Baker, Healey to face off over pipeline tariff

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Attorney General Maura Healey (left) and Governor Charlie Baker.John Blanding/Globe Staff

Attorney General Maura Healey's office normally would be defending Governor Charlie Baker's state agencies in a court battle — but not this time.

Instead, when the state Supreme Judicial Court hears arguments about the Baker administration's proposed pipeline tariff on Thursday, a lawyer from Healey's office will be opposing the administration, not supporting it.

The issue involves an unusual tariff that the Department of Public Utilities could allow utility companies — namely Eversource Energy and National Grid — to impose on electric ratepayers to help pay for natural gas pipeline construction. The DPU approved the rules last fall to address the region's pipeline constraints.

The proponents argue that the cost of new or expanded pipelines would be more than offset by cheaper gas as more flows into the region.

Healey isn't buying it, though. Her office has filed a friend-of-the-court brief siding with the Conservation Law Foundation's challenge of the surcharge and one of her staff lawyers is expected to make a brief argument before the state's highest court on Thursday.

The AG's office argues that existing electricity market rules address some of these issues, making this unprecedented requirement for electric ratepayers to shoulder pipeline construction costs unnecessary. The plan, her office argues, would expose ratepayers to risks that the Legislature sought to avoid by restructuring the electric industry in the late 1990s.

Healey has decided to play the role of ratepayer advocate, one of the attorney general's responsibilities. The law firm of Nelson Mullins Riley & Scarborough is representing the Department of Public Utilities.

This is the first time that the attorney general's office has challenged the action of another state agency before the SJC since 2008. In that instance, it was also an energy issue that separated the administration and the attorney general.

"This issue is at the core of whether New England continues to decarbonize its energy platform or lock into fossil fuels for another generation," said Bradley Campbell, Conservation Law Foundation's president. "The last thing the government should be doing is providing a subsidy to natural gas pipelines, especially when that subsidy is against the interests of families and businesses paying their electricity bills."

A spokesman for Baker's energy and environmental affairs agencies declined to discuss the case on Wednesday, citing a policy against discussing pending litigation.

National Grid and Eversource Energy, meanwhile, have filed their own friend-of-the-court brief in support of the Department of Public Utilities. The utilities argue that pipeline bottlenecks have led to shortages in winter months, when heating customers have priority in New England for the gas, driving up the price of the fuel that many power plants to use to keep the lights on. They say this dynamic has collectively added billions of dollars to electricity costs over the past few years.

Thursday's court hearing comes two weeks after energy giant Kinder Morgan abruptly suspended its plan for a massive pipeline through western Massachusetts and southern New Hampshire. The company cited the uncertainty around the future of the pipeline tariff as one of its reasons.

But Spectra Energy is still hoping to move ahead with its own pipeline expansion in New England, known as Access Northeast. National Grid and Eversource are seeking separate state approvals to buy pipeline capacity on the Spectra project through 20-year contracts and pass those costs on to electricity ratepayers. Spectra would use those contracts to help finance its project.

Pipeline opponents have criticized these contracts, including at a protest on Tuesday on the State House steps that drew about 150 people. Many of them are worried that language supportive of a pipeline tariff could be included in a broad-reaching energy policy bill that House leaders are expected to unveil later this month.