affordable Solutions. Despite public statements to the contrary, NESCOE and the states agree in private that they “are not looking for market adjustments as alternatives to our current investment infrastructure path” that could be far less costly – to the public’s wallets and to our climate.
    • During a private meeting in Washington, D.C., regional grid operator ISO-New England’s CEO admitted that the point of the governors’ plan is to “overbuild” gas pipeline. However, as Vermont Governor Shumlin suggested recently, overinvestment risks “huge stranded costs” for customers in decades to come. This effort is not about reliability, as NESCOE would have us believe. It’s about directing public money to large energy companies outside of public oversight.
    • As for the governors’ interest in buying more Canadian hydropower by forcing customers to pay for new international power lines, the documents include recent analysis showing that hydropower doesn’t need long-term contracts or other help and that it wasn’t even available to New England when we wanted it during the coldest days of last winter. However, the states and NESCOE appear to be disregarding these findings entirely.

Ultimately, CLF obtained a mere fraction of the documents we requested. Despite acting on behalf of state governments and receiving $2 million annually in public funding through our electricity bills, NESCOE claims that it is not subject to public records laws and is refusing to provide any documents to CLF. Most of the New England states have not yet provided or are actively withholding their documents about the plan.

CLF is considering legal action to force compliance and bring these documents to light. But it’s clear that NESCOE and the governors’ representatives are not interested in a meaningful, transparent planning process that considers the best interest of electric customers and also complies with the states’ legally mandated climate policies. As the customers whose dollars are at risk, we all should have a chance to fully understand what we will be buying with this proposed plan – through an open process based on sound research and analysis, not backroom dealings with industry insiders.

Read CLF’s detailed briefing on the documents here.

Download the archive of documents referenced in CLF’s detailed briefing here.

24 Responses to “Documents Reveal Governors’ Gas and Hydropower Plan Shaped by Industry and Incomplete Analysis”

  1. Erica Emmet

    Thank you CLF!

    It is comforting, especially for those of us with property through which the pipeline would run, that you are peeling back the layers and exposing this for the travesty it is.

    We cannot allow this unnecessary regional blight of a project to go forward.

    Thank you for your continued efforts on behalf of all residents of the Commonwealth and beyond.

  2. Joshua Jackson

    This is why I’m a contributor to CLF. Keep up the great work, and thank you!

  3. Jon Ganem

    Can anything else be done to forward the objective obtaining these documents and or stopping the pipeline? We are involved in a regional letter writing campaign at this point.
    Thank you for the work you are doing.

  4. Rosemary Wessel

    Thank you for all the work you’ve been doing on this and for this report. Confirms a lot of suspicions I’ve had as we’ve been digging around the background info on this fight.

  5. Nancy Allen

    Remarkable work, CLF. Thank you for your perseverance and top quality effort of relaying this information.

    “Sunlight is said to be the best of disinfectants.”
    -Justice Louis D. Brandeis

  6. Rene' Lake-Gagliardi

    Thank you CLF for this report.
    Having a proactive position is critical – and people are ready to be invested.
    Being sold out is no longer an option.

  7. Roberta Flashman

    Thank you CLF. This report along with the comment sent to NESCOE a few weeks ago really set the bar for gathering information and condensing it into well written, well research, and understandable documents.
    Truly a boost to the environmental community.

  8. Bill Foote

    I agree that doing anything behind closed doors is not the right way to go about it.

    It should be noted that the Governors didn’t just wake up one day and say, ‘this is what we’re going to do.’ They watched as regional energy system creaked under the load of a tough winter.
    You complain about the use of the word ‘overbuild’ but that’s because the NEPOOL region is very underserved ‘energy-wise’ than any other area of the country. ‘Overbuild’ is an engineering term that is meant to provide a capacity safety margin.
    I think Shumlin is smoking something if he thinks that energy consumption can shrink like cell phone technology has. He’s making a technology comparison to physical laws. They aren’t comparable.
    VT had the chance, years ago to run a main gas trunk up I91 and didn’t do it for the expense of the line and the price of gas. Today, that choice exists again, with the price of gas being substantially cheaper. I don’t know if that makes it more economically viable, but not reviewing options because it doesn’t agree with your world view is bad fiduciary management.
    If Shumlin is really worried about stranded costs, he wouldn’t have seen VY shut down.

