Thread by @jglarusso

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I’m not sticker-shocked at the $1.5B price tag of @EversourceMA’s GCEP project, considering the miles of work in public roadways & the drilling under the river to submerge the cable, build & retrofit substations, etc.

No, what galls me & should gall everyone…

#mapoli

https://twitter.com/xiaowang1984/status/1778138809663709473

…is that in its MA DPU dockets seeking approval of their two proposed LNG supply contracts with Everett Marine Terminal (EMT) Eversource said that alternatives to the contracts —physical upgrades to its gas distribution system to enhance system safety and reliability would,…

…well, take a *lot* of time and work.

Specifically, Eversource’s expert testified that “an internal distribution betterment option with expansion of the LNG vaporization capacity would be similar in costs to the Proposed Agreement, and, given the scope of the required…

…construction, needed permits and other considerations it could take several years to complete.”

Construction. Permits. Years to complete. Oh my!

But years to complete? Seriously? After all of the years that Eversource squandered after it first knew that EMT—the facility it…

…says it relies on to provide gas supply on peak design days and needs to maintain gas pressures and gas system reliability—might be going away? Really?

Let’s account for the years that Eversource squandered after it knew that EMT was in danger of being shuttered. Let’s work…

…our way backward in time.

October 2021
Eversource releases an RFP for gas supply for the winter 2024/25 (i.e. next winter). Winter 2024/25 is significant because it will be the first winter after Mystic Generating Station closes. Mystic, which is adjacent to EMT & is fueled…

…by its LNG, is EMT’s biggest customer and takes ~ 75-80% of EMT’s “sendout.” Mystic is operating on a “cost of service” (COS) agreement approved by @FERC. Once the COS agreement ends this coming May 31, Mystic will cease operations. Constellation has said that if it can’t…

@FERC …replace the fixed contract revenue that Mystic provided with new fixed contracts, it too will cease operations. Constellation responded to Eversource’s October 2021, RFP and the two companies began negotiating fixed contracts that would allow EMT to keep operating and…

@FERC …allow Eversource to buy gas for winter 2024/25–and every subsequent winter through 2029/30–from EMT. @nationalgridus and @Unitil negotiated similar contracts with Constellation, and it is these four contracts that are currently before the DPU pending approval.

@FERC @nationalgridus @Unitil Next stop going backward in time?

December 2018
FERC approves the first Mystic COS agreement to keep it operating so that ISO New England can plan for the closure of the largest fossil fuel plant in New England.

That is, more than five years ago everyone, including…

@FERC @nationalgridus @Unitil …Eversource, knew that Mystic was on borrowed time and would soon be closing. And because Eversource is as sophisticated a participant in gas markets as any, it knew what the implications would be for EMT if Mystic closed. Eversource knew that if Mystic closed, EMT would…

@FERC @nationalgridus @Unitil …be in jeopardy. More than five years ago.

But let’s go back in time a little further still…

March 29, 2018
Six years ago Mystic’s owner announced that it would retire the power plant. Six years ago Eversource knew Mystic’s days were numbered, and that EMT’s days were…

@FERC @nationalgridus @Unitil …potentially numbered as well.

Knowing that it relied on EMT for gas supply during peak demand events (think Polar Vortex), and on certain days to maintain gas distribution system pressures and reliability, what did Eversource do six years ago when Mystic’s owner announced it…

@FERC @nationalgridus @Unitil …intended to close Mystic and, in essence, threw a grenade into the region’s electricity and gas markets? Nothing. Eversource did nothing. Neither did National Grid or Unitil.

It wasn’t until almost three years later, when Eversource released its RFP for winter 2023/24 gas…

@FERC @nationalgridus @Unitil …supply, that Eversource provided any indication that it was planning for EMT’s possible closure. But Eversource’s planning relied exclusively on a strategy to keep EMT open by providing EMT with the fixed contract revenue it needs to sustain operations. That is, …

@FERC @nationalgridus @Unitil …Eversource’s exclusive strategy was—together with National Grid and Unitil—to step into Mystic’s shoes as EMT’s counterparty for the fixed revenue contracts EMT needed to remain open. Apparently, during those six years Eversource never seriously considered upgrading its own…

@FERC @nationalgridus @Unitil …gas distribution system in anticipation of EMT’s possible closure. It never considered “an internal distribution betterment option,” as its expert testified because, you know, Construction. Permits. Years to complete.

