States Won't Make Ratepayers Pay for Natural Gas Pipelines

Officials in Massachusetts and two other New England states have decided that utility ratepayers should not bear the cost and risk of building new natural gas pipelines. The first shoe dropped in August, when the Massachusetts Supreme Court ruled that the so-called pipeline tax would violate state law. Following that decision, officials in New Hampshire and Connecticut also decided not to make ratepayers in their states pay similar utility surcharges.

The decisions threaten plans to expand natural gas supply in New England, because pipeline developers were planning to pass billions of dollars of construction costs on to ratepayers. Faced with the prospect of paying for their own pipelines, developers such as Kinder Morgan are backing out of the projects. New England consumers already pay the highest prices in the nation for natural gas, and those prices could surge higher this winter, according to a recent report by Bloomberg.