What Could Go Wrong With The Granite Bridge Pipeline?
When the Northeast Energy Direct pipeline was proposed for southern New Hampshire, it took only a few months before every town along the route had representatives on a municipal pipeline coalition and had hired attorneys. “No Pipeline” signs were everywhere. All I hear along the Granite Bridge pipeline route are crickets.
Since the pipeline doesn’t cross private property and the towering liquefied natural gas, or LNG, tank has few neighbors, it seems the only question is just how much the project will reduce people’s property taxes.
I won’t pretend that all the people and towns along NED’s southern New Hampshire route fought the pipeline out of concern for climate change. Most people worried about the environment and damage to their wells from blasting. Affected landowners and abutters worried about safety and the impact on property values. A few welcomed the thought of the cash offered for allowing the pipeline to cross their land. Towns were promised generous tax payments.
Still, it’s curious that even without eminent domain issues, people aren’t worried about safety, property values or damage to their wells. Liberty Utilities has held 75 meetings with town administrators, first responders and elected representatives. They’ve promised millions in tax revenue for these towns.
Epping alone stands to receive $7 million a year and $150 million over the lifetime of the project. That’s got to be pretty tempting for a town with a total annual tax burden of $18 million.
What could go wrong?
Depreciation. The lifetime of the project is over 40 years. Seven million dollars a year for 40 years would be $280 million. That means that while the first-year payment might be $7 million, in succeeding years that amount will decrease.
Then there are the abatements the utilities request to decrease their tax burden. Bow recently scraped together $5.7 million in a first payment to Eversource due to abatements on 2012 and 2013 taxes. The Monitorreported: “The case has stark implications for Bow taxpayers; according to various town estimates, Bow could owe
Eversource a tax refund of at least $8.5 million. If Eversource decided to pursue differences in valuation for the 2014, 2015 and 2016 years, it could add even more to the amount the town will need to refund. By contrast, the town’s operating budget is about $10 million.”
Merrimack Station and its infamous coal scrubber are at the center of this controversy.
Despite environmentalist warnings that coal-fired electricity plants were on the “way out,” PSNH, the N.H. Public Utilities Commission and the Legislature pushed the estimated $250 million scrubber project through. Thanks to intervention by the Legislature, the PUC assigned the cost of the scrubber to the ratepayers and all the return on equity (profit) went to the shareholders. Even though a settlement has taken effect and the scrubber doesn’t show up as a stranded asset on our utility bills, it’s hard to forget that the final cost ballooned to $500 million and ratepayers are still paying for it, no matter how it’s labeled.
Liberty Utilities proposes a $340 million project that doubles its pipeline capacity and multiplies its storage of LNG/LPG by a factor of 16. The LNG tank planned for Epping, at 2 billion cubic feet, would equal half the LNG storage for the entire state of New Jersey. Really?
There’s no downside for Liberty, though. If they overbuild by a factor of two or three, at least their shareholders aren’t paying for it and the company is guaranteed to recover its investment plus a return on equity from Liberty ratepayers. If the project is an economic flop, it will also apply for abatements from the towns.
Finally, the Legislature is considering changes to how the utilities are taxed by the towns.
The estimate given for Epping on the Granite Bridge project page includes a footnote: “*All estimates assume 2017 tax rates. Estimates do not reflect any future changes to state, county or local taxes.”
The public can learn about the pipeline (from Liberty’s perspective) on Wednesday, May 23, from 5 to 8 p.m. at Josiah’s Meetinghouse on Route 125 in Epping. Maybe Liberty ratepayers in other towns ought to take an interest in this project? After all, they’re the ones who will pay