The state Public Utilities Commission voted 2-1 Thursday to move forward on a possible natural gas pipeline expansion in Maine, which could help control high electricity costs by increasing supplies to gas-fired power plants during the winter.

Critics say that benefit isn’t worth the cost of as much as $75 million a year that customers may need to pay to subsidize the project.

Commissioners Tom Welch and Mark Vannoy voted to move to the next regulatory phase and review three proposals for new pipelines. Commissioner David Littell opposed the decision, saying the agency needs to examine more alternatives before going ahead with such a costly proposal – the $75 million annual subsidy could run for 20 years.

The timing of the next phase is unclear, but the PUC may complete its review and be ready to recommend an option early next year. The governor needs to approve any plan.

Anthony W. Buxton, a lawyer who represents Tennessee Gas Pipeline, which has one of the proposals before the PUC, said the pipeline could be in operation in about four years if the PUC moves fairly quickly.

Current supplies of natural gas are adequate for New England for most of the year, Buxton said. But during cold stretches, the pipeline system can’t carry enough natural gas to meet the increased demand, he said, and that means prices shoot up.


An expanded pipeline network could meet that demand, but there’s a risk for ratepayers. The subsidy, which pipeline backers say is needed to make the project financially viable, would involve the state buying some of the pipeline’s capacity. If demand is weak and state officials can’t find a private user who needs the capacity, the state would still have to pay for its share of the expanded capacity. And that cost could fall onto ratepayers’ shoulders.

The state’s involvement in what is normally a private business concerns the Conservation Law Foundation, which has opposed the decision for further study of the pipeline proposals.

“It’s a use of ratepayer money that’s inappropriate,” said Greg Cunningham, a senior lawyer with the foundation.

The foundation also objects because expansion means increasing the state’s reliance on natural gas, and that runs counter to efforts to reduce greenhouse gas emissions, he said.

But the head of the Governor’s Energy Office said increasing pipeline capacity into Maine can help avoid electricity price spikes, which have hit businesses hard the past two winters and are expected to do so again this year.

“We’ve really seen the effect – small businesses, printing presses, bowling alleys and restaurants – we’re getting a lot of concern from businesses because they’re seeing that there are really significant price increases that are going to occur, probably starting in December,” said Patrick Woodcock, director of the energy office.


He said that beyond the volatility of natural gas prices, officials are concerned because the retirement of a nuclear power plant in Vermont and a coal plant in Connecticut will reduce the region’s electricity-generating capacity this year, setting the stage for even sharper increases.

Tim Schneider, the Maine public advocate, said he expects the PUC to move quickly on its review of pipeline proposals.

“It’s the urgency of the problem,” he said. “You’re going to start seeing regional gas price volatility this winter.”

Schneider said he expects the PUC to forward a proposal to the governor in the first few months of 2015. Timing is critical because Welch is expected to retire from the commission at the end of this year, and Littell’s term is up in March.

That means whoever is elected governor will be able to appoint two of the three commissioners who will rule on the next phases of the gas pipeline proposal.

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