Massachusetts’ Highest Court Rejects ‘Pipeline Tax’

Charging residential electricity customers to subsidize a so-called “pipeline tax” to pay for construction of private natural gas pipelines is unlawful, the Massachusetts Supreme Judicial Court ruled.

Days after the Aug. 17 decision on a lawsuit brought by the Conservation Law Foundation, four electric utilities under Eversource and National Grid withdrew petitions for capacity on Access Northeast, a $3 billion pipeline planned by Spectra Energy, National Grid and Eversource, news outlets reported.

The Conservation Law Foundation, based in Boston, Mass., supports environmental conservation.

“This is an incredibly important and timely decision,” David Ismay, CLF’s lead attorney on the case, said in a statement the day the ruling was announced. “The course of our economy and our energy markets runs counter to the will of multi-billion dollar pipeline companies, and, thanks to today’s decision, the government will no longer be able to unfairly and unlawfully tip the scales.”

The case was Conservation Law Foundation v. Massachusetts Department of Public Utilities (DPU).

According to the opinion written by one of the justices of the court, the state Department of Public Utility’s 2015 rule (“Order 15-37”) allowing Massachusetts electric customers to be charged for the construction of interstate gas pipelines is prohibited by statutes that have been on the books in Massachusetts for almost two decades, the CLF noted in its statement.

The opinion stated that Order 15-37 was “invalid” because, among other things, it would “reexpose ratepayers to the types of financial risks from which the Legislature sought to protect them.”