October 17, 2017

PURA to review CT utilities' pipeline practices

Following a report last week alleging that Connecticut's utility providers Eversource and Avangrid artificially constrained pipeline capacity, driving up energy prices, the state's utilities regulator has opened a review of the matter.

In a filing late last week, PURA said it will review local distribution companies' "gas supply portfolio, asset strategies and practices."

The filing doesn't reference the report published by the Environmental Defense Fund -- which Eversource disputed as "a complete fabrication" and "not credible" -- but a spokesman on Tuesday acknowledged the review was spurred by the research's findings.

The report's authors analyzed data from the Algonquin pipeline, which crosses Connecticut, and found that the utilities "routinely" ordered large deliveries of natural gas, "then sharply reduced those orders at the last minute," leaving no time for anyone else to use the capacity. The authors, who stopped short of accusing either utility of doing it on purpose, called the practice "down scheduling."

The Office of Consumer Counsel said it would participate in the PURA proceeding.

"These are serious allegations that need to be thoroughly investigated, and I am appreciative that PURA responded promptly by opening this investigation," Consumer Counsel Elin Katz said in a statement. "We actively track the natural gas market and work with fellow state agencies, our utility companies, and other stakeholders to ensure that energy markets work in a fair and transparent manner. While we are generally confident that our markets function as intended, claims of this magnitude must be thoroughly investigated to ensure consumer confidence in the bills they pay."

Meanwhile, also on Tuesday, U.S. Sen. Richard Blumenthal sent a letter to the Federal Energy Regulatory Commission requesting that the agency investigate the EDF report's findings.

"While the motive remains unclear, I urge FERC to immediately investigate allegations of over withholding of natural gas by these companies in Connecticut, and if it is found that market manipulation has occurred, FERC should expeditiously order a ban or other appropriate restriction on this practice and ensure that affected consumers are swiftly and fully compensated," Blumenthal said in a statement.

Eversource said Tuesday that it follows all rules and regulations related to gas procurement.

"We are confident that any review would demonstrate that we are always acting in the best interest of our customers and communities," spokesman Mitch Gross said in a statement.

Editor's note: This story has been updated to include comment from Eversource

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