Massachusetts High Court Strikes Down ‘Pipeline Tax,’ Ruling That Utilities Can’t Finance Natural Gas Pipelines

The Massachusetts Supreme Judicial Court yesterday struck down the "pipeline tax," a mechanism where electrical ratepayers would foot the bill for natural gas pipeline expansion, according to an article by MassLIve.com.

Justice Robert Cordy wrote that the funding mechanism would undermine the objectives of the state's 1997 utility restructuring act and re-expose ratepayers to financial risks that lawmakers sought to mitigate two decades ago. “The restructuring law broke up vertically integrated energy monopolies and forced electric utilities to sell their power-generating assets. The law created a competitive market for electricity,” MassLive.com wrote. The “pipeline tax” is technically a tariff that would have passed the cost of building multi-billion-dollar natural gas pipeline costs on to electrical ratepayers.

The Conservation Law Foundation explained that the court declared it unlawful for Massachusetts "to force residential electricity customers to subsidize the construction of private gas pipelines." The ruling instead makes the companies themselves "shoulder the substantial risks of such projects."

To read the MassLive.com article, click here.

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