WASHINGTON: Eversource and Avantgrid [United Illuminating] have won a major battle in a against allegations by an environmental group that the utilities manipulated the price of natural gas in New England.
FERC the Federal energy regulator has issued a ruling clearing the utilities of manipulation of the natural gas transmission system serving New England.
The Commission “has revealed no evidence of anticompetitive withholding of natural gas pipeline capacity on Algonquin Gas Transmission (line),” they added case closed saying, “the commission will take no further action on the matter.”
The FERC investigation was begun in August 2017 when the Environmental Defense Fund (EDF) claimed that natural gas utilities deliberately manipulated the market to create shortage conditions, which effectively raised electricity prices in New England by $3.6 billion over the past three years.
The FERC statement said that “commission staff took these allegations very seriously and conducted an extensive review of both publicly available and non-public data.” FERC’s review concluded, that that EDF’s study was flawed and led to incorrect conclusions.
Transmission of natural gas into New England is typically tight and during the winter often runs at capacity. While six pipelines serve New England the Tennessee Gas Pipeline and the Algonquin Gas pipelines deliver more than half of the region’s gas. The pipelines limit access to electric power plants in favor of home heating when cold snaps increase demand. The allocation toward residential use can increase the price of electricity.
The utilities and gas regulators have called for new transmission pipelines, but environmental groups and Massachusetts’ attorney General Maura Healey have fought the expansion plans, claiming that there was sufficient capacity already.
Commission staff found that a 2017 report by the Environmental Defense Fund was flawed and led to incorrect conclusions, FERC said in a Tuesday news release. The commission said it "found no evidence of capacity withholding" after an "extensive review of both publicly available and non-public data."
The EDF released a white paper last August  that asserted local gas distribution companies in New England withheld pipeline capacity on the Algonquin system, increasing gas and electricity prices and costing customers an extra $3.6 billion for power over a three-year period. Eversource had sent the EDF, a cease and desist order in December  threatening to sue the environmental group if they continued with allegations that were “irreparably harming the company's reputation.”
Bill Akley Eversource’s President of Gas Operations defended the companies practices of in a statement explaining the utilities "are required to make sure our customers have enough gas to heat their homes."
Akley added the FERC review "validates what we've said all along, which is that our gas supply management practices are carried out on a day-to-day basis in line with industry best practices to fulfill our core public-service obligation to customers."
A comparison of natural gas wholesale market prices in New England and PJM Interconnection, a regional transmission organization that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia, revealed that the same volume of natural gas used by New England generators during 2014 would have cost over $600,000,000 less in PJM due to lower gas prices.