The major energy bill that Governor Charlie Baker signed last week was hailed by its proponents as a victory for consumers and for the environment.
But there were two big winners who didn’t get mentioned in the press releases: Eversource and National Grid.
New England’s largest electric utilities lobbied heavily on Beacon Hill to make their priorities known — and it paid off. The legislative leadership sent Baker a bill that largely resembled the utility-friendly version approved by the House, containing only pieces of the more environmentally focused Senate version.
Here are five reasons for the two utilities to celebrate:
Finally, a new path to Canada: The bill’s primary goal was to compel utilities to buy more “clean energy,” likely hydropower from Canada and possibly from wind farms in northern New England, as well as up to 1,600 megawatts of offshore wind, from projects under development. Eversource and National Grid will now be allowed to pass any extra costs for these contracts on to consumers.
But the utilities gain in another way. Both are involved with power line projects through northern New England that could be used to deliver all that clean energy. The law is particularly important to Eversource because of its $1.6 billion Northern Pass, a transmission project hung up in the New Hampshire permitting process. National Grid, meanwhile, is helping to finance two projects developed by Anbaric, one through Vermont and a much bigger line that would go underwater from Maine to Plymouth.
Don’t touch those tariffs: The Senate version would have banned something the utilities badly wanted — tariffs on electric rate payers to help pay for natural gas pipelines. But the ban was dropped in the version of the bill that became law. This was a victory for the utilities because they happen to be partners in a natural gas pipeline expansion project led by Spectra Energy. This project, known as Access Northeast, is aimed at bringing more natural gas to the region’s gas-fired power plants so they can run more frequently in the winter.
The utilities can’t rest easy yet. The state Supreme Judicial Court is reviewing a legal challenge to these tariffs that could still undo them.
Every little bit counts: With this law, utilities can now collect a surcharge of up to 2.75 percent from ratepayers to help offset the costs of the long-term contracts for hydropower or offshore wind. Utilities argue they need this extra revenue to preserve their credit scores because of the way they account for these contracts on their books.
Keeping these credit ratings strong, they say, ensures that they can borrow money at a good rate, helping to curb electric rates.
Don’t move too quickly: The state requires the big utilities to buy a certain amount of electricity from renewable sources such as solar and wind, and the Senate version of the energy bill would have doubled the pace at which those mandates increase every year. But the utilities didn’t like this, arguing it would unfairly increase costs for ratepayers. The leadership on Beacon Hill ended up jettisoning the language before sending the bill to Baker.
Goodbye, Cape Wind: In the end, the leadership opted for the House of Representatives language that prevents Cape Wind Associates from bidding for the offshore wind contracts. In early 2015, Eversource and National Grid canceled previous long-term contracts with Cape Wind. Eversource executives, in particular, were reluctant to enter into a contract with Cape Wind in the first place.