    Hydropower doesn’t need ‘other help’ as you noted, but it does need alleys to transport that electricity. And that is what you’re trying to block, evidently.

    I get it. You don’t want to see any other energy sources to support the region. That’s clear. I just hope that when we face sags, brownouts, rolling blackouts or outright blackouts that the people that support you realize it was your ‘leadership’ that put them in that situation.

  9. Barb Welch

    Tom will not respond to this because he has a pretty thick skin and he knows the futility of engaging in a pissing contest in the comments section of an internet blog. But my skin is not so thick and I really don’t like it when people slander my husband.

    I’ve worked with conservation nonprofits for the past twenty years, and for much of that time Tom has been the chairman of the Maine Public Utilities Commission. I’ve heard arguments from all sides about how we should generate and deliver electricity to our homes and businesses. The one thing I’m sure of is that it’s a complicated issue and there are legitimate points of view supporting many different policy approaches.

    But it is irresponsible and arrogant to imply that if someone disagrees with you it must be because he’s on the take. If conservation organizations expect to be regarded as credible participants in the policy debate we need to make our case on the merits. We do not advance the conversation with snarky attacks on a public servant doing his best to represent the interests of all the citizens of the state, to whom (unlike the Conservation Law Foundation) he is ultimately accountable.

  10. Jane Palmer

    I wish to respond to the wife of the Chair of the Maine Public Utilities Commission, Barb Welch. She says her husband Tom Welch is ” doing his best to represent the interests of all the citizens of the state”. I don’t live in Maine and know nothing of what has gone on in that state in terms of this Governors’ plan, but I read the above article and saw nothing snarky about it and I didn’t take away from the piece that Mr Welch was being accused of being “on the take”. I felt the report was very clear in that it references documents and (now) known facts about the source of memorandums and information that is being submitted in the case Mr Welch is overseeing for the state’s investment in infrastructure. This is EXACTLY what the public needs to know in these situations. I have been amazed at the amount of ‘revolving door” politics, cronyism, and “behind closed doors” decisions that take place in the energy realm. Our energy future is something we need to get right and if exposing questionable connections makes Mrs Welch nervous, perhaps she should think about the larger picture and how decisions SHOULD be made, as opposed to how they currently are being made. If the facts contained in the article are disputed, that would be grounds for a complaint. But it seems as though Mrs Welch is going on the attack on CLF rather than defending her husband.

    • Barb Welch

      “But it’s clear that NESCOE and the governors’ representatives are not interested in a meaningful, transparent planning process that considers the best interest of electric customers and also complies with the states’ legally mandated climate policies. As the customers whose dollars are at risk, we all should have a chance to fully understand what we will be buying with this proposed plan – through an open process based on sound research and analysis, not backroom dealings with industry insiders.”

      I don’t really know how I could read this statement except as an attack on the people involved in the NESCOE talks. And since Tom is the only person in the group specifically named here, it feels pretty personal.

      This blog post claims to be all about documented facts, but it ignores a few facts. The NESCOE group is not a regulatory body. It has no authority or mechanism to implement anything, or to make any “backroom deals with industry insiders.” It was conceived from a recognition that the New England states have no hope of solving their acute energy problems unless they cooperate with each other. They are trying to put together a plan that all the governors would be willing to support – which would then be submitted to the legislative and regulatory processes in each state and at the federal level. Processes that include public hearings and comment periods and disclosure.

      I don’t know where Ms. Palmer lives, but in Maine these decisions are not made behind closed doors. The PUC, at least during Tom’s tenure, has a reputation for making decisions based on the merits of the case. Ms. Palmer and the CLF may not agree with those decisions all the time; for that matter neither do I. But no one can claim they didn’t have an opportunity to weigh in during the decision-making process if they cared enough to take the trouble.