This is a utility which, on the electricity side of the…

@FERC @nationalgridus @Unitil …house is implementing a project as vast, & complex, & costly as GCEP (), and on the gas side of the house is implementing a project as vast, & complex, & costly as the pipe replacement GSEP project ()eversource.com/content/reside…
mass.gov/doc/eversource…

@FERC @nationalgridus @Unitil In short, at some point during the last six years Eversource decided not to upgrade its own gas distribution assets to prepare for EMT’s possible closure, but decided instead to execute contracts that require it to rely on Constellation’s asset, EMT. Moreover, the four…

@FERC @nationalgridus @Unitil …contracts ain’t cheap: they’re estimated to cost almost one billion dollars over the six years they’ll be in place. Which brings us to the six year terms of the contracts. Why six years? That was a question that the Attorney General asked in the DPU dockets. The answer? Six…

@FERC @nationalgridus @Unitil …years is enough time to build new gas transmission capacity—new pipelines—into the region so that the utilities would no longer need to rely on EMT. There’s but one gas transmission project out there that’s been proposed: @Enbridge’s Project Maple. static1.squarespace.com/static/56afc3b…

@FERC @nationalgridus @Unitil @Enbridge Consruction. Permits. Six years to complete. If it’s all in service of building a new gas pipeline into the region, then those daunting challenges seem suddenly surmountable.

It should be clear that, if you want to picture how Eversource, National Grid, & Unitil see New…

@FERC @nationalgridus @Unitil @Enbridge …England’s energy future, you have to imagine that the future will be gas: gas now, gas for the foreseeable future, gas, just gas.

In light of the decarbonization mandated by the Commonwealth’s Global Warming Solutions Act and the Order issued by the DPU in its Future of Gas…

@FERC @nationalgridus @Unitil @Enbridge …docket (which no longer allows cost recovery for gas infrastructure without proof that non-gas alternatives were considered, or for the promotion of natural gas expansion), the gas now, gas for the foreseeable future, gas, just gas mindset of Eversource, National Grid, & …

@FERC @nationalgridus @Unitil @Enbridge …Unitil is not only out of step with reality, it is out of step with the Commonwealth’s legal requirements.

But that is not what galls me and should gall everyone else. No, what galls me is that, notwithstanding how long they’ve known EMT was in jeopardy of closing…

@FERC @nationalgridus @Unitil @Enbridge …—six years—and all they could have done to prepare for its eventual closure, it wasn’t until last February 12 that Eversource, National Grid, & Unitil opened their dockets to have their contracts with Constellation approved. Moreover, it…

@FERC @nationalgridus @Unitil @Enbridge …is impossible not to discern the importance the utilities attach to themselves for having delivered—at the 11th hour—the contracts they say will prevent mid-winter gas outages that could leave untold thousands of Mass. residents freezing in the cold for weeks on end. “Look…

@FERC @nationalgridus @Unitil @Enbridge …at us! We’re heroes! We come bearing the solution that will vouchsafe the reliability of the gas distribution system and keep the wolf of gas outages away from each and every door!”

As if.

@FERC @nationalgridus @Unitil @Enbridge No, Eversource, National Grid, and Unitil are not to be congratulated for coming up with a scheme to keep EMT open when it’s by no means clear that the region needs to continue relying on it. (Gas use for electricity generation is plateauing in New England; residential gas use…

@FERC @nationalgridus @Unitil @Enbridge …for heating is or soon will be plateauing.)

Eversource, National Grid, and Unitil should in fact be contrite. Contrite for doing nothing during the last six years, even though they knew that long ago the risks that EMT’s closure posed to gas distribution system…

@FERC @nationalgridus @Unitil @Enbridge …reliability. Contrite for not upgrading their own distribution system—their own asset—to enhance reliability, opting instead to rely entirely on Constellation’s. Contrite for dropping this hot potato in the DPU’s lap in early February with the admonition that the contracts…

@FERC @nationalgridus @Unitil @Enbridge …had to be approved by May 1, or else.

Or else. If the contracts are not approved by May 1 the entire transaction will crater. EMT will close. There will be no way to maintain gas distribution system reliability and safety.

Or else.

@FERC @nationalgridus @Unitil @Enbridge So if the DPU finds that it lacks the legal authority to approve the contracts given the structure of the transaction (and there is SJC precedent that suggests this might be the case), or if the Attorney General or some other party with standing successfully appeals an…

@FERC @nationalgridus @Unitil @Enbridge …order of the DPU approving the contracts, the utilities would have us believe they, and not the utilities, would be responsible for the catastrophe of a mid-winter gas outage.

No. No, responsibility for any gas outage that might occur, with or without EMT—whether because…

@FERC @nationalgridus @Unitil @Enbridge …the DPU declines to approve the contracts, or some litigant successfully appeals their approval—will squarely rest on the shoulders of the utilities. They knew. They had sufficient time. They did nothing to upgrade their assets in the face of a known risk to reliability. They…

@FERC @nationalgridus @Unitil @Enbridge …backed Mass. officials and residents into a corner by waiting until February of this year to approve the solution they preferred to pursue.

The utilities should be contrite because it is the people of Massachusetts that gave them regulated monopolies to provide safe,…

@FERC @nationalgridus @Unitil @Enbridge …reliable, and affordable gas service, and there is *every* indication that, in this case, they failed to meet their obligations under that compact.

That’s what galls me.

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