Martha Klein: Stop the pipeline tax once and for all

March 28, 2017 GMT

We face a decision with enormous consequences for everyone who pays an electric bill in Connecticut — whether to spend billions of dollars on a fracked gas pipeline or to continue our great progress in reducing our reliance on dirty fossil fuel through energy efficiency and clean technologies.

A new report by a highly respected research firm, Synapse Energy Economics, completely disproves the arguments that big utilities make to justify these pipelines.

The report, sponsored by the Connecticut Sierra Club, finds that building the pipelines will cost more than twice what the utilities claim — $6.6 billion versus $3.2 billion. And it finds that use of natural gas will decrease by 27 percent by 2023, compared to 2015, leaving us footing a bill for pipelines that we won’t even need.

The utility companies cleverly only included the projected construction cost in their claims — $3.2 billion. But anyone who builds a new home knows that the construction costs are just the start. There are the inevitable cost overruns, maintenance and many other factors that make up the true cost. The secret $6.6 billion cost estimate isn’t just some random guess — it comes from testimony from an expert witness for Eversource, one of the primary investors of the pipeline.

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Here in Connecticut, we will be forced to pay at least $85 million more on our electric bills to cover the pipeline costs, and if other states don’t join in to cover the cost, we could be saddled with as much as another $1.9 billion.

Consumers in Connecticut will cover the pipeline costs directly through our electric bills. We will pay for the construction and overruns through this highly unusual funding mechanism, not Eversource or its shareholders.

This pipeline tax was ruled unconstitutional by the Massachusetts Supreme Court and overruled by regulators in New Hampshire, but here in Connecticut, we are still paying this tax unless something is done.

What happens once the pipelines are built? According to the Synapse report, they will sit underused as we keep paying for them.

One of the great success stories in New England that gets little attention is that we are making extraordinary progress in shifting to clean energy thanks to increased energy efficiency, solar, wind and carbon dioxide emission caps. Connecticut was recently rated fifth in the country for its use of energy efficiency and ranks ninth for its installed solar power.

That means our dangerous reliance on natural gas will shrink, not only by 27 percent seven years from now compared to 2015, but a dramatic 41 percent by 2030. So we don’t need these pipelines that will sit as symbols of the past if built.

Given that these pipelines don’t make any sense at any level, why are the big utilities fighting for them?

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Because like any company, they are driven by profit, and they stand to make a great deal. For any investment they make, they are granted an automatic return of five to fifteen percent. Who wouldn’t like that deal — you take someone else’s money and invest it with an automatic return. So they have every incentive to build the pipelines and no reason not to.

How can we stop this? One way is to stop the pipeline tax as other New England states have done. Connecticut Sierra Club supports House Bill 6546 that would do away with the pipeline tax. If these pipelines are such a good idea, let the utilities pay for them.

Let’s look to the future and let Connecticut continue to be a leader in the fight against global warming. New technologies are working and are saving our state money right now. Let’s invest in those, not the technology of a generation ago.

Martha Klein is chair of the Connecticut Sierra Club.