New England Utility Wants Study Claiming Electric Rate Inflation Taken Down

Dec 14, 2017

Utility company Eversource is demanding a national environmental group take down a study that says they unfairly withheld natural gas capacity and inflated electric rates– but the Environmental Defense Fund is standing by its research.

The group's October study said New England electric customers paid $3.6 billion extra between 2013 and 2016, because Eversource and Connecticut-based Avangrid habitually bought up natural gas pipeline capacity they didn't end up needing.

The study says this practice, while legal, "artificially limits gas supply to the region and drives up gas and electricity prices."

“While the studied behavior may have been within the two firms’ contractual rights, the significant impacts in both the gas and electricity markets show the need to consider improvements to market design and regulation as these two energy markets become increasingly interlinked,” the study’s authors, made up of academics and EDF economists, wrote.

Eversource called the study a “complete fabrication” when it was released. Now, they’ve sent a cease and desist letter to the EDF.

Martin Murray, a spokesman for Eversource, says they don't dispute that prices were volatile during the study period, especially during 2014’s “Polar Vortex.”

"What we are disputing is the false and very harmful claim that that was caused in large part by Eversource or others artificially constraining capacity,” he says.

He argues the volatility came from New England’s overstretched natural gas supply system, which Eversource argues must expand to meet demand. He also says higher gas prices don’t directly benefit the company’s bottom line.

Murray says the EDF report undermined public trust in the company, leaving customers and government officials questioning the intentions of Eversource practices.

In a statement, EDF spokesman Jon Coifman says their lawyers are reviewing Eversource's letter. He added, “We stand by the analysis and reject this obvious attempt to intimidate and chill legitimate public inquiry.”

Murray says Eversource has also retained legal counsel on the issue, and may take some further, unspecified action if the study isn’t taken down.

This report comes from the New England News Collaborative: Eight public media companies, including Rhode Island Public Radio, coming together to tell the story of a changing region, with support from the Corporation for Public Broadcasting.