  11. N. Jonathan Peress

    We appreciate the thoughtful comments above and interest in CLF’s advocacy. We agree that our current and future energy needs present complicated issues for which consideration of numerous different prospective policy solutions -vetted publicly- is warranted, which is one of the themes of CLF’s advocacy. CLF’s briefing and the underlying analysis is fact based, and documentary evidence is presented for all of CLF’s perspectives. Readers are entitled to their own perspectives on those documents and we welcome and encourage discussion about them here.

  12. Linda Kaye-Moses

    The questions that occur to me are as follows: 1. Do we, as citizen residents of our respective States (mine is Massachusetts), have the power or control to stop the pipeline in its tracks NOW?; 2. And if (1) is true, how do we excercise that power?

  13. George Bacon

    It may be important to some to note that with the hard winter we just had 2013/2014 that at times many of the existing gas fired electric generation plants had their gas supplies interrupted so the gas could be used for home and commercial use which was critical at the time. Most gas fired generation contract for interruptible gas supplies because it is less expensive and prioritizes gas for home and commercial heating during times of short supply. The lights were kept on by relying on the few gas fired plants that had oil backup supplies, use of older less efficient oil fired generation and increased use of coal fired plants supplemented by hydro. This is well documented in ISO-NE Reports issued this spring on the experiences of the winter of 2013/2014.

    Renewables did their part but that still was only a small fraction of the total electric generation needed. So for the lack of sufficient gas supply into New England the cost of electricity increased significantly being based on the more expensive fuel which was surprisingly oil! On one winter day this winter 60% of the modern less polluting gas fired combined cycle units, having significantly lower emissions than the alternative oil and coal fired facilities, were off-line for lack of sufficient gas coming into New England.

    This resulted in significantly higher electric rates and put at risk the air quality in the region that so many have fought so long to achieve; changing out gas generation for oil and coal. If gas had been available those same gas fired generators would have been kept on line. With the pending retirements of older less efficient and more polluting oil and coal units there will be even more pressure this winter and the next few winters as new gas fired generators will have difficulties being financed without a more robust gas supply into the region.

    We are all much in favor of renewables and the promise they have for the future but if the electric supply is put at risk or becomes unreliable we will loose public support for the bright plans that many worked hard for. The lights must stay on to keep public support.

  14. N. Jonathan Peress

    Thank you for your comment and fact-based discussion. We agree with your premise. Keeping the lights on at an acceptable cost, and in a manner which facilitates the ongoing transformation of the energy system towards renewable and distributed generation solutions, is a core focus of CLF’s energy advocacy. In this regard, natural gas must be a tool towards decarbonization by, for example, providing a quick start firming resource when the wind is not blowing or sun is not shining. This function will diminish over time as renewable and distributed energy technologies, along with smart energy management systems, demand response and storage technologies are more fully integrated. As to the case study of last winter we would note that CLF (and various companies participating in the New England market) proposed alternatives, like targeted and strategic use of Liquefied Natural Gas, that would have kept the lights on in a cleaner and cheaper way; that alternative was not pursued by the very some leaders who are now pursuing an out-of-market approach to getting large new pipelines built.

    • George Bacon

      Thanks for your thoughts; keeping the lights on at an acceptable cost in a manner that facilitates the on-going transformation of the energy system towards renewables and distributed generation solutions certainly is our goal but the realities of the next few years (10 to 20 years) are these; today July 15th for example gas generation is providing 59% of the reliable electric supply, nuclear is approximately 28% and renewables and hydro provides a much smaller portion on the order of 3% to 4% of our total needs. We cannot sustain an electric supply heavily dependent on gas fired generation especially in the winter without a sufficiently robust gas supply coming into New England. We are expanding the use of natural gas for home and commercial heating and during sever winters 50% to 60% of our electric generation supply is at risk of natural gas interruption to divert our current natural gas supply to residential and commercial heating needs.

