On February 27, 2018, FERC staff completed an inquiry in which they did not uncover any evidence of anticompetitive withholding of natural gas pipeline capacity on Algonquin Gas Transmission, LLC pipeline ("Algonquin") by New England shippers. The inquiry initially arose from allegations made by the Environmental Defense Fund ("EDF") that Eversource Energy ("Eversource") and Avangrid, Inc. ("Avangrid") were artificially constraining capacity on the Algonquin. After finding that Eversource and Avangrid did not engage in anticompetitive behavior, FERC staff will not take any further action on the matter.
In November 2017, twelve New England electricity consumers filed
a class action lawsuit in in the U.S. District Court of
Massachusetts against Eversource and Avangrid, arguing that the
energy companies raised power prices by artificially constraining
capacity on Algonquin (see December 12, 2017 edition
of the
In December 2017, in response to these allegations, Eversource
sent a cease and desist letter to Fred Krupp, President of EDF, and
N. Jonathan Peress, EDF's Senior Director of Energy Market
Policy (see December 20, 2017 edition of the
WER). Eversource directed both EDF executives to
immediately stop the publication of all statements insinuating that
Eversource has withheld gas pipeline capacity from the wholesale
electricity market in order to earn profits from higher
prices. Eversource declared that it was in compliance with
state laws prohibiting such withholding behavior. FERC staff then commenced a review of the allegations. The
review was conducted by FERC's Office of Enforcement's
Division of Analytics and Surveillance, which is tasked with
monitoring wholesale natural gas and power markets for potential
market manipulation and any other inappropriate behavior.
FERC staff examined both publicly available and non-public data
pertinent to these allegations. On review, FERC staff
determined that EDF's study was flawed and incorrectly
concluded that anticompetitive withholding occurred. FERC
staff also stated that they did not find any evidence of capacity
withholding. A copy of FERC's press release on its findings is available
here. The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.