This story was originally produced by the New Hampshire Bulletin, an independent local newsroom that allows NHPR and other outlets to republish its reporting.
In an opinion released Wednesday, the New Hampshire Supreme Court affirmed an order by the state’s Public Utilities Commission denying Liberty Utilities’ request to recover development costs related to the abandoned Granite Bridge project through temporary rate hikes for customers.
In 2020, Liberty Utilities chose to walk away from its proposed $340 million fracked natural gas transmission pipeline project, which would have included a 27-mile pipeline on state property along Route 101 from Exeter to Manchester. The plan also included construction of a liquified natural gas storage and conversion facility in Epping.
The project proved controversial, and Liberty instead decided to go with a cheaper alternative: a 20-year capacity contract with Tennessee Gas Pipeline to meet the growing demand for natural gas in the state. Liberty serves 87,000 natural gas customers and 43,000 electric customers in 51 communities across New Hampshire.
As part of its efforts to construct Granite Bridge, Liberty spent approximately $9.1 million on preliminary designs, environmental assessments, outside consulting services, and options to purchase land, among other things. In 2021, the utility sought to recoup $7.5 million in development costs from the abandoned project by temporarily increasing rates for customers.
The Public Utilities Commission rejected the effort, sharing the opinion of Consumer Advocate Donald Kreis that the request ran afoul of state law, which says utilities can’t charge ratepayers for projects that are under construction.
According to state law, “public utility rates or charges shall not in any manner be based on the cost of construction work in progress. At no time shall any rates or charges be based upon any costs associated with construction work if said construction work is not completed.”
But Liberty argued that since Granite Bridge was never physically under construction, it could recoup costs. Much of the state Supreme Court’s Wednesday opinion focused on teasing out that argument, and what exactly qualifies as “construction work.”
“While no physical structure was built, Liberty’s costs remained ‘associated with’ one because Liberty incurred costs specifically related to its plan to build a physical structure,” the opinion said.
In the 2021 PUC docket, written testimony from Liberty employees also included the argument that the costs were necessary “to conduct due diligence” to determine the least cost option to address growing demand for natural gas in the region, a statutory obligation at the time. The Supreme Court agreed with the PUC that the costs were not routine planning, and instead were spent to further a specific project.
Both Kreis and the Department of Energy opposed Liberty’s Supreme Court appeal.
Reached for comment on Wednesday, a spokesperson for Liberty Utilities said, “While we are disappointed with the ruling, we respect the decision of the Supreme Court.”
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