Like a racer facing a caution flag warning of hazards ahead, America’s natural gas pipeline developers are seeing signs that their business plans aren’t tracking with the future. Mistakes in this race carry price tags in the billions, and could leave ratepayers (in other words, the public) footing the bill for decades to come.
Two recent developments in particular – a report from the Massachusetts Attorney General’s Office and a rate case at the Federal Energy Regulatory Commission (FERC) – show that the economics for new natural gas pipeline capacity to supply power plants are not as compelling or sustainable as the conventional wisdom would have you believe.
Together, the AG report and the FERC case provide a strong counterpoint to those now rushing to create excessive new pipeline capacity. They suggest that many pipelines will lose customers and money as lower cost alternatives outcompete them, and long before investor expectations are met and their financing is paid off. The question is whether policymakers and pipeline developers will slow down and consider the dangers, or continue to plow ahead. Read More