Purchase of Utility Would Spark Natural Gas Pipeline Boom in Maryland
Next month, the Maryland Public Service Commission will vote on whether to allow a Canadian energy company to buy Washington Gas and Light, a public utility that has provided electricity and natural gas to customers in the District of Columbia and Maryland suburbs for more than a century.
The proposed merger of AltaGas and Washington Gas is part of a trend across the country. Increasing numbers of locally-owned and controlled public utilities are being bought up by large corporate conglomerates based in distant headquarters, according to Paul Patterson, a utility industry analyst at Glenrock Associates in New York.
“What you are seeing generally speaking in the utility sector is a considerable amount of consolidation for several years now,” Patterson said. “So, in the Washington DC area, for instance, you saw PEPCO – which is a familiar name on the electric side – that was bought recently by Exelon, which owns Baltimore Gas and Electric and some other utilities in Philadelphia and Chicago.”
As part of the discussions over Maryland’s approval of the proposed $4.5 billion AltaGas/Washington Gas merger deal, Governor Larry Hogan’s administration negotiated for the Canadian company to pay $103 million to kick start a natural gas pipeline expansion project in rural areas throughout Maryland, according to the Maryland Energy Administration.
Among the areas where pipelines would likely be built include parts of the Eastern Shore that currently lack natural gas service, such as Chestertown and Princess Anne.
Mike Tidwell is founder of the Chesapeake Climate Action Network. He complained that these new pipelines would carry gas produced by hydraulic fracturing in nearby Pennsylvania and West Virginia. Tidwell said it makes no sense for Governor Hogan to be encouraging this fracked gas delivery system while signing a law last year that bans fracking in Maryland, because it is harmful to the environment.
“Governor Larry Hogan got a lot of PR for embracing the Paris Climate Accords after President Trump recklessly withdrew from the accords,” Tidwell said. “And yet, at the same time, the governor is quietly, behind the scenes, trying to promote gas expansion in Maryland. The two don’t add up. It’s a contradiction. It’s hypocrisy.”
Ben Grumbles, the Hogan Administration’s Secretary of the Environment, strongly disagrees.
“We support a ban on fracking,” Grumbles said. “But not a ban on natural gas throughout the state, or the use of natural gas infrastructure that ensures that the gas is delivered safely and responsibly.”
Grumbles said that expanding natural gas service will be good for the climate, because it replaces other forms of energy that produce even more pollution.
“One key component of this is that natural gas helps to displace imported coal,” Grumbles said. “And gas also – specifically for the settlement – helps to displace dirtier sources of energy, such as home heating oil, or industrial diesel.”
But Tidwell said this is not accurate. He said new research shows that so much methane – a potent greenhouse gas – leaks from gas pipelines, and escapes during the fracking process, that fracked gas can be as bad, or possibly worse, than coal or heating oil
“The science keeps showing that fracked gas is increasingly worse for the climate than we thought,” Tidwell said. “So in my mind, the governor should have no business promoting this gas consumption in Maryland, bringing it to Maryland, and building these pipelines, when, at the same time, he’s told the world that he –as a Republican governor of Maryland – actually wants to do something about climate.”
The Maryland Public Service Commission will make a decision on the proposed merger and gas pipeline expansion by April 4th.