      Gas generation as we agree must provide backup to renewables until the regional growth of renewables provides sufficient backup to itself (wind is blowing somewhere) but at the present pace of growth of renewables and the pushback in some areas (wind) that might be longer than we all would like.

      In the interim New England has some of the highest electric prices in the nation and our local industry is under severe pressure of competition from other regions with much lower electric cost. LNG is a possible alternative but at the present cost of natural gas in the U.S. LNG cannot economically compete (no one will make the necessary investments without a return on that investment) and any LNG on the world market is headed for Europe or Asia where prices for LNG are higher.

      As a result for the foreseeable future natural gas and natural gas growth is the only way to meet the electric supply growth in New England and the only way on the short term (10 to 20 years) to support construction of new electric generation at a lower cost to allow the retirement of old less efficient and thus more polluting oil and coal generation.

      This reality may be difficult for some but if we want to keep the support we have from the general public we need to lower electric rates where we can and the only way to achieve any possibility of lowering electric rates is to expand the natural gas supply into New England; all other alternatives are more expensive. Renewables growth even at the high electric rates we have is too slow to solve the immediate problem and needs for more efficient and less polluting electric generation.

      • N. Jonathan Peress

        Mr. Bacon, again you are highlighting areas where we agree. We clearly are experiencing gas deliverability challenges in New England, causing adverse environmental and economic impacts. The need for enhancing the means to, and amount of gas reaching, gas generators in the limited winter-time hours when we are experiencing constraints is apparent, as is the need for market refinements, energy efficiency investment and other elements of the prospective solution set. The point of our discussion above is that before committing to spend billions in public (energy customer) money over 40 or more years for long-lived infrastructure, it is necessary to engage in a thorough and public process. Years of New England-wide experience in planning for and investing in energy infrastructure to achieve public benefit goals and objectives demonstrate that thorough public vetting and transparency provides for better (more cost-effective) outcomes and, consequently, increased public support. Such a process increases the degree of confidence that decisions directing billions in public capital will be effective and efficient in the long term – at least over the period for which public funds are being obligated, and through the useful life of the infrastructure so funded. Doing so in an open and transparent manner will provide for a more durable outcome in resolving the challenges you so rightly note.

        • George Bacon

          We are in full agreement on the need for a transparent and open process; I believe our elected officials always benefit from a wide range of informed opinion and knowledge. I also believe though that the environmental community has a responsibility to facilitate a balance of environmental benefits and energy costs; that one without the other is not viable.
          Thanks to CLF for this opportunity to air these thoughts.

  15. Annette Smith

    It would be most helpful for CLF to acknowledge the reality that the organization’s goal of building out more onshore wind in New England is not going to succeed. Much harm is being done to communities, property owners, and natural resources by mountaintop wind development. Building out the number of turbines required to meet CLF’s goals is not realistic. The sooner CLF abandons its support for big wind, the better.

  16. Paul Lauenstein

    In the 1980′s, when MWRA was withdrawing 330 million gallons per day from a reservoir system that was only rated for 300 million gallons per day, they proposed a $500 million pipeline to bring supplementary water east from the Connecticut River valley. The people in western MA said “NO,” so MWRA resorted to fixing leaks and promoting water conservation. Today, despite more population and a bigger service area, MWRA’s 2.5 million customers only need 200 million gallons per day.

    Why can’t the same approach be used with energy?

    • George Bacon

      I remember those times well; when the MWRA had plans to meet a growing need for water and had plans to secure that increased supply from the Connecticut River. At that time, water rates were so low that there was little emphasis by users (industry, residential and commercial users) to conserve.

      The construction of the Deer Island Treatment Plant and its enormous price tag and the need to recover that investment in increased water and sewer rates was the primary reason for the significant reduction in water use. Simply raising the cost of water supply to users resulted in a significant emphasis on water conservation to reduce water and sewer bills.

