Pipeline Tax Paused But Not Dismissed by R.I. PUC

Pipeline tax opponents see the PUC's ruling as a sign of the inevitable. (Tim Faulkner/ecoRI News)

Pipeline tax opponents see the PUC's ruling as a sign of the inevitable. (Tim Faulkner/ecoRI News)

By TIM FAULKNER/ecoRI News staff

WARWICK, R.I. — The controversial pipeline tax sought by electric companies across New England received a temporary halt in Rhode Island.

On Sept. 29, Rhode Island's Public Utilities Commission (PUC), with only two of its three members voting, agreed that dismissing the tax, as requested by the Conservation Law Foundation, would present administrative difficulties for National Grid if the company is able to resurrect its fee program in Massachusetts, where it was recently dealt a setback in court.

The pipeline tax is a tariff that National Grid and Eversource Energy hoped to apply to electric bills to pay for the surge in pipeline and other natural-gas infrastructure projects across New England, such as Spectra Energy’s $3 billion Access Northeast project. The tariff was the result of a 2013 agreement by New England governors to collaborate and share the costs in regional energy projects.

But on Aug. 17, the Massachusetts Supreme Judicial Court dealt a setback to this regional energy initiative by declaring the pipeline tax unconstitutional. The decision removed the region’s largest pool of customers, 43 percent, from using the fee to pay its share for new pipelines and compressor stations. To make matters worse, the Massachusetts Senate approved a bill banning electricity customers from paying for natural-gas projects.

Citing the high cost to ratepayers and harm to the environment, the Conservation Law Foundation (CLF) soon filed a motion to dismiss the tariff plan in Rhode Island.

At a Sept. 21 hearing before the Rhode Island PUC, National Grid argued for a pause in its application until a solution can be found in Massachusetts. One alternative includes shifting the tariff from electric to natural-gas customers. Any new program, however, is likely to take months for approval and may even require the Massachusetts Legislature to write and enact a new law. The Legislature doesn't reconvene until January.

The Rhode Island PUC, therefore, scheduled a meeting for Jan. 13 to hear an update from National Grid on its tariff plan in Massachusetts. So far, Maine has approved the tariff but stipulates that it can only be enacted if the other participating New England states approve their own pipeline tax. Connecticut and New Hampshire have yet to rule on the tax. Vermont is not participating in the regional tariff plan.

After the PUC’s recent decision, CLF attorney Megan Herzog said the ruling was good news for Rhode Island and only delayed an eventual dismissal of the tariff.

“The stay is in effect until National Grid finds a pathway forward in Massachusetts and we don’t feel they have a pathway forward in Massachusetts or Rhode Island," Herzog said.

National Grid spokesman David Graves said the company will explore its options and do more planning on funding its natural-gas projects. “The pipeline is still necessary and still needed,” Graves said.

Ben Weilerstein of Toxics Action Center said the stay allows the environmental advocacy group to increase public opposition to the tariff.

“Just as we were able to stop it in Massachusetts, we can stop the pipeline tax in Rhode Island,” Weilerstein said.