The Market Speaks — Maine (and New England) Should Listen

The preliminary conclusions are in on Maine’s proposed gambit to invest ratepayer money on natural gas pipeline expansion—it’s not worth the risk.  Those were the findings of the Maine Public Utilities Commission (PUC) staff in its recommendations to the Commission issued last night.  The staff report finds that the cost of using ratepayer money to subsidize investment in natural gas pipeline capacity is likely to outweigh any benefits from such unprecedented public funding.  The principal reasons for this risk imbalance are the uncertainty associated with the effects of changing gas and electric markets as well as the impacts of a number of natural gas pipeline proposals that are pending and could affect the outcome of any investment by Maine. The PUC staff’s conclusions are correct and reflect the positions taken by CLF in the proceedings that led up to the report, that exposing ratepayers to the risks inherent in energy markets is the wrong approach.

CLF advocated that, rather than seek to intervene in the energy markets, Maine and the other New England states should instead ensure proper management of those markets to create incentives for the private sector to make economic investments in necessary energy infrastructure that are consistent with state law and policy.  As noted in the PUC report, private investment in incremental increases in our natural gas pipelines is now emerging as the natural gas market is churning out new privately-financed pipeline proposals, suggesting that public investment is both unnecessary and risky in light of rapidly changing market conditions. Maine should step aside and allow the private markets to do their thing.


The Market Speaks — Maine (and New England) Should Listen