      Unfortunately the same approach could not lessen the increasing demand for natural gas in the region since much of the increasing demand is as a result of fuel switching to reduce use of more expensive fuels. Increases in the demand for natural gas to support home/commercial heating and increasing use of natural gas for electricity generation is not as a result of lack of conservation of energy but as a result of a growing need.

      • Jon Magee

        It should be noted that fuel switching is itself a process that is promoted by state subsidies (at least in Massachusetts), and that a change in policy could alter increasing demand for natural gas for home heating.

  17. Ariel Elan

    To George Bacon–You said that increases in the use of natural gas for electricity generation are “not…a result of lack of conservation of energy”. I generally try very hard not to be sarcastic, but are you living on the same planet I am?

    Have you been to any major city lately, and noticed the millions of lights burning inside buildings all night, while no one is in them? Have you driven past any malls or commercial strips, factories, business centers, parking lots, and noticed the millions of lights burning all night to light buildings and parking lots that are closed and uninhabited?

    As for the use of natural gas for heating, and electricity for cooling, are you unaware that most homes, businesses, and factories have not yet been fully insulated and air-sealed? Do you have any idea how many of these buildings could receive “super-insulation”, also known as a “deep energy retrofit”, for the cost of a $6 billion pipeline? Have you spoken with anyone who had a deep energy retrofit on a leaky, older New England wooden house, and found their year-round TOTAL energy cost dropped from $6000 to $300?

    And are you aware that every dollar spent on weatherization contributes to the creation of 8 times as many jobs as the same dollar applied to building new natural-gas infrastructure?

    No “lack of conservation” in New England? Can’t wait for THAT day!

  18. Sharon of spfld

    I agree with the amount of money that will be spent and that the jobs it also will create will go away after this major undertaking of the pipeline will be better use, I live in Spfld. I just heard on the news about your town meeting and want to applaud the towns people an agree with your not wanting the pipeline and than as i,m reading your comments that basically everything was done behind close doors is their way of agreeing and proceeding what there deal is,not asking or telling you anything as they come to a agreement, well hopefully this idea will help,get your surrounding towns and the towns,cities also that this pipeline is going threw in are state and fight all together, go ask Vermont, and all the propose area that they were considering,or that are in the same situation pull all the data you can together to get the whole picture whats on the table in other places,get everyone you can from mass, to tell the governors this is not what we want,and remember that they are not in your corner and their tactic is we need this,its our future while who,s pocket is being lined with the profit not us will be paying for it.reach out find another way go over there heads its not what the majority wants and their doing it anyway, a little hope look at the situation now with the casino, that because of the effect it will have on our neighboring towns,an cities its back on the ballot an were all gonna vote again and i hope everyone votes no.most of those meeting were behind close doors also and are city council not one was there or invited to those behind the door meetings why because they didn’t want any conflict what we got was a proposal. Don’t let them tell you its gonna happen there only words that in their minds thats it no its not remind them WHO VOTED THEM IN THE FIRST PLACE AND IF THEY ARE SAYING YOUR ALL WRONG AND THAT’S NOT WHAT GONNA HAPPEN ? WRONG THEIR THERE TO REPRESENT WHO THEM SELVES AND THEIR IDEAS NO YOU AND WHAT YOU WANT!!!THIS SEEMS TO BE THE NORM OF ARE OFFICIALS THAT WE VOTE IN OFFICE TO REPRESENT US THE PEOPLE THE CITIZENS OF AMERICA AND THEY DON’T!!THEY SURE DOING A HELL OF A JOB SEEING THE PIPELINE GO THREW FOR CORPORATE AMERICA .I will tell you i,m gonna write a letter to Gov. Neal and say i don’t want it the pipeline an how these closed doors meeting are not right to us the citizens. reach out you never know what will happen if we all pull together people need to start caring on what going on here at home in america,

Leave a Reply

By submitting a comment here you grant Conservation Law Foundation a perpetual license to reproduce your words and name/web site in attribution. Inappropriate comments will be removed at admin's